Shell plc SHEL recently decided to restart production at the Penguins field in the U.K. North Sea, utilizing a modern floating production, storage and offloading (FPSO) facility. The new FPSO, operated by Shell, will become the new export route for the revamped oil and gas production, replacing the previous route via the Brent Charlie platform, which discontinued its operations in 2021.

The redevelopment program also involved drilling additional wells tied back to the new FPSO.

SHEL’s Expectations From the Penguins Field

Shell expects the peak production of around 45,000 barrels of oil equivalent per day (boe/d) from the Penguins field with an estimated recoverable resource volume of around 100 million boe. The field is also expected to produce enough gas to heat around 700,000 U.K. homes annually.

Compared to Brent Charlie, the Penguins field is expected to have around 30% lower emissions and will extend the life of this key field by around 20 years, ensuring long-term contributions to the U.K.’s energy supply.

SHEL’s Revamp to Enhance the U.K.’s Energy Security

At present, the U.K. is dependent on imports to meet its oil and gas demands, and the Penguins field is a source of domestic oil and gas production that will satisfy the nation’s energy needs. Although the extracted oil will be transported to refineries outside the U.K., these facilities supply refined products back to the country because of their limited refining capacities. Additionally, natural gas from Penguins will be transported through an existing pipeline to the St. Fergus gas terminal in Scotland, feeding into the U.K.’s national gas network. This project highlights Shell’s continued investment in competitive and lower-emission energy solutions.

An Insight Into Penguins Field

The Penguins field, discovered in 1974, previously produced oil and gas between 2003 and 2021. The field is 165 meters of water depth, around 150 miles northeast of the Shetland Islands. The Penguins Redevelopment will involve drilling approximately eight wells and include a modern FPSO (operated by Shell with a 50% holding).

SHEL’s Zacks Rank and Key Picks

London-based Shell is one of the primary oil supermajors — a group of the U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some top-ranked stocks like SM Energy Company SM, Sunoco LP SUN and Gulfport Energy Corporation GPOR.While SM Energy and Sunoco currently sport a Zacks Rank #1 (Strong Buy) each, Gulfport Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Denver, CO-based SM Energy Company is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. The Zacks Consensus Estimate for SM’s 2024 earnings indicates 15.11% year-over-year growth.

Dallas, TX-based Sunoco LP is a master limited partnership that deals with distributing motor fuel to roughly 10,000 customers, including independent dealers, commercial customers, convenience stores and distributors. The Zacks Consensus Estimate for SUN’s 2024 earnings indicates 184.11% year-over-year growth.

Gulfport Energy is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America. The Zacks Consensus Estimate for GPOR’s 2024 earnings indicates 108.53% year-over-year growth.

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