Exxon Mobil Corporation’s XOM Australian unit and Woodside Energy have approved the final investment decision for the Turrum Phase 3 project, a $221 million initiative aimed at tapping underdeveloped gas resources in the Gippsland Basin. The project will involve drilling five new wells in the Turrum and North Turrum gas fields, ensuring continued gas supply for Australia’s east coast.

Australia's competition regulator has warned that the country’s east coast could face gas shortages from 2027, potentially leading to reliance on imports. The Turrum Phase 3 project is seen as a critical step in mitigating this shortfall, contributing to the domestic market’s stability. Simon Younger, the chair of ExxonMobil Australia, noted that although the Gippsland Basin's resources will eventually be depleted, projects like Turrum will help sustain gas production in the Bass Strait beyond 2030.

The Gippsland Basin joint venture, a 50-50 partnership between Esso Australia Resources (a subsidiary of ExxonMobil) and Woodside Energy (Bass Strait), is operated by Esso Australia. The approval of Turrum Phase 3 follows the recent greenlight for the Kipper 1B project, another development aimed at increasing gas output from the region.

Woodside’s executive vice president, Liz Westcott, highlighted that these investments are crucial for preventing future supply shortages. She emphasized that all gas from the Bass Strait fields supports Australia’s domestic market.

With ExxonMobil and Woodside pushing forward with these projects, the Australian energy market is set to receive a much-needed boost in gas supply, potentially stabilizing domestic prices and ensuring energy security beyond the next decade.

XOM’s Zacks Rank & Key Picks

ExxonMobil currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, NextDecade Corporation NEXT and Oceaneering International, Inc. OII. While Archrock presently sports a Zacks Rank #1 (Strong Buy), NextDecade and Oceaneering each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. As demand for LNG continues to grow, the company’s strategic investments in infrastructure and planned liquefaction capacity provide strong upside potential. With the global LNG market expanding, NEXT is well-positioned to tap into the increasing export demand from the United States.

Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. With a geographically diverse asset portfolio and a balanced revenue mix between domestic and international operations, the company effectively mitigates risk. As a leading provider of offshore equipment and technology solutions to the energy sector, OII benefits from strong relationships with top-tier customers, ensuring revenue visibility and business stability.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

Oceaneering International, Inc. (OII) : Free Stock Analysis Report

Archrock, Inc. (AROC) : Free Stock Analysis Report

NextDecade Corporation (NEXT) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research