Eni SpA E, the Italian energy giant, is actively considering additional sales of its upstream oil and gas assets, signaling continued efforts to optimize its portfolio. This move follows the company's recent agreement with global energy trading firm Vitol, involving selling stakes in assets located in the Ivory Coast and the Republic of Congo.
Speaking on Monday, Eni’s chief operating officer for upstream operations, Guido Brusco, noted that the company had received “significant expressions of interest” from investors after its latest asset divestments. The robust response is prompting Eni to continue working on these kinds of deals, Brusco added, hinting at further asset sales.
In March, Eni reached a deal with Vitol to offload stakes in upstream assets across the Ivory Coast and the Republic of Congo for a total consideration of $1.65 billion, as of Jan. 1, 2024, with a final cash adjustment to be made at closing. The transaction reflects Eni’s broader strategy to streamline its portfolio and attract capital through divestments while still advancing its energy transition goals.
The potential new sales could help Eni reallocate capital more efficiently, invest in energy transition projects, or reduce debt. At the same time, high investor interest indicates a resilient appetite for upstream oil and gas assets, particularly in Africa, where Eni has long maintained a significant footprint.
E currently has a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, Kinder Morgan, Inc. KMI and Enterprise Products Partners L.P. EPD. While Archrock presently sports a Zacks Rank #1 (Strong Buy), Kinder Morgan and Enterprise Products carry a Zacks Rank #2 (Buy) each. 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. AROC provides natural gas contract compression services and generates stable fee-based revenues.
Archrock’s earnings beat estimates in three of the trailing four quarters and met once, delivering an average surprise of 8.81%.
Kinder Morgan is a leading North American midstream player with a stable and resilient business model, largely driven by take-or-pay contracts, which ensure consistent earnings and facilitate reliable capital returns to shareholders. KMI operates one of the largest natural gas pipeline networks, positioning it to benefit from the projected increase in U.S. natural gas demand by 2030.
Kinder Morgan’s earnings beat estimates in one of the trailing four quarters, met once and missed in the other two, delivering an average negative surprise of 1.85%.
Enterprise generates stable fee-based revenues from its vast network of oil and gas pipelines spanning 50,000 miles, connecting prolific U.S. shale plays. Notably, the acquisition of Pinon Midstream, which aims to provide services in the prolific Permian Basin, is expected to drive the partnership’s cash flows. This move enhances its NGL value chain and addresses regional infrastructure constraints, with strong customer demand expected to boost revenues.
EPD’s earnings beat estimates in two of the trailing four quarters and missed in the other two, delivering an average surprise of 1.83%.
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