Eni Strikes Big With New Discovery in Sureste Basin

Eni SpA E, an Italian energy giant, has announced a major new oil discovery in the Yopaat-1 EXP exploration well in Block 9, located approximately 63 kilometers off the coast in the mid-deep waters of the Cuenca Salina in the Sureste Basin, offshore Mexico. The preliminary estimates suggest that the discovery holds around 300-400 million barrels of oil equivalents (Mboe) and associated gas in place.

The Yopaat-1 EXP well was drilled in a water depth of 525 meters and reached a total depth of 2,931 meters, encountering approximately 200 meters of net pay of hydrocarbon-bearing sands in the Pliocene and Miocene sequences. The drilling operation was accompanied by an extensive subsurface data acquisition campaign, ensuring a comprehensive understanding of the geological formation.

The Block 9 joint venture consists of Eni as the operator with a 50% participating interest and Repsol holding the remaining 50%. This discovery, in conjunction with other successful finds in Eni-operated Blocks 7 and 10, underscores the significant value of Eni's asset portfolio in the Sureste Basin. The overall estimate of resources now exceeds 1.3 billion barrels of oil equivalent (Bboe), paving the way for future development plans. Eni is exploring the potential for a "Hub" development to integrate this discovery with others in the area, leveraging the existing infrastructure.

Eni's presence in Mexico dates back to 2006, and in 2015, the company established its wholly-owned subsidiary, Eni Mexico S. de R. L. de C.V. Today, Eni stands as the leading foreign operator in the country, holding rights in eight exploration and production blocks in the Sureste Basin, of which the company operates seven.

Eni's latest discovery in the Sureste Basin marks a promising chapter in its Mexican operations, paving the way for future growth and development. The company's ongoing efforts to explore and develop new resources underscore its role as a key player in the global energy market.

With the support of its partner Repsol, Eni is well-positioned to capitalize on this discovery, driving forward its vision of a sustainable and prosperous energy future in Mexico.

Zacks Rank & Key Picks

E currently has a Zack Rank #3 (Hold).

Investors interested in the energy sector may look at some better-ranked stocks like Hess Corporation, Sunoco LP and SM Energy Company, each sporting a Zacks Rank #1 (Strong Buy) at present.

Hess is a leading oil and natural gas exploration and production company that made several world-class oil discoveries in the Stabroek Block, located off the coast of Guyana. The company is currently in the process of being acquired by supermajor Chevron in an all-stock deal worth $53 billion. The merger will likely result in the creation of an energy behemoth with a massive portfolio of producing assets. 

The Zacks Consensus Estimate for HES' 2024 EPS is pegged at $10.28. The company has a Zacks Style Score of B for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.

The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.17, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.

SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company's attractive oil and gas investments should create long-term value for shareholders.

The Zacks Consensus Estimate for SM's 2024 EPS is pegged at $6.95. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2025 in the past seven days.

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