ExxonMobil's GPX Project Set to Resume After Settlement

A bankruptcy judge has approved a crucial settlement between the joint venture behind Exxon Mobil Corporation's XOM $10-billion Golden Pass liquefied natural gas project in Texas and the lead contractor, Zachry Holdings Inc. The decision allows other companies to take over and complete the project, which had faced significant delays.

Located near the Louisiana border, the Golden Pass LNG facility's construction had been nearly halted after Zachry Holdings filed for Chapter 11 bankruptcy in March. The filing came after the project, known as GPX, experienced cost overruns totaling at least $2.4 billion beyond its original budget. Consequently, Zachry Holdings let go of thousands of workers, severely impacting the construction timeline.

QatarEnergy holds a 70% stake in the Golden Pass LNG venture, while ExxonMobil owns the rest. The approved settlement involves transferring Zachry's unfinished work to CB&I LLC, a unit of McDermott International Inc., and Chiyoda International Corp. However, the timeline for restarting construction and completing the project remains uncertain. The first LNG cargoes were initially expected in the first half of 2025.

The settlement fully resolves the financial and legal disputes among the parties involved. Zachry Holdings stated that the agreement would expedite its bankruptcy restructuring process, allowing the company to emerge stronger and better positioned for growth.

The Golden Pass LNG project, situated at the Sabine Pass site of a former gas-import terminal, is designed to process natural gas for LNG exports. It is one of two significant U.S. LNG facilities slated to considerably boost the supply of superchilled fuel from the world's top exporter within the next 12 months.

The development marks a significant step forward for the Golden Pass LNG project, which has faced numerous challenges and delays. This ambitious project aligns with ExxonMobil's strategic vision to enhance the natural gas supply chain from the world's leading exporter.

Zacks Rank & Stocks to Consider

ExxonMobil currently carries a Zack Rank #4 (Sell).

Investors interested in the energy sector may look at some better-ranked companies mentioned below. These three companies presently sport a Zacks Rank #1 (Strong Buy).

SM Energy Company SM 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 shareholder value.

The Zacks Consensus Estimate for SM's 2024 and 2025 earnings per unit is pegged at $7.09 and $8.66, respectively. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

Sunoco LP SUN 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 more than 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value and Growth Score of A.

The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.26, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.

GeoPark Ltd. GPRK, based in Hamilton, Bermuda, is an explorer, operator and consolidator in the oil and gas sector. The company primarily operates in Chile, Colombia, Brazil and Argentina. It has a Zacks Style Score of A for Value and B for Growth.

The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $3.23 and $3.98, respectively. The company has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.

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