The Zacks Analyst Blog Highlights: Eni SpA, ExxonMobil, Total SA, ConocoPhillips and Albemarle
CHICAGO, Sept. 17, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Eni SpA (NYSE:E-Free Report), ExxonMobil Corporation (XOM-Free Report), Total SA (TOT-Free Report), ConocoPhillips (COP-Free Report) and Albemarle Corporation (ALB-Free Report).
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Here are highlights from Monday's Analyst Blog:
Eni's Kashagan Flows First Oil
Italian oil and gas company Eni SpA (NYSE:E-Free Report) announced that the giant Kashagan oil field in Kazakhstan has started producing oil.
Located in the North Caspian Sea, approximately 80 kilometers southeast of Atyrau, in Kazakhstan – the Kashagan oil field – remains one of the largest finds. Since the field was discovered back in 2000, it clearly hints at the challenges faced by companies in discovering such vast resources today.
The production from the field got delayed by almost a decade. Moreover, its $41.2 billion cost makes it the most expensive oil project. Various technical problems, dispute with the Kazakh government and disagreement among oil companies were the main reasons for the delay.
Eni has a stake of 16.81% in the consortium for the development of Kashagan. The company is also accountable for development and start of production of the field through Agip Kazakhstan North Caspian Operating Company.
The consortium is represented by NCOC (North Caspian Operating Company), which operates within the North Caspian Sea Production Sharing Agreement (NCSPSA). Other partners include KazMunayGas, ExxonMobil Corporation (XOM-Free Report), Royal Dutch Shell plc (RDS.A), Total SA (TOT-Free Report), ConocoPhillips (COP-Free Report) and Inpex, holding 16.81%, 16.81%, 16.81%, 16.81%, 8.4% and 7.56%, respectively.
Inspite of having drilled several wells, the initial yield was just 26,000 barrels a day. Eventually, the project is expected to add around 1.5 million barrels of oil per day to the global yield. This amount will be equivalent to around 1.6% of the world's total or roughly the amount Libya produces.
The yield is projected to grow up to 180,000 barrels per day, in the initial phase, until the spring of 2014 and gradually increase to about 370,000 barrels of oil equivalent per day by the end of 2014 and the beginning of 2015.
Considered as one of the most complex and challenging industrial projects worldwide, the oilfield is estimated to hold recoverable resources of 35 billion barrels of oil in place.
Eni carries a Zacks Rank #3 (Hold).
Albemarle Downgraded to Strong Sell
On Sep 14, Zacks Investment Research downgraded chemical company Albemarle Corporation (ALB-Free Report) to a Zacks Rank #5 (Strong Sell).
Why Downgraded?
Albemarle posted disappointing second-quarter 2013 results on Jul 17. The company reported adjusted earnings (excluding non-operating items) of 97 cents a share in the quarter compared with $1.28 a share earned in the year-ago quarter. The results were below the Zacks Consensus Estimate of 99 cents.
The company delivered negative earnings surprises in two of the last four quarters, but it recorded an average positive surprise of 3.01% for the last four quarters.
Revenues decreased 7.4% to $634.2 million in the quarter from $684.9 million in the year-ago quarter, missing the Zacks Consensus Estimate of $660 million. The results were impacted by Albemarle's exit from the phosphorus flame retardants business, lower metals surcharges, unfavorable pricing in bromine portfolio and lower Fine Chemistry Services volumes, partly offset by favorable volumes in Refinery Catalysts and Brominated Flame Retardant businesses.
Net sales in the Fine Chemistry segment slipped 16% to $176.1 million in the second quarter from $208.1 million in the previous-year quarter primarily due to unfavorable sales volumes and pricing. Net sales in the polymer solutions segment also slipped 9% to $224.3 million due to phosphorus flame retardants business exit in the second quarter of 2012 and overall lower flame retardant pricing, partly offset by favorable flame retardants volumes.
Sluggish economic environment across Europe, weak electronics and construction markets, and lower metals surcharges at the beginning of 2013 impacted Albemarle's performance. However, Albemarle successfully met several key milestones with the bromine and organometallics expansions, which are expected to be beneficial to the company on a long-term basis.
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