Eni SPA E announced a significant oil and gas discovery with Sonatrach in Algeria's gas-rich Berkine North Basin.

The discovery is situated in the Zemlet el Arbi concession in the Algerian desert. It is operated by Eni and Sonatrach. The latest discovery is estimated to contain 140 million barrels of crude oil.

The companies drilled the exploratory well on the HDLE exploration prospect, situated about 15 kilometers from the Bir Rebaa North field processing facilities. The HDLE-1 well discovered light oil in the Triassic sandstones of Tagi formation. It encountered 26 meters of net pay of oil and gas, with excellent petrophysical properties.

HDLE-1 is the first well of the new exploration campaign planned for the Berkine North Basin. The exploration campaign involves drilling five wells in the North Berkine concessions. During the production test, the well delivered 7,000 barrels of oil per day and associated gas of 5 million standard cubic feet per day.

Since 1981, Eni has been contributing to Algeria’s growth, wherein it operates multiple concessions. The company has an equity production of 95,000 barrels of oil equivalent per day in the country. The latest discovery will back Eni’s near-field and infrastructure-led exploration strategy, enabling a rapid valuation of the new resources.

In December 2021, Sonatrach and Eni signed an oil exploration and production contract in the onshore Berkine basin area to expand their partnership in Algeria.The companies also signed a memorandum of understanding to work on initiatives aimed at Algeria’s energy transition.

Eni has a plan to drill four additional appraisal wells in Algeria. A second well, HDLE-2, will be drilled in April to confirm the additional capabilities of the structure extending in the adjacent Sif Fatima 2 concession. Beside this, Eni and Sonatrach are planning to proceed with the production phase of the latest discovery, with production expected in the third quarter of 2022.

Company Profile & Price Performance

Headquartered in Rome, Italy, Eni is one of the leading integrated energy players in the world.

Shares of Eni have underperformed the industry in the past six months. The stock has gained 12.2% compared with the industry’s 37.2% growth.

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Zacks Rank & Stocks to Consider

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

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.