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Nabors (NBR) Speeds Up Renewable Push, Backs Solar Firm Vast

Nabors Industries Ltd NBR recently introduced a new vision document to guide its energy transition efforts — "Energy Without Compromise." This will showcase the company's clean energy initiatives from its core business and its new renewable energy projects.

As part of the oil and gas drilling contractor’s carbon reduction efforts, Nabors Energy Transition Corporation (NETC) — a Nabors Industries-backed special-purpose acquisition company — has joined forces with Vast Solar, an Australian provider of renewable energy. The transaction, which is anticipated to close later this year, values the combined company at approximately $305 million-$586 million. The combined company, which will be owned 8% by Nabors and 38% by Vast shareholders, will retain the Vast brand name and continue to operate from Australia. It will also be listed on the New York Stock Exchange.

Vast Solar, which was founded in 2009, specializes in creating unique technologies for energy systems using concentrated solar power (CSP). CSP uses mirrors to reflect sunlight onto a receiver, which subsequently absorbs the solar energy as heat in sodium, as opposed to the typical photovoltaic (PV) solar panels, which transform light into electricity. Although the cost of wind and PV solar has greatly declined, their intermittency is a major issue that can only be solved with storage, according to Vast CEO, Craig Wood.

The company proposes to construct the utility-scale CSP facility VS1 at Port Augusta in South Australia, which will start operating in 2025. It also plans to unite its power generation technology with a green methanol production facility in the same location.

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Nabors is one of the largest land-drilling contractors in the world, conducting oil, gas, and geothermal land drilling operations.The Vast transaction is Nabors’ ninth and the biggest in the energy transition space.

Zacks Rank & Other Key Picks

Nabors currently carries a Zack Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other stocks for investors interested in the energy space include Murphy USA Inc. MUSA and Valero Energy Corporation VLO, both sporting a Zacks Rank #1, and Halliburton CompanyHAL, carrying a Zacks Rank #2.

Murphy USA operates stations close to Walmart supercenters and sells low-cost, high-volume fuel. This helps the company to get a lot more business than its competitors. Another significant competitive advantage for the firm is its access to product distribution centers and pipelines, which helps control costs in the intensely competitive retail sector. Over the past 30 days, MUSA has witnessed upward earnings estimate revisions for 2023 and 2024.

Valero Energy, a TX-based company, is the largest independent refiner and marketer of petroleum products in the United States. With 15 refineries spread across Canada, the United States and the United Kingdom, it has a daily refining capacity of 3.1 million barrels. Over the past 30 days, VLO has seen an upward revision in earnings estimates for 2023.

Halliburton Company, one of the major oilfield service companies in the world, provides a range of construction, engineering, and maintenance services to the energy, industrial, and government sectors. Over the past 30 days, HAL has witnessed upward earnings estimate revisions.

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Halliburton Company (HAL) : Free Stock Analysis Report

Nabors Industries Ltd. (NBR) : Free Stock Analysis Report

Valero Energy Corporation (VLO) : Free Stock Analysis Report

Murphy USA Inc. (MUSA) : Free Stock Analysis Report

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