Petrobras PBR recently announced the sale of its entire stake in four onshore production fields in the State of Espírito Santo (jointly called Norte Capixaba Cluster) to Seacrest Petróleo SPE Norte Capixaba Ltda (Seacrest). The transaction is part of PBR’s divestment plan to reduce debt and focus on deepwater exploration and production. It involves four onshore fields — Canc, Fazenda Alegre, Fazenda So Rafael and Fazenda Santa Luzia.
The Norte Capixaba Cluster contributes 3.3% to Petrobras' production in the State of Espírito Santo. Seacrest paid $426.65 million to PBR and owes another $66 million in contingent payments that are to be based on future prices of international crude benchmark Brent. The deal is valued at $544 million in total.
The transaction does not impact Petrobras' other undertakings in the region, where it continues operations in major deepwater fields like Parque das Baleias, in addition to seven exploratory areas. The state also hosts the company's Cacimbas and Sul Capixaba natural gas processing units, as well as Barra do Riacho Waterway Terminal.
This sale is significant for Petrobras as it reduces the company's stake in onshore fields and reinforces its commitment to deepwater exploration and production. Despite the controversy surrounding PBR’s divestment plan, the company announced that it will maintain its commitments made in the Strategic Plan 2023-27 for the State of Espírito Santo. It will lay emphasis on the deployment of the Maria Quitéria platform at Parque das Baleias, the interconnection of new wells and an increase in its production curve by 2027.
Besides a targeted investment of $20 billion in chartering new platforms, the plan projects capital investments of $78 billion for PBR’s overall operations over the next five years. The exploration and production segment will receive 83% of the projected amount, while the refining, gas and power segments will receive 12%.
In conclusion, Petrobras' sale of its entire stake in four onshore fields in the State of Espírito Santo is a significant development in its divestment plan.
Zacks Rank and Key Picks
Petrobras, headquartered in Rio de Janeiro, is the largest integrated energy company in Brazil and one of the largest in Latin America. It engages in activities like oil exploration, exploitation, refining, processing, trading and transportation. PBR also deals in natural gas, fluid hydrocarbons and other energy-related activities. Currently, Petrobras carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like Sunoco (SUN), sporting a Zacks Rank #1 (Strong Buy), and Marathon Petroleum (MPC) and Ranger Energy Services (RNGR), each holding a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco: SUN is worth approximately $4.59 billion. Its shares have risen 7.9% in the past year.
Sunoco is a Dallas-based MLP that distributes motor fuel to more than 10,000 customers in 30+ states. Its general partner, Sunoco GP LLC, is owned by Energy Transfer Operating LP, an affiliate of Energy Transfer LP.
Marathon Petroleum: MPC is valued at around $58.02 billion. It delivered an average earnings surprise of 20.91% for the last four quarters and its current dividend yield is 2.30%.
Marathon Petroleum currently has a forward P/E ratio of 6.36. In comparison, its industry has an average forward P/E of 9.10, which means the company is trading at a discount to the group.
Ranger Energy Services: RNGR is valued at around $242.99 million. In the past year, its shares have risen 18.5%.
Ranger Energy Services currently has a forward P/E ratio of 5.30. In comparison, its industry has an average forward P/E of 11.60, which means the company is trading at a discount to the group.
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