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Exxon Mobil Corporation XOM has made a significant natural gas discovery off Egypt’s Mediterranean coast, an area of growing importance for the global energy sector. The find, announced in an emailed statement by the Texas-based energy giant, comes as Egypt seeks to revitalize its dwindling gas production and position itself as a regional energy hub.
ExxonMobil completed drilling the Nefertari-1 exploratory well in the North Marakia Block, approximately five miles off Egypt’s northern coastline. The well revealed gas-bearing reservoirs, and the company indicated that it will continue to evaluate the results. ExxonMobil entered this block in 2019 and sold a 40% stake to QatarEnergy in 2022, reflecting the region’s potential for collaborative energy investments.
The drilling operation was carried out using Valaris Ltd.’s DS9 drillship, a high-specification rig designed for deepwater exploration.
The Eastern Mediterranean has emerged as a hotspot for natural gas exploration following significant discoveries in Israeli waters in the late 2000s. The region’s proximity to energy-hungry markets in Europe and the Middle East enhances the economic appeal of any discovery, although ongoing political instability in the area poses challenges.
Egypt, once poised to become a major energy supplier for Europe, has experienced setbacks in recent years. As of June, gas production in the country declined to its lowest level since 2017, forcing the government to import liquefied natural gas (LNG) at levels unseen in six years. A severe dollar shortage further hampered investment, with foreign energy firms scaling back operations due to unpaid arrears by the Egyptian government.
In response, Egypt has launched a repayment plan aimed at restoring investor confidence. The country is targeting a return to LNG exports by the end of 2027, signaling a renewed commitment to bolster domestic production.
The Mediterranean Sea has become an increasingly important area for natural gas discoveries, with several multinational companies investing heavily in exploration. ExxonMobil’s success in the Nefertari-1 well could attract further investments and partnerships, enhancing Egypt’s efforts to restore its status as a major gas exporter.
XOM’s Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company SM, Sunoco LP SUN and TechnipFMC plc FTI. While SM Energy and Sunoco presently sport a Zacks Rank #1 (Strong Buy) each, TechnipFMCcarries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.