Equinor ASA EQNR realized first oil from the Peregrino phase 2 project in Brazil.

Located in the Campos Basin, Peregrino is the largest field operated by Equinor outside of Norway. Peregrino Phase 2 produced oil from a new wellhead platform and a new drilling platform, Peregrino C.

Peregrino is the first of several major field developments in Brazil. Equinor operates the Peregrino field with a 60% interest.

Peregrino Phase 2 involves a new platform with drilling rigs and living quarters tied to the existing Peregrino FPSO. The new platform will provide 350 long-term offshore and onshore jobs in Brazil. The project also involved a new pipeline for importing gas to the Peregrino C platform for power generation.

In April 2020, production from the offshore Peregrino field was suspended after a water injection riser was detected to rupture during a leak test. Since then, Equinor has carried out a significant program of maintenance, upgrades and repairs to the FPSO vessel. Equinor began producing oil from the Peregrino field last July, after more than two years since production was suspended.

Equinor has made significant investments to reduce carbon dioxide emissions from the Peregrino field, in line with its low carbon strategy. Phase 2 is expected to reduce absolute emissions by 100,000 tonnes of carbon dioxide per year from the field.

Phase 2 of the Peregrino project will likely extend the life of the offshore field and add 250-300 million barrels of oil. Despite covid-related challenges, the phase 2 project was completed within initial cost estimates of $3 billion.

The launch of Peregrino Phase 2 is a major milestone in Equinor’s growth strategy in Brazil. The project allows the company to introduce valuable new resources into production, while investing in technology to reduce emissions. Notably, Peregrino Phase 2 will increase production from the field to 110,000 barrels per day on the shelf and reduce its emissions intensity by 50%.

Price performance

Equinor shares have underperformed the industry over the past three months. The stock gained 9.8% against industry growth of 17.3%.

Image source: Zacks Investment Research

Zacks Ranking and Other Stocks to Consider

Equinor is currently carrying a Zack Rank #2 (Buy).

Investors interested in the energy sector could look to the following companies that currently sport a Zacks #1 (strong buy) ranking. You can see the full list of today’s Zacks #1 Rank stocks here.

freedom of energy LBRT provides hydraulic fracturing services to upstream onshore energy companies in multiple basins across North America. LBRT’s debt-to-capitalization ratio is only 16% compared to many of its peers, which are heavily leveraged, representing around 50% of their total capital structure.

Liberty Energy has witnessed upward revisions to earnings estimates for 2022 and 2023 over the past 60 days. The company currently has a Zacks style score of A for growth and B for value. LBRT is expected to see a 272.6% increase in profits in 2022.

ExxonMobil Corporation XOM is one of the world’s leading integrated energy companies. At the end of the second quarter of 2022, XOM’s total cash and cash equivalents were $18.9 billion and long-term debt was $39.5 billion. The company has significantly lower debt exposure than other large integrated companies.

ExxonMobil has witnessed upward revisions to earnings estimates for 2022 and 2023 over the past 30 days. The company has a Zacks Style Score of A for growth and momentum, and B for value. XOM is expected to experience 144.2% earnings growth for 2022.

EQT Corporation EQT is a pure-play Appalachian explorer, which is one of the largest natural gas producers in the United States. For 2022, the company expects free cash flow of $2.2 billion to $2.5 billion, suggesting an increase from the $934.7 million reported last year.

EQT Corp has witnessed upward revisions to earnings estimates for 2022 and 2023 over the past 30 days. The company has a Zacks style score of B for growth. EQT is expected to experience 369.6% earnings growth in 2022.

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Equinor ASA (EQNR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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