Tuesday, September 3, 2013

This Oil Major Has Discovered A Billion Barrels Of Oil But Nobody Cares - Why?

Very few energy companies can claim to be more successful at finding oil in 2013 than Eni SpA (NYSE:E). The Italian energy giant, which is 30% owned by the government, has made some of the biggest oil and gas discoveries this year in Africa, Europe and Asia but in the last 52 weeks, due to its own inefficiencies and the problems with its oilfield services subsidiary Saipem SpA, its ADR has been up just 4.28%. Several analysts have identified (such as here), that Eni is undervalued as compared to its peers like Total (NYSE:TOT) and Royal Dutch Shell (NYSE:RDS.A). I believe that its undervaluation is justified and the company will continue to underperform in the coming quarters.
Oil Discoveries
In 2013 alone, Eni has confirmed 11 discoveries representing a total of nearly a billion barrels of oil equivalents. Some of the bigger ones have been in Ghana, Pakistan, Egypt and Mozambique. More recently, Eni hit .... Read More