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Equinor (EQNR) Gets Approval for Canada's Bay du Nord Project

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Equinor ASA (EQNR - Free Report) received approval from the Canada government to proceed with the Bay du Nord development project to drive the Newfoundland and Labrador economy.

Discovered in 2013, Bay du Nord is situated in the Flemish Pass region off the coast of Newfoundland and Labrador. Once completed, it will be the first deepwater drilling site in Canada. The project, operated by Equinor, is currently expected to be valued at more than $12 billion.

Bay du Nord has faced strong opposition from environmental groups as it was believed to hinder the desperate attempts to reduce emissions and protect the environment from climate change. After conducting an environmental analysis, the Canada government found that the project will not cause adverse environmental impacts due to the implementation of mitigation measures.

The Bay du Nord project was years in the making due to environmental problems. The decision on whether Bay du Nord would proceed was initially scheduled for December 2021. It was delayed for 90 days. In March, Equinor faced a second delay in reaching a decision on the project and was extended for 40 more days.

Equinor plans to use a massive floating production, storage and offloading vessel, capable of producing up to 200,000 barrels per day. The project involves three light oil discoveries in the Flemish Pass Basin, with estimated recoverable resources of 300 million oil barrels. Additional discoveries in the area could increase the estimate significantly. The project is expected to commence production as early as 2028.

Bay du Nord will be a key driver to help meet the global oil demand, while supporting the country's pledge to carbon neutrality by 2050. The project is also crucial to the Newfoundland and Labrador economy as it would provide significant employment and economic opportunities.

Company Profile & Price Performance

Headquartered in Stavanger, Norway, Equinor is one of the leading integrated energy companies in the world.

Shares of EQNR have outperformed the industry in the past six months. The stock has gained 43.4% compared with the industry’s 26.3% growth.

 

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Zacks Rank & Stocks to Consider

Equinor currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Viper Energy Partners LP (VNOM - Free Report) generates strong and steady royalty income from mineral interests in Eagle Ford and the Permian Basin. At 2021-end, VNOM estimated its proved reserves at 128 million barrels of oil equivalent (MMBoe), suggesting a year-over-year increase of 29%.

Viper Energy’searnings for 2022 are expected to increase 94.8% year over year. VNOM was authorized by the board of directors of its general partner to make a cash distribution of 47 cents per common unit, payable Mar 11, 2022, to shareholders of record as of Mar 4, 2022. The metric increased almost 24% from the prior-quarter figure of 38 cents per common unit.

Centennial Resource Development, Inc. is an independent oil and gas exploration and production company. As of Dec 31, 2021, CDEV’s total proved reserves of 305 million barrels of oil equivalent increased 2.1% year over year.

Centennial Resource’s earnings for 2022 are expected to increase 113% year over year. At the end of the fourth quarter, CDEVhad a net debt to capitalization of 23.1%. Notably, the company’s debt-to-total capital ratio has persistently been lower than the industry since last year, reflecting lower debt exposure. This can provide it with financial flexibility for growth projects.

TotalEnergies SE (TTE - Free Report) is among the top five publicly traded global integrated oil and gas companies based on production volumes, proved reserves and market capitalization. At present, the company has more than 12 years of proved reserves, and in excess of 20 years of proved and probable reserves.

TTE’s earnings for 2022 are expected to increase 34.7% year over year. TotalEnergies is managing long-term debt quite efficiently and trying to keep the same at manageable levels. Its debt to capital has been declining over the past few years. As of Dec 31, 2021, TotalEnergies’ cash and equivalents were $21,342 million, enough to address the current borrowings of $13,645 million.


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