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ExxonMobil's $1.28 Billion Nigeria Deal With Seplat Nears Approval

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Exxon Mobil Corporation’s (XOM - Free Report) divestment of its Nigerian onshore assets to Seplat Energy is set to be approved in the coming days, as stated by Nigeria’s president Bola Tinubu, according to a Reuters report. This $1.28 billion deal has been under scrutiny since its announcement in 2022, with many analysts viewing it as a key indicator for the approval of similar transactions in the region.

XOM’s Strategic Move in Nigeria

ExxonMobil’s decision to sell its Nigerian onshore assets to Seplat Energy highlights its ongoing shift in strategy. Amid challenges such as crude oil theft and pipeline vandalism in the Niger Delta, the company is increasingly focusing on deepwater projects for expansion. This sale, which has now secured regulatory clearance, will be finalized shortly following ministerial approval, Tinubu confirmed in a televised address commemorating Nigeria's 64th independence anniversary.

The Nigerian Upstream Petroleum Regulatory Commission is yet to make an official announcement, but the president’s remarks suggest that the deal will be closed soon.

XOM’s Broader Investment Plans

In addition to the Seplat transaction, ExxonMobil has signaled its long-term commitment to Nigeria with a proposed $10 billion investment in offshore oil operations. This investment marks a renewed push by XOM to expand its deepwater portfolio in the country. Tinubu’s administration has placed emphasis on regulatory reforms aimed at attracting foreign investors, having already secured more than $30 billion in foreign direct investments since he assumed office.

XOM and Nigeria's Economic Climate

While ExxonMobil is moving ahead with its Nigerian ventures, the country continues to grapple with economic challenges. Tinubu’s administration has implemented sweeping fiscal reforms, including easing foreign exchange controls and cutting fuel subsidies, which have sparked domestic discontent due to rising living costs. However, Tinubu has pledged further reforms, such as reducing taxes on businesses, to make Nigeria more attractive to foreign investors like XOM.

The imminent approval of the ExxonMobil-Seplat deal should pave the way for more energy sector transactions and reinforce Nigeria’s ambition to remain a top oil-producing nation despite the ongoing challenges.

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 TechnipFMC plc (FTI - Free Report) , Core Laboratories Inc. (CLB - Free Report) and VAALCO Energy, Inc. (EGY - Free Report) . While TechnipFMC sports a Zacks Rank #1 (Strong Buy) at present, Core Laboratories and VAALCO carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry, with a focus on the subsea segment in offshore basins worldwide. FTI’s growing backlog ensures strong revenue visibility and supports margin improvements.

The Zacks Consensus Estimate for FTI’s 2024 EPS is pegged at $1.34. The company has a Zacks Style Score of B for Value and A for Growth. It has witnessed upward earnings estimate revisions for 2025 in the past 60 days.

Core Laboratories, an oilfield services company, has a deep portfolio of sophisticated, proprietary products and services that positions it to take advantage of the growing maturity in the global hydrocarbon reserve base. CLB’s expanding international upstream projects indicate a positive trajectory for revenues and profitability, especially as oil demand continues to rise globally.

The Zacks Consensus Estimate for CLB’s 2024 EPS is pegged at $0.95. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2025 in the past 30 days.

VAALCO Energy is an independent energy company involved in upstream business operations, with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company’s production outlook seems bright.

The Zacks Consensus Estimate for EGY’s 2024 EPS is pegged at $0.65. The company has a Value Score of A. It has witnessed upward earnings estimate revisions for 2024 in the past 60 days.

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