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BP plc (BP) Expands Footprint in Offshore Newfoundland

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U.K. supermajor BP plc (BP - Free Report) emerged as a big winner in the latest call for bids by the Canada-Newfoundland & Labrador Offshore Petroleum Board (“C-NLOPB”) for deep-water zones off Eastern Newfoundland and the Jeanne d'Arc basin.

An amount of nearly C$758 million (US$565.3 million) was collected by C-NLOPB in work commitments from operators that intend to explore the promising frontier region.

A minimum amount of C$10 million was required for the bidders to offer in work commitments for an initial nine-year license.

A total of six parcels were awarded by the C-NLOPB off eastern Newfoundland for the seven bids made in the licensing round.

The bid for the 233,654-hectare Parcel 3 was the biggest and attracted C$276.3 million. The parcel will be operated by BP’s Canadian subsidiary with a stake of 50%. Other partners in the parcel are Hess Corporation (HES - Free Report) and Noble Energy, Inc. , each with 25%.

The three parties – BP, Noble Energy and Hess – also joined in to bid about C$125.2 million on the 252,482 hectare Parcel 8 as well as committed C$12 million to the 192,807 hectare Parcel 4.

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BP and Noble Energy will have a stake of 60% and 40%, respectively, in Parcel 10 – a 264,249 hectare tract.

Parcel 13 – a 169,578 hectare tract – saw Chinese firm Nexen Energy gain complete ownership by bidding C$40.2 million in work commitments.

Parcel 7 – a 202,138-hectare tract – saw Navitas Petroleum and DKL Investments jointly bidding C$48 million. Upon winning the bid the companies gained stake of 30% and 70%, respectively. .

C-NLOPB awarded two parcels in the Jeanne d'Arc basin spanning across 353,843 hectares. A total of three bids were received.

Husky Energy won blocks – Parcel 1 and Parcel 2 – with a 100% stake. It bid C$155 million on Parcel 1 (138,339 hectares) and C$89 million on Parcel 2 (73,235 hectares).

In Jan 2017, the successful bidders will receive exploration licenses from C-NLOPB.

BP currently has a Zacks Rank #3 (Hold). A better-ranked player from the same sector is SunCoke Energy Inc. (SXC - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SunCoke Energy posted a positive earnings surprise of 177.78% in the preceding quarter. It reported a positive earnings surprise in three of the four preceding quarters.

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