PetroChina (PTR) Carries Out Internal Transfer Of 16 Blocks

Per Reuters, PetroChina Company Limited (NYSE:PTR) , a subsidiary of state-owned China National Petroleum Corporation (“CNPC”), recently conducted an internal transfer of mining rights within its affiliates. It will enable the units that have mature fields to search for oil and gas in underdeveloped areas.

PetroChina has transferred 16 blocks for exploration and production, which incorporates blocks from Ordos, Sichuan and Qaidam basins. These blocks are mainly located in the central and western parts of China. The units of PetroChina, which received the blocks and currently operate in matured fields, are mainly located in Daqing, Huabei, Liaohe and Yumen. These affiliates mainly operate in the eastern part of the country.

A third of PetroChina's current crude oil volumes come from the Daqing Oil region, the largest crude oil producing region in China. However, it has matured over the years and is well past its prime. As the degree of difficulty in extracting crude oil from the mature Daqing field increases over time, costs will escalate. In fact, the company has warned that volumes could fall by 4.5% this year.

The move by PetroChina is thus expected to reduce resource imbalance at the company's units. The step also follows the government of China's broader sector reform drive.

About PetroChina

PetroChina is the largest integrated oil company in China. It was established in Nov 1999 as part of the restructuring of CNPC, a state-owned entity, which currently holds 86.35% stake in PetroChina. The company has four segments: Exploration & Production, Natural Gas & Pipelines, Refining & Chemicals, and Marketing.

PetroChina is expected to benefit from its robust portfolio of assets and leverage to the fast-growing Chinese economy. The company’s natural gas business will lucrative growth prospects in the coming years as China moves from coal to natural gas. Additionally, the integrated nature of its business is a positive for PetroChina. The company may take advantage of the current situation through its refining and marketing segments as lower prices have prompted higher sales.

Zacks Rank and Other Stocks to Consider

PetroChina has a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the oil and energy sector are ConocoPhillips (NYSE:COP) , Northern Oil and Gas, Inc. (NYSE:NOG) and Holly Energy Partners, L.P. (NYSE:HEP) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Houston, TX-based ConocoPhillips is a major global exploration and production company. The company’s sales for 2017 are expected to increase 24.4% year over year. The company delivered an average positive earnings surprise of 152.3% in the last four quarters.

Minnetonka, MN -based Northern Oil and Gas is an independent energy company. The company’s sales for the fourth quarter of 2017 are expected to grow 51.9% year over year. The company pulled off an average beat of 175% in the last four quarters.

Dallas, TX-based Holly Energy is a production pipeline company. The company’s sales for 2017 are expected to climb 10.4% year over year. The company came up with a positive earnings surprise of 57.1% in the third quarter of 2017.

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