Exxon Mobil Corporation (XOM Quick QuoteXOM - Free Report) , the U.S. oil and gas giant, is scheduled to drill a well targeting natural gas finds offshore Cyprus in January 2025. Since the Russian invasion of Ukraine in 2022, many major energy companies have been trying to explore new energy reserves in the Mediterranean region in an attempt to diversify from Russia.

Many oil-producing companies have been eyeing the East Mediterranean region, where many natural gas discoveries have been made in recent years. Following the invasion of Ukraine, Europe witnessed energy supply disruptions and moved toward finding new resources to ensure the region’s energy security.

ExxonMobil secured exploration licenses in Cyprus in 2017. The company made a significant gas find in 2019 at a well named Glaucus. The drilling activity, scheduled for next year, includes two wells, namely Pegasus and Electra. Per a senior executive at XOM, the Electra well is anticipated to yield promising results.

Electra is located in Block 5, one of Cyprus’ 13 offshore exploration areas. According to Reuters, Electra has a huge prospect of becoming a standalone development. This means that it has the potential to become a commercially viable resource on its own. However, the company mentioned that it needs to conduct appraisal drilling of the well before reaching any conclusion. Additionally, Pegasus is situated close to Glaucus in Block 10 offshore Cyprus.

ExxonMobil mentioned that it has gathered comprehensive, three-dimensional seismic data that indicate the presence of hydrocarbon reserves. The company has identified huge prospects in the region, and it is taking the next step in the exploration phase, which involves testing the potential using a drilling rig. XOM holds licenses over two offshore blocks in partnership with QatarEnergy to explore oil and gas reserves in the country.

XOM’s Zacks Rank and Key Picks

Currently, XOM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Smart Sand, Inc. (SND Quick QuoteSND - Free Report) , FuelCell Energy (FCEL Quick QuoteFCEL - Free Report) and Nine Energy Service (NINE Quick QuoteNINE - Free Report) , each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Smart Sand is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained oil and gas market demand, SND is expected to see growing demand for its services, reflecting a positive outlook.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. The company operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the need for NINE’s services is anticipated to increase, which should position the company for growth in the long run.