What happened
Investors in both Chevron (CVX 0.12%) and ExxonMobil (XOM -0.23%) had a good Friday, at least as far as their stocks' performance was concerned. On the back of a media report that a very promising new market is about to open, shares of both energy-sector incumbents rose at market-beating rates. Chevron closed the day 2.7% higher and ExxonMobil increased 2.3%; by contrast, the S&P 500 index crept up by 1.5%.
So what
In an exclusive article published well before market hours on Friday, The Wall Street Journal reported that Chevron and ExxonMobil are currently in "advanced" talks with Algeria's state-run energy company Sonatrach on a drilling agreement. Citing the North African country's energy minister Mohammed Arkab and "people familiar with the discussions," the newspaper added that a deal could be reached by the end of this year.
Algeria has vast deposits of natural gas, which is currently in demand in Europe due to the disruptions caused by the war in Ukraine (and the ensuing need for new sources). According to the Journal, the country is believed to hold the third-largest amount of shale gas reserves on this planet. At the moment, it has three pipelines through which it transports its gas to Europe.
What also makes the timing fortuitous is that Chevron and ExxonMobil have been benefiting greatly from the long-tail strength in oil demand and persistently high prices. This has given the two companies bulging coffers, and they are willing and eager to spend on promising new plays throughout the world.
Now what
The Journal said that an unnamed ExxonMobil spokeswoman confirmed her company had held discussions with Sonatrach, but would not provide additional detail. Chevron went a bit further, saying that it has signed an agreement with the government to access data in several oil and gas basins in the country.
