European Stocks Set to Open Higher as Galp Energia Soars on Namibia Gas Discovery

European stocks are poised for a positive start on Monday, with the benchmark Stoxx 600 index up 0.3% in early trading. Retail stocks are leading the gains, while Portugal's Galp Energia has surged 17% after announcing a significant gas discovery in Namibia.

Galp Energia conducted testing operations at the Mopane-1X and Mopane-2X wells in Namibia's Orange Basin, where it discovered substantial light oil columns in high-quality reservoir sands. The company estimates the Mopane field could hold at least 10 billion barrels of oil equivalent, positioning it as a potentially transformative commercial discovery.

Citi analysts described the test results as close to a best-case scenario, confirming a "transformational" discovery for Galp Energia. The Portuguese oil and gas company holds an 80% stake in the Petroleum Exploration Licence 83 (PEL 83) in the Orange Basin.

The Mopane field could become a significant new revenue source for Galp Energia, which already has strong investments in projects off the coast of Brazil and in Mozambique's Rovuma Basin. In 2023, the company posted a record profit of 1 billion euros, up 14% from the previous year.

Why this matters: Galp Energia's discovery in Namibia has the potential to transform the company's prospects and significantly boost its oil and gas reserves. The find also highlights the ongoing exploration and development activities in Africa's offshore basins, which could attract further investment from international energy companies.

Galp Energia CEO Andy Brown expressed excitement about the discovery, stating, "This is a transformational discovery for Galp Energia and for Namibia. We look forward to working with our partners and the Namibian authorities to appraise and develop this world-class resource."

The positive sentiment from Galp Energia's discovery has contributed to the broader upbeat mood in European markets on Monday, as investors look to regain momentum after a somewhat uncertain sentiment last week due to Middle East tensions and repricing of interest rate expectations.

Key Takeaways

• Galp Energia discovers substantial light oil in Namibia's Orange Basin.
• Mopane field estimated to hold at least 10 billion barrels of oil equivalent.
• Galp Energia holds 80% stake in the Petroleum Exploration Licence 83 in Namibia.
• Discovery has potential to transform Galp Energia's prospects and boost oil/gas reserves.
• Positive sentiment from Galp's discovery contributes to broader upbeat mood in European markets.