Statoil Hits Gas at Smorbukk

Norwegian major Statoil ASA (STO) has struck gas/condensate deposit in the Smorbukk North prospect at Haltenbanken in the Norwegian Sea.

Drilled by deepwater semisubmersible rig Transocean Leader, exploration well 6506/9-3, is situated on production license (PL) 479 in the Norwegian Sea. The well has proven a 130-foot gas/condensate column in the Gam formation of mid-Jurassic age. Moreover, a thin gas/condensate column was found deeper in the mid-Jurassic Ile formation.

The reservoir properties of the Garn formation are considered good, but it is somewhat inferior than expected in the Ile formation. The initial projected volume of the discovery is in the range of 25-47 million barrels of recoverable oil equivalent.

The three discoveries in the area including the Asgard field were all made in the 1980s. The latest find, which comes after nearly three decades is promising and validates the upside potential on the Norwegian Continental Shelf (NCS).

The Smorbukk North discovery is a high temperature well, positioned directly north of the Asgard field. It is likely to be developed rapidly and competently through a tie-in to available infrastructure. These will speed-up the availability of resources and likely extend the production life of the Åsgard production facilities.

Statoil, the operator of the license, has an interest of 40.95%. The other partners include Eni SpA (E), Petoro AS, ExxonMobil Corporation (XOM) and Total SA (TOT) with a holding of 19.6%, 14.95%, 14.7% and 9.8%, respectively.

Statoil’s endeavor to improve recovery of resources in mature fields is noteworthy. The company has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the NCS. We believe that Statoil is well positioned to sustain its production growth for the next few years on the back of its large resource base at NCS.

Statoil carries a Zacks Rank #4 (Sell).