Norway-based major international integrated oil and gas company, Statoil ASA (STO) announced that oil and natural gas production has started from its Jack/St. Malo project in the U.S. Gulf of Mexico. The addition of production from Jack/St. Malo is an important building block in Statoil's plan for a more than four-fold increase in offshore production from the U.S. Gulf of Mexico by 2020.
The Jack and St. Malo fields are located within 25 miles of each other in approximately 7,000 feet (2,100 meters) of water in the Walker Ridge area, approximately 280 miles (450 km) south of New Orleans, LA. The fields were co-developed with subsea completions flowing back to a single host, semi-submersible floating production unit located between the fields, with a production capacity of 170,000 barrels of oil and 42.5 million cubic feet of natural gas per day.
Total production from the two fields is expected to eventually ramp up to 94,000 barrels of oil-equivalent per day. Statoil's expected production from the combined fields is approximately 23,000 barrels of oil per day at peak production. The Jack and St. Malo fields were discovered in 2004 and 2003, respectively, and are estimated to contain combined total recoverable resources in excess of 500 million oil-equivalent barrels. Statoil has a working interest of 25% in the Jack field, with co-owners Chevron Corporation (CVX) (50%) and Maersk Oil (25%). Statoil also holds a 21.5% working interest in the St. Malo field.
Statoil is an integrated oil and gas company. One of the world's biggest sellers of crude oil, Statoil is also a major supplier of natural gas in the European market with substantial industrial operations. The group has service stations in the Scandinavian countries, Ireland, Poland, the Baltic states and Russia.
In recent times, Statoil has delivered strong exploration results, adding significantly to its resource base by making several high impact discoveries. The latest finds give the company access to new regions in Norway, Russia, Azerbaijan, Tanzania as well as Australia, paving way for long-term growth.
Statoil aims to achieve an equity production of above 2.5 million barrels of oil equivalent in 2020. This growth is expected to come from new projects from 2014 to 2016 that would result in a compound annual growth rate of 2% to 3% for the period 2012 to 2016. The second stream of projects is expected within the 2016−2020 period that would likely lead to a CAGR of 3% to 4%.
Statoil currently carries a Zacks Rank #4 (Sell). Better-ranked players in the energy sector include Murphy USA Inc. (MUSA) and Sandridge Mississippian Trust II (SDR). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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