Norwegian oil giant Statoil ASA (STO), announced the completion of a two-well programme in the Krafla area in the North Sea along with its PL035 partners. Share price, however, has been trending downward post announcement and has shown a 5.4% fall.
The company has found significant new recoverable resources in the Krafla area since 2011. These comprise the licenses PL035 and PL272, consisting of Krafla Main, Krafla West, Askja West, Askja East and Krafla North. Other discoveries like the Krafla Main Tarbert appraisal well and oil detection in the Krafla North prospect have enhanced the strength of the Krafla field development project.
Statoil expects to have discovered approximately140–220 million barrels of oil equivalent of recoverable resources. The discovery has been made at an area located about 25 kilometers southwest of Oseberg South and 150 kilometers west of Bergen. Considering the maturity of the area of the shelf, the volumes are considerable.
Statoil makes relentless efforts to unlock the potential of the mature areas of the Norwegian Continental Shelf (NCS). Toward this aim, the company utilizes better recovery initiatives in producing fields and targeted exploration programmes in surrounding areas which are likely to boost productivity going forward. These discoveries in the Krafla area prove the existence of such growth opportunities in the North Sea.
Statoil operates PL035/PL272 with a 50% stake. The other partners – Svenska Petroleum Exploration AS and Detnorskeoljeselskap ASA – have an interest of 25% each.
Statoil’s endeavors to improve recovery of resources in mature fields are commendable. 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 steady production growth for the next few years on the back of its large resource base at NCS.
Statoil currently carries a Zacks Rank #5 (Strong Sell). Better-ranked players from the energy sector such as InterOil Corporation (IOC), Golar Energy Partners LP (GMLP) and Hallador Energy Company (HNRG) sport a Zacks Rank #1 (Strong Buy).
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