Norwegian energy giant Statoil ASA’s (STO) share price rose by nearly 1% on the announcement that it has discovered oil at its wildcat well 30/11-10 in the North Sea. The development was reported by the Norwegian Petroleum Directorate (NPD). However, later the share price dropped over three consecutive sessions, finally closing at $17.83 per share on Dec 29, 2014.
The latest wildcat in the Oseberg area of the Norwegian North Sea was drilled by semisubmersible Transocean Leader at a depth of 344 feet. The well 30/11-10 in production license PL 035, was drilled just north of the 30/11-8S gas/oil/condensate discovery, which was made in 2011, and about 16 miles southwest of the Oseberg South field.
The well came across mobile oil in the mid-Jurassic Ness formation in good quality reservoir rocks. Per NPD, preliminary estimates about the size of the discovery range between 6.3 million barrels and 19 million barrels of oil. The result of the discovery can be ascertained by accessing the previous findings made under the same license.
The well represents the eighth exploration well in PL035. The license was awarded in Norway's second licensing round in 1969.
Recently, Statoil has delivered strong exploration results by making several high impact discoveries thereby adding significantly to its resource base. The latest finds give the company access to new regions of Norway, Russia, Azerbaijan, Tanzania as well as Australia, paving the way for long-term growth.
Statoil aims to achieve an equity production of above 2.5 million barrels of oil equivalent in 2020. The growth is expected to come from new projects during 2014–2016 that would result in a compound annual growth rate (CAGR) of 2–3% for the period of 2012–2016.
Statoil carries a Zacks Rank #5 (Strong Sell). Investors may consider better-ranked stocks like Spectra Energy Partners, LP (SEP), Seadrill Partners LLC (SDLP) and Sandridge Mississippian Trust II (SDR) all of which sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment