Statoil ASA STO has entered into a number of deals involving farm in and farm out of various fields, which are likely to increase the company’s operatorship in priority areas. The transactions will also enhance its control over asset development and costs through shared efficiencies.
Statoil intends to divest a 15% interest in the Gudrun field on the Norwegian Continental Shelf to Repsol. Even after shedding the stake, Statoil will remain the operator and largest equity holder with an interest of 36%.
Also, Statoil plans to purchase equity of 31% in the U.K. license for Alfa Sentral, a field spread across the U.K.-Norway maritime border. The deal is subject to approval from partner, Repsol.
On approval, the agreement on Alfa Sentral will augment Statoil’s holding in the U.K. license for the field. This transaction comes on the heels of the agreement between Statoil and First Oil in Nov 2015. If the deal comes through, Statoil will become the largest equity holder in the Alfa Sentral field in both the U.K. and Norway licenses. This will also boost the company’s share of the resource base and its potential future profitability. The field is an important project for Statoil and its development, as a tie back to the existing Sleipner infrastructure, will help to extend and further develop the Sleipner area.
Moreover, Statoil intends to acquire a 13% stake in the Eagle Ford joint venture from Repsol. With this purchase the company will become the field’s sole operator. This will facilitate Statoil to optimize field development along with efficiency in operations and cost savings.
Lastly, Statoil will undertake operatorship of the BM-C-33 license in Brazil’s Campos basin, in agreement with its license partners. The license is currently pending approval from authorities. Upon receiving formal approval from the Brazilian authorities, Statoil will be able to utilize its deep-water and gas experience to develop the BM-C-33 discoveries.
Both the transactions for Gudrun and Eagle Ford are valued at the same amount and have the same effective dates of Jan 1, 2015. The deals are expected to achieve closure before the end of 2015, subject to government approvals.
Currently, Statoil carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Energy Transfer Equity, L.P. ETE, ReneSola Ltd. SOL and Boardwalk Pipeline Partners, LP BWP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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