Norwegian giant Statoil ASA (STO) has commenced the drilling of Snilehorn exploration prospect in the Norwegian Sea.
The Snilehorn prospect is being targeted by the 6407/8-6 well, which is 2.5 miles away from the Hyme producing oilfield also in the Norwegian Sea. Hyme produces into the facilities in Njord field.
The semi-submersible rig Songa Trym is being used to drill the well 6407/8-6 in production license (PL) 348 in a water depth of about 282 meters. The rig started drilling the Snilehorn well after plugging and abandoning well 6608/10-15, which succeeded in a discovery at the Svale Nord prospect in Statoil’s PL 128 last week.
The probe, estimated to have a total depth of around 3,205 meters, is being drilled along with a planned sidetrack well and will target oil and gas in the Jurassic Ile, Tilje and Åre Formations, which are similar to the Hyme reservoir.
Another partner in the license, Northern Europe-focused Faroe Petroleum, said if the drilling of this well is successful, Statoil intends to fast-track a development similar to the Hyme development.
The Snilehorn exploration well, is part of Faroe’s six-well program and provides an opportunity to enhance output at a low cost through a fast-track tie-back to the close by Hyme field.
Statoil is a major international integrated oil and gas company. We appreciate Statoil’s endeavors to improve recovery of resources in mature fields. The company has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the Norwegian Continental Shelf (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 carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1 (Strong Buy) stocks – China Petroleum & Chemical Corp. (SNP), SM Energy Company (SM) and Range Resources Corp. (RRC) – are good buying options for the short term.