Statoil's North Sea Prospect Turns Out Dry

Zacks Equity Research

Norwegian oil major Statoil ASA (STO) has drilled a dry well at the Juv prospect in the Norwegian sector of the North Sea.

Drilled by semi-submersible Songa Trym, about 35 miles north of the Fram field in the North Sea, the wildcat well 35/11-16S, encountered only traces of petroleum in a targeted Upper Jurassic rock (intra-Draupne formation sandstone). Hence, it has been classified as dry by the Norwegian Petroleum Directorate. The well was drilled from PL 248C, targeting the prospect PL090B.  

Statoil’s aim of drilling this probe was to establish additional resources for a potential development of its earlier Astero discovery. The state-owned explorer carries a 60% stake in the license with Petoro holding the remaining 40%.

Drilled to a vertical depth of 3,211 meters below sea level in a water depth of 367 meters, the well, will now be permanently plugged and abandoned.

The rig owned by Songa Offshore will then be moved to drill another wildcat, 35/11-17, for Statoil. Located at the F-West prospect in its adjacent operated PL90, 35/11-17 is also being targeted in relation to Astero.

Statoil’s endeavor to improve recovery of resources in mature fields is noteworthy. 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 currently holds a Zacks Rank #4 (Sell). Other stocks in the oil and gas sector such as Helmerich & Payne, Inc. (HP), Matrix Service Co. (MTRX) and Patterson-UTI Energy Inc. (PTEN) with a Zacks Rank #1 (Strong Buy) are expected to outperform.

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