Equinor (EQNR) Hires Drilling Rig for Bay du Nord Project
Equinor ASA EQNR hired a drilling rig to carry out an exploration program for its Bay du Nord project.
Discovered in 2013, Bay du Nord is situated in the Flemish Pass region off the coast of Newfoundland and Labrador. Once completed, it will be the first deepwater drilling site in Canada. Bay du Nord involves six discoveries with significant additional near-field prospectivity.
The Hercules semi-submersible drilling rig has been awarded a contract to carry out the exploration drilling program. Hercules is a sixth-generation deepwater semi-submersible drilling rig, which is capable of operating 3,000 meters below the water surface. It will start exploring the Flemish Pass Basin next year.
The project was initially delayed due to rising expenses and the coronavirus pandemic. However, the project was resumed after some nearby discoveries increased resources and potentially secured the environmental all-clear from Ottawa.
In May, Equinor delayed plans to develop the Bay du Nord offshore oil project to enhance project robustness despite the volatile market conditions. Meanwhile, Equinor was evaluating plans to keep exploring for more oil in the North Atlantic region.
About 979 million barrels of recoverable oil had been discovered in the Bay du Nord area. The exploration drilling program is part of Equinor’s plans to enhance the Bay du Nord project and make it more financially feasible.
Bay du Nord will be a key driver to help meet the global oil demand, while supporting the country's pledge to carbon neutrality by 2050. The project is also crucial to the Newfoundland and Labrador economy, as it will provide significant employment and economic opportunities.
Canada is one of Equinor’s core areas. Through Bay du Nord, the company maintains a strong business in the country.
Price Performance
Shares of EQNR have underperformed the industry in the past month. The stock has gained 2.3% compared with the industry’s 2.5% growth.
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Zacks Rank & Stocks to Consider
Equinor currently carries a Zack Rank #5 (Strong Sell).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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