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Statoil Confirms Oil off Norway

Zacks Equity Research

Norwegian major Statoil ASA (STO) has yet again achieved drilling success in its latest appraisal on the Johan Sverdrup find, off Norway. The appraisal has confirmed oil presence in the southern part of the huge discovery, giving a boost to the resource availability in the area.

Drilled in the Kvitsoy basin in production license 265 (PL265), well 16/2-15 encountered a 30-meter gross oil column in Upper to Middle Jurassic reservoir sandstone. Per the Norwegian Petroleum Directorate, around 20 meters of the gross oil column is considered to be of superior quality.

The oil-water contact was struck at a depth similar to the adjoining wells and pressure data showed communication with the best portion of the Sverdrup reservoir.

Statoil, the operator, holds a 40% stake in PL265, with partners Det norske, Petoro and Lundin Petroleum holding 20%, 30% and 10%, respectively. The license is estimated to hold recoverable reserves between 3.3 billion and 7 billion barrels of oil equivalent.

Semi-submersible rig, Ocean Vanguard, drilled the well in a water depth of 111 meters and drilled to a total depth of 1984 meters. The well that is located around five kilometers south-west of the original discovery will soon be plugged and abandoned on a permanent basis.

Statoil and Lundin Petroleum, which operates nearby PL501 into which the discovery extends, have spud the tenth exploration probe in the license after executing a thorough evaluation campaign over the last year.

Recently, Statoil confirmed additional quantity with a well spud at the Geitungen prospect on the fringes of the discovery as well as struck oil on the northern flank in the Espevaer High area. In 2013, the Norwegian operator intends to drill up to three additional wells in the area.

Statoil, which recently made a gas discovery — Lavani-2 — in Block 2, offshore Tanzania along with its partner ExxonMobil Corporation (XOM), holds a Zacks #5 Rank, which is equivalent to a Strong Sell rating for a period of one to three months.

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