) has farmed-in to 80% of PetroFrontier Corp's working interest
in the four exploration permits and two exploration permit
applications in the Southern Georgina play in Northern Territory,
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The four exploration permits include EPs 103, 104, 127 and 128
and the two exploration permit applications are EPA 213 and 252.
Statoil will take over the operatorship from Sep 1, 2013.
The state-run player has altered the terms of an existing farm-in
deal covering assets in the Southern Georgina basin. In Jul 2012,
the state-run player had received consent to acquire interest in
about four PetroFrontier shale exploration permits in Northern
Per the deal, initially Statoil was to hold 25% interest in the
four permits with the option of operating the second phase and
increasing its stake to about 65%. Till date, the partners have
jointly spent $30 million on initial exploration activities.
However, for the balance of 2013 and 2014, Statoil has decided to
fully finance a 2D seismic package and the drilling and
stimulation of four and six vertical well tests, estimated at $50
million. Apart from the money already spent on these permits, the
company may put in another $160 million by the end of 2016 if it
chooses to advance with further development over three phases.
Statoil will own 80% only at the end of phase 3, while its
Canadian partner PetroFinance will hold 20%. Any additional cost
after phase 3 will depend on each company's working interest.
The Southern Georgina Basin asset spread over 14 million acre
area is considered prospective. Statoil's deal is in sync with
its exploration strategy of accessing early and buying in large
scales to de-risk the plays and grow organically through
exploration activities. The company is believed to benefit from
its current position in the play.
Statoil carries a Zacks #5 (Strong Sell). However, Zacks Ranked
#1 (Strong Buy) stocks -
Newpark Resources Inc.
Gulfmark Offshore, Inc.
) - are expected to perform impressively over the short term.