Norwegian energy giant
) has contracted three rigs - Bideford Dolphin, Stena Don and
Scarabeo 5 - for about NOK 9.17 billion ($1.62 billion). The rigs
will be deployed in the Norwegian Continental Shelf (NCS) to drill
numerous fast-track developments as well as for spudding and
NCI BLDG SYSTEM (NCS): Free Stock Analysis
SCHLUMBERGER LT (SLB): Free Stock Analysis
STATOIL ASA-ADR (STO): Free Stock Analysis
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The Bideford Dolphin rig - owned by Dolphin Drilling AS - has been
contracted at an estimated value of NOK 2.96 billion for fixed
period and is scheduled to begin operations in the first quarter of
2014 through the first quarter of 2017. It will be used to drill
the Tordis, Vigdis and the Statfjord field in the North Sea.
Additionally, Statoil has gained a potential two-year option for
The Stena Don rig - owned by Stena Drilling - has been contracted
at an estimated value of NOK 3.11 billion for fixed period. The rig
is likely to come online from the fourth quarter of 2013 and extend
its operations till the fourth quarter of 2016. It will be used for
production drilling on the Troll field as well as on the Fram
H-Nord in the North Sea. Additionally, Statoil has secured a
potential option for one year.
Lastly, the Scarabeo 5 rig - owned by Saipem - will be employed on
various NCS fields for drilling and completion of production wells.
The rig will be operational from the third quarter of 2014 till the
third quarter of 2017. The contract, with an estimated value of NOK
3.10 billion for the fixed period, holds a potential one-year
Statoil has engaged these rigs for operations in the NCS as the
medium-term drilling plans ramp up. The new rig capacity will
assist Statoil to achieve its production targets by 2020. We
appreciate Statoil's endeavor to improve recovery of resources in
mature fields. The rigs will improve drilling and well maintenance,
which will further contribute to improved recovery and thus provide
impetus to future growth.
Statoil, which recently contracted
) for electric wireline logging services on the NCS, holds a Zacks
#2 Rank (short-term Buy rating). Longer term, we maintain our
Neutral recommendation on the stock.