Norwegian oil giant
) stock price surprised with a 2% drop in the trading session
that followed the announcement of its deal with the Thai
exploration and production company PTTEP.
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The agreement relates to the division of their interests in the
Kai Kos Dehseh (KKD) oil sands project in Alberta, Canada.
Subsequent to the completion of the transaction, Statoil will
continue to operate Leismer and Corner development projects with
100% ownership, while PTTEP will completely own the Thornbury,
Hangingstone and South Leismer areas.
Per the transaction, Statoil will pay a balancing amount of $200
million to PTTEP, along with a working capital adjustment
effective from Jan 1, 2013. The transaction is expected to close
by the third quarter of 2014 and is subject to customary
Statoil got access to KKD through the acquisition of North
American Oil Sands Corporation in 2007. Later, in 2011, PTTEP
purchased a 40% stake in KKD, with Statoil continuing as the
The Leismer project is the first phase of the steam-assisted
gravity drainage full field development of KKD. Currently,
Leismer is in production with an operating capacity of 20,000
barrels per day. Initially, a final investment decision for the
Corner project was planned for the first part of 2014. However,
both the parties have decided to delay this until the transaction
is wrapped up.
The decision to execute the transaction rests on the duo's
commitment to enhance shareholder value. It also gives them the
choice to develop the assets at their own pace.
Statoil carries a Zacks Rank #3 (Hold). Some better-ranked stocks
in the oil and gas sector include
NGL Energy Partners LP
Cheniere Energy Partners L.P.
Northern Tier Energy LP
). All these stocks hold a Zacks Rank #1 (Strong Buy).