Statoil Strikes Oil in Norway - Analyst Blog

By Zacks Equity Research,

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Norwegian integrated oil and gas player, Statoil ASA ( STO ) has struck a new source of oil in the country. The prospect is located about 7 km north of Grane field and 150 km west of Stavanger, Norway. Being in the vicinity of existing installations, the source has chances of being developed without delay.

Statoil and its partners are extensively drilling exploration well 25/11-27 in the prospect. The well is estimated to contain 18-33 million barrels of recoverable oil.

Located in the Grane Unit in the North Sea, the ownership of 25/11-27 is spread out among Statoil (36.7%), Norwegian state owned Petoro AS (28.9%), Exxon Mobil ( XOM ) (28.2%) and ConocoPhillips ( COP ) (6.2%).

Statoil has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the Norwegian Continental Shelf ("NCS"). We believe that Statoil is well positioned to sustain its steady production growth for the next few years on the back of its large resource base at NCS.

We believe production growth from operations is a key component for the company's overall annual upstream growth plans over the next few years. Statoil has made progress on various projects and expects to make significant additions to its resource base in the coming years. This is evident from the company's estimated compound annual growth rate of 3% to 4% during 2016-2020. Hence, Statoil's progress on the new prospect is a significant move.

Statoil is an integrated oil and gas company. One of the world's biggest sellers of crude oil, the company is also a major supplier of natural gas in the European market and has substantial industrial operations. Statoil has service stations in the Scandinavian countries, Ireland, Poland, the Baltic States and Russia. The company is one of the world's most environmentally-efficient producers and transporters of oil and gas.

Statoil holds a Zacks Rank #3, which is equivalent to a Hold rating for a period of one to three months. In the near term, we would advise investors to focus on Zacks Rank #2 (Buy) Braskem S.A. ( BAK ) among the international oil integrated players.

BRASKEM SA (BAK): Free Stock Analysis Report

CONOCOPHILLIPS (COP): Free Stock Analysis Report

STATOIL ASA-ADR (STO): Free Stock Analysis Report

EXXON MOBIL CRP (XOM): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: BAK , COP , STO , XOM

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