Equinor (EQNR), DNO Advance Heisenberg Discovery in North Sea

Equinor ASA EQNR, the Norwegian state-owned energy giant, and DNO, a compatriot oil and gas operator, have successfully completed an appraisal well and sidetrack aimed at further delineating the Heisenberg oil and gas discovery made in 2023.

The Heisenberg discovery, located in license PL827SB in the northern part of the Norwegian North Sea, represents a new shallow play with promising potential. Following the completion of the appraisal activities, the recoverable volumes from Heisenberg are now expected in the range of 24-56 million barrels of oil equivalent (MMboe), with a mean estimate of 37 MMboe. The appraisal well and sidetrack operation led to the encounter of oil-bearing sands in the deeper secondary target, Hummer, according to DNO.

Equinor and DNO are now gearing up for further exploration activities, with plans to drill a well in the second quarter of this year in order to explore an additional deep prospect named Angel while continuing to delineate the Heisenberg discovery toward the west.

Situated within the vicinity of major North Sea hubs like Troll B, Kvitebjørn and Gjøa, with the first two being operated by Equinor, Heisenberg holds strategic importance. Its proximity to these hubs positions it well for potential tieback developments, facilitating efficient production operations.

In light of the recent successes in exploration activities, particularly in the North Sea region, discussions are underway for the fast-track development of Heisenberg. This development aligns with a broader strategy aimed at capitalizing on recent discoveries in the area. Notably, DNO holds a stake in several recent discoveries, including the Carmen discovery made last year.

Commenting on the developments, Bijan Mossavar-Rahmani, executive chairman of DNO, emphasized the shift in focus toward quality discoveries and the subsequent need to enhance production. This underscores the strategic imperative of efficiently transitioning from exploration to production phases, leveraging the potential of discoveries like Heisenberg to contribute to the company's overall portfolio.

Zacks Rank & Key Picks

Equinor currently carries a Zack Rank #4 (Sell).

Some better-ranked stocks in the energy sector are Sunoco LP SUNMurphy USA Inc. MUSA and Energy Transfer LP ET. While Sunoco and Murphy USA sport a Zacks Rank #1 (Strong Buy) each, Energy Transfer carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow. 

The Zacks Consensus Estimate for SUN’s 2024 earnings per share (EPS) is pegged at $4.96. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.

Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States.

The Zacks Consensus Estimate for MUSA’s 2024 EPS is pegged at $26.32. The company has a Zacks Style Score of B for Growth and B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.

Energy Transfer is a publicly traded limited partnership focused on diverse energy assets in the United States. The company’s core operations involve natural gas midstream services, transportation, storage, crude oil facilities and marketing assets.

The Zacks Consensus Estimate for ET’s 2024 earnings per unit is pegged at $1.44. The company has witnessed upward earnings estimate revisions for 2024 in the past 30 days. ET’s 2024 earnings are expected to rise 32.1% year over year.

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

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