OMV AG OMVJF, an Austrian energy player, announced that its subsidiary OMV Norge and its partners have made a new gas discovery in the Norwegian Sea. OMV Norge drilled a wildcat well (6605/6-1 S) targeting the Haydn/Monn exploration prospects, which led to the successful discovery.
The wildcat well was drilled using the semi-submersible rig Transocean Norge, owned by the renowned offshore drilling contractor Transocean RIG. The Transocean Norge rig is the first of its kind to have received the Abate (Power+) notation for its efforts in reducing greenhouse gas emissions related to its operations.
The recoverable resources at the gas discovery are estimated to be in the band of 30-140 million barrels of oil equivalent (boe). The discovery lies in the production license (PL) 1194, operated by OMV.
OMVJF holds a 40% stake in PL 1194, while its partners Vår Energi and Inpex Idemitsu Norge own a 30% stake each. The Norwegian Offshore Directorate (“NOD”) noted that 6605/6-1 S was the first well to be drilled in PL 1194.
The preliminary estimates at the primary exploration target suggest that the size of the discovery lies in the range of 4-12 million standard cubic meters (Sm3) of oil equivalent.
The objective of the primary exploration was to confirm the presence of petroleum in the Upper Cretaceous reservoir rocks within the Springar Formation. The secondary objective was to test the presence of petroleum in the Nise Formation, which is a part of Upper Cretaceous as well.
The 6605/6-1 S well was not subjected to formation testing. However, extensive data was collected about the well and sampling was carried out. In the primary target, the well encountered a gas column approximately 20 meters thick, with 13 meters in sandstone reservoirs of moderate to good quality. However, the gas/water contact was not found.
Moreover, the well encountered gas-filled sandstone layers approximately 11 meters thick, in the lower part of the Springar Formation. Another gas column, approximately 5 meters thick, was found in the secondary exploration target at the Nise Formation. There is uncertainty regarding the size of these discoveries.
The preliminary estimates, however, show that the lower part of the Springar Formation has 0.5-5 million Sm3 of recoverable oil equivalent. The Nise Formation is estimated to hold 0.5-6 million Sm3 of recoverable oil equivalent.
The gas discovery is located 300 km toward the west of the Norwegian mainland. The water depth at the site is 1,064 meters. The gas find is situated approximately 65 kilometers from the Polarled pipeline and the Aasta Hansteen field. OMV and its partners in PL 1194 are evaluating the potential for developing the gas find by leveraging their existing infrastructure in the proximity. OMV stated that using subsea infrastructure to connect to the Aasta Hansteen host platform should enable cost-effective development and lower carbon emissions.
The well was drilled to a vertical depth of approximately 4,641 meters below the sea level and a measured depth of 5,123 meters. The well was terminated at the Nise Formation. It has been permanently plugged and abandoned.
Zacks Rank and Key Picks
Currently, OMVJF and RIG carry a Zacks Rank #3 (Hold) each.
Some better-ranked stocks in the energy sector are SM Energy SM and MPLX LP MPLX. SM Energy presently sports a Zacks Rank #1 (Strong Buy), while MPLX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an upstream energy firm operating in the prolific Midland Basin and the South Texas regions. For 2024, the company expects its production to increase from the prior-year reported figure, signaling a bright production outlook.
MPLX LP owns and operates a wide range of midstream assets. The partnership's midstream assets include oil and natural gas gathering systems and transportation pipelines for crude, natural gas and refined petroleum products. MPLX is least exposed to commodity price fluctuations as it generates stable fee-based revenues. Furthermore, it surpasses its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its unitholders.
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