Spud with the goal of adding volumes to the massive $15.5 billion Johan Castberg project, the Nunatak well - 7220/5-2 - failed to generate commercial results with its gas discovery in rocks of the Cretaceous age. This was also the first of the four highly anticipated wells drilled by the rig West Hercules in 2013.
Despite being geologically the riskiest among the four projects, the Nunatak well as evaluated first because of its proximity to the Skrugard discovery. Nunatak - an independent structure in a geological formation younger than - lays partly over the latter.
While carrying out drilling operations, the partnership acquired significant data for the further development of the Johan Castberg field. However, the outcome at Nunatak will in no way influence the expectations from the next three drilling operations as these are aimed other play models. Statoil believes that the Johan Castberg area has oil potential as well.
The West Hercules rig is expected to move to the adjoining license PL608 to drill its second option at the Iskrystall prospect, upon completion of the Nunatak. A prospect in the early-middle Jurassic play, Iskrystall, was proven by the Skrugard and Havis discoveries, at a significantly greater depth.
Earlier this month, the Johan Castberg project was delayed by Statoil due to a planned tax increase and cost concerns that eroded its profitability. Statoil operates PL532 with 50% ownership. The license partners Eni and Petoro AS have a share of 30% and 20%, respectively.
Statoil carries a Zacks Rank #4 (Sell). However, there are Zacks Ranked #1 (Strong Buy) stocks - PetroQuest Enerrgy Inc. ( PQ ) and Hornbech Offshore Services, Inc. ( HOS ) - that are expected to perform impressively over the short term.