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Statoil (STO) Awards ERRV Contract to Sentinel Marine - Analyst Blog

Norwegian oil giant Statoil ASASTO has awarded a contract for the delivery of a new multi-role Emergency Response & Rescue Vessel ("ERRV") to Sentinel Marine Limited. Its share price, however, has been trending downward post-announcement and has shown a 6.4% fall.

The ERRV is meant to support operations on the Mariner field on the UK Continental Shelf ("UKCS"). An Aberdeen-based company, Sentinel Marine, owns and operates offshore support vessels in the oil and gas marine industry. Mariner Sentinel, the new 65 meter ship will be tailored to suit Statoil's needs and will be offering emergency cover, oil spill response alertness and tanker assist competencies for the Mariner field.

Slated to become functional in Jul 2016, the ERRV contract with Sentinel Marine has a fixed duration of five years. It also comprises five one-year extension options.

Located about 150 kilometers east of the Shetland Isles, the Mariner field is presently being developed. The production is scheduled to commence in 2017, while hook-up and commissioning is anticipated to start in 2016.

Mariner Sentinel is likely to be delivered in early 2017. Meanwhile, in the summer of 2016, Sentinel Marine will arrange for another ERRV for emergency cover on Mariner. This vessel will be used until the new vessel becomes operational.

Statoil operates the Mariner field with 65.11% equity. The other co-venturers are JX Nippon Exploration and Production (U.K.) Limited and Dyas Mariner Ltd., holding 28.89% and 6%, respectively.

Statoil currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks from the oil and gas sector include Valero Energy Partners L.P. VLP , Western Gas Equity Partners, L.P WGP and Hallador Energy Company HNRG . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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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.


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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