Statoil (STO) Hires West Phoenix Rig To Drill 4 Wells

Statoil (OL:STL) ASA (NYSE:STO) , along with its partners, intends to commence exploration drilling on the UK and Norwegian continental shelves using the semi-submersible rig — West Phoenix.

Operations are expected to begin from the summer of 2018. Two seadrill companies — North Atlantic Drilling UK Ltd. and North Atlantic Norway Ltd — have been awarded the contract.

An exploration well for the Ragnfrid North license on the Norwegian Continental Shelf (NCS) will be the first to be drilled by the West Phoenix. Subsequently, three wells will be drilled on the UK Continental Shelf (UKCS). The rig has received the requisite consent from the authorities for these operations.

The cost for drilling the Ragnfrid North is estimated at $19.5 million, while the cost of the three wells on the UKCS is projected to be $18.5 million. The operations include integrated drilling services such as fuel, casing running, remotely operated underwater vehicle (ROV), slop treatment and cuttings handling as well as mobilization and demobilization.

Located in PL199, Ragnfrid North lies about 20 kilometers south of the Kristin field in the Norwegian Sea. On completion of the well, the rig will travel to the UKCS where Statoil will drill three wells.

The appraisal well will establish the potential volume range in the Verbier discovery. Announced in October 2017, Verbier was initially estimated to hold 25-130 million barrels of oil. The partners in P2170 are Statoil, Jersey Oil and Gas and CIECO V&C (UK) Limited holding 70%, 18% and 12%, respectively.

The Pip prospect occupies the Fladen Ground Spur area in license P2318. The Bigfoot prospect lies 30 kilometers (about 20 miles) south of the Mariner field, in license P2314. Statoil operates these licenses with a holding of 50%, while BP (LON:BP) owns the remaining 50%.

The drilling of all these four wells is expected to take about four to five months. They will be drilled in a continuous campaign and is scheduled to begin in the third quarter.

In January, Statoil awarded contracts to North Atlantic Norway Ltd and the West Hercules for drilling in the Barents Sea.

Q4 Price Performance

During the last three months, Statoil’s shares have gained 13.4% against the industry’s 1.9% decline.

Zacks Rank & Other Key Picks

Statoil carries a Zacks Rank #1 (Strong Buy).

A few other top-ranked players in the same sector are Occidental Petroleum Corp. (NYSE:OXY) , Pioneer Natural Resources Co. (NYSE:PXD) and ConocoPhillips (NYSE:COP) . All these stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here

Houston, TX-based Occidental Petroleum is an integrated oil and gas company. The company delivered an average positive earnings surprise of 24.57% in the preceding four quarters.

Headquartered at Irving, TX, Pioneer Natural Resources is an independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 66.92% in the preceding four quarters.

ConocoPhillips, based in Houston, TX, is a major global exploration and production (E&P) company. The company delivered a positive earnings surprise of 144.45% in the preceding four quarters.

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