Statoil Acquires Operatorship & Partial Ownership in P.2170
Statoil ASA STO has entered into a Sales and Purchase Agreement (SPA) with Jersey Oil and Gas plc and CIECO Exploration and Production (UK) Limited. According to the deal, Statoil will gain 70% ownership as well as operatorship of the P.2170 license on the U.K. Continental Shelf (UKCS).
Located in the Buchan Graben in the Outer Moray Firth region, the P.2170 license lies in an area containing the Buchan, Buzzard and Ettrick oil discoveries. Statoil is expected to pay $2 million as transaction cost. Notably, the equity ownership of Jersey Oil and Gas and CIECO Exploration and Production in the license is 18% and 12%, respectively.
The closure of the agreement is subject to approval by the Oil and Gas Authority (OGA).
The Mariner field, which is operated by Statoil is currently under development. Statoil aims to be an active explorer on the UKCS as it believes that substantial hydrocarbon resource remains unexplored in the area.
Statoil’s endeavor to improve recovery of resources in mature fields is commendable. The company has operations in all major hydrocarbon-producing regions of the world, with an emphasis on the Norwegian Continental Shelf (NCS). We believe that Statoil is well positioned to sustain its steady production growth over the next few years on the back of its large resource base at NCS.
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In recent times, Statoil has delivered strong exploration results and added significantly to its resource base by making several high impact discoveries. The latest finds give the company access to new regions of Norway, Russia, Azerbaijan, Tanzania as well as Australia, thereby paving the way for long-term growth.
Statoil carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Devon Energy Corporation DVN, NGL Energy Partners LP NGL and Enbridge Energy Partners L.P. EEP. All these stocks sport a Zacks Rank #1 (Strong Buy).
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