Statoil (STO) Completes Exploration Program For Bay Du Nord

Statoil (OL:STL) ASA (NYSE:STO) and its partners have completed a 19-month exploration drilling program, offshore Newfoundland.

The drilling program is aimed at enhancing the strength of the Bay du Nord project and examining new areas of the Flemish Pass Basin.

The Flemish Pass Basin is situated about 500 kilometers east of St. John’s, Newfoundland and Labrador. The rig, Seadrill West Hercules, was employed by Statoil to safely and competently drill nine wells in the area to better understand its frontier.

The drilling program comprised of four exploration wells in close proximity of the 2013 Bay du Nord discovery. It also included three appraisal wells on the discovery. Two exploration wells were also drilled in areas outside the Bay du Nord discovery. Despite harsh offshore environment, the program delivered strong operational and HSE performance, thereby setting several records on drilling speed during the campaign.

These apart, two oil discoveries have been made at the Bay de Verde and Baccalieu prospects in the Bay du Nord area. Both these discoveries – resulting from the aforesaid drilling program – added significantly to the resource base for a potential development at the Bay du Nord discovery.

In 2013, Statoil had estimated the volume at the Bay du Nord discovery to be in the range of 300–600 million barrels of recoverable oil. The latest appraisal and near-field exploration of the area has reduced key reservoir uncertainties and affirmed the volumes in the lower end of the range.

The drilling program, which was initiated in Nov 2014, was extended by a month to include the drilling of Baccalieu, a well on a licence awarded by the C-NLOPB in the 2015 land sale. Statoil was able to progress from access to well-completion on this license within four months. However, Statoil is still in the process of assessing the commercial potential of the Bay du Nord discovery.

Currently, Statoil carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include CVR Refining, LP (NYSE:CVRR) , PetroChina Co. Ltd. (NYSE:PTR) and Braskem S.A. (NYSE:BAK) . All these stocks sport a Zacks Rank #1 (Strong Buy).