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Norwegian giant Statoil ASA (STO - Analyst Report) made a second natural gas find at the Iskrystall prospect on PL 608 in the Barents Sea, offshore Norway.

The probe, located about 30 kilometers southwest of 7220/8-1 Johan Castberg and about 240 kilometers north of Hammerfest, turned out to be a major disappointment as it failed to enhance crude reserves.

Drilled by Seadrill Ltd.’s (SDRL - Snapshot Report) semisubmersible rig West Hercules, well 7219/8-2 proved a gas column of around 200 meter and is estimated to hold recoverable reserves in the range of 6 to 25 million barrels of oil equivalents.

Nunatak, the prospect to be drilled, resulted in a small gas find that was not commercially viable. The Iskrystall represents the second of the four prospects to be drilled in the Johan Castberg area in 2013. The primary goal is to prove further volumes for the Johan Castberg field development.

An extensive data acquisition program was carried out in the Iskrystall well comprising coring, wire line logging and fluid sampling.  The study gave vital geological information about the Johan Castberg area.

The project was delayed due to rising costs and taxes. Further, Statoil and its partners had proposed to postpone its investment decision for the project in Jun 2013. The parties intended to further develop the resource base and field development plans for the project. Moreover, concerns relating to the projects tax frame work prevail.

The partners will make an investment decision on the project, only after they complete the remaining exploration wells and ongoing work on field development plans.

Statoil, the operator of PL 608, has an ownership share of 50%. The other license partners include Eni SpA (E - Analyst Report) and Petoro AS, holding 30% and 20%, respectively.

Statoil carries a Zacks Rank #3 (Hold). However, Zacks Ranked #1 (Strong Buy) stock China Petroleum & Chemical Corp. (SNP - Analyst Report) is a good buying option for the short term.

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