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Statoil Cuts Johan Sverdrup Capex Due to Price Volatility
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Statoil ASA announced that it has slashed the planned capital expenditure on Johan Sverdrup field in the North Sea. The decision came on the heels of the ongoing oil price volatility. The company, however, expects initial daily production capacity to rise as much as 40%.
The field’s Phase 1 production capacity was estimated at 440,000 barrels per day (b/d) compared with the previous estimate of 315,000–380,000 b/d. The first-phase planned spending was cut to 99 billion kroner from the previous 123 billion kroner. Similarly, total capital expenditure, including Phase 2 investment and production expansion, is now expected at 140-170 billion kroner, down from 170-220 billion kroner.
Overall, market experts now believe that the project will be profitable at below $25/bbl, down from Statoil’s February forecast of below $30/bbl. The North Sea field, discovered in 2010, is estimated at 1.9–3 billion boe. Production drilling has started on the first of a total of 35 wells to be drilled during Phase 1. Partners in the project include operator Statoil with 40.0%, Lundin Norway with 22.6%, Petoro with 17.4%, Det norske oljeselskap holding 11.6%, and Maersk Oil with 8.4%.
Statoil is a Norway-based major international integrated oil and gas company. Though the company has operations in all major hydrocarbon-producing regions of the world, it has an upstream focus. Due to its strong offshore exposure, Statoil is a leader in subsea production.
In recent times, Statoil 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 the new regions of Norway, Russia, Azerbaijan, Tanzania and Australia, thereby paving the way for long-term growth.
Zacks Rank & Key Picks
Currently, Statoil carries a Zacks Rank #3 (Hold). Some better-ranked players from the broader energy sector are Devon Energy Corporation (DVN - Free Report) , NGL Energy Partners LP (NGL - Free Report) and Enbridge Energy Partners L.P. . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Statoil Cuts Johan Sverdrup Capex Due to Price Volatility
Statoil ASA announced that it has slashed the planned capital expenditure on Johan Sverdrup field in the North Sea. The decision came on the heels of the ongoing oil price volatility. The company, however, expects initial daily production capacity to rise as much as 40%.
The field’s Phase 1 production capacity was estimated at 440,000 barrels per day (b/d) compared with the previous estimate of 315,000–380,000 b/d. The first-phase planned spending was cut to 99 billion kroner from the previous 123 billion kroner. Similarly, total capital expenditure, including Phase 2 investment and production expansion, is now expected at 140-170 billion kroner, down from 170-220 billion kroner.
Overall, market experts now believe that the project will be profitable at below $25/bbl, down from Statoil’s February forecast of below $30/bbl. The North Sea field, discovered in 2010, is estimated at 1.9–3 billion boe. Production drilling has started on the first of a total of 35 wells to be drilled during Phase 1. Partners in the project include operator Statoil with 40.0%, Lundin Norway with 22.6%, Petoro with 17.4%, Det norske oljeselskap holding 11.6%, and Maersk Oil with 8.4%.
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Statoil is a Norway-based major international integrated oil and gas company. Though the company has operations in all major hydrocarbon-producing regions of the world, it has an upstream focus. Due to its strong offshore exposure, Statoil is a leader in subsea production.
In recent times, Statoil 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 the new regions of Norway, Russia, Azerbaijan, Tanzania and Australia, thereby paving the way for long-term growth.
Zacks Rank & Key Picks
Currently, Statoil carries a Zacks Rank #3 (Hold). Some better-ranked players from the broader energy sector are Devon Energy Corporation (DVN - Free Report) , NGL Energy Partners LP (NGL - Free Report) and Enbridge Energy Partners L.P. . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>