Norwegian oil giant Statoil ASA ( STO - Analyst Report ) has hired Seadrill Limited’s ( SDRL - Snapshot Report ) rig –– West Aquarius –– for deepwater exploration activity offshore Newfoundland, Canada. Statoil did not reveal the contract value or the hiring charges for the vessel.

The ultra deepwater drilling rig belongs to the sixth generation semi-submersible DP3 vessel class. Built in 2009, in South Korea, the vessel is equipped to function in rough environment up to a water depth of 3,000 meters.

Statoil aims to drill three exploration wells off Newfoundland and is expected to commence operations in late 2012 and continue through 2013. Two of the wells are located in the Flemish Pass Basin, where Statoil remains the operator with a 50% interest. The other partners in these licenses are Chevron Corporation ( CVX - Analyst Report ) and Repsol YPF SA, holding 40% and 10%, respectively. The third well lies in the Jeanne d'ArcBasin.

Statoil has chartered West Aquarius from ExxonMobil Corporation ( XOM - Analyst Report ) . In November 2011, ExxonMobil had contracted West Aquarius for a period of two years at a dayrate of $526,000, holding an option for further contract extension until June 2017.

The company is increasingly shifting its focus to the still-unexplored areas of offshore Newfoundland, and intends to become one of the major producing operators of the region in the coming years. As exploration remains a key component of its growth strategy, this will enhance the company’s volume growth prospects.

Per the Zacks Consensus, the earnings per share estimate for Statoil is $3.00 for 2012 and $3.02 for 2013. This implies a decline of 69.5% in 2012 and a growth rate of 0.9% in 2013.

Statoil holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation on the stock.