Norwegian oil and gas major Statoil ASA’s ( STO - Analyst Report ) exploration campaign relating to a wildcat on the Lovund prospect in the Norwegian Sea has failed. The company did not encounter any hydrocarbons in the probe 6610/10-1.

The primary purpose of spudding the exploration well 6610/10-1 was to ascertain petroleum in Lower Jurassic reservoir rocks, known as the Bat group, in the Helgeland basin. The well was drilled to a total depth of 2,988 meters.

According to Norwegian Petroleum Directorate, the reservoir rocks in the Bat group stumbled upon by the wildcat was of superior quality. However, the well turned out to be dry.

The well 6610/10-1 lies on Statoil's wholly owned production license 386 and is located around 90 kilometers north-east of the producing Norne field. The well 6610/10-1 was the first to be drilled in the license.

The well was drilled by Seadrill Limited’s ( SDRL - Snapshot Report ) semi-submersible drilling rig West Alpha. The rig is now expected to start work for the U.S. super major ExxonMobil Corporation ( XOM - Analyst Report ) in the North Sea to drill production wells on the Balder field.

This news follows the company’s relinquishment of its stakes in the deepwater Karama block. Statoil found no hydrocarbon reserve in the block situated offshore Makassar Strait. These unsuccessful ventures are costly and are likely to put downward pressure on the company’s earnings.

However, its widespread operations in all major hydrocarbon-producing regions of the world as well as the growing upstream presence in the emerging basins of the Caspian Sea, West Africa and the deepwater U.S. Gulf of Mexico will enable Statoil to sustain its production growth for the next few years.

Statoil holds a Zacks Rank #3, which is equivalent to a Hold rating for a period of one to three months. However, there are other stocks in the oil and gas sector such as Royal Dutch Shell Plc ( RDS.B - Snapshot Report ) , which holds a Zacks Rank #1 (Strong Buy) and is expected to perform better.