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Norway’s biggest energy company, Statoil ASA (STO - Analyst Report) has completed the appraisal of an exploration well – 16/5-3. The appraisal confirms that the company’s Johan Sverdrup oil discovery extends into production license (PL) 502 and adds a small upside to the field's resources.

A 13.5-meter oil column was proved by the well in a high-quality Jurassic reservoir in the license and established communication with the rest of the field in licenses 501 and 265.

The results also point to additional upside potential in the area as Statoil proposes to drill a new exploration well at the Cliffhanger prospect, west of Johan Sverdrup. Statoil has planned to issue a new estimate for the whole field by the end of 2013 after including the PL 502 volumes.

The Johan Sverdrup field was discovered by Lundin Petroleum AB in 2010 and is estimated to hold around 3.6 billion barrels of oil. The field is likely to be the largest offshore Norway since Statfjord, discovered in 1974.

Per the Norwegian Petroleum Directorate, Sverdrup has aided in restoration of interest in exploration in waters off the coast of Norway.  In 2013, the crude output in the region is projected to plunge for the 13th successive year to less than half its peak reached in 2000.

Statoil, the operator of PL 502, has a stake of 44.44%, while the other partners include Petoro AS and Det norske oljeselskap ASA.

Statoil holds a Zacks Rank #2, which is equivalent to a short-term Buy rating. However, there are other stocks in the energy sector, namely, Enerplus Corporation (ERF - Snapshot Report),  Range Resources Corporation (RRC - Analyst Report) and EPL Oil & Gas, Inc. , which carry a Zacks Rank #1 (Strong Buy) and are expected to perform impressively over the next few months.

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