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Norwegian energy company Statoil ASA (STO - Analyst Report) has proven significant additional resources within the Shetland Group and the Lista Formation at the Gullfaks license in the Norwegian sector of the North Sea.

Though the presence of hydrocarbons in the Shetland Group/Lista Formation was known for a long time, the poor quality of reservoirs hindered development. However, a well test over the formations in the 34/10-A-8 production well, on the Gullfaks A platform, had shown good flow rates. The well is currently yielding at a rate of 7,500 barrels per day and has generated over 1 million barrels since Dec 2012.

Initial estimates based on analysis, modeling, formation testing and sampling in the applicable interval indicate that the find holds recoverable 40–150 million barrels of oil equivalents. The resource estimate derived from these calculations has some uncertainty involved as its model indicates further upside potential.

Gullfaks is located in the Tampen area in the northern North Sea and was commissioned on Dec 22, 1986. The field is being developed through three permanent installations, which have produced over 2.4 billion barrels of oil and over 56 billion cubic meters of gas.

Statoil, the operator, of the Gullfaks Field holds a 70% interest, while partner Petoro has the remaining 30% stake.

The latest well test flow at the Gullfaks license is in sync with Statoil’s strategy of reviving the Norewegian continental shelf. The Shetland Group and the Lista formation are younger and considerably shallower deposits with different properties vis-a-vis the deposits of the Brent Group, where the main reservoirs of Gullfaks are situated.

The discovery will offer new capacity that can provide high-value production in the short term. It also augurs well for the prospects of the field and its installations.

Statoil holds a Zacks Rank #3 (short-term Hold rating). However, Zacks Ranked #1 Range Resources Corporation (RRC - Analyst Report), EPL Oil & Gas, Inc and Stone Energy Corp (SGY - Analyst Report) are expected to outperform the market over the next few months.

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