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Norwegian major Statoil ASA (STO - Analyst Report) has inked an agreement with BP plc (BP - Analyst Report), relating to farming-in 30% equity share in four exploration licenses, offshore South Australia. The deal amount was kept confidential.

Located in the frontier Ceduna Sub Basin within the Great Australian Bight, off the coast of South Australia – the four licenses EPP 37, 38, 39 and 40 – span an area of over 24,000 square kilometers.

With 3D seismic survey complete in 12,000 square kilometers in the license area, BP is currently finalizing the processing of this data. The subsequent steps involve maturation of drillable prospects and continued environmental studies.

The work agenda comprises drilling of four wells within the largely unproven license area. BP will retain the operatorship of the exploration licenses, even after the farm-out.

The agreement has provided Statoil access to licenses, which are believed to hold immense potential for a major discovery and are still under explored. The agreement is in sync with the company’s strategy of aligning its long-term growth objective by gaining early access to new and promising basin, thereby positioning it for high impact exploration.

Per Statoil, high-impact discoveries are defined as those having a total yield of over 250 million barrels of oil equivalent (boe) or 100 million boe net to the company.

Statoil has been present in Australia since it farmed-in into Petrofrontier's four existing and two outstanding onshore exploration permits in the South Georgina Basin of the Northern Territories through a joint venture project.

Statoil holds a Zacks Rank #3 (Hold). However, there are other Zacks Ranked #1 (Strong Buy) stocks – Dawson Geophysical Company (DWSN - Snapshot Report) and SM Energy Company (SM - Analyst Report) – in the sector that appear rewarding.

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