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Equinor (EQNR) Makes Natural Gas Discovery Offshore Norway
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Equinor ASA (EQNR - Free Report) and partners made a commercially-viable natural gas discovery in production license 1128 in the Norwegian Sea.
This is the first hydrocarbon discovery made on the Norwegian Continental Shelf this year.
Drilled by the Deepsea Stavanger drilling rig, exploration wells 6605/1-2 S and A made the gas discovery in the Norwegian Sea. These are the first and second exploration wells in production license 1128, awarded in APA 2020. Equinor operates the license with a 70% interest.
The well 6605/1-2 S encountered three sandstone layers in the Springar Formation, with moderate to good reservoir quality. The well 6605/1-2 A proved a 12-meter gas column in the uppermost sandstone layer, with moderate to good reservoir quality. The wells were not formation-tested, but extensive data collection and sampling were performed.
The latest discovery, Obelix Upflank, was made 23 kilometers south of the Irpa gas field, which is currently being developed. The latest discovery is estimated to hold 12.6-69.2 million barrels of oil equivalent or 2-11 billion standard cubic meters of recoverable gas.
Equinor and partners will evaluate further delineation of the discovery and tie-in to the Irpa field. Discoveries near existing infrastructure require less volume to be commercially developed and can be brought online with low emissions. Equinor, with its partners, will consider tying back the latest discovery to Irpa. The companies have submitted a plan for development and operation for the tie-in to the Irpa field.
Norway is currently the largest single gas supplier to Europe after Russia flows were significantly reduced, with Norwegian deliveries meeting about 25% of Europe’s demand. The discovery will add to the company’s profitability on the Norwegian Continental Shelf.
Price Performance
Shares of Equinor have underperformed the industry in the past six months. The stock has declined 9.3% against the industry’s 23.4% growth.
Transocean, Inc. (RIG - Free Report) is the world’s largest offshore drilling contractor and leading provider of drilling management services. RIG reported an adjusted net loss of 6 cents per share in the third quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 15 cents.
Transocean is expected to see earnings growth of 25.7% in 2022. Despite the struggles with the coronavirus-induced price and demand slump, Transocean's backlog of $7.3 billion reflects steady demand from customers, and offers earnings and cash flow visibility.
ProPetro Holding Corp. (PUMP - Free Report) is an oilfield service provider operating primarily in the Permian Basin over west Texas and New Mexico. PUMP is expected to see an earnings rise of 164.2% in 2022.
As of Sept 30, ProPetro had $43.2 million in cash and cash equivalents, and total liquidity of $155 million. ProPetro’s balance sheet is debt-free, which provides a potential lifeline amid the difficult operating environment. The steep cutbacks to its capital budget further strengthen its financial position.
Helmerich & Payne Inc. (HP - Free Report) is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. HP’s third-quarter fiscal 2022 adjusted profit of 27 cents per share beat the Zacks Consensus Estimate of 5 cents.
Helmerich & Payne is expected to see an earnings surge of 280% in 2022. HP boasts a strong balance sheet, carrying $542.6 million in long-term debt. The company’s debt-to-capitalization stands at just 16.4% compared with many of its peers that are hugely burdened with debts, accounting for around 50% of their total capital structure.
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Equinor (EQNR) Makes Natural Gas Discovery Offshore Norway
Equinor ASA (EQNR - Free Report) and partners made a commercially-viable natural gas discovery in production license 1128 in the Norwegian Sea.
This is the first hydrocarbon discovery made on the Norwegian Continental Shelf this year.
Drilled by the Deepsea Stavanger drilling rig, exploration wells 6605/1-2 S and A made the gas discovery in the Norwegian Sea. These are the first and second exploration wells in production license 1128, awarded in APA 2020. Equinor operates the license with a 70% interest.
The well 6605/1-2 S encountered three sandstone layers in the Springar Formation, with moderate to good reservoir quality. The well 6605/1-2 A proved a 12-meter gas column in the uppermost sandstone layer, with moderate to good reservoir quality. The wells were not formation-tested, but extensive data collection and sampling were performed.
The latest discovery, Obelix Upflank, was made 23 kilometers south of the Irpa gas field, which is currently being developed. The latest discovery is estimated to hold 12.6-69.2 million barrels of oil equivalent or 2-11 billion standard cubic meters of recoverable gas.
Equinor and partners will evaluate further delineation of the discovery and tie-in to the Irpa field. Discoveries near existing infrastructure require less volume to be commercially developed and can be brought online with low emissions. Equinor, with its partners, will consider tying back the latest discovery to Irpa. The companies have submitted a plan for development and operation for the tie-in to the Irpa field.
Norway is currently the largest single gas supplier to Europe after Russia flows were significantly reduced, with Norwegian deliveries meeting about 25% of Europe’s demand. The discovery will add to the company’s profitability on the Norwegian Continental Shelf.
Price Performance
Shares of Equinor have underperformed the industry in the past six months. The stock has declined 9.3% against the industry’s 23.4% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Equinor currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Transocean, Inc. (RIG - Free Report) is the world’s largest offshore drilling contractor and leading provider of drilling management services. RIG reported an adjusted net loss of 6 cents per share in the third quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 15 cents.
Transocean is expected to see earnings growth of 25.7% in 2022. Despite the struggles with the coronavirus-induced price and demand slump, Transocean's backlog of $7.3 billion reflects steady demand from customers, and offers earnings and cash flow visibility.
ProPetro Holding Corp. (PUMP - Free Report) is an oilfield service provider operating primarily in the Permian Basin over west Texas and New Mexico. PUMP is expected to see an earnings rise of 164.2% in 2022.
As of Sept 30, ProPetro had $43.2 million in cash and cash equivalents, and total liquidity of $155 million. ProPetro’s balance sheet is debt-free, which provides a potential lifeline amid the difficult operating environment. The steep cutbacks to its capital budget further strengthen its financial position.
Helmerich & Payne Inc. (HP - Free Report) is a major land and offshore drilling contractor in the western hemisphere, having the youngest and most efficient drilling fleet. HP’s third-quarter fiscal 2022 adjusted profit of 27 cents per share beat the Zacks Consensus Estimate of 5 cents.
Helmerich & Payne is expected to see an earnings surge of 280% in 2022. HP boasts a strong balance sheet, carrying $542.6 million in long-term debt. The company’s debt-to-capitalization stands at just 16.4% compared with many of its peers that are hugely burdened with debts, accounting for around 50% of their total capital structure.