Norwegian company Statoil ASA (STO - Free Report) recently concluded the takeover of operatorship of Petrobras' 66% operated interest of the BM-S-8 offshore license in Brazil's highly prolific Santos basin.
BM-S-8 includes a significant portion of the Carcará oil discovery, one of the largest discoveries in the world in recent years.
Discovered in 2012, Carcará is located on the geological trend of the adjacent Lula field and Libra area. It represents an exceptional discovery of high-quality oil of about 30 degrees API and related gas in a thick reservoir with excellent properties. It overlaps both BM-S-8 and open acreage to the north, which is likely to be part of a license round in 2017.
The license round will offer Statoil an opportunity to expand its footprint in the field. Statoil estimates the recoverable volumes within the BM-S-8 license in the range of 700–1,300 million barrels of oil equivalent.
Apart from the Carcará discovery, BM-S-8 offers exploration upside that is likely to considerably augment its resource base. With the license in its final exploration phase only one exploration commitment well remains to be drilled by 2018.
On the completion of the transaction, Statoil paid Petrobras $1.25 billion or 50% of the total consideration. The balance will be paid upon the fulfillment of certain objectives. These are partially related to the license award, but mainly to the future unitization of Carcará. The effective date for the transaction is Jul 1, 2016.
Statoil also has interests in other assets in offshore Brazil. These include Peregrino, Peregrino Phase II and license BM-C-33 comprising the Pão de Açúcar, Gavea and Seat discoveries in the Campos Basin as well as eight exploration blocks in Espírito Santo basin.
Zacks Rank and Stocks to Consider
Statoil currently has a Zacks Rank #3 (Hold). Some better-ranked players in the same sector include SunCoke Energy Inc. (SXC - Free Report) , Suncor Energy, Inc. (SU - Free Report) and TransCanada Corporation (TRP - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SunCoke Energy posted a positive earnings surprise of 177.78% in the last reported quarter. It reported a positive earnings surprise in three of the four preceding quarters.
Suncor Energy posted a positive earnings surprise of 300.00% in the preceding quarter. It reported an average earnings surprise of 40.55% for the four preceding quarters.
TransCanada posted a positive earnings surprise of 22.92% in the last reported quarter.
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