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Statoil (STO) Halts Drilling in Barents Sea on Court Order

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Integrated energy company Statoil ASA recently announced its decision to halt drilling activities in the Barents Sea of the Arctic region. The company was forced to stop the operation subsequent to a court-imposed temporary injunction owing to technology-related battle with Neodrill − provider of drilling technology products in Norway.

In details, Statoil was restricted by the Stavanger District Court from utilizing Cap-X drilling technology for subsea developments in the Arctic area. NeoDrill claimedthat the subsea technology − which could lower expenses considerably by almost 30% − is adapted from itsproprietary Conductor Anchor Node (CAN) technology. However, Statoil claimed that the verdict of the court to obstruct its drilling program in the region is based on wrong information.

Following the legal obstacle, Statoil stopped drilling Blaamann – the first among the five wells in the Barents Sea. Although it is uncertain when the integrated player will be able to commence operating Blaamann, it remains hopeful of finishing all the five wells by 2017. Statoil added that with time it will use alternative technology to restart drilling and is committed of finishing the Barents Sea project within the scheduled time.

Investors should know that almost 67% of the undiscovered resources located offshore Norway is in the Barents Sea, per information from the Norwegian Petroleum Directorate.

Norway-based Statoil is involved in upstream, midstream and downstream energy businesses. The company’s one-year pricing chart depicts significant strength as revealed that the stock gained 10.2% as against 3.3% improvement for the Zacks categorized Oil & Gas-International Integrated industry.

On the flip side, Statoil’s earnings surprise history is disappointing as it missed the Zacks Consensus Estimate in three of the last four quarters with an average negative earnings surprise of 94.87%.

Somebetter-ranked players in the energy sector include Canadian Natural Resources Limited (CNQ - Free Report) , McDermott International Inc. and W&T Offshore Inc. (WTI - Free Report) . Canadian Natural sports a Zacks Rank #1 (Strong Buy), while McDermott and W&T Offshore carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.      

We expect year-over-year earnings growth for Canadian Natural to be 720% for 2017. 

McDermott beat the Zacks Consensus Estimate in each of the trailing four quarters with an average positive surprise of 387.50%.   

W&T Offshore had an average positive earnings surprise of 69.21% in the last four quarters.

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