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Statoil Hits Non Commercial Gas Volume in Korpfjell Well

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Statoil ASA (STO - Free Report) along with partners has confirmedgas volume, which is small and non-commercial in the Korpfjell well in the southeast Barents Sea.

Located between Norway and Russia, Korpfjell represents the first exploration well that has been drilled in the formerly disputed region.

The main aim behind the drilling operations in the large geological structure in Korpfjell was to establish whether any oil was present. However, small gas volumeshaveonly been established through drilling. The gas discovery is projected to contain recoverable resources of 40-75 million barrels of oil equivalents or 6-12 billion standard cubic meters of gas.Proven in the well’s main target, the gas volume does not qualify for a commercial development. Statoil and its license partners will now beginevaluating the acquired well data.

In 2018, Statoil intends both participation in partner-operated wells andoperated wells in the Barents Sea southeast area. Drilling of a second commitment well in the Korpfjell license PL 859 is also a part of the aforesaid plans.

Among the Barents Sea wells included in the 2017 exploration campaign of Statoil, Korpfjell represents the fourth well that has been drilled. The first being the Kayak oil discovery announced on Jul3, followed by the Blåmann gas discovery on Jul17 and Gemini North on Aug 7. The drilling of the first four wells was performed in a secure and efficient manner, without any serious injuries.

The semi-submersible drilling rig Songa Enabler was used to drill the Korpfjell well. The rig will now be transferred to the Koigen Central prospect in license PL718 in the western part of the Barents Sea once the well has been permanently closed and discarded.

Statoil, the operator of Korpfjell (PL859) owns 30%. Other partners include Chevron Corporation (CVX - Free Report) , Petoro, Lundin Norway and ConocoPhillips (COP - Free Report) holding 20%, 20%, 15% and 15%, respectively.

Statoil has vast operations in the Norwegian Continental Shelf (NCS). Although, the current drilling did not meet expectations, we believe that Statoil is well positioned to sustain its steady production growth over the next few years on the back of its large resource base at NCS. The company’s constant effort to grow its resource base and enhance shareholder value can be seen by the positivity in its price chart.Year to date,shares of Statoil have gained 2.4% compared with the industry’s decrease of 6.2%.

Zacks Rank & Stock Picks

Currently, Statoil carries a Zacks Rank #3 (Hold). Another better-ranked player in the energy sector includes TransCanada Corporation (TRP - Free Report) ,   which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

Headquartered in Calgary, Canada, TransCanada is a midstream energy firm in North America. The company delivered an average positive earnings surprise of 4.06% over the last four quarters.

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