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Statoil-Total Conclude Stake Purchase in North Platte Find

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Statoil ASA and Total SA (TOT - Free Report) concluded the purchase of Cobalt International Energy’s interest in the North Platte discovery in the U.S. Gulf of Mexico. The purchase of 60% operated interest in the asset was valued at $339 million.

The partners won the joint bid for the asset in a bankruptcy auction of some of Cobalt’s assets held on Mar 6, 2018. On completion of the purchase, Statoil owns a 40% non-operated interest in North Platte. Total became the operator of the asset after its stake increased to 60% from 40%. The effective date of the transaction is Jan 1, 2018.

North Platte, a Paleogene oil discovery, includes four blocks in the Garden Banks area of the U.S. Gulf of Mexico. Since its discovery in 2012, the find has been appraised completely with three drilled wells and multiple sidetracks.

Currently, Statoil has interests in eight producing fields in the U.S. Gulf of Mexico and two in development. Production from these assets is projected to reach 110,000 barrels of oil equivalent per day, which will place Statoil among the top five producers from the deepwater Gulf of Mexico. By 2020, the company’s portfolio is expected to attain an average cash margin of about $45 per barrel after tax at an oil price of $70.

The latest acquisition is in sync with Statoil’s strategy to strengthen its presence in CO2 high-quality assets. It is an ideal fit to its U.S. offshore portfolio as it has immense knowledge of the Paleogene play in which they are the second largest producer.

Besides its offshore portfolio in the U.S. Gulf of Mexico, Statoil has widespread onshore operations in the Eagle Ford (Texas), the Bakken (North Dakota) and the Appalachian basin (Ohio and Pennsylvania).

Price Performance

Statoil’s shares have gained 10.2% in the last three months versus the industry’s 5.5% decline.


Zacks Rank & Key Picks

Statoil carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Continental Resources, Inc (CLR - Free Report) and SunCoke Energy Inc (SXC - Free Report) . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Continental Resources is an independent oil and natural gas exploration and production company. It delivered an average positive earnings surprise of 64.9% over the last four quarters.

SunCoke Energy produces metallurgical coke in the United States. The company delivered an average positive earnings surprise of 130.6% in the last four quarters.

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