Equinor ASA (EQNR - Free Report) along with partners Eni SpA (E - Free Report) and Petoro has hit oil in the appraisal well on the Cape Vulture discovery in the Norwegian Sea.
Located 7 kilometers northwest of the production vessel on the Norne field, the Cape Vulture Appraisal well was drilled by the Songa Encourage rig. The well establishes 50-70 million recoverable barrels of oil that is more than double the remaining oil reserves at the Norne field.
In December 2016, the exploration drilling in the Cape Vulture well (6608/10-17S), including side-tracks (6608/10-18, 6608/10-18B and 6608/10-18C), were initiated . The wells were drilled in production license 128 as license 128D was awarded in the APA (award in predefined areas) round in 2015.
Norne field, originally planned to be shut in 2014, had productive life extended to 2036. This is expected to generate considerable spin-offs and enhance production. Further, field development is likely to result in an upside potential for additional recoverable reserves from Cape Vulture.
The appraisal, which is projected to be complete, has led to the discovery of a new play on the Nordland Ridge in the Norwegian Sea. This indicates Equinor’s strategy to adapt new methods as well as try innovative and unproven ideas to unlock the remaining commercial resources on the Norwegian continental shelf (“NCS”) and secure activity for a longer period.
The partners in the Norne license will eventually make a development decision related to the discovery. This emphasizes that substantial resources can be recovered through existing infrastructure on the NCS.
The Northern Norway oil era commenced with the Norne field development off Nordland. Norne was the first field in the region to be developed and brought online in 1997.The remaining recoverable oil reserves in the fields producing through the Norne FPSO (including Alve, Urd, Skuld and Marulk) are currently projected at about 40 million barrels. There are also recoverable gas reserves equivalent to about 80 million barrels of oil equivalent in these fields.
In the past year, Equinor’s shares have surged 38.2% compared with the industry’s 24.8% rally.
Zacks Rank & Stocks to Consider
Equinor currently carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Petroleo Brasileiro S.A. (PBR - Free Report) or Petrobras SA and Shell Midstream Partners, L.P (SHLX - Free Report) . Both these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Petrobras is the largest integrated energy firm in Brazil and one of the major players in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.
Shell Midstream Partners is involved in owning, operating, developing and acquiring pipelines and other midstream assets. The partnership delivered an average positive earnings surprise of 7.9% in the trailing four quarters.
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