Brazil Clears Statoil's Stake Buy from Vale - Analyst Blog

Norwegian energy provider Statoil ASA's STO offshore oil concession stake purchase from mining giant Vale was approved by the Brazilian government.

This authorizes Statoil to acquire 25% of the BM-ES-22A concession, which consists of two blocks – ES-M-468 and ES-M-527 – in the Espírito Santo basin offshore Brazil, near several other blocks where Statoil is either operator or partner.

The well proved two reservoir levels with 34–36 API oil and currently the discovery is being evaluated by the drilling of the Montanhês well.

Located in the outer Espirito Santo Basin and partly adjacent to the BM-ES-32 concession, where Statoil is a partner, the appraisal of BM-ES-22A was based on the result of the nearby Indra discovery made in 2010.

The Arjuna well was drilled in 2012 as an assessment of the Indra discovery and established that this accumulation stretches into BM-ES-22A, from the nearby block BM-ES-32. The well hit an oil column of 200 meters. A production test proved existence of a good quality reservoir with 29 API oil.

Statoil holds a 25% in the block, while Petrobras, the operator, retains the remaining 75% interest. The transaction is in line with Statoil's expansion strategy expanding positions in the core exploration areas. The company is currently planning the acquisition of 3D seismic data, which is expected to start in the second quarter of 2014 on the blocks awarded in the 11th Round.

Statoil currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas industry worth considering include Valero Energy Corporation VLO, Range Resources Corporation RRC and Helmerich & Payne, Inc. HP. All these stocks sport a Zacks Rank #1 (Strong Buy).


 
HELMERICH&PAYNE HP: Free Stock Analysis Report
 
RANGE RESOURCES RRC: Free Stock Analysis Report
 
STATOIL ASA-ADR STO: Free Stock Analysis Report
 
VALERO ENERGY VLO: Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!