Statoil Hits Oil & Gas at Valemon Prospect - Analyst Blog

Norwegian giant Statoil ASA STO together with the Valemon Unit partners has made an oil and gas discovery in the Valemon Nord Prospect, about 100 miles northwest of Bergen in the North Sea.

Drilled by the rig Transocean Leader, the discovery wells – 34/10-54 S and 34/10-54 A, are located around 10 kilometers north of the planned Valemon installation. The total estimated recoverable reserves in Valemon North are expected in the range of 20–75 million barrels of oil equivalent.

A gross 164-meter gas/condensate and oil column in the Middle Jurassic Brent Group was proved by the main wellbore 34/10-54 S. The side-track 34/10-54 A established a gross 100-meter gas/condensate column in the Brent Group and in sand of unspecified Jurassic age. The side-track also proved an additional gross 140-meter gas/condensate column in the Statfjord Group. Gas/condensate was also found in the middle Jurassic Cook Formation.

Discovered in 1985, Valemon field is one of Statoil's largest ongoing development projects on the Norwegian Continental Shelf, with recoverable reserves estimated at 206 million barrels of oil equivalents.

The development concept is a fixed platform, with rich gas export to Heimdal and condensate export to Kvitebjorn. The field is scheduled to come online in the fourth quarter of 2014. Statoil, the operator of the Valemon Unit area, holds an interest of 53.8%. Other partners are Petoro AS, Centrica Resources (Norge) AS and A/S Norske Shell holding 30%, 13% and 3.2%, respectively.

The new discovery in the proximity of the Valemon gas and condensate field currently under development, has increased the reserve base in the Valemon Unit area as well as the value of the field development.

Statoil carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Range Resources Corporation RRC, Unit Corporation UNT and Helmerich & Payne, Inc. HP, all with a Zacks Rank #1 (Strong Buy).