Equinor ASA
EQNR
recently announced that it has discovered oil in production license 554, close to the Visund field in North Sea, offshore Norway. This marks the fifth discovery so far in the Norwegian Continental Shelf in 2021.
The company drilled exploration wells 34/6-5 S and 34/6-5 ST2 in the Garantiana West prospect, only around 10 kilometers north-east of the famous Visund field. The first well discovered 86 meters of oil column in the Cook formation. A medium-good quality sandstone reservoir of 60 meters was discovered at the site. It is drilled 3952 meters below sea, wherein water depth is 285 meters. The company estimates recoverable resources within 1.3-3.6 million standard cubic meters of oil equivalent. This can translate to recoverable resources of 8-23 million barrels of oil equivalent.
The second well, 34/6-5 ST2, is actually a technical side-step adopted by the company as it faced some technical issues in the main well. Both the wells were permanently plugged and abandoned by the company, following extensive data collection. It used West Hercules drilling rig at the site, which will now move on to production licenses PL272 and 035.
Importantly, this discovery can allow the company to utilize its nearby existing infrastructure in the Garantiana field development project to produce oil. The tied-back option will likely allow it to gain massive profits due to low production costs, as new costly infrastructure installments will not be required.
Markedly, the company has
Eni SPA
’s
E
subsidiary VårEnergi and
BP plc
’s
BP
affiliate Aker BP as partners in the production license 554.
Price Performance
Shares of Equinor have gained 50.6%, outperforming the
industry
’s 24.1% growth in the past year.
Image Source: Zacks Investment Research
Zacks Rank & Stock to Consider
The company currently has a Zacks Rank #3 (Hold). A better-ranked player in the energy space is
EarthstoneEnergy, Inc.
ESTE
, having a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Earthstone’s revenues for 2021 are expected to jump 87.7% year over year.
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