Thu, Jan. 22, 5:58 PM
- Even though it vowed last February to cut costs by $1.3B by 2016, Statoil (NYSE:STO) is getting severely squeezed by the fall in oil prices; Oslo-based Sparebank1 Markets estimates that as long as oil prices stay below $90/bbl, STO must borrow money to pay its dividends and capital expenditure, and if oil averages $60/bbl this year, the company would need to borrow NOK56B ($7.3B) to meet those obligations.
- STO’s current debt stands at NOK86.8B, up from 30.2B three years ago; Citi analysts say STO’s capex and dividend commitments are set to outstrip cash flow by 23% in 2015.
- STO has reduced capex by selling more than $20B worth of assets over the last five years, and the company’s director of development and production in Norway says the cost cutting "must be intensified."
Wed, Jan. 14, 11:43 AM
- Statoil (STO -0.5%) says it has handed back three of its four Greenland offshore oil and gas exploration licenses, as the play is considered too risky and too costly amid falling oil prices.
- STO is keeping one license off Greenland's east coast where the deadline for drilling is longer.
- GDF Suez (OTCPK:GDFZY) also says it has handed back both its Greenland licenses as it did not see any prospects of actually drilling any wells, and Maersk Oil (OTCPK:AMKAF) last week postponed a decision on whether to drill for oil off the island.
Tue, Jan. 13, 8:45 AM
- Statoil (NYSE:STO) says it will shut oil production at the Aasgard field in the Norwegian Sea due to a coming storm and will reduce the number of workers at the Kristin platform, but hopes to restart production at the gas and condensate field as soon as Thursday.
- STO reduced numbers at several oil and gas platforms in the North Sea due to storm Nina last week.
- Aasgard produced 49.7K bbl/day of oil in October, according to the latest available data.
Fri, Jan. 9, 8:19 AM
- Statoil (NYSE:STO) says it plans to extend the life of the Norne oil and gas field in the Norwegian Sea to 2030, having initially planned to shut down during 2014.
- Norne and its satellites have produced ~700M boe since 1997, with remaining resources possibly totaling 300M boe.
- The recovery factor for the main Norne field today is 56.5% - among the top worldwide results for production from subsea fields - which STO hopes to increase to 60%.
Thu, Jan. 8, 8:05 AM
- Statoil (NYSE:STO) could be forced to further delay its Johan Castberg project in Norway’s Arctic waters, acting CEO Eldar Saetre says.
- STO delayed Castberg last June following disappointing exploration results in the Barents Sea failed to boost the profitability of the project, after the company had complained about rising costs and a tax increase; since June, oil prices have been sliced in half.
- Castberg is still profitable at prices below $80/bbl, STO said in November.
- STO +1.8% premarket.
Mon, Jan. 5, 2:21 PM
- Statoil (STO -5.2%) says it has started production of natural gas and condensate from the Valemon field in North Sea and expects to recover up to 192M boe over the field's lifetime.
- STO says the high pressure and high temperature field will cost ~$3B once all production wells are in operation.
- STO owns a 53.7% stake in Valemon.
Mon, Jan. 5, 12:39 PM
- ConocoPhillips (COP -4.8%) says it is flowing its first barrels of oil from the Eldfisk II project in the Norwegian North Sea, in the company’s second big startup off the coast of Norway since late 2013.
- COP says its newly productive project, alongside its other Norwegian offshore wells, will boost its output by 60K boe/day by 2017, and plans to drill 40 new water-injection and oil wells at its Norwegian field over the next three years.
- The Eldfisk field is one of four offshore oil regions that make up Norway’s Greater Ekofisk Area, operated by COP and co-owned with Total (NYSE:TOT), Eni (NYSE:E), Statoil (NYSE:STO) and others.
Dec. 23, 2014, 8:21 AM
- Southwestern Energy (NYSE:SWN) agrees to acquire an undivided 20% of Statoil's (NYSE:STO) ownership in Marcellus Shale oil and gas assets in West Virginia and Pennsylvania for $394M.
- SWN's purchase equates to 30K net acres and increases its overall working interest in the assets to ~73%; STO's net production from the properties was 29M cfe/day of gas as of Oct. 2014.
- When combined with the acreage just acquired from Chesapeake Energy, SWN is obtaining a total of 443K net acres.
Dec. 22, 2014, 3:57 PM
- Statoil (STO -1%) says it discovered oil at one of its wildcat wells in the North Sea, estimating the size of the discovery at 6.3M-19M barrels.
- STO drilled the well just north of another well where a discovery was made in 2011 and a few miles southwest of the Osberg South field; it is the eighth exploration well in the production license.
- Last week, STO said it would invest $600M-plus to develop the Rutil discovery in the Gullfaks reserve area of the North Sea.
Dec. 19, 2014, 8:42 AM
- Statoil (NYSE:STO) says it had awarded a four-year drilling and well services contract for the $7B Mariner heavy oil field off the U.K. to Schlumberger (NYSE:SLB).
- The contract also includes options for Bressay, another heavy oil field off the U.K. which is still in an evaluation phase.
- Drilling is planned to start in 2016 with first production in 2017, and the field is set to produce for 30 years.
Dec. 16, 2014, 3:26 PM
- A consortium led by Statoil (STO +3.3%) has submitted a development plan for the Rutil discovery in the North Sea’s Gullfaks Rimfaks Valley that will extend production from the Gullfaks A platform, providing close to 80M boe.
- The development, one of STO's fast-track projects, will cost 4.6B kroners ($610M), and production is scheduled to begin during Q1 2017.
- The field, which is expected to operate for 15 years, is expected to produce 31K boe/day at its peak production in 2019.
- STO has delayed several new developments as low oil prices and high costs have hurt profits and eaten into its cash, but the Gullfaks project should keep costs relatively low by using existing infrastructure and extend the lifetime of the Gullfaks A platform.
Dec. 15, 2014, 2:42 PM
- The European Commission gives conditional clearance for BP (BP -3.1%) to acquire jet fuel business Statoil Fuel and Retail Aviation (NYSE:STO), subject to conditions.
- The competition authorities say BP had committed to divesting SFRA's activities at Stockholm, Malmo, Gothenburg and Copenhagen airports to remove concerns that increased concentration there would have led to price increases of fuel for airlines.
Dec. 9, 2014, 2:57 PM
- Chevron (CVX +0.3%) is granted rights to explore three blocks offshore New Zealand in the Pegasus and East Coast Basins southeast of North Island, one of the country’s two main islands.
- The license, which begins in April 2015, covers more than 6.26M acres in a frontier basin with water depths from 2,600 to 9,800 ft.
- CVX will operate the blocks and hold a 50% stake, while Statoil (STO -0.4%) will own the remaining interest.
Dec. 5, 2014, 5:38 PM
- The Eagle Ford shale formation in south Texas produced its billionth barrel of oil some time last month, according to analysts at research firm Wood Mackenzie.
- Eagle Ford now accounts for 16% of total U.S. oil production, and the firm forecasts E&P spending of $30.8B in the region next year, ~22% of the total $139.3B expected in U.S. onshore spending.
- Eagle Ford is widely considered the most profitable U.S. shale field, and many analysts speculate the break-even price for production to remain profitable is ~$50/bbl in much of the play.
- Top Eagle Ford producers include EOG, CHK, COP, MRO, BHP, APC, APA, BP, COG, CRZO, CWEI, CRK, XOM, GDP, HES, MTDR, MUR, NFX, PVA, PXD, ROSE, RDS.A, RDS.B, SN, SM, STO, SFY, TLM, ZAZA
Dec. 5, 2014, 12:56 PM
- Norway's economy is getting slammed by falling oil prices, and a new survey by Statistics Norway says the country's oil companies expect to cut investment spending by 14% next year, which could drag Norwegian economic growth down to 1% from an estimated 2.6% this year.
- Norway’s oil companies are already showing the strain: Statoil (STO -1.4%) has delayed major projects and said it will seek to cut costs by $1.3B/year from 2016, and Seadrill (SDRL +0.6%) recently canceled its dividend, sending its shares into a freefall.
- As many as 10K Norwegian and foreign oil industry workers have been laid off YTD, equivalent to more than 10% of workers employed in the sector.
- “We’re starting to get really worried,” says the head of the union that recently threatened to strike unless the government acts to avoid job reductions in the oil industry.
Dec. 5, 2014, 7:48 AM
- Statoil (NYSE:STO) says it will suspend operations of three oil drilling rigs for longer than previously planned because of overcapacity and plunging global oil prices.
- "When the rig contracts were signed it was challenging to ensure sufficient rig capacity. Today the activity is facing lower margins, a generally high-cost level and subsequent lower profitability," says STO's chief of procurement.
- STO -1.7% premarket.
STO vs. ETF Alternatives
Statoil ASA is an integrated oil and gas company. It explores, produces, transports, refines, and markets petroleum and petroleum-derived products. It has operations in Norway, rest of Europe, North America, Africa, Asia and South America.
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