Yahoo Finance Equinor (EQNR) to Divest Interest in Statfjord Area to OKEA
Equinor ASA EQNR has agreed to sell a 28% operating interest in PL037 (Statfjord area) to OKEA, with effect from Jan 1, 2023. The total consideration is worth $220 million, along with a contingent payment component based on oil and gas prices over a three-year period. A 28% working interest in PL037 entitles the holder to 15.4% in Sygna Unit, 23.9% in Statfjord Unit, 28% in Statfjord Nord and 14.0% in Statfjord Øst Unit.
A division of Equinor, called FLX, is in charge of using innovative working methods to ensure safe and effective operation of late-life assets. Spirit Energy and Equinor inked a contract in December 2021, allowing EQNR to buy Spirit Energy's stake in the Statfjord region.
With this transaction, Equinor currently owns 78.6% of the operating interest in Statfjord Unit, with the remaining 3.4% held by Vår Energi. The company will continue to operate the Statfjord field and have a 54.7% working interest post the transaction with OKEA.
According to Camilla Salthe, senior vice president for Field Life Extension, FLX, this transaction will allow the company to optimize its oil and gas portfolio, while also bringing a seasoned industrial partner into the Statfjord alliance.
This will support the Statfjord region's diversification and high value-creation in the coming years. She also added that by developing new ways of working, the company aims to prolong the lifetime of the field till 2040 and reduce emissions by 50% within 2030. The transaction, along with the recent acquisitions from Wellesley in Norway, establishes Equinor’s approach to long-term portfolio optimization and high grading.
Since the beginning of production in 1979, Statfjord has generated gross revenues over NOK 1,675 billion and produced more than 5.1 billion barrels of oil equivalent. The acquisition is anticipated to close in the fourth quarter of 2023, subject to customary government approval.
Zacks Rank & Key Picks
Currently, Equinor carries a Zack Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks for investors interested in the energy sector are CVR Energy CVI and Valero Energy Corporation VLO, each sporting a Zacks Rank #1, and Murphy USA Inc. MUSA,carrying a Zacks Rank #2 (Buy).
CVR Energy, a diversified holding company with its main office in Sugar Land, TX, is an independent refiner and marketer of high value transportation fuels. Over the past seven days, CVI has seen an upward revision in earnings estimates for 2023 and 2024.
Valero Energy is a global manufacturer and marketer of transportation fuels and petrochemical products.With 15 refineries spread across Canada, the United States and the United Kingdom, it has a daily refining capacity of 3.1 million barrels. Over the past 30 days, VLO has seen an upward revision in earnings estimates for 2023 and 2024.
Murphy USA operates stations close to Walmart supercenters and sells low-cost, high-volume fuel. This helps the company to get a lot more business than its competitors. Another significant competitive advantage for the firm is its access to product distribution centers and pipelines, which helps control costs in the intensely competitive retail sector. Over the past 30 days, MUSA has witnessed an upward revision in earnings estimates for 2024.
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