Wednesday, October 1, 2014

Statoil, The Cheapest Oil Major, Is Looking Super Attractive

This article was originally published by Seeking Alpha on September 16, 2014. 

Summary: Statoil has just sold another asset for $1.3 billion. The company has built significant positions in three major U.S. shale plays. Statoil’s real strength, however, lies somewhere else.

The Norwegian energy major Statoil (NYSE:STO) has recently announced another major asset sale; and that is great news for investors.

On Friday, Statoil announced the sale of some of its domestic assets to Wintershall AG for $1.3 billion as the former gears up to spend billions on its future projects. Statoil has been bolstering its balance sheet over the last four years by selling its non-core assets valued at $20 billion. The asset sales will allow Statoil to tap into its massive portfolio of projects in Norway and international markets and allow the company to cut its capital expenditure by $1.8 billion through the end of the decade.

Onshore U.S. Assets

Over the years, Statoil has amassed attractive positions in three of the leading onshore U.S. shale fields. The company owns more than 600,000 net acres at Marcellus in West Virginia and Pennsylvania, around 290,000 net acres in the Bakken formation in North Dakota and 59,000 net acres in Eagle Ford in Texas. In the previous quarter, Statoil produced around 121,900 barrels of oil equivalents per day, or boepd, from Marcellus, 50,200 boepd from Bakken and 37,700 boepd from Eagle Ford.

Since 2010, Marcellus has been making the biggest contribution to the company's production from onshore U.S, and this trend will likely continue in the future. Additionally, the company's onshore U.S. operations ... read full article at Seeking Alpha.