OMV AG OMVJF, an Austrian energy company, announced that its subsidiary OMV Norge and its partners have discovered a new gas reservoir in the Norwegian Sea. OMV Norge drilled a fast-track well (6605/6-1 S) targeting the Haydn/Monn exploration areas, which led to the successful discovery.
The target well was drilled using the semi-submersible drilling rig Transocean Norge, which belongs to the renowned offshore drilling company. Transocean RIG. The Transocean Norge drilling rig is the first of its kind to receive the Abate (Power+) certificate for its efforts to reduce greenhouse gas emissions associated with its operations.
The recoverable resources of the gas discovery are estimated at 30-140 million barrels of oil equivalent (boe). The discovery is located in production license (PL) 1194, which is operated by OMV.
OMVJF holds a 40% interest in PL 1194, while its partners Vår Energi and Inpex Idemitsu Norge each own a 30% interest. The Norwegian Offshore Directorate (“NOD”) determined that 6605/6-1 S was the first well drilled in PL 1194.
Preliminary estimates for the primary exploration target suggest that the discovery size is in the range of 4 to 12 million standard cubic metres (Sm).3) Oil equivalent.
The objective of the primary exploration was to confirm the presence of petroleum in the Upper Cretaceous reservoir rocks within the Springar Formation. The secondary objective was to test the presence of petroleum in the Nise Formation, which is also part of the Upper Cretaceous.
Formation testing was not completed on well 6605/6-1 S. However, extensive data was collected and samples taken from the well. In the primary target, the well encountered a gas column approximately 20 meters thick, of which 13 meters were contained in medium to good quality sandstone reservoirs. However, gas/water contact was not established.
In addition, gas-filled sandstone layers approximately 11 metres thick were encountered in the lower part of the Springar Formation. A further gas column approximately 5 metres thick was found in the secondary exploration target of the Nise Formation. There is uncertainty about the size of these discoveries.
However, preliminary estimates indicate that the lower part of the Springar Formation is 0.5 to 5 million sm.3 recoverable oil equivalent. The Nise Formation contains an estimated 0.5 to 6 million Sm3 of recoverable oil equivalent.
The gas discovery is located 300 km west of mainland Norway. The water depth is 1,064 meters. The gas discovery is located approximately 65 kilometers from the Polarled pipeline and the Aasta Hansteen field. OMV and its partners in PL 1194 are evaluating the potential for developing the gas discovery using their existing infrastructure nearby. OMV stated that using the subsea infrastructure to connect to the Aasta Hansteen host platform should enable cost-effective development and lower CO2 emissions.
The well was drilled to a vertical depth of approximately 4,641 meters below sea level and reached a measured depth of 5,123 meters. The well terminated at the Nise Formation. It was permanently plugged and abandoned.
Zacks Rank and Important Tips
Currently, OMVJF and RIG each have a Zacks Rank of 3 (Hold).
Some better valued stocks in the energy sector are SM Energy SM and MPLX-LP MPLX. SM Energy currently has a Zacks Rank #1 (Strong Buy), while MPLX has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is an upstream energy company operating in the prolific Midland Basin and South Texas regions. The company expects production to increase year-over-year in 2024, indicating a positive production outlook.
MPLX LP owns and operates a broad range of midstream assets. The partnership’s midstream assets include oil and natural gas gathering systems and transportation pipelines for crude oil, natural gas and refined petroleum products. MPLX is the least exposed to commodity price fluctuations because it generates stable, fee-based revenue. In addition, it outperforms its industry peers in terms of distribution yield, reflecting its commitment to returning capital to its shareholders.
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