Norwegian energy giant Statoil ASA(ADR) (NYSE:STO) reported that it has exercised 11 options worth $16 billion.
The suppliers offer a range of services, including maintenance and modification (M&M) as well as isolation, scaffolding and surface protection (ISS) suppliers.
The M&M work will be carried out on 22 facilities offshore and onshore, by five companies, which have gained extensions from Aug 1, 2014 to Jul 31, 2016. The companies awarded M&M contracts are – Aibel AS, Aker Solutions MMO AS, Reinersten AS, Fabricom AS and Apply Sorco AS.
The ISS work is for 20 facilities offshore and onshore to be performed by four companies also spanning the same time frame. The companies – Linjebygg Offshore, Beerenberg Corp., Kaefer Energy and Bilfinger Industrier – have received options of ISS contracts.
The exercising of the options is the result of evaluation of various factors comprising experience, future needs, market development, HSE and quality.
For 2013, Statoil ASA(ADR) (NYSE:STO) has increased its drilling targets and now plans to drill about 60 exploration wells worldwide versus 50 projected previously and about 20 high impact wells between 2013 and 2015.
The recent oil discoveries in Flemish Pass Basin, offshore Canada and near Norne, gas/condensate discovery north of Asgard, as well as its partnership with Australian oil and gas company OMV in the Wisting Central oil discovery in the Hoop area, Norway, are in sync with its strategy of exploring new frontiers and help to create value through active portfolio management.
Consequently, these finds also boost its financial flexibility. The company now has operational activities in all onshore assets in the U.S. Bakken, Marcellus and Eagle Ford. This goes to show the company’s focus on succeeding in high impact prospects and expanding operations worldwide.
Statoil ASA(ADR) (NYSE:STO) carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include SM Energy Co. (NYSE:SM), Abraxas Petroleum Corp. (NASDAQ:AXAS) and Western Gas Partners, LP (NYSE:WES). All these stocks hold a Zacks Rank #1 (Strong Buy).
Disclaimer: This article is written by Zacks Equity Research and originally published at Zacks.com.