Statoil (NYSE:STO) is planning an aggressive exploration program in the Gulf of Mexico through 2014 and has a large number of prospects spread across this region. The company is counting on the success of this exploration program to generate long-term production growth.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Gulf of Mexico
Statoil has interests in 300 exploration areas in the Gulf of Mexico and is active on an operated and non-operated basis here. The company plans to drill between eight and 10 exploration wells and four appraisal wells across its portfolio from 2012 to 2014.

The company reported its first operated discovery in the Gulf at the Logan prospect in October 2011. It has not disclosed an estimate of the original oil in place at Logan, but has called the resources here "significant." Statoil plans to drill an appraisal well at Logan in 2013. Petrobras (NYSE:PBR) and Ecopetrol (NYSE:EC) both own a non-operated interest in the Logan prospect.

Statoil is currently drilling the Bioko prospect in the Gulf, which is located close to the Logan discovery. Conoco Phillips (NYSE:COP) is involved on a non-operated basis and owns 40% of Bioko. The Logan and Bioko prospects are targeting the Paleogene or Lower Tertiary formations.

Another operated well for Statoil in the Gulf is the Kilchurn well located on Green Canyon Block 404. The company started drilling this well in January 2012 and is targeting Miocene formations.

SEE: Oil And Gas Industry Primer

Non Operated
Statoil is involved on a non-operated basis at the Heidelberg prospect operated by Anadarko Petroleum (NYSE:APC). The company reported its first discovery here in 2009 and has drilled several successful appraisal wells since that time.

Exploration activity is much riskier than the development drilling that most investors are accustomed to, and Statoil has been involved with unsuccessful wells in the Gulf. The company owns a 27.5% interest in the Kakuna prospect drilled by Nexen (NYSE:NXY) at a gross cost of $120 million. This well was reported as noncommercial by Nexen in May 2012 and was plugged and abandoned by the company.

SEE: A Guide To Investing In Oil Markets

Other Prospects
Statoil has a number of other prospects in Gulf of Mexico that will be tested through 2014. These include Candy Bars, Demon Star, Coral and Hummer Shallow. The company hasn't disclosed much on these prospects but has referred to them as "high volume."

SEE: What Determines Oil Prices?

The Bottom Line
Statoil is active in many areas of the world in its search for future oil and gas opportunities and has a large number of prospects in the Gulf of Mexico. The company is slowly making progress on its own operated leases while partnering with more experienced operators in other areas of the Gulf of Mexico.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Forex Strategies

    Two Great Currencies To Profit From Oil Volatility

    U.S. dollar crosses with Canadian and Australian dollars offer easy access to crude oil trends due to their tight correlation with energy futures.
  2. Markets

    The 5 Biggest Chinese Natural Gas Companies

    Read about the top five Chinese natural gas companies as measured by gas production volume and learn a little more about their business operations.
  3. Economics

    Who Wins With Low Energy Prices? 

    Low oil prices are here to stay for some time. Which economies will benefit or lose from the low oil price regime?
  4. Options & Futures

    Analyzing The 5 Most Liquid Commodity Futures

    Crude oil leads the pack as the most liquid commodity futures market, followed by corn and natural gas.
  5. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  6. Savings

    Do Natural Gas Prices Always Follow Oil Trends?

    Prices for oil and natural gas are highly correlated. But investors should be aware of different factors affecting the prices of these commodities.
  7. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  8. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  9. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  10. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
  5. Unconventional Oil

    A type of petroleum that is produced or obtained through techniques ...
  6. Green collar

    A worker who is employed in an industry in the environmental ...
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!