Statoil (NYSE:STO) is targeting oil and gas production of 500,000 barrels of oil equivalent (BOE) per day from its North American properties by 2020. This growth will be generated from the continued development of shale resources and other projects in Canada and the Gulf of Mexico.
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North American Overview
Statoil reported oil and gas production of 149,000 BOE per day from its North American operations in the first quarter of 2012, an increase of 75% compared to the corresponding quarter of 2011. The company estimates that it has 23 billion BOE of potential resources spread across its global portfolio, with approximately 6 billion BOE, or 26% located in North America.
Statoil has acreage in various onshore shale plays in the United States and plans the aggressive development of these areas to generate the promised production growth. The company acquired a major position in the Bakken play in North Dakota and Montana through the acquisition of Brigham Exploration Company in late 2011.
It now has 375,000 net acres exposed to the Bakken and reported production of 26,000 BOE per day from here in the first quarter of 2012. Another major area for Statoil is the Eagle Ford Shale, where the company has 80,000 acres under lease and production of 11,000 BOE per day. It is involved with Talisman Energy (NYSE:TLM) in a joint venture in the Eagle Ford Shale and will become operator of this acreage in the first quarter of 2013.
Statoil also reported production of 50,000 BOE per day from the Marcellus Shale and has 680,000 net acres under lease prospective for this formation. The company is still operating rigs here despite the low natural gas prices as it looks to hold leases before they expire.
SEE: A Natural Gas Primer
One operation that will provide part of the North American growth is the Leismer Demonstration Project, an oil sands project in Alberta. Statoil started producing oil from here in January 2011 and reported production of 10,000 BOE per day in the first quarter of 2012.
Statoil is planning an expansion at Leismer that will increase the gross capacity to 40,000 BOE per day. The company is also planning oil sands projects at the Corner and Thornbury project areas that will increase gross capacity in the oil sands to 120,000 BOE per day.
SEE: Oil And Gas Industry Primer
Gulf of Mexico
Statoil has also invested considerable capital in the Gulf of Mexico and expects a number of projects to start up production by 2020. These include the Jack and St. Malo fields under development by Chevron Corporation (NYSE:CVX) which is expected to start up in 2014.
Statoil is also involved with the development of the Caesar Tonga Field operated by Anadarko Petroleum (NYSE:APC), which started up production in March 2012. The operator expects production to ramp up to 45,000 BOE per day from three wells and plans additional phases of future development here.
SEE: What Determines Oil Prices?
The Bottom Line
Statoil is bullish in North America and is planning a development program here that will more than triple the oil and gas production by 2020. Many other operators have adopted similar strategies as they seek to take advantage of the North American renaissance.
At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.