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Equinor (EQNR) Uncovers Oil in Snofonn Nord Exploration Well

Equinor ASA EQNR announced an oil discovery in Snofonn Nord with the 7220/8-2 S exploration well situated at the Johan Castberg field in the Barents Sea.

In February 2022, the Norwegian authorities granted a drilling permit to Equinor for the 7220/8-2 S well in production license 532.

Equinor is the operator of the production license 532, which was awarded in the 20th licensing round in 2009. Var Energi ASA and Petoro are the remaining license holders. Notably, this is the 12th exploration well to be drilled in production license 532.

The well was drilled five kilometers south-southeast of the discovery well 7220/8-1 on the Johan Castberg field. Using the Transocean Enabler semi-submersible drilling rig, the well was drilled 1269 meters below the water surface. It has now been permanently plugged and abandoned.

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Based on preliminary estimates, the size of the latest discovery is estimated to hold 37-50 million barrels of recoverable oil equivalent. The discovery will further increase the profitability of Equinor’s Johan Castberg field.

Snofonn Nord is a significant discovery in the vicinity of the Johan Castberg development. It can add valuable volumes to the installation in the future. Equinor, together with the other licensees, will consider tying the latest discovery to the Johan Castberg field.

With the latest discovery, Var Energi celebrates its first exploration success this year. The discovery adds valuable volumes to the company’s resource base, supporting its long-term growth targets.

Company Profile

Headquartered in Stavanger, Norway, Equinor is one of the leading integrated energy companies in the world.

Zacks Rank & Other Stocks to Consider

Equinor currently carries a Zack Rank #1 (Strong Buy).

Investors interested in the energy sector might look at the following companies that also presently flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinder Morgan, Inc. KMI is a leading midstream energy infrastructure provider in North America. The company’s board of directors approved a cash dividend of 27.75 cents per share for the first quarter of 2022. This suggests a 2.8% increase from the prior dividend of 27 cents per share.

Kinder Morgan expects to generate a net income of $2.5 billion in 2022. The company anticipates DCF and adjusted EBITDA of $4.7 billion and $7.2 billion, respectively. Moreover, to strengthen the balance sheet, it is planning to end this year with a net debt to adjusted EBITDA of 4.3 times. With this plan, KMI is expecting the ratio for 2022 to be lower than its long-term target of 4.5 times.

Petrobras PBR is one of the largest publicly-traded Latin American oil companies, which dominates Brazil’s oil and gas sector. In the first quarter, PBR generated a positive free cash flow for the 28th consecutive quarter, with the metric rising to $7,932 million from $5,594 million recorded in last year’s corresponding period.

Petrobras, burdened with a huge debt load, emphasized its debt reduction in its recent five-year business management plan (2022-2026) to strengthen its credit rating. As PBR focuses on regaining its financial footing by selling assets and curtailing debt load, it successfully managed to lower gross debt below its 2022 target of $60 billion in the third quarter of 2021, well ahead of time. Post the latest quarterly earnings, the figure stands at $58.6 billion.

Murphy Oil Corporation MUR is a global oil and gas exploration and production company. Recently, MUR’s board of directors approved a 40% increase in the quarterly dividend rate from the fourth quarter of 2022, taking the total annualized figure to 70 cents per share.

Murphy Oil’s total debt to capital declined to 37% for the first quarter of 2022 from 40.2% at the end of 2021. Its times interest earned (TIE) ratio was 2.9 for the first quarter of 2022, up from the fourth-quarter 2021 level of 1.2. A strong and positive ratio is indicative of the firm’s ability to meet its debt obligations in the near future without any difficulty.


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