Statoil cancels rig and takes $350 million hit after Angola disappoints
Statoil cancels rig and takes $350 million hit after Angola disappoints
STAVANGER, Norway -- Statoil has decided to cancel its Stena Carron rig contract after fulfilling its work commitments in the Statoil-operated blocks 38 and 39 in the Kwanza basin, offshore Angola.
The rig contract will cease with effect from Nov. 21, 2014.
Statoil’s first well results from the area have been disappointing and although the company still sees remaining prospectivity in the basin and on the Statoil acreage, more time is needed to evaluate the well results and mature new prospects before deciding on future activities.
The first two Statoil-operated wells in this pre-salt play, Dilolo and Jacaré, have been drilled safely and efficiently. These two wells also fulfill the drilling commitments on these two blocks. The Jacaré well in Block 38 has now been plugged and abandoned.
Statoil is participating in eight commitment wells across five blocks in the Kwanza basin. So far, four wells have been completed and one well, operated by Total, is ongoing in Block 40.
The costs of terminating the operations and associated services, including the Stena Carron rig contract, will be booked in the fourth quarter and amount to about $350 million.
The 2014 guiding for organic exploration expenditures of $3.5 billion remains, including the Jacaré well cost in Block 38, which will be expensed in the fourth quarter. In addition, it is expected that the signature bonus in Block 38 will be impaired.
