December 16, 2023 [Yahoo Finance]- Equinor ASA EQNR reached an agreement to acquire Shell plc’s SHEL share at the Linnorm gas discovery in the Norwegian Sea.
Per the deal, Equinor is set to obtain a 30% stake in the PL 255 license, which encompasses the Linnorm gas discovery.
The agreement depends on Equinor becoming the operator instead of Shell. The deal is scheduled to be completed in the first quarter of 2024.
The Linnorm discovery is the biggest untapped gas find on the Norwegian Continental Shelf, with an estimated 25-30 billion cubic meters of recoverable gas resources. This surpasses the remaining gas reserves in each of the active fields Aasta Hansteen, Martin Linge and Gina Krog.
With the acquisition, Equinor aims to strengthen its presence in the Halten area, aligning with its strategy to enhance its portfolio on the Norwegian Continental Shelf. Equinor currently operates productive hubs in this region and continues to identify appealing opportunities for further development.
The reservoir holds relatively dry gas with a notable CO2 content, a situation characterized by Equinor as complex and challenging. The Norwegian state-owned company is actively investigating the possibility of connecting Linnorm to either its Kristin or Asgard B installations through a tie-back.
In addition to acquiring new assets, Equinor has been involved in divesting some of its current holdings. A recent divestment involves the company’s exit from Nigeria through a deal with Chappal Energies to sell its Nigeria business.
Meanwhile, Shell has been actively engaged in activities in the Gulf of Mexico. Recently, the company obtained the remaining interest in a deepwater field in the U.S. Gulf of Mexico, achieving full ownership of this asset. The field has been developed as a subsea tie-back to the nearby Ursa production hub.
Prior to this, Shell made a final investment decision on a phased three-well program aimed at enhancing production at another development in the U.S. Gulf of Mexico.
Zacks Rank & Stocks to Consider
Equinor currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
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