Canceled Rig Costs Statoil $350 Million After Angola Bust

Canceled Rig Costs Statoil $350 Million After Angola Bust

From Bloomberg BusinessWeek

Statoil ASA (STL) will take a $350 million charge to cancel a rig contract two years early after disappointing wells off Angola, as Norway’s biggest energy company seeks to cap investments.

Statoil will book the cost, which covers terminating the Stena Carron drill ship contract as of today and canceling other services, in the fourth quarter, it said in a statement. The $700 million contract was initially meant to last to the end of 2016, according to the website of Stena Drilling Ltd., a unit of Stena AB, and earlier statements from Statoil.

“Statoil’s first well results from the area have been disappointing,” the Stavanger-based company said in today’s statement. “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.”



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