Lundin Petroleum AB hit a thinner-than-expected extension of the Johan Sverdrup North Sea find, potentially Norway’s biggest offshore discovery since the 1970s.
“The reservoir came in somewhat thinner than expected,” the Norwegian Petroleum Directorate said today in a statement. The appraisal well drilled on the southwest flank of the find proved “six meters of sandstone with very good reservoir quality” without encountering so-called oil-water contact.
Johan Sverdrup spans three licenses in the Utsira High area and may be the biggest crude find off Norway since Statfjord in 1974 with as much as 3.6 billion barrels of oil. Sverdrup has revived industry interest in Norway’s North Sea as oil output is set to fall for a 13th year to less than half a peak in 2000.
“Although the well was drilled in a part of the discovery which is assumed to have the thinnest oil column, we guess the data point for the well could have a somewhat negative impact on the current resource estimate,” Swedbank First Securities analyst Teodor Sveen Nilsen said in a note to investors.
Lundin, based in Stockholm, fell as much as 2.1 percent to 138.20 kronor in the city, the lowest intraday level since Aug. 27, and traded 1.4 percent lower as of 10:36 a.m. local time.
The company is “pleased to have proved the extension of the reservoir at this location with excellent sand quality,” Chief Executive Officer Ashley Heppenstall said in a statement.
Lundin’s partners at Sverdrup include Statoil ASA, Norway’s biggest energy company, and Det Norske Oljeselskap ASA.
“It’s clearly good news that we found continuous reservoir sands at this extreme south-western tip of the reservoir,” said Teitur Poulsen, vice president for investor relations, declining to detail the implications for the field resource estimate. “To still have a six-meter column here removes a lot of uncertainty.”