Norway’s Statoil ASA (NYSE: STO)—the country’s state-owned oil and gas producer, has bought up 70,000 acres in the Marcellus Shale area for $590 million. The acreage was purchased from Grenadier Energy Partners, Protege Energy II, and PetroEdge.
“A majority of the net acres in this transaction are located in the liquid-rich part of the Marcellus,” Statoil said. “The market for these products is substantially better- paying than the current market for dry gas in the U.S.”
As the oil fields of Norway continue to produce in decreasing amounts, Statoil is keenly eyeing expansion opportunities elsewhere. The Marcellus assets currently produce 5,000 barrels of oil equivalent per day and have 300-500 million barrels in risked resource.
As far as Statoil is concerned, the company expects to push U.S. oil output from 166,000 barrels (Q3 2012) to more than 500,000 barrels of oil equivalent per day by 2020. Ultimately, Statoil hopes to go over 2.5 million barrels per day worldwide.
Statoil isn’t new to the Marcellus; it began exploratory entry in 2008 and has also gone into the Eagle Ford (2010) and Bakken/Three Forks (2011). This deal brings Statoil’s total Marcellus acreage to over 750,000 acres.
Currently, the company produces shale gas as the major product; in Q3, numbers were about 63,000 barrels of oil equivalent per day.
Statoil has increasingly moved toward liquid gas production as the cost of dry gas continues to fall due to production glut.