Many companies are struggling to survive the oil price war raging between OPEC and the United States. Some will make it out alive, though wounded, and some will fall.
With all the players on the field during this tumultuous time, it’s hard to know where to invest. But I’ve seen the signs, and I think one company is not only a safe bet, but a lucrative one.
Indeed, it’s time to revisit one of the top global players in the oil and gas field…
I’m talking about Statoil (STO).
The company is a global powerhouse that’s prepped and ready to benefit from a rebound in global growth, oil prices, natural gas prices, geopolitics, and technology.
Of course, all this is predicated on the long-term view that oil and gas prices return to a state of normalcy. But as I said earlier this week, I think that’s likely.
When it does, Statoil will be triumphant.
Armed and at the Ready
The Norwegian giant is trading at very attractive levels after being pushed down by more than 25% in the past few months – along with everyone else. Let’s take a look at how (and why) Statoil will be the victor.
For one, the company has massive oil reserves. It’s estimated that just one of its fields – Sverdrup, in the North Atlantic Ocean – will produce over $200 billion in revenue at current prices over the next few decades.
Statoil is the pioneer deepwater drilling company in that region, too. Last year, I wrote about its massive discovery in Iceberg Alley, which has the potential to produce another 300 million to 600 million barrels of oil.
It’s also worth noting that the company is an active player in both deepwater and onshore drilling around the world, with operations on every continent (except for Antarctica, of course). This global reach provides good diversification for its portfolio, which is advantageous during this fragile geopolitical time.
Now when it comes to technology, the company isn’t afraid to embrace new tools in order to operate in some of the harshest conditions in the world, like the Arctic and North Atlantic oceans. In the North Atlantic, Statoil has been employing 4-D technology, which uses a time-lapse function to save it more than a billion dollars in drilling and exploration costs.
And as I wrote last week in my article on clean coal, Statoil has partnered with General Electric (GE) to explore the use of carbon dioxide as a possible replacement for water in fracking, thus reducing the cost and dependence on water and also aiding in the sequestration of carbon emissions.
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To top it off, Statoil is also a major producer of natural gas, and supplies more than 14% of Europe’s gas needs. With Russia continuing to roil the natural gas markets in Europe, Statoil stands to reap the rewards of increased demand from a stable source.
So how much will you benefit by rallying for Statoil?
Riding to Victory
Statoil currently pays a hefty dividend of almost 5%. And even though the dividend is likely to fall to around 3.5% to 4% at current oil and gas prices, energy stocks are well known for producing income. Statoil will remain one of the highest dividend payers in the market.
The oil and gas field is hypercompetitive, and the recent downdraft has created a ton of opportunities.
More volatile plays are certainly out there, especially in the shale oil sector. But if you’re looking for diversification, reserves, and a nice fat dividend, Statoil may be the ticket for your portfolio.
And “the chase” continues,
P.S. Today, America is on the verge of energy independence. And there’s no doubt that it will lead the way for growth in the next decade. But is that enough to launch the country into a new Golden Age? That’s the question Wall Street Daily’s Chief Resource Analyst Karim Rahemtulla – along with over two dozen top investment experts – will answer this coming March in St. Petersburg, Florida. The Oxford Club’s 17th Annual Investment U Conference will be held there from March 11 to 14. Click here now for the details.