Equinor ASA EQNR reduced its estimate of total recoverable reserves in the Mariner oilfield to 180 million barrels of oil equivalent from its initial consideration of 275 million barrels.

The downward revision led to an impairment charge of $1.8 billion in the area. The Mariner oilfield is situated on the East Shetland Platform of the U.K. North Sea. Equinor operates the field with a 65.1% interest.

The Mariner oilfield, which commenced production in 2019, comprises two reservoirs — Heimdal and Maureen. The field’s reserves have a significant degree of uncertainty due to the high subsurface complexity and its early production phase.

Equinor’s revision of Mariner reserves is associated with an updated seismic interpretation and experience of production from the Maureen reservoir. This has brought forth a revised reservoir model, the outcomes of which are further supported by the results of the first well into the Heimdal reservoir.

When the oilfield came into operation, it was expected to extract more than 300 million barrels of oil over a 30-year period. Mariner is expected to produce 22,000 barrels per day (bpd) in the near term, declining from an average of 30,000 bpd last year.

The Mariner field development involves a production, drilling and quarters platform based on a steel jacket. Crude oil produced from the oilfield is shipped to a floating storage unit, which is then transported to shore through tankers. Notably, the field is expected to produce oil for the next 30 years.

Equinor is ready to collaborate with the Mariner joint venture partners to seek opportunities to improve recovery and production. EQNR intends to continue drilling on the field to increase cash flow in the future.

Company Profile & Price Performance

Headquartered in Stavanger, Norway, Equinor is one of the leading integrated energy companies in the world.

Shares of EQNR have outperformed the industry in the past six months. The stock has gained 43.7% compared with the industry’s 26.9% growth.

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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 carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PetroChina Company Limited PTR is the largest integrated oil company in China. PetroChina is one of the largest producers of crude oil and natural gas in the world. The company’s natural gas business offers lucrative growth prospects in the coming years as China moves from coal to natural gas.