We are upgrading Statoil SA – ADR (STO) to Outperform from Neutral ahead of the quarterly results. Statoil is gaining momentum with the start-up of operations on several new oil and gas fields.
The company is also planning turnarounds on several oil and gas fields in 2010 to improve recovery of resources in mature fields. We like Statoil for its strong finances, relatively improved asset base over its peers and significant exploration initiatives in the North Sea.
The recent spin-off of its retail arm is a catalyst for long-term growth. Statoil remains focused on improving returns on capital employed (ROCE) by maintaining disciplined capital outlays and reducing operating costs.Zacks Investment Research
