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Statoil has decided to cancel the Stena Carron drillship contract after fulfilling the work commitments in the Statoil-operated blocks 38 and 39 in the Kwanza basin offshore Angola.

The rig contract will cease with effect from 21 November 2014.

Statoil’s first well results from the area have been disappointing and although the company still sees remaining prospectivity in the basin and on the Statoil acreage, more time is needed to evaluate the well results and mature new prospects before deciding on future activities.

The first two Statoil-operated wells in this pre-salt play, Dilolo and Jacaré, have been drilled safely and very efficiently. These two wells also fulfil the drilling commitments on these two blocks. The Jacaré well in block 38 has now been plugged and abandoned.

Statoil is participating in eight commitment wells across five blocks in the Kwanza basin. So far four wells have been completed and one well is ongoing in block 40 operated by Total.

The costs of terminating the operations and associated services including the Stena Carron contract will be onerous contract and expensed in fourth quarter amounting to approximately USD 350 million.

The 2014 guiding for organic exploration expenditures of USD 3.5 billion remains, including the Jacaré well cost in Block 38, which will be expensed in fourth quarter. In addition it is expected that the signature bonus in block 38 will be impaired.