Equinor Hits Dry Patch at Barents Sea's Deimos Exploration Well

Equinor ASA (EQNR), the Norwegian state-owned energy giant, has drilled a dry exploration well (7117/4-1, Deimos) in the Barents Sea, finding no commercial hydrocarbons in its latest prospect off the coast of Norway, per an Offshore Energy report.

Details of the Well and Its Stakeholders

The dry well, drilled by COSL Drilling Europe’s semi-submersible COSL Prospector rig, is the first exploration in production license 1238, about 135 km west of the Snøhvit field and 260 km northwest of Hammerfest. Equinor operates the license with a 40% stake, alongside partners Vår Energi, Aker BP and Petoro, holding 20% each.

Geological Results

The drilling targeted Eocene and Paleocene reservoir rocks of the Torsk Formation. However, due to high pressures during drilling, a technical sidetrack was required, and the primary and secondary exploration targets were both unfulfilled. Only a four-meter sandstone layer with good reservoir quality was encountered above the main target, but no commercial hydrocarbons were found.

Operational Impact

Despite not being formation-tested, extensive data were acquired before the well was classified as dry and set to be permanently plugged and abandoned. The drilling reached a vertical depth of 2,511 meters below sea level in a water depth of 283 meters. This marks a setback for Equinor's exploration campaigns in the Barents Sea, although activities elsewhere in the region, such as around Johan Castberg, remain ongoing.

Broader Context

The rig deal for the COSL Prospector — initiated with a two-year contract and options to extend — enables flexibility for Equinor and its partners in ongoing and future exploration across Norwegian waters.

EQNR’s Zacks Rank and Key Picks

EQNR currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector may look at a couple of better-ranked stocks like Precision Drilling Corporation PDS, Antero Midstream Corporation AM and Archrock, Inc. AROC. While Precision Drilling sports a Zacks Rank #1 (Strong Buy) at present, both Antero Midstream and Archrockcarry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.           

Precision Drilling is an oilfield services company. It provides contract drilling, well servicing and strategic support services to the oil and gas industry in North America and internationally. It provides land drilling, directional drilling, turnkey drilling, camp and catering services, and procures and distributes oilfield supplies.

PDS’ earnings beat estimates in two of the trailing four quarters and missed in the other two, delivering an average surprise of 977.7%. The Zacks Consensus Estimate for 2025 earnings indicates a 14.2% year-over-year decline.

Antero Midstream generates stable cash flow by providing midstream services under long-term contracts with Antero Resources. The company prioritizes debt reduction by effectively utilizing free cash flow after dividends. Antero Midstream’s higher dividend yield compared to its sub-industry peers reflects its commitment to generating shareholder returns.

AM’s earnings beat estimates in two of the trailing four quarters, met once and missed in the other, delivering an average surprise of 1.13%.

Archrock benefits from nearly full fleet utilization at 96%, indicating strong demand for its natural gas compression services and effective use of its high-cost equipment. The company’s recent acquisition of NGCS has expanded its large-horsepower asset base and improved customer relationships, boosting both scale and earnings potential. However, risks remain. 

AROC’s earnings beat estimates in three of the trailing four quarters and met in the remaining one, delivering an average surprise of 6.50%.

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