STATOIL NET INCOME $1.4 BLN
STATOIL - Statoil reports adjusted earnings of USD 3.0 billion and adjusted earnings after tax of USD 1.3 billion in the second quarter of 2017. IFRS net operating income was USD 3.2 billion and the IFRS net income was USD 1.4 billion.
The second quarter was characterised by:
- Solid earnings and strong cash flow. Net debt ratio reduced to 27.5%
- Good operational performance and high regularity. Around 5% production growth expected in 2017
- Project deliveries and efficiency improvements on track
"Our solid financial results and strong cash flow are driven by good operational performance with high production efficiency and continued cost improvements. At oil prices around 50 dollars per barrel, we have generated 4 billion dollars in free cash flow, and reduced our net debt ratio by 8.1 percentage points since the start of the year. We expect to deliver around 5% production growth this year, and at the same time realise an additional one billion dollars in efficiencies," says Eldar Sætre, President and CEO of Statoil ASA.
"Together with the supplier industry, we continue to make strong progress on project development and execution. Gina Krog has started production, and we are progressing Johan Sverdrup and other important projects like Aasta Hansteen, Mariner, Oseberg Vestflanken, Peregrino II, Dudgeon and Hywind. On the NCS, we have received approval for three new projects and submitted one additional plan for development," says Sætre.
"So far this year, we have drilled 14 exploration wells and made nine discoveries. Several of these can quickly be put into profitable production. Our exploration programme in the Barents Sea started with the Kayak discovery and gives us the opportunity to test several new prospects. We expect to drill around 30 exploration wells in 2017. Based on strict prioritisation and efficient drilling operations we are able to reduce our guidance for exploration spending this year to around 1.3 billion dollars," says Sætre.
Adjusted earnings were USD 3.023 billion in the second quarter, up from USD 0.913 billion in the same period in 2016. Adjusted earnings after tax were USD 1.289 billion in the second quarter, up from negative USD 0.028 billion in the same period last year. Higher prices for both oil and gas, solid operational performance with high production, a reversal of provisions in Angola of USD 0.754 billion and continued progress on improvement work contributed to the increase.
IFRS net operating income was USD 3.244 billion in the second quarter compared to USD 0.180 billion in the same period of 2016.
IFRS net income was USD 1.436 billion, up from negative USD 0.302 billion in the same period last year.
Statoil delivered equity production of 1,996 mboe per day in the second quarter, an increase from 1,959 mboe per day in the same period in 2016. The increase was primarily due to strong operational performance, increased gas offtake and ramp-up of new fields. Excluding portfolio changes, the underlying production growth was 3% compared to the second quarter last year.
Adjusted exploration expenses in the quarter were USD 0.224 billion, down from USD 0.423 billion in the second quarter of 2016.
Cash flows provided by operating activities in the first half of 2017 amounted to USD 9.931 billion compared to USD 3.349 billion for the same period last year. Organic capital expenditure was USD 4.5 billion in the first half of 2017. At the end of second quarter, net debt to capital employed was reduced to 27.5%.
The board of directors has decided to maintain a dividend of USD 0.2201 per ordinary share for the second quarter and continue the scrip programme this quarter giving shareholders the option to receive the dividend in cash or newly issued shares in Statoil at a 5% discount.
The twelve-month average Serious incident frequency (SIF) was 0.8 for the twelve months ended 30 June 2017, compared to 0.7 in the same period a year ago.
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REUTERS - Brent LCOc1 futures fell 43 cents, or 0.5 percent, to $79.14 a barrel by 0218 GMT, after climbing 35 cents on Tuesday. Last week, the global benchmark hit $80.50 a barrel, the highest since November 2014. U.S. West Texas Intermediate (WTI) crude CLc1 futures eased 25 cents, or 0.4 percent, to $71.95 a barrel, having climbed on Tuesday to $72.83 a barrel, the highest since November 2014.
FT - Most oil majors can now cover dividends and capital expenditure at prices around $50 per barrel, meaning that, at $80, they make a healthy surplus.
EIA - The United States remained the world's top producer of petroleum and natural gas hydrocarbons in 2017, reaching a record high. The United States has been the world's top producer of natural gas since 2009, when U.S. natural gas production surpassed that of Russia, and the world's top producer of petroleum hydrocarbons since 2013, when U.S. production exceeded Saudi Arabia’s. Since 2008, U.S. petroleum and natural gas production has increased by nearly 60%.
PLATTS - China became the largest contributor to global LNG consumption growth in 2017. It surpassed South Korea as the world's second largest LNG importer and its share of global LNG demand is expected to converge with that of Japan by 2030.