ENI NET LOSS €1.2 BLN
Eni: second quarter and first half of 2016 results
Highlights and outlook
- Hydrocarbon production at 1.734 million boe/d in the first half, up by 0.5%(down by 2.2% in the quarter); excluding the impact of the production shutdown at Val d'Agri, production rose by 2.4% (up by 1.5% in the quarter)
- Eni reaffirms guidance of stable production y-o-y, despite the Val d'Agri shutdown
- Achieved 5 out of the 6 main start-ups scheduled for 2016, among which was the Goliat oilfield in the Barents Sea. Confirmed contribution from new start-ups and ramp-ups of approximately 290 kboe/d for FY2016, including production of the Nooros project in Egypt, which started-up with record time-tomarket
- Confirmed schedules and costs of ongoing development projects which will fuel future production growth higher than 5% in 2017 and will add 500 kboe/dof new production in the plan period
- Exploration: 550 mmboe of resources mainly near-field. Upped to 600 million boe of new resources the initial guidance of 400 million boe for the FY
- Capex optimization: confirmed 20% y-o-y reduction at constant exchange rates
- In the first half 2016, all mid-downstream segments reported positive adjusted EBIT
- Cash flow: €3.1 billion (down by 51% from 1H 2015). Organic cash coverage of capex confirmed at a Brent scenario of approximately 50$/bl in 2016
- GHG emissions: the emission index per barrel produced down by 9%, in line with targets
- Continuing operations:
- adjusted operating profit: €0.77 billion in the first half 2016, down €2.3 billion y-o-y (or 75%) due to a negative trading environment (down €2.8 billion), partly offset by an improved performance;
- €0.19 billion in the quarter (down by 88% from the second quarter of 2015)
- adjusted net earnings: loss of €0.27 billion in the first half 2016; loss of €0.29 billion in the quarter
- reported net earnings: loss of €0.83 billion in the first half 2016; loss of €0.45 billion in the quarter
- Group net earnings: loss of €1.24 billion in the first half
- Net borrowings: €13.81 billion at period-end; leverage at 0.26
- Interim dividend proposal of €0.40 per share
Claudio Descalzi, Eni's Chief Executive Officer,commented: "Eni has achieved significant results in the first half of 2016,despite the weak but slowly improving market environment. Hydrocarbon production beat expectations, offsetting the suspension of activity in Val d'Agri and the disruptions in Nigeria. Our main developments are proceeding on time and on budget,allowing us to confirm our expected production growth of more than 5% in 2017. Our exploration, which is focused on near field activity, has allowed us to revise upwards our expectations for new discoveries in just six months. In mid and downstream, we have achieved positive results across all of our operations due to restructuring and efficiency measures which will continue as planned. Our strategy, including the optimization initiatives and a reduced cost base, has allowed us to absorb part of the impact of a low oil price scenario with a positivecontribution of €1 billion to EBIT. We are maintaining our strong balance sheet, funding capex with our cash flow at a Brent price of 50$/bl. On this basis I will propose an interim dividend of €0.40 per share to the Board."
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GAZPROM - The parties discussed relevant issues related to bilateral cooperation, including the Baltic LNG project. Emphasis was placed on the priority measures aimed at developing a joint design concept (pre-FEED).
BHGE - U.S. Rig Count is up 11 rigs from last week to 1,063, with oil rigs up 8 to 869, gas rigs up 4 to 193, and miscellaneous rigs down 1 to 1. Canada Rig Count is up 13 rigs from last week to 195, with oil rigs up 8 to 127 and gas rigs up 5 to 68.
REUTERS - Brent crude futures had risen $1.02 cents, or 1.3 percent, to $81.28 a barrel by 0637 GMT. The contract dropped 3.4 percent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown. U.S. West Texas Intermediate (WTI) crude futures were up 80 cents, or 1.1 percent, at $71.77 a barrel, after a 3 percent fall in the previous session. WTI is on track for a 3.5 percent drop this week.
EIA - Brent crude oil spot prices averaged $79 per barrel (b) in September, up $6/b from August. EIA expects Brent spot prices will average $74/b in 2018 and $75/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019.