Statoil Q1 Earnings Down on Prices

Statoil reversed a $4.57bn loss in Q1 2015, when it booked impairments of $5.94bn, into a $611mn net profit in the latest quarter, it said on April 27.  

Low oil and gas prices meant this year’s adjusted Q1 earnings were 71% lower at $857mn, compared to $2.95bn in Q1 2015, and roughly half the Q4 2015 level of $1.78bn, although CEO Eldar Saetre pointed to "strong operational performance across all business areas."

Equity oil and gas production was 2.054mn barrels of oil equivalent per day in Q1 2016, similar to the year ago level. That split out into 901,000 boe/d gas (up 3%) and 1.154mn b/d liquids, down 2%. The combined share offshore Norway was 2% higher.

The Norwegian state-controlled firm said it intends to continue to mature its large portfolio of exploration assets and estimates it will spend around $2bn on exploration in full year 2016, although in Q1 it invested $280mn, 20% less year-on-year.

Average invoiced gas prices for Q1 2016 were $5.45/mm Btu in Europe, down 31% year-on-year, and $2.29/mn Btu in North America, down 48% - but in both cases higher than Q1 prices reported by BP a day earlier. Statoil still sells some Norwegian gas part-indexed to oil, whereas BP’s gas is predominantly hub-indexed.

Statoil mentioned its Q1 2016 purchase of a 11.93% stake in Lundin Petroleum for $541mn. The Swedish firm operates the Edvard Grieg oil and gas development with 50% (Statoil's stake 15%) and has a 22% stake in Statoil-run Johan Sverdrup oil development, drilling of which started last month.

Statoil changed the currency in which it reports results at the start of this year to US dollars, from Norwegian kroner.

Mark Smedley