Statoil Posts Poor Q2 Results

Published at 03:24PM - 27/07/16

Statoil announced today a strong downfall in its net operating income for the second quarter of the year, at US$180 million (£137.22 million) compared to US$3.63 billion (£2.76 billion) in the same period of 2015.

The company attributed the disappointing results to the continued low crude oil prices and a lower refining margin.

“We delivered solid operational performance with strong production growth and progress on project development and execution. Our financial results were affected by low oil and gas prices in the quarter,” Statoil CEO and Presient, Eldar Sætre, said.

Statoil Posts Poor Q2 Results

“We maintain our production guidance, expecting annual organic production growth of around 1% from 2014 to 2017. Strict prioritisation, good results from our improvement programme and more effective drilling operations allow us to lower our 2016 capex and exploration guidance,” the executive added.

Over the period, the company reported adjusted earnings of US$913 million (£696.04 million) compared to US$2,88 billion (£2.197 billion) in the same period in 2015, reflecting reduced overall operating costs as a result of the continued cost improvement measures.

Adjusted earnings after tax were negative US$28 million (negative £21.3 million), compared to US$929 million (£708.24 million) in the same period in 2015.

Statoil Increases Production Amid Financial Low

The Norwegian company produced 1,959 million barrels of oil equivalent (boe) in the second quarter, which represents a 6% increase compared to Q2-2015.

The company completed 15 wells and announced two discoveries on the Norwegian Continental Shelf (NCS) and one in Canada.

However, Statoil also experienced two fatal accidents over the period: the helicopter crash near Bergen where 13 people lost their lives and a fatal injury on a contractor in a grinding accident in a yard in Korea.

Meanwhile, the second quarter included a series of new agreements for Statoil, namely the contract signed with Lundin Petroleum to divest its 15% interest in the Edvard Grieg field.

As well as this, the company was awarded five new licences in Norway’s 23rd licensing round and acquired JX Nippon’s 45% interest in, and operatorship of, the UK licence for the Utgard field.

Finally, Statoil saw the sanctioning of the Plan for Development and Operation of the Oseberg Vesflanken 2 field.