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Statoil says profit falls on lower oil, gas prices

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(Globalpost/GlobalPost)

State-backed Norwegian oil giant said on Thursday that second-quarter profit fell more than expected due to sliding oil and gas prices and weaker results from its trading division.

Net profit in the April to June period fell to 4.3 billion kroner (548.95 million euros, $725 million) from 26.4 billion a year ago, when results were strengthened by one-off items and higher oil and gas prices.

Statoil's results suffered from a seven-percent dip in oil prices and an 11 percent decline in gas sales, and from lower profits in its trading division.

"However, we have maintained good cost control and delivered strong earnings, particularly from our international portfolio," chief executive Helge Lund said in a statement.

Analysts polled by Dow Jones Newswires had expected profits to reach 11.67 billion kroner.

Revenue also failed to meet expectations as it fell 26.1 percent to 148.3 billion kroner, as did net operating income, which was down 44.7 percent to 34.3 billion.

Statoil produced 1,967 million barrels of oil equivalent (boe) per day in the quarter compared with last year's production of 1,980 million boe per day.

Teodor Sveen Nilsen, an analyst at Swedbank First Securities, told Dow Jones production volumes were "decent" but that profits were significantly lower than anticipated.

As a result, he expected to lower his full-year estimate for adjusted earnings before interest and tax by two to four percent.

The Oslo-based group repeated that production would be lower this year than last year, when it stood at just over two million boe per day, and its long-term production target of more than 2.5 million boe per day by 2020.

To achieve that target it plans to make $19 billion worth of investments this year and to drill 50 wells.

Shares in Statoil, an index heavyweight, were 1.51 lower in mid-afternoon trading on the Oslo stock exchange, which was down 0.43 percent.

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http://www.globalpost.com/dispatch/news/afp/130725/statoil-says-profit-falls-lower-oil-gas-prices-0