Statoil: 2014 Second quarter results
25 July 2014 - 3:07PM
Statoil's (OSE:STL, NYSE:STO) second quarter 2014 net
operating income was NOK 32.0 billion, a decrease of NOK 2.3
billion compared to the second quarter of 2013. Adjusted earnings
were NOK 32.3 billion.
"Statoil delivered solid operational performance in the quarter,
with continued high production regularity on the Norwegian
continental shelf and project execution according to plan. We have
deferred gas production to enhance value, but remain on track for
delivering on our production guiding for 2014. Our quarterly
earnings were impacted by divestments, seasonal effects and lower
gas prices. For the first half of the year, earnings were around
the same level as in the same period last year," says Helge Lund,
Statoil's president and CEO.
Statoil's net income for the second quarter was NOK 12.0
billion, an increase from NOK 4.3 billion in the same period of
2013. Earnings per share were NOK 3.75, an increase from NOK
1.38.
Adjusted earnings were NOK 32.3 billion, a 15% decrease compared
to the second quarter last year. The net adjustments of NOK 0.3
billion are primarily related to gains and impairments. In the
second quarter, the company recorded a gain of NOK 3.6 billion from
the farm-down in Shah Deniz and the South Caucasus Pipeline. The
gain was offset by impairments of NOK 4.3 billion in the US onshore
business, mainly related to sustained local price differentials.
Adjusted earnings after tax were NOK 9.9 billion, compared to NOK
11.3 billion in the same period last year.
"Our cash flow from operations before tax is NOK 118 billion so
far this year, and we have a strong balance sheet. We will pay a
dividend of NOK 1.80 per share for the quarter, in line with our
commitment to capital distribution to our shareholders," says
Lund.
Net debt to capital employed at the end of the quarter was 16%.
Organic capital expenditure is USD 10 billion year-to-date, and the
guidance of USD 20 billion for 2014-2016 remains unchanged.
Statoil's adjusted earnings from upstream activities in Norway
decreased from NOK 31.5 billion to NOK 24.1 billion. Earnings from
upstream activities outside Norway increased to NOK 6.3 billion
from NOK 5.9 billion, while earnings from the midstream increased
to NOK 2.4 billion from NOK 0.8 billion.
In the quarter, Statoil made the high-impact Piri discovery in
Tanzania. The discovery brings the total of gas in-place in Block 2
up to approximately 20 tcf, adding volumes for a future large-scale
gas infrastructure development. Exploration expenses were NOK 2.7
billion, down NOK 1.4 billion compared to same quarter last year.
The decreased expenses were mainly due to increased capitalisation
as a result of successful wells.
"We continue progressing our programmes to reduce cost and
improve capital efficiency. In the quarter, we have announced a
potential to reduce between 1100 and 1400 positions. Reductions of
around 1000 positions in our staffs and support services are
already implemented. We have also established six specific
high-impact projects addressing technical efficiency across the
company, and we are now executing the first wave. We are on track,
and will provide an updated status when we report our results for
the full year," says Lund.
Statoil delivered production of 1,799 mboe per day in the second
quarter, down 9% compared to second quarter in 2013. Starting and
ramping up of new fields such as Skarv in Norway, Marcellus and
Eagle Ford in the United States together with PSVM and CLOV in
Angola contributed positively to the production. This increase was
partly offset by divestments and redetermination, expected natural
decline, seasonal effects and optimisation of gas production.
Statoil continued its strong progress on project development and
execution, including the award of a letter of intent for two steel
jackets to the Johan Sverdrup field. This represents a new step
forward in planning of the first phase of this important
development on the Norwegian continental shelf.
The serious incident frequency (SIF) improved from 0.9 in the
second quarter of 2013 to 0.7 in the second quarter of 2014.
Key events since first quarter 2014:
- The CLOV deepwater development came on stream in Angola in line
with the initial project schedule.
- The Johan Sverdrup development: New steps taken by awarding
letters of intent for two steel jackets.
- Statoil made the high-impact Piri discovery offshore Tanzania,
the world's largest gas discovery in 2014 year-to-date.
- Statoil and PTTEP completed the agreement to divide Canadian
oil sands interests.
- The farm downs in Shah Deniz and South Caucasus Pipeline were
completed.
- Statoil opened its new research centre for improved oil
recovery at Rotvoll in Trondheim, Norway.
- Portfolio adjustments in Angola blocks 15/06, 38 and 39.
- Statoil and Statkraft made an investment decision on the
Dudgeon Offshore Wind Farm in the UK.
Further information from:
Investor relations Morten Sven Johannessen,
vice president investor relations, +47 909 34 148 (mobile)
Press Jannik Lindbæk jr., vice president media
relations, +47 977 55 622 (mobile)
This information is subject of the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities Trading
Act.
Press release 2014 Second quarter results
http://hugin.info/132799/R/1837873/638904.pdf Financial statements
and review 2nd quarter 2014
http://hugin.info/132799/R/1837873/638905.pdf Presentation 2nd
quarter 2014 Torgrim Reitan CFO
http://hugin.info/132799/R/1837873/638943.pdf
HUG#1837873
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