OSLO: Statoil ASA, Norway’s biggest oil and gas producer, posted second-quarter profit that beat estimates as higher production and refining margins helped to weather a plunge in crude prices.
Net income excluding financial and other items fell to 7.2 billion kroner ($882 million) from 9.9 billion kroner a year earlier, the Stavanger-based company said Tuesday. That beat the average 5.5 billion-krone estimate in a Bloomberg survey of 20 analysts.
“Statoil delivered encouraging operational performance with good production growth and high regularity, whilst continuing to reduce cost,” Statoil’s Chief Executive Officer Eldar Saetre said in a statement.
Statoil and competitors such as Royal Dutch Shell Plc and Total SA are cutting investments and operational costs after oil prices fell by about 50 percent over the last 12 months. Statoil on Tuesday further lowered planned spending for this year to $17.5 billion compared with $20 billion last year, deepening cuts by $500 million.
That comes after the company, which operates more than 70 percent of Norway’s oil and gas production, set in motion a sweeping efficiency program that includes thousands of job cuts in the three years through 2016. Statoil’s savings program is on track, Saetre said at a press conference.
Output in the quarter rose 4 percent from a year earlier to 1.87 million barrels of oil equivalent a day. That beat the average estimate of 1.85 million barrels in a survey of 33 analysts published by the company.
While Statoil’s average liquids price fell to $55 a barrel from $99.7 a year earlier, refining margins grew to $9.6 a barrel from $3.9, it said. The marketing and processing unit delivered net operating income of 5.1 billion kroner in the quarter, up from 2.6 billion kroner a year earlier.
Statoil, of which the Norwegian state owns a 67 percent stake, will pay a second-quarter dividend of 0.22 cents a share, equivalent to 1.8 krone, after saying in February it would maintain payouts at that level in the year’s first three quarters despite lower oil prices. The company has been raising debt and selling assets to afford dividends and investments over the past years.
The oil producer will change its presentation currency to U.S. dollars from kroner from the first quarter next year to reflect its exposure to the currency and be better aligned with rivals’ reporting, it said. It will announce future dividends in dollars.
Statoil shares rose as much as 4.2 percent in Oslo trading, the most since April 7, and were up 3.1 percent at 134.5 kroner as of 9:05 a.m. in Oslo.