Statoil ASA

2015 second quarter results

Statoil (OSE:STL, NYSE:STO) delivered Adjusted earnings of NOK 22.4 billion and adjusted earnings after tax of NOK 7.2 billion in the second quarter. Statoil reported Net income in accordance with IFRS of NOK 10.1 billion, including gains from divestments.

"In the second quarter, Statoil delivered encouraging operational performance with good production growth and high regularity, whilst continuing to reduce cost. Our financial results were characterised by gains from divestments and lower prices. Also in the second quarter, we report a close to neutral free cash flow after dividend and proceeds", says president and CEO of Statoil ASA, Eldar Sætre.

Adjusted earnings were NOK 22.4 billion in the second quarter compared to NOK 32.3 billion in the same period in 2014. The reduction was primarily a consequence of lower oil prices in the second quarter of 2015 compared to the same period last year. Realised average liquids prices in the quarter were down 28% measured in NOK compared to the second quarter last year. Adjusted earnings after tax were NOK 7.2 billion, compared to NOK 9.9 billion in the same period last year.

Statoil's net income according to IFRS for the second quarter was NOK 10.1 billion, compared to NOK 12.0 billion in the same period in 2014. The gain from the divestment of the Shah Deniz project and the South Caucasus Pipeline was NOK 12.3 billion, impacting the IFRS results. Earnings per share were NOK 3.15, down from NOK 3.75 in the same period last year.

"We continue to progress our effort to improve operational and capital efficiency, and reduce cost. Reduced underlying operational expenses both on the Norwegian Continental shelf (NCS) and in our international operations, as well as reduced capital expenditures, demonstrate that our initiatives are effective. In June we announced adjustments to the company's structure and operating model to further strengthen our competitiveness," says Sætre.

Despite divestments, Statoil delivered production of 1,873 mboe per day in the second quarter, up 4% compared to the same period in 2014. The underlying production growth, after adjusting for divestments, was 7% compared to the second quarter last year. The production from the NCS grew 7% in the second quarter of 2015 compared to last year. The increase was mainly due to ramp-up of production on various fields, higher gas sales from the NCS and lower maintenance compared to the second quarter of 2014. Expected natural decline and reduced ownership shares from divestments partially offset the increase. Equity production outside of Norway was 724 mboe per day and represented almost a 4% increase, adjusted for the Shah Deniz divestment.