Statoil Profit More Than Doubles on Asset Sales, Oil Prices
February 08, 2012, 2:46 PM ESTBy Kari Lundgren
(Adds 2012 production forecast in fifth paragraph.)
Feb. 8 (Bloomberg) -- Statoil ASA, Norway’s largest oil and natural gas company, said fourth-quarter profit more than doubled on rising oil prices and asset sales.
Net income rose to 25.5 billion kroner ($4.4 billion) from 9.5 billion kroner a year earlier, the Stavanger-based company said today. That beat the 13.3 billion-krone average estimate of nine analysts surveyed by Bloomberg. Sales rose 22 percent to 174 billion kroner.
The state-controlled company has plans to raise production to 2.5 million barrels of oil equivalent a day in 2020 as it expands abroad and seeks to maintain production at home. Its ambitions were bolstered last year by finds such as the Johan Sverdrup deposit in the North Sea, which may hold 3.3 billion barrels of oil equivalent, as well as finds in the Barents Sea.
“We delivered strong exploration results in 2011, adding more than 1 billion barrels to Statoil’s resource base,” Helge Lund, Statoil’s chief executive officer, said in a statement. “Making high impact discoveries in the mature North Sea as well as in the Barents Sea reaffirms the potential of the Norwegian continental shelf.”
The company’s equity production rose 2 percent to 1.975 million barrels a day in the quarter. Statoil said it expects production to increase 3 percent on a compound basis in 2012.
‘Changed Significantly’
“Statoil has changed significantly over the last two or three years,” Michael Alsford, an analyst at Citigroup Inc. in London, said in a note before the report. “A combination of acquisitions and some exploration success provides the portfolio with much more genuine depth than it once had.”
Average liquid prices rose 19 percent while gas prices increased 22 percent, the company said. Profit was also boosted by the sale of a stake in Norwegian pipeline owner Gassled for 17.4 billion kroner.
Capital expenditure will be about $17 billion this year including $3 billion on drilling 40 exploration wells around the world.
The company, which operates about 80 percent of Norway’s oil and gas production, is seeking to keep up output from maturing fields at home as it expands abroad. Norway’s oil output has halved since 2000 and Statoil has been struggling to replace reserves.
The so-called reserve replacement ratio was 1.17 in 2011.
The explorer expanded its stake in U.S. unconventional assets last year with the $4.4 billion acquisition of Brigham Exploration Co., becoming one of the top 10 holders of Bakken shale acreage. Statoil entered U.S. shale gas resources in 2008 by buying $3.38 billion in assets from Chesapeake Energy Corp. In June it bought Eagle Ford shale acreage from SM Energy Co.
--Editors: Will Kennedy, Jonas Bergman
To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
