Eni Sticks to Production Guidance after 3Q Slowdown

Reuters

MILAN, Oct 30 (Reuters) – Italian oil and gas group Eni reiterated its full-year production outlook after third-quarter net profit rose 2.5 percent, with lower taxes offsetting the negative impact of the fall in oil prices and production.

Oil majors have seen their stock market values tumble alongside a 25 percent drop in crude oil prices over the past four months, sliding to a four-year low of near $85 a barrel on slowing global demand and ample supplies.

State-controlled Eni said in a statement that adjusted net profit in the three months to Sept. 30 was 1.17 billion euros ($1.47 billion), above a consensus forecast of 861 million euros in a Reuters poll of six analysts.

"The results were more or less in line with what I expected, but the cashflow result was good," one Milan analyst said.

Operating cashflow in the quarter was 3.98 billion euros, which the company said was its best in a third quarter for five years.

Oil and gas production in the quarter fell 4.7 percent year on year to 1.576 million barrels of oil equivalent per day, hit by mature field declines and maintenance, but the company confirmed that it expects full-year output to be in line with 2013.

"Our exploration is continuing to deliver extraordinary results which will drive future growth in our upstream portfolio," CEO Claudio Descalzi said.

Eni, the biggest foreign oil major in Africa, said earlier on Thursday that it had found about 1 billion barrels of oil equivalent off the coast of Congo.

The company, which is planning about 11 billion euros of asset sales, said it expected to cut capital expenditure for the full year compared with the 12.8 billion euros it invested in 2013.

Many oil majors have reduced investments on increasingly costly projects to return more money to shareholders as lower oil prices bite into margins. (1 US dollar = 0.7940 euro)

(Reporting by Stephen Jewkes; Editing by David Goodman)

 

Copyright 2017 Thomson Reuters. Click for Restrictions.

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