Aker BP Raises Production Guidance

Aker BP ASA has revised up the lower end of its projected production for 2024 from 420,000 barrels of oil equivalent a day (boed) to 430,000 boed, while the upper end remains at 440,000 boed.

The Norwegian continental shelf operator saw output fall year-on-year and quarter-on-quarter to 414,700 boed in the third quarter due to planned maintenance activities. Fornebu, Norway-based Aker BP now expects production to recover in the fourth quarter, according to its results report.

Also on September 3, it announced the start of production in the Tyrving field in the Alvheim area, five months earlier than planned. The field’s recoverable resources are estimated to be 25 million boe.

“The company is advancing several large-scale field developments set to significantly boost production from 2027”, the exploration and production company said in the report on its website. “These projects are progressing on schedule, within budget, and demonstrate robust economics”.

Third-quarter 2024 production cost was $6.6 a barrel. Aker BP lowered its full-year cost guidance to about $6.5 per barrel from around $7 previously.

Third quarter net profit landed at $173 million, or $0.27 per share — down by both prior-year and prior-quarter comparisons due to lower production, lower sales volumes and weaker realized prices.

Net sales totaled 391,300 boed, comprising 345,000 boed of liquids and 46,400 boed of natural gas.

While Aker BP’s average realized gas prices rose year-on-year and quarter-on-quarter to $63.5 per boe, oil declined to $80.3 per boe.

Operations generated $2.76 billion in cash flow, while operating profit landed at $1.7 billion. Pre-tax profit came at $1.63 billion. EBITDA totaled $2.61 billion.

Aker BP recognized impairments of $304 million, “consisting of technical goodwill on Grieg/Aasen, Johan Sverdrup and Valhall”.

It declared a dividend of $0.6 per share for the third quarter, up from $0.55 last year.

Aker BP ended the quarter with $3.36 billion in cash and cash equivalents while bank and bond debt rose to $6.67 billion.

Aker BP recently issued dollar-denominated senior notes due 2034 and 2054 with an aggregate principal amount of $1.5 billion.

The 10-year bonds worth $750 million have a 5.125 percent interest while the 30-year ones, which also have a principal amount of $750 million, have a 5.8 percent interest. The coupons are payable semi-annually.

Aker BP plans to use proceeds for “general corporate purposes” and the redemption of outstanding notes maturing 2025 and 2026, for which it had already launched a purchase offer, according to regulatory disclosures.

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