Statoil: Solid Production Growth in Strong Markets
The Statoil group (OSE: STL, NYSE: STO) had a net income of 8.7 billion in the third quarter of 2005, compared to NOK 5.8 billion in the third quarter of 2004.
The increased income in the third quarter of 2005, compared to the third quarter of 2004, was mainly related to:
- an increase in the average oil price measured in NOK of 35 per cent
- an increase in natural gas prices measured in NOK of 27 per cent
- an increase in oil and gas production of 17 per cent, while lifting increased by 11 per cent
- improved results from refining operations
"The third quarter has been another strong quarter for Statoil, characterized by high oil and gas prices, production growth, and good margins and high regularity in the refineries," says chief executive Helge Lund. "We can once again present record results from our operations."
"Oil and gas production has increased by no less than 17 per cent compared with the same quarter last year. We have experienced substantial growth in gas production from the Norwegian continental shelf, and oil and gas production from our international operations continues to show solid progress."
"I'm pleased to note that since we last published our results, we have secured new building blocks for our international activities," says Mr Lund. "We have been awarded five new licenses in Libya, Brazil and Nigeria. We have further strengthened our position in the Gulf of Mexico through a collaboration with ExxonMobil, and we are on Gazprom's shortlist of potential partners for the Shtokman development in the Barents Sea. These results underpin our purposeful work for a long-term industrial development of Statoil."
Return on average capital employed after tax (ROACE)* for the 12 months ended 30 September 2005 was 26.5 per cent, compared to 19.5 per cent for the 12 months ended 30 September 2004. This increase was mainly due to higher oil and gas prices. Normalised ROACE* for the 12 months ended 30 September 2005 was 12.1 per cent, compared to 12.6 per cent for the corresponding period in 2004. The reason for the change in normalized ROACE is mainly increased investments. ROACE and normalized ROACE are defined as non-GAAP financial measures*.
In the third quarter of 2005, earnings per share were NOK 4.01 (USD 0.61) compared to NOK 2.69 (USD 0.40) in the third quarter of 2004.
Income before financial items, income taxes and minority interest increased from NOK 16.1 billion in the third quarter of 2004 to NOK 23.9 billion in the third quarter of 2005. This was mainly related to an increase in the average oil price measured in NOK of 35 per cent and a 27 per cent increase in gas prices measured in NOK. In addition, increased margins from the refineries were the main contributing factor to the NOK 0.4 billion increase in results from the downstream business.
Total oil and gas production in the third quarter of 2005 amounted to 1,128,000 barrels of oil equivalent (boe) per day compared to 965,000 boe per day in the third quarter of 2004. Total oil and gas liftings in the third quarter of 2005 were 1,081,000 boe per day compared to 977,000 boe per day in the third quarter of 2004. This implies an underlifting of 47,000 boe per day in the third quarter of 2005 compared to an overlifting of 12,000 boe per day in the third quarter of 2004.
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