Statoil Reports 2013 Second Quarter Results STO

Statoils (NYSE:STO) second quarter 2013 net operating income was NOK 34.3 billion. Adjusted earnings were NOK 38.0 billion. "Statoil delivered an operationally solid quarter. We produced as planned, delivering record production from our portfolio outside Norway. We are on track and maintain our guidance for 2013," says Helge Lund, Statoil's president and CEO.

"Our financial results were impacted by lower prices for liquids and gas and weak trading results. However, we have maintained good cost control and delivered strong earnings, particularly from our international portfolio," says Lund.

In the quarter, Statoil ramped up several fields. The company continues to have a high activity level in projects on the Norwegian continental shelf, with major field developments ongoing such as Gudrun, Åsgard subsea compression and Valemon.

"The activity level on new field developments is high. We are executing our projects according to plan," says Lund.

Statoil continued its exploration progress with five discoveries in the quarter. The company has accessed attractive exploration acreage in Norway, Russia, Azerbaijan, Tanzania and Australia, further strengthening its position for profitable long term growth.

Second quarter results 2013

Statoil's net operating income was NOK 34.3 billion compared to NOK 62.0 billion in the second quarter of 2012. Adjusted earnings [5] were NOK 38.0 billion, compared to NOK 45.8 billion in the second quarter of 2012. Adjusted earnings after tax [5] were NOK 11.3 billion, compared to NOK 11.5 billion in the second quarter of 2012. Net income was NOK 4.3 billion compared to NOK 26.6 billion in the second quarter of 2012.

Key events since first quarter 2013:

Revitalising Statoil's legacy position on the Norwegian continental shelf (NCS) by progressing new projects as planned, including Gudrun, Åsgard subsea gas compression, Valemon and Aasta Hansteen. Two category- J rigs acquired by the licence partners of Gullfaks and Oseberg Area Unit to increase recovery and extend field life. Johan Castberg project postponed for review, due to updated project estimates and pending clarification in the fiscal framework.

Accessing attractive acreage in the Barents Sea, Brazil, Tanzania, Russia, Caspian and Australia. Oil discoveries announced offshore Newfoundland in Canada and in the Grane area in Norway. Important Johan Sverdrup appraisal completed, confirming the extent and characteristics of the reservoir.

Stepping up our activity in unconventional resources by assuming operatorship for all activities in the eastern part of our Eagle Ford asset in Texas. Statoil now has operational activities in all onshore assets in the US (Bakken, Marcellus and Eagle Ford).

Building offshore clusters by sanctioning the Julia and Heidelberg developments in the Gulf of Mexico.

Creating value from a superior gas position: The Shah Deniz consortium announced that it has selected the Trans Adriatic Pipeline (TAP) to deliver gas from the Shah Deniz Stage 2 project.

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Earnings season continues.....Royal Dutch Shell [RDS.A], Statoil [STO] and Plains Exploration [PXP]

Royal Dutch Shell [RDS.A] Chief Executive Officer Peter Voser commented: “Our industry continues to see significant energy price volatility as a result of economic and political developments. Oil prices have fallen recently but Shell is implementing a long term, competitive and innovative strategy against this volatile backdrop.”

“Shell's underlying CCS earnings were $7.5 billion for the quarter, a 2% increase in CCS earnings per share from the first quarter of 2012. These results were underpinned by Shell's growth projects, an improvement in downstream profitability, and were delivered despite a difficult security environment in Nigeria.”

“Our profits pay for Shell's dividends and investment in new projects to ensure affordable and reliable energy supplies for our customers, and to add value for our shareholders.”

“Shell is investing for profitable growth, whilst maintaining strong capital discipline. We are developing some 30 new projects and maturing a series of further opportunities for investment. So far this year, we’ve seen the growth impact of recent start ups and we took four final investment decisions in petrochemicals, deepwater, and LNG”......Read the entire Shell earnings report.

Statoil [STO] president and CEO Helge Lundfirst announced 1st quarter 2013 net operating income was NOK 38.0 billion. Adjusted earnings were NOK 42.4 billion. "We deliver financial results impacted by lower production and reduced prices. We continue to deliver good industrial progress according to plan. As previously announced, production in 2013 will be lower than in 2012. We are on track to deliver 2 to 3% average annual production growth from 2012 to 2016 and production above 2.5 million barrels of oil equivalent per day in 2020," says Helge Lund, Statoil's president and CEO.

In addition to the expected lower production in the quarter, production was impacted by operational disruptions at Snøhvit, Troll and Peregrino. Statoil's net operating income was also impacted by a provision related to the Cove Point terminal in the US. Adjusted earnings [5] were down 28% compared to the first quarter 2012. The underlying cost development in the period is stable.

Statoil's cash flows provided by operating activities decreased by 19% compared to the first quarter of 2012, explained by the lower production and reduced prices......Read the entire Statoil earnings report.

Plains Exploration & Production Company (PXP) announces 2013 first-quarter financial and operating results. PXP reported first-quarter revenues of $1.2 billion and net income attributable to common stockholders of $22.6 million, or $0.17 per diluted share, compared to revenues of $524.3 million and a net loss attributable to common stockholders of $82.3 million, or $0.64 per diluted share, for the first-quarter of 2012.

The first quarter 2013 net income attributable to common stockholders includes certain items affecting the comparability of operating results. Those items consist of realized and unrealized gains and losses on our mark to market derivative contracts resulting in a net loss of $202.0 million due in large part to higher crude oil forward prices, a $15.5 million unrealized gain on investment in McMoRan Exploration Co. common stock, debt extinguishment costs of $18.1 million, and other items. When considering these items, PXP reports adjusted net income attributable to common stockholders of $139.6 million, or $1.05 per diluted share (a non-GAAP measure), compared to $77.0 million, or $0.58 per diluted share, for the same period in 2012.

A reconciliation of non GAAP financial measures used in this release to comparable GAAP financial measures is included with the financial tables. PXP's 2013 first-quarter daily sales volumes averaged 170.4 thousand BOE per day compared to 87.9 thousand BOE in the first quarter of 2012......Read the entire Plains Exploration earnings report.


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Crude Oil Declines as Norway Orders End to Strike

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Crude oil dropped from the highest close in two days after Norway ended a strike by energy workers that had threatened to halt production by western Europe’s largest crude exporter.

Futures slipped as much as 1.1 percent in New York after the Norwegian government ordered compulsory arbitration in the dispute, preventing a lockout of platform workers that was scheduled to start at midnight yesterday. Norway pumped 1.63 million barrels of oil a day in May, or about 1.8 percent of global consumption, data from the Norwegian Petroleum Directorate show.

“Traders are probably taking the premium out of oil now that they think the strike will be settled,” said David Lennox, an analyst at Fat Prophets in Sydney. “It was looking like the strike was going to deteriorate further. That risk premium is certainly coming out of crude.”

Oil for August delivery fell as much as 98 cents to $85.01 a barrel in electronic trading on the New York Mercantile Exchange and was at $85.15 at 11:05 a.m. Sydney time. The contract climbed 1.8 percent yesterday to $85.99, the highest close since July 5. Prices are 14 percent lower this year.

Read the entire Bloomberg article

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Norway's Statoil is preparing to shut down production on the Norwegian Continental Shelf (NCS) following a notice of lockout from the Norwegian Oil Industry Association (OLF), the company said Thursday in a statement.

A lockout means a complete shutdown of Norwegian oil and gas production, highly possible government intervention and an end to the strike, which is now running into 12 days.

The decision made by the OLF affects all 6,515 members of Industry Energy, the Organisation of Energy Personnel (SAFE) and the Norwegian Organisation of Managers and Executives (Lederne) who are covered by the offshore pay agreements.

"The conflict is deadlocked and the demands are unreasonable," chief negotiator of the OLF Jan Hodneland said in a statement.

The announced lockout will start on July 9, 2012 at 2400 local time (2200 GMT), and all production on the NCS will be halted, Statoil said.

"Statoil is planning a controlled shutdown of production and return of personnel to land from July 9, 2012 at 2400 [local time]. It will take one to four days to shut all production on the NCS, depending on the characteristics and complexity of each field," Statoil added.

The shutdown on the NCS means that Statoil will have to grapple with a production shortfall of 1.2 million barrels of oil equivalent per day. The group's lost revenue resulting from the production stoppage will amount to around $87 million (NOK 520 million) per day, up an eye-popping $57 million (NOK 340 million) from the OLF's earlier estimate on June 27, 2012.

The striking workers are demanding for an early retirement age for offshore workers at 62 but the OLF has argued that their demands are not in line with government reforms.

"The strike could be a short-term factor supporting Brent prices, but not in the long-term as there are ample crude supplies," IHS Pruvin & Gertz managing director Victor Shum told Rigzone.

The NCS contains 70 oil and gas producing fields sited on the following blocks: The North Sea 56, The Norwegian Sea 13 and The Barents Sea 1. Among the affected fields is the Oseberg field which is critical in the oil market as crude produced from it forms part of the Brent Index. The index represents the average price of trading in the 21-day BFOE (Brent Blend, Forties, Oseberg, Ekofisk) market in the relevant delivery month as reported by industry media.

Posted courtesy of Rigzone.Com

Talisman, Statoil Buy Texas Shale in $1.3 Billion Joint Venture Deal

A Canadian-Norwegian joint venture is buying 97,000 acres of natural gas rich land in Texas' Eagle Ford play, the companies said Sunday. Calgary based Talisman Energy Inc. and Stavanger, Norway based Statoil are paying $1.325 billion for the land, which currently belongs to Enduring Resources, Talisman said. The project will be a 50-50 joint venture between the companies. Talisman will be the initial operator, but Statoil will operate at least half of the joint assets within three years.

Talisman estimated that the property contains the equivalent of 800 million barrels of oil. The property currently produces the equivalent of 5,500 barrels of oil per day, Talisman said. It said six wells are producing energy, and 20 more will have been drilled by year's end. Shale oil and gas deposits have become a key source of U.S. energy production. New techniques make it easier to reach oil and gas trapped beneath layers of rock deep underground. Both Talisman and Statoil have been expanding their shale gas operations in North America.

Courtesy of  INO.com Market and Intraday News


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Iraq Seals Deal with Russia's Lukoil-led Group

A consortium grouping Russia's private oil giant Lukoil and Norway's Statoil ASA on Sunday signed a final deal to develop one of Iraq's biggest oil fields, capping an auction process key to the OPEC nation's plans to boost output and generate sorely needed reconstruction revenues. The deal on West Qurna Phase 2 field in southern Iraq is the last of the 10 fields that Iraq awarded last year during two international licensing rounds as it looked to revamp an oil sector battered by years of sanctions, neglect and, most recently, postwar violence and political bickering.

The signing Sunday also offers some much needed political capital for Iraqi officials as they head into elections in March determined to show that they are actively turning the country around following the turmoil and instability that has defined Iraqis' daily lives since the 2003 U.S. led invasion to topple Saddam Hussein. "These contracts will bring in cash to Iraq, and move ahead plans to develop the infrastructure," said Oil Minister Hussain al-Shahristani, adding that these deals afforded Iraqis the chance to "look toward a bright future."

Although it sits atop the world's third largest proven reserves of conventional crude, Iraq currently only produces about 2.5 million barrels per day, a level still far below its pre-2003 war output. Officials say international companies like Lukoi and Statoil, which together won West Qurna Phase 2 in the December licensing round, are key to raising that output to over 12 million barrels per day in about six years.

Such production, viewed by analysts as unrealistic in that timeframe, would rival Saudi Arabia's. The kingdom, seen as the de facto leader of the Organization of the Petroleum Exporting Countries, currently produces over 8 million barrels per day, but has an overall output capacity in excess of 12 million barrels per day.

For the 15 international firms that won development rights in the various fields, the 20 year contracts were their first chance at access to Iraq since Saddam expelled foreign firms and nationalized the sector in the 1970s. Despite the tempting spoils, the auction results were mixed, with only 10 deals struck out of the 21 oil and gas fields offered during the two licensing rounds.....Read the entire article.

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Crude Oil Futures Increase Following U.S. Stock Market Gains, OPEC Prices Slip

"Crude Oil Futures Increase Following U.S. Stock Market Gains"
Crude oil futures rose for a second day as U.S. equities gained and the U.S. dollar dropped. Oil rebounded as the stock market advanced as a gauge of home prices unexpectedly improved and General Electric Co. led a rally in industrial companies. Prices dropped earlier on an Energy Department report that oil inventories rose 3.86 million barrels to 370.6 million, the highest since September 1990. “There are a large number of financial professionals trading oil who are paying more attention to the equity markets and the U.S. dollar, while ignoring the fundamentals of the oil market,” said Tim Evans....Complete Story

"OPEC's Oil Price Slips Below $48.50"
The price for oil produced by the Organization of Petroleum Exporting Countries (OPEC) shed more than $1 Tuesday, settling at $48.49, the group announced Wednesday.
One barrel (158 liters) of OPEC crude oil was $1.10 lower on Tuesday than on the previous day. The price has dropped by $2.96 since last Friday. The Vienna based cartel calculates an average price based on 12 brands produced by its members....Complete Story

"Statoil’s Arctic Status Threatened as Exxon, Shell Make Bids"
StatoilHydro ASA may see its dominance eroded in Norway’s Arctic as Exxon Mobil Corp. and Royal Dutch Shell Plc bid in the country’s first frontier oil and natural gas licensing round for three years. Norway has offered 28 complete and partial blocks in the Barents Sea off its northern tip and 51 in the Norwegian Sea, which straddles the Arctic Circle. The permits will be awarded “sometime in the spring,” said Jon Evang, an Oil Ministry spokesman, without being more specific....Complete Story


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