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Statoil financial results

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LNG Industry,

Statoil reports adjusted earnings of US$ 2.3 billion and US$0.8 billion after tax in the third quarter of 2017. IFRS net operating income was US$1.1 billion and the IFRS net income was negative US$0.5 billion.

The third quarter was characterised by:

  • Solid earnings and underlying cash flow. Stable net debt ratio [5] at 27.8%.
  • Good operational performance. Expected production growth [7] in 2017 increased to around 6%.
  • Project deliveries and efficiency improvements on track. Capex guidance reduced to around US$10 billion for 2017.

“Our solid earnings and underlying cash flow from operations are driven by good operational performance with high production and continued efficiency improvements. In the quarter, we delivered 15% production growth and 11% reduction in underlying operating cost per barrel. In addition, we see strong contribution from our liquids trading and refining business,” says Eldar Sætre, President and CEO of Statoil ASA.

“With an oil price below US$52 per barrel, we have generated US$3.6 billion in free cash flow so far this year, based on good contributions from all business segments. This has further strengthened our financial position,” says Eldar Sætre.

“We continue to realise efficiency improvements and deliver strong progress on project development and execution. We reduce our organic capex guidance for 2017 by US$1 billion, to around US$10 billion. This is the result of hard work from the organisation, in close collaboration with our suppliers and partners, and strict capital discipline. We are getting more for less,” says Eldar Sætre.

Adjusted earnings [5] were US$2.3 billion in the third quarter, up from US$0.6 billion in the same period in 2016. Adjusted earnings after tax [5] were US$0.8 billion in the third quarter, up from negative US$0.3 billion in the same period last year. Higher prices for both oil and gas, solid operational performance with high production, strong liquids trading and refinery margins contributed to the increase.

IFRS net operating income was US$1.1 billion in the third quarter compared to US$0.7 billion in the same period of 2016. Net operating income was impacted by net impairments charges of US$0.8 billion, mainly related to an unconventional onshore asset in North America of US$0.9 billion, triggered by lower than expected production. IFRS net income was negative US$0.5 billion, down from negative US$0.4 billion in the same period last year.

Statoil delivered equity production of 2 million bpd in the third quarter, an increase from 1.8 million bpd in the same period in 2016. The increase was primarily due to increased flexible gas production due to higher prices, lower turnaround activity, ramp-up of new fields, additional well capacity, and continued strong operational performance. Adjusted for portfolio changes, the underlying production growth was 15% compared to the third quarter last year.

Adjusted exploration expenses in the quarter were US$0.4 billion, down from US$0.6 billion in the third quarter of 2016.

Cash flows provided by operating activities before tax amounted to US$14.9 billion in the first nine months of 2017 compared to US$9.9 billion for the same period last year. Organic capital expenditure was US$6.7 billion in the first nine months of 2017. At the end of third quarter, net debt to capital employed [5] was 27.8%.

The board of directors has decided to maintain a dividend of US$0.2201 per ordinary share for the third quarter and continue the scrip programme this quarter giving shareholders the option to receive the dividend in cash or newly issued shares in Statoil at a 5% discount.

The twelve-month average Serious Incident Frequency (SIF) was 0.7 for the twelve months ended 30 September 2017, compared to 0.8 in. the same period a year ago.

With effect as of the third quarter 2017, segment names have been changed for the reporting segments DPN and DPI. New names are Exploration and Production Norway (E&P Norway) and Exploration and Production International (E&P International), respectively. There are no changes to other reporting segments, and operating segments’ names remain unchanged.

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