Statoil ASA, Norway’s largest oil and gas company, said first-quarter profit tripled as crude prices surged and production increased.
Net income rose to 11.1 billion kroner ($1.8 billion), or 3.49 kroner a share, from 3.67 billion kroner, or 1.15 kroner, a year earlier, the Stavanger-based company said today. That beat analysts’ estimates of 10.6 billion kroner. Sales gained 15 percent to 129.7 billion kroner.
“Our equity production has been high and oil prices have been rising,” Chief Executive Officer Helge Lund said in the statement. “Despite weaknesses in the gas market our natural gas business has delivered solid results, as a consequence of high offtake from our customers and good trading performance.”
Oil demand and prices revived in the quarter from a year earlier as the global economic recession eased. Oil prices in New York averaged 82 percent higher in the period. BP Plc, which vies with Royal Dutch Shell Plc as Europe’s biggest oil company, last week said its profit more than doubled, while Chevron Corp. had its largest gain in at least a decade.
Statoil’s average sale price for oil rose 73 percent to $74 a barrel. The company’s production gained 1 percent in the quarter, helped by fields such as Agbami in Nigeria and Tahiti in the Gulf of Mexico. Output climbed to 2.102 million barrels a day from 2.074 million a day.
‘Very Good’
“Internationally this is very good, it must be the best they’ve done, predominantly due to better prices,” said Trond Omdal, an analyst at Arctic Securities ASA, who has a “buy” rating. “This is the first time total production is over 2.1 million barrels, which shows their portfolio has potential.”
So-called entitlement output fell to 1.915 million barrels of oil equivalent a day from 1.935 million barrels a year earlier. The company was estimated to produce 1.918 million barrels in a survey of six analysts by Bloomberg.
Statoil got 1.64 kroner a cubic meter of gas, down 35 percent from a year earlier. Europe may be oversupplied with natural gas until 2015, according to the IEA.
The company said today that it expects the gas market to “be challenging in the near term” and that refining margins will remain at “a low level, at least in the near term.”
Output Target
Statoil in February cut its output target for 2012 to between 2.1 million to 2.2 million barrels of oil equivalent a day, from 2.2 million barrels a day because of weak gas market.
The company, which has operating rights on about 80 percent of Norway’s oil and gas production, is seeking to maintain domestic output and is expanding in countries such as Angola and the U.S. as Norwegian reserves dwindle. Norway’s output is forecast to decline for a 10th year in 2010, according to the Norwegian Petroleum Directorate.
Statoil’s reserve replacement ratio rose to 73 percent last year from 34 percent in 2008. The ratio will likely rise to more than 100 percent in the next couple of years, Lund said earlier this year. The unit production costs will be between 35 and 36 kroner per barrel of oil equivalent in 2010, the company also said in February.