Higher oil and gas prices helped boost Repsol YPF SA's (REP.MC) third-quarter net income, even as the company reported a steep drop in oil and gas production compared with last year.
Higher oil and gas prices helped boost Repsol YPF SA's (REP.MC)
third-quarter net income, even as the company reported a steep drop in oil and
gas production compared with last year.
Net income of EUR557 million was up 24.3% from last year and well above the
EUR443.1 million analysts' consensus estimate compiled by Factset. However, the
company's closely-watched replacement-cost-adjusted net profit came in at
EUR429 million; that was slightly below the EUR432 million forecast, weighed
down by higher interest charges and the company's sale of a minority stake in
its Argentine YPF unit.
Total oil and gas production for the quarter fell 18.2% to 283,000 barrels of
oil equivalent a day, pushed down by a shutdown in March in war-ravaged
Libya
and
maintenance in
Trinidad and Tobago
. Production
recently resumed in the North African country, and is currently at about
100,000 barrels a day, Miguel Martinez, Repsol's chief financial officer, said
on a call with investors. He added that he expects the company to be producing
an average of about 170,000 barrels of oil a day in 2012.
That estimate is more cautious than what Repsol's joint venture in Libya
recently told its contractors, according to a letter reviewed by Dow Jones
Newswires that the venture sent to contractors in early November. The letter
said its production in the massive Sharara field could return to pre-war levels
as early as next month.
Repsol ceased operations in
Libya
in
March after war broke out in the country. Just before the conflict started in
Libya
,
Repsol pumped out around 4% of its production from the North African country,
or about 340,000 barrels daily. The company operates fields there jointly with
France
's
Total SA (TOT) and
Austria
's OMV
AG (OMV.VI), as well as
Libya
's
state-owned oil company.
Production also slowly recovered in
Argentina
in
the quarter after strikes depressed output there in the second quarter.
Output in the
Gulf of Mexico
, which had ceased following a
recently-lifted drilling moratorium, has almost fully recovered, to an average
of 28,000 barrels of oil equivalent per day, the company said.
Higher prices for gas and crude oil, as well as at service stations in
Argentina
,
helped offset the effects of production declines.
Liquefied natural gas was a bright spot with higher volumes and marketing
margins. Operating income in that division rose 125% to EUR108 million.
Earlier this week, Repsol said its YPF unit had discovered a large amount of
shale oil in the south of
Argentina
and
would continue an intensive drilling program there.
Martinez
said
that the company is confident Repsol's ability to extract the oil and would
book 20 million to 25 million barrels of the find to its reserves this year. He
added that the company is not pursuing any acquisitions.
At 1422 GMT, Repsol shares were down 0.7% to EUR22.1, while the Ibex-35 was up
0.29%.
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