Category Archives: 2011
InterOil Corporation today said that its 2011 net profit was $17.7 million compared with a net loss of $44.5 million for the same period in 2010.
Fourth Quarter 2011 Highlights and Recent Developments
• During the fourth quarter, InterOil completed two Heads of Agreements (HOA) on long-term LNG supply for its proposed LNG project in Papua New Guinea, bringing the total of its three HOAs to 3.3 to 3.8 million tonnes per annum (mtpa). While not binding, these HOAs set out the basis upon which the parties intend to negotiate and document terms for the purchase and sale of LNG.
• Exploration activities continued across our three Petroleum Prospecting Licenses (PPLs) in PNG during the quarter. Seven dip lines were acquired to further delineate the Wahoo and Mako prospects and identify potential drilling locations. Processing and interpretation of the data is ongoing. A third phase of seismic data acquisition, which consists of two dip orientated lines totaling 21 kilometers in length over the Tuna prospect and Wahoo/Mako prospects, commenced on December 22, 2011. Line preparation is currently in progress.
• Net profit for the year ended December 31, 2011 was $17.7 million compared with a net loss of $44.5 million for the same period in 2010, an improvement of $62.2 million. The operating segments of Corporate, Midstream Refining and Downstream collectively returned a net profit for the year of $82.3 million. The development segments of Upstream and Midstream Liquefaction yielded a net loss of $64.6 million.
• Subsequent to the quarter end, on January 17th, 2012, InterOil announced that the Triceratops-2 delineation well had been spudded. The Triceratops-2 well is an appraisal well to test the presence of hydrocarbons and determine whether a potential reefal carbonate reservoir exists in the Triceratops field.
InterOil’s Chief Executive Officer Phil Mulacek commented, “We continue to work with our existing LNG development partners and the PNG government to advance our LNG project towards first production. Simultaneously, our advisors are managing the process of soliciting and evaluating proposals from potential strategic LNG partners. If a strategic partner is selected, we expect that such a partner would assist with accelerating the LNG project’s capacity growth. Our delineation drilling at Triceratops has the potential to add to our substantial resource estimate at Elk and Antelope, and provide back-up supply for increasing LNG capacity. Our prospect inventory is maturing and we anticipate that it will support our goal of a multi-year, multi-well exploration program. We believe that these achievements, combined with our strong balance sheet, support our continued growth and operational success.”
- InterOil Spuds Triceratops-2 Well in Papua New Guinea (mb50.wordpress.com)
- Soros Makes Waves Again (fool.com)
- InterOil Is Inches From Finalizing $6 Billion LNG Project (dailyfinance.com)
Spanish oil company, Repsol, posted a net income of EUR 2.193 billion in 2011, 53.3% lower than that recorded in 2010 and which included the one-time gain from the agreement between Repsol and China’s Sinopec in Brazil.
Earnings were negatively affected by external factors such as the armed conflict in Libya and the strikes and the suspension of the Petróleo Plus program in Argentina.
The Upstream unit’s (exploration and production) recurring operating income was 1.301 billion euros by the end of 2011, a decrease of 11.7% compared to the previous year. Higher international crude oil and gas prices along with lower exploration costs somewhat mitigated the effect of lower production due to external factors and the depreciation of the dollar against the euro.
Repsol’s crude realization prices increased 14.4% compared to 2010. Particularly noteworthy was the 29.6% increase in the Repsol gas realization price compared with a 9.1% decline in the Henry Hub index benchmark. Realization prices had a positive impact of 648 million euros on the upstream unit’s income. During 2011, oil and gas production was 298,800 Boepd, 13.2% less than in 2010, mainly due to reduced production of liquids in Libya, and maintenance work in Trinidad and Tobago. In October, operations in Libya resumed and gross production of almost 300,000 Boepd has already been achieved.
Especially significant was the increased reserve replacement ratio for the Upstream unit, which in 2011 rose to 162% from 131% in 2010. Investments made during the period in this area totalled 1.813 billion euros, 62% more than during 2010. Investment in field development represented 43% of the total and was assigned mainly to the United States, Bolivia, Trinidad & Tobago, Venezuela, Peru and Brazil. Investments in exploration were 40% of total investments, and conducted primarily in the United States, Brazil and Angola. The rest of the investment went mainly to the acquisition of Eurotek in Russia.
During 2011 multiple operations were carried out in this unit that consolidated and increased a portfolio of assets and projects that will allow Repsol to meet its production growth objectives and reserves replacement ratio.
Repsol highlighted the start of development of the giant Cardon IV gas field in Venezuela, the new discovery in the Sapinhoa (previously Guará) appraisal well in Brazil which confirms the high potential of the area, as well as the declaration of commercial viability which allows the company to book reserves. Additionally the company increased production in the Margarita-Huacaya fields in Bolivia and the Shenzi field in the United States.
Repsol in 2011 also received approval from the Algerian authorities to start development work in the Reggane gas project in Algeria.
In addition, the company drilled six successful wells: Sapinhoa North, Northeast Carioca, Gávea (rated one of the 10 largest oil discoveries in the world in 2011) and Malombe in Brazil; Buckskin 2 in the United States and A1-130 in Libya (February 2011).
During 2011, Repsol added 720 mboe in contingent resources from successful exploration, acquisitions and revisions of existing fields. During the period, Repsol acquired a total of 79,000 km² of new acreage in 13 countries including Alaska, Ireland, Norway, Colombia and the United States.
In February 2012, Repsol announced two new discoveries; in Sierra Leone (Jupiter) and a highly promising find in Brazil (Pao de Açúcar).
Kosmos Energy announced yesterday financial results for the third quarter 2011. The Company generated net income attributable to common shareholders of $52 million in the third quarter of 2011, or $0.13 per basic and diluted share. This compares to a net loss attributable to common unit holders of $99 million for the same period in 2010.
Highlights for the third quarter 2011 include:
- Two Jubilee liftings totaling approximately 2 million barrels of oil, net to Kosmos
- EBITDAX of $191 million
- Grew total liquidity by over $115 million to nearly $1.1 billion
- Exploration discovery at Akasa on West Cape Three Points Block
- Successful Enyenra-3 appraisal well on Deepwater Tano Block
- Jubilee Unit participation interest increased as a result of expert redetermination
- Expanded exploration portfolio, with increase in offshore Morocco position to approximately 12 million gross acres
Third-quarter 2011 oil revenues were $230 million, or $115.50 per barrel sold. Production expense was $24 million, or $12.13 per barrel, and depletion and depreciation was $43 million, an average of $21.36 per barrel. Exploration expense for the third quarter 2011 was $11 million. General and administrative costs were $39 million, with over 50 percent related to non-cash items, primarily the Company’s long-term equity incentive compensation program. Interest expense was $17 million. The effective tax rate for the third quarter 2011 was 49 percent.
Cash and cash equivalents at the end of the third quarter 2011 was $656 million, with long-term debt of $1 billion. Total liquidity, including cash and cash equivalents and available borrowing under the debt facility, was nearly $1.1 billion.
Brian F. Maxted, President and Chief Executive Officer, commented, “Our results for the third quarter were very strong, supported by our oil liftings and continued robust Brent pricing. While production at Jubilee has not ramped up as quickly as planned, the ultimate resources recoverable from this giant field are unchanged, and we continue to be encouraged by its reservoir performance. We had a number of positives in our exploration and appraisal drilling programs for the quarter, with successes on both of our Ghana blocks, which continue to highlight the value upside of our Ghana assets. At the same time, we are further enhancing the Company’s portfolio of exploration opportunities, capturing substantial acreage offshore Morocco during the quarter.”
Jubilee Unit Redetermination
A redetermination of the Jubilee Unit tract participation interest was recently completed, resulting in an increase in Kosmos’ Unit interest. As determined by an independent expert analysis, a greater portion of the Jubilee field resources reside in the West Cape Three Points Block than was established under the original tract participations. The original tract participations in the Jubilee Unit were 50 percent for both the West Cape Three Points and Deepwater Tano Blocks. After expert analysis, the Unit interests have been changed to 54.37 percent for the West Cape Three Points Block and 45.63 percent for the Deepwater Tano Block. Accordingly, the Company’s Jubilee Unit interest increased to 24.08 percent from 23.51 percent.
All of the Jubilee Phase 1 wells have been drilled, and current oil production is approximately 80,000 barrels per day. Identified completion issues require one of the producing wells to be sidetracked, as well as downhole remediation on certain other wells. Once these completion issues have been resolved, production is expected to continue ramping up toward the FPSO facility capacity. The J-7 production well is currently being sidetracked, with completion expected at the beginning of 2012. Additionally, the Phase 1A development, including five production and three injection wells, is being planned to commence drilling in 2012.
Kosmos is currently drilling the Teak-3 appraisal well on the West Cape Three Points Block, testing a potential updip stratigraphic extension of the discovery wells. Results at Teak-3 are expected by the end of November 2011. The Teak-4 appraisal well is scheduled to begin drilling late in the first quarter of 2012.
On the Deepwater Tano Block, Kosmos and its partners are currently redrilling the Enyenra-1 (previously known as Owo-1) discovery well, with plans to perform a drill stem test at that location. Immediately following operations at Enyenra-1, the Enyenra-4 appraisal well will be drilled over 4 miles downdip from Enyenra-2, on the south flank of the discovery. Results at Enyenra-4 are expected in the first quarter of 2012.
New Ventures Portfolio
Kosmos’ new ventures team is pursuing a number of opportunities to further enhance the Company’s exposure to new petroleum systems. Kosmos recently entered into a new petroleum agreement for the Essaouira Block offshore the Kingdom of Morocco. The Essaouira Block covers 2.9 million gross acres and is located north of the Company’s Foum Assaka Block. Both blocks are in the Agadir basin. Kosmos will be the operator of the Essaouira Block with a 37.5 percent working interest. As a result of the new agreement, Kosmos’ total acreage position offshore Morocco has grown to approximately 12 million gross acres. The Company is planning an approximately 5,000 square kilometer seismic shoot offshore Morocco on the Foum Assaka and Essaouira Blocks, targeted to begin before year-end 2011.
Kosmos Energy Ltd. is an international oil and gas exploration and production company focused on underexplored regions in Africa. The Company’s asset portfolio includes major discoveries and exploration prospects with significant hydrocarbon potential in several West African countries. Kosmos is listed on the New York Stock Exchange and is traded under the ticker symbol KOS.
Source: Kosmos Energy, November 11, 2011
- Tullow Strikes Oil at Enyenra Well, Offshore Ghana (mb50.wordpress.com)
- Anadarko Reports Successful Itaipu Appraisal, Offshore Brazil (mb50.wordpress.com)
- Ghana: Seadrill Inks One-Year Contract for Ultra-Deepwater Newbuild West Leo (mb50.wordpress.com)
- The Run Continues In Hornbeck Offshore (mb50.wordpress.com)
- Bowleven Announces Drilling Success, Offshore Cameroon (mb50.wordpress.com)
Apache Corporation reported production of 752,000 barrels of oil equivalent (boe) per day and earnings of $983 million, or $2.50 per diluted share, for the three-month period ending Sept. 30, 2011. These compare with production of 667,000 boe per day and net income of $765 million, or $2.12 per diluted share, for the same period in the prior year.
Excluding certain items that management believes affect the comparability of operating results, Apache reported adjusted earnings of $1.2 billion in third quarter 2011 compared with $797 million in the year-earlier period. On a per-share basis, adjusted earnings were $2.95 in the third quarter compared with $2.20 per diluted share in the prior-year period. Oil and gas revenues for third quarter 2011 were $4.3 billion, a 41 percent increase from $3.0 billion for the same period last year. Cash from operations before changes in operating assets and liabilities* were $2.7 billion, up 35 percent from the prior year’s $2.0 billion.
“Apache had a very productive quarter, both in operations and commercial activity,” said G. Steven Farris, chairman and chief executive officer. “For the sixth consecutive quarter, we achieved record daily production on an equivalent basis. We’ve commenced development of the Balnaves oil field offshore Western Australia. We’ve extended the productive range of our holdings in Egypt’s remote Western Desert with new producers in the Faghur Basin. We continue to drill from the extensive, multiyear inventory of drillable locations we have developed in the Permian, Central, Gulf of Mexico and Canadian regions of North America. Domestically, the recent focus has obviously been on higher-margin oil and liquids-rich opportunities. This operational flexibility is a competitive advantage of Apache’s portfolio model.
“Apache made great progress commercially as well during the quarter. We announced the acquisition of ExxonMobil’s Beryl and other selected fields in the U.K. sector of the North Sea, expanding our presence in this region. In Australia, the partner-operated Wheatstone Project advanced to development. This is Apache’s first liquefied natural gas (LNG) project, and we expect it will enable us to monetize an estimated 2 trillion cubic feet of natural gas resource from the Brunello, Julimar, and Balnaves fields, which also are in development, at premium prices pegged to the worldwide market for LNG, creating additional value at those discoveries,” Farris said.
Liquid hydrocarbons represented 50 percent of production and 78 percent of revenues. Apache benefited from higher oil prices for both its international production indexed to Dated Brent benchmarks and sweet crudes from the Gulf of Mexico, which continue to receive a meaningful premium per barrel compared with production benchmarked to West Texas Intermediate prices.
- Apache Proceeds with Development of Balnaves Oil Field Offshore Western Australia (mb50.wordpress.com)
- USA: Anadarko, Apache and Noble Energy Hire ENSCO 8505 Rig (mb50.wordpress.com)
- Canada: Kitimat LNG Wins Export Licence (mb50.wordpress.com)
- Australia: Apache Wins Environmental Approval for Julimar/Brunello Gas Fields (mb50.wordpress.com)
- Apache Considers Entering Israeli Oil and Gas Sector (mb50.wordpress.com)
ION Geophysical Corporation reported third quarter 2011 revenues of $115.7 million, compared to revenues of $121.6 million in the third quarter of 2010. Net income in the third quarter of 2011 was $8.7 million, or $0.06 per diluted share, compared to $11.9 million, or $0.08 per diluted share, in the third quarter of 2010.
ION Geophysical Corporation is a leading provider of geophysical technology, services, and solutions for the global oil & gas industry. ION’s offerings are designed to allow E&P operators to obtain higher resolution images of the subsurface to reduce the risk of exploration and reservoir development, and to enable seismic contractors to acquire geophysical data safely and efficiently.
Oceaneering International, Inc. today reported third quarter earnings for the period ended September 30, 2011. On revenue of $602 million, Oceaneering generated net income of $78.6 million, or $0.72 per share.
These results include an $18.3 million pre-tax gain, $11.9 million after tax using an incremental tax rate of 35%, on the previously announced sale of the Ocean Legend, a mobile offshore production system. Also, the third quarter results included a lower provision of income taxes due to recognition of $4.9 million of tax benefits principally related to prior years.
Oceaneering reported revenue of $516 million and net income of $59.2 million, or $0.54 per share, for the third quarter of 2010. For the second quarter of 2011, Oceaneering reported revenue of $546 million and net income of $56.7 million, or $0.52 per share.
Quarterly earnings were also higher year over year on the strength of record quarterly operating income from Remotely Operated Vehicles (ROV) and Subsea Products. Sequentially, Oceaneering’s quarterly EPS increase was attributable to improved operating income from four of its five business segments: ROV, Subsea Products, Subsea Projects and Advanced Technologies.
M. Kevin McEvoy, President and Chief Executive Officer, stated, “We are very pleased with our record EPS for the quarter, particularly in light of regulatory-constrained activity in the U.S. Gulf of Mexico (GOM). Our overall operations performed within expectations and we remain on track to achieve record EPS for the year.
“Compared to the second quarter of 2011, ROV operating income increased on the strength of higher international demand to provide drill support and vessel-based services. Our quarterly ROV days on hire increased to an all-time high of over 19,000 days. Subsea Products operating income rose on profit increases from most of our product lines, led by increased sales of valves and Installation and Workover Control System services. Subsea Products backlog at quarter-end was $403 million, comparable to our June 30 backlog of $405 million and up from $308 million one year ago.
“Sequentially, Subsea Projects operating income was higher due to the gain on the sale of the Ocean Legend and a slight seasonal increase in demand for our diving services. Advanced Technologies operating income improved on higher demand from the U.S. Navy to perform engineering services and submarine repair work.
“We are adjusting our 2011 EPS guidance range to $2.11 to $2.15, from $1.90 to $1.98, to reflect our third quarter results and our EPS outlook for the fourth quarter of $0.48 to $0.52, based on an expected quarterly tax rate of 31.5%. We continue to anticipate that our ROV and Subsea Products segments will achieve record operating income in 2011.
“We are initiating 2012 EPS guidance with a range of $2.35 to $2.55, as we expect another record earnings year. For our services and products, we anticipate continued international demand growth and a moderate rebound in overall activity in the GOM. The major determinant of our guidance range spread is the amount of operating income growth we generate from our Subsea Projects business.
“Compared to 2011, we anticipate all of our segments will have higher operating income results in 2012; ROV on greater service demand off West Africa and in the GOM and Subsea Products on the strength of higher tooling sales and increased throughput at our umbilical plants. For Subsea Projects, we foresee a gradual recovery in the GOM during 2012 and a substantial increase in revenue and operating income as a result of an anticipated international expansion of our deepwater vessel project capabilities.
“Looking beyond 2012, our belief that the oil and gas industry will continue to invest in deepwater projects remains unchanged. Deepwater remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates at relatively low finding and development costs. With our existing assets, we are well positioned to supply a wide range of the services and products required to support safe deepwater efforts of our customers.”
- Norway: Goliat Field Goes Online (mb50.wordpress.com)
- Norway: Statoil 3Q Net Income Rises 39 pct (mb50.wordpress.com)
- Mexico: Cal Dive to Install Subsea Pipeline in Abkatun Offshore Field (mb50.wordpress.com)
- Going deeper: Canyon Offshore’s ROV pilots explain there’s more than meets the eye (gcaptain.com)
- Hess Plans Development Of Tubular Bells GOM Project (gcaptain.com)
- Sarah: deepwater intervention vessel (mb50.wordpress.com)
- Shell Perdido: The first full field subsea separation and pumping system in the Gulf of Mexico. (video) (mb50.wordpress.com)
Hercules Offshore, Inc. today reported a loss from continuing operations of $17.0 million, or $0.12 per diluted share, on revenue of $163.0 million for the third quarter 2011, compared with a loss from continuing operations of $16.1 million, or $0.14 per diluted share, on revenue of $157.6 million for the third quarter 2010.
John T. Rynd, Chief Executive Officer and President of Hercules Offshore stated, “Activity levels in the U.S. Gulf of Mexico Shelf are on the rise, as operators increasingly focus on liquids rich drilling opportunities. Concurrently, several jackup rigs have departed for international opportunities, resulting in a tight environment for rig availability in the region. Hercules Offshore has been the primary beneficiary of the improving fundamental trends in the shallow water U.S. Gulf of Mexico, which have accelerated during the third quarter. Average dayrates in our Domestic Offshore segment have increased by nearly $10,000 per day over the past year, with leading edge rates suggesting further upside for our domestic jackup fleet.
“Our International Offshore segment was recently successful at securing several contracts, including attractive, long term extensions for the Hercules 261 and Hercules 262 in the Middle East. These contracts are a testament to our strong performance and relationship with the customer, Saudi Aramco. Tempering our international success was the recently announced damage to the Hercules 185, where we are anticipating approximately six months of downtime for repairs.”
Domestic Offshore revenue increased to $60.2 million in the third quarter 2011 from $25.1 million in the comparable period in 2010. Approximately 70% of the revenue increase is attributable to the acquisition of the Seahawk rigs, while higher utilization and dayrates on the legacy fleet contributed to the remaining revenue growth. Average revenue per rig per day increased by $9,722 per rig per day to $49,060 in the third quarter 2011 compared to $39,338 in the prior year period. Utilization in the third quarter 2011 increased to 74.2% from 62.9% in the third quarter 2010. However, operating days rose by more than 90%, largely as a result of the acquisition of the Seahawk rigs. Domestic Offshore operating expenses increased to $53.2 million in the third quarter 2011 from $38.7 million in the third quarter 2010, due to costs associated with the acquired Seahawk rigs. Domestic Offshore recorded an operating loss of $12.8 million in the third quarter 2011 compared to an operating loss of $32.1 million for the respective prior year quarter.
International Offshore revenue declined to $49.0 million in the third quarter 2011 from $74.4 million in the third quarter 2010. The decline was primarily driven by new contracts at lower market rates on the Hercules 208, Hercules 258, Hercules 260 and Rig 3, as well as the downtime related to transition between contracts. The reduction in revenue related to these aforementioned rigs was partially offset by the increased utilization on the Hercules 185. Overall, average revenue per rig per day declined to $96,388 in the third quarter 2011 from $138,344 in the third quarter 2010, and operating days declined to 508 days from 538 days, in the respective periods. Third quarter 2011 operating expenses were $29.1 million compared to $31.1 million in the third quarter 2010, as lower costs associated with new contract terms on the Hercules 258 and Hercules 260 were partially offset by higher costs on the Hercules 185. International Offshore general and administrative expenses during the third quarter 2011 include an $8.0 million benefit, compared to a $1.5 million benefit during the third quarter 2010, from the reversal of an allowance for doubtful accounts related to payments received from a customer in Angola. Operating income decreased to $12.9 million in the third quarter 2011 from $26.9 million in the third quarter 2010.
Inland revenue for the third quarter 2011 increased to $8.1 million from $5.7 million in the third quarter 2010, primarily driven by an increase in average revenue per rig per day to $31,008 in the third quarter 2011 from $21,357 in the third quarter 2010. Utilization of 94.9% during the third quarter 2011 is comparable to 97.5% for the prior year period. Third quarter 2011 operating expenses were $3.5 million, which includes approximately $2.6 million in gains for asset sales, compared to $8.3 million in the comparable period in 2010. Year ago results include an accrual of approximately $3.0 million related to a multi-year state sales and use tax audit. Inland recorded operating income of $0.9 million in the third quarter 2011 compared to an operating loss of $8.6 million in the third quarter 2010.
Domestic Liftboats generated revenue of $16.7 million in the third quarter 2011 compared to $24.6 million in the third quarter 2010. Year ago results were positively impacted by coastal remediation work related to the BP-Macondo incident. The absence of the BP-Macondo related work led to a decline in utilization to 69.8% during the third quarter 2011 from 91.6% for the prior year period. Average revenue per liftboat per day was down slightly to $7,443 in the third quarter 2011 compared to $7,684 in the third quarter 2010. Operating expenses were essentially flat at $11.4 million in the third quarter 2011. Operating income for Domestic Liftboats was $0.6 million in the third quarter 2011 compared to operating income of $9.4 million in the comparable prior year period.
International Liftboat revenue increased modestly to $28.9 million in the third quarter 2011 compared to $27.8 million in the third quarter 2010, largely due to higher utilization, which rose to 64.1% in the third quarter 2011 from 56.6% in the prior year period. This was partially offset by a decline in average revenue per liftboat per day to $21,325 from $23,176 in the same periods, respectively. Operating expenses increased to $14.1 million in the third quarter 2011 versus $13.0 million in the prior year period due to higher labor and maintenance costs. Operating income for International Liftboats was $8.5 million in the third quarter 2011, compared to $9.4 million in the same period of the prior year.
Discovery Offshore S.A. Investment
Since Hercules Offshore’s initial $10 million investment in Discovery Offshore S.A. (Oslo Axess: DISC), which gave the company an 8% ownership stake, the Company has completed several purchases of Discovery common stock, totaling approximately $24.2 million. The most recent purchase on September 13, 2011 increased Hercules’ holding in Discovery to 18.4 million shares, corresponding to 28.0% of Discovery’s share capital.
Headquartered in Houston, Hercules Offshore, Inc. operates a fleet of 49 jackup rigs, 17 barge rigs, 65 liftboats, two submersible rigs, and one platform rig. The Company offers a range of services to oil and gas producers to meet their needs during drilling, well service, platform inspection, maintenance, and decommissioning operations in several key shallow water provinces around the world. Hercules Offshore currently holds 28.0% of share capital in Discovery Offshore, a pure play, ultra-high specification jackup rig company.
- High-Spec Jackup Market: Hercules Offshore increases stake in Discovery Offshore (mb50.wordpress.com)
- Bermuda: AOD to Increase Water Depth Capacity for its Jack-ups (mb50.wordpress.com)
- Shallow Gulf Waters Get Lonely; Hercules Offshore Holds Hope That It Can Dominate in Aging Energy Field (gcaptain.com)
- Push for permits in Gulf of Mexico (mb50.wordpress.com)
“Statoil delivered strong financial results in the third quarter of 2011, reflecting operational performance in line with expectations and strong oil and gas prices throughout the period,” says Helge Lund, Statoil’s chief executive officer.
Statoil presented the long term strategy and long term growth outlook on its capital markets day in June 2011, where revitalisation of the NCS with high value barrels and expansion in unconventionals are among key building blocks.
“The giant Aldous/Avaldsnes discovery clearly reaffirms the strong potential of the Norwegian continental shelf, and we continue our long-term effort to position Statoil as an industrial player and operator within unconventionals through the offer to acquire all shares of the Brigham Exploration Company,” says Lund.
The quarterly result was mainly affected by a 30% increase in the average prices for liquids measured in NOK, a 13% increase in average gas prices, a 13% increase in lifted volume compared to the same period last year, and a net impairment loss of NOK 4.8 billion mainly related to the refinery business.
Net income in the third quarter of 2011 was NOK 9.9 billion compared to NOK 13.8 billion in the same period last year. The decrease stems primarily from lower gain on net financial items and higher tax rates, and was only partly offset by higher net operating income. The tax rate for the quarter was 76.6%.
Adjusted earnings in the third quarter of 2011 were NOK 43.1 billion, a 62% increase compared to NOK 26.7 billion in the third quarter of 2010.
Adjusted earnings after tax were NOK 11.4 billion in the third quarter of 2011. Adjusted earnings after tax exclude the effect of tax on net financial items, and represent an effective adjusted tax rate of 73.5% in the third quarter of 2011.
Total equity production was 1,764 mboe per day in the third quarter of 2011 compared to 1,552 mboe per day in the third quarter of 2010.
Highlights since second quarter 2011:
Successful exploration, highlighted by the Aldous/Avaldsnes oil discovery in the North Sea, one of the largest finds ever on the Norwegian continental shelf. Statoil holds a 40% interest in both licences. In total, 9 discoveries on 13 completed wells by 30 September.
Further expanding in unconventionals, through a merger agreement between Statoil and Brigham Exploration Company for Statoil to acquire all the outstanding shares of Brigham through an all-cash tender offer. If the tender offer is successful, the acquisition adds 375,000 net acres in the Williston Basin with potential for oil production from the Bakken and Three Forks formations. The transaction builds on Statoil’s stepwise build-up in the United States and establishes Statoil as an operator in unconventional plays.
Maturing the project portfolio, including August start-up of the Pazflor development in Angola. Statoil has a 23.33% interest and Pazflor is expected to contribute with 47 000 barrels per day in equity capacity when plateau is reached in the first quarter next year.
Industrial progress, as plans for development and operation (PDO) are submitted to the authorities for the Skuld field in the Norwegian Sea and for the subsea gas compression project at Åsgard, to maintain production from the Mikkel and Midgard reservoirs. PDO for Stjerne and Vigdis North East has been approved.
Participating interests in two exploration licences in Camamu-Almada basin offshore Brazil have been farmed down 10% and 15% respectively to Gran Tierra Energy. The agreement is subject to approval by Brazilian authorities and other conditions.
1 billion Norwegian kroner = 182.23900 million U.S. dollars
- USA: Statoil Signs Energy Partneship Agreement with UT (mb50.wordpress.com)
- Norway: Statoil Gets Clearance to Use Island Constructor (mb50.wordpress.com)
- Statoil Buys Brigham for $4.4 Billion to Get Bakken Shale (businessweek.com)
- Statoil buys Texas-based Brigham for $4.4B (seattlepi.com)
- Norwegian giant in it for the long haul with Texas shale venture (mb50.wordpress.com)
- Deal Profile: Statoil to Buy Brigham for $4.4 Billion (blogs.wsj.com)
- Statoil Q3 profit drop 25 percent on higher costs (seattletimes.nwsource.com)