Statoil
(OSE:STL, NYSE:STO) delivered
adjusted earnings of NOK 15.2 billion and adjusted earnings after
tax of NOK 1.6 billion in the fourth quarter 2015. For the
full year 2015, adjusted earnings were NOK 77.0 billion and
adjusted earnings after tax were NOK 19.5 billion. Statoil's net
income in accordance with IFRS for the fourth quarter 2015 was
negative NOK 9.2 billion, and for the full year 2015 it ended at
negative NOK 37.3 billion, mainly as a result of lower short term
price assumptions leading to impairment charges and
provisions.
Today, Statoil presents its update to the capital markets,
announcing a step-up in its improvement programme by 50% to USD 2.5
billion per year in 2016. One year ahead of plan, Statoil delivers
annual cost improvements of USD 1.9 billion, compared to its 2016
target of USD 1.7 billion. Statoil is reducing organic capital
expenditure from USD 14.7 billion in 2015 to around USD 13 billion
in 2016, and has substantially improved its portfolio of
non-sanctioned projects, with planned start-up by 2022, reducing
the average break-even oil price from USD 70 per boe in 2013 to USD
41 per boe in 2016.
"The result in the fourth quarter is highly impacted by the weak
commodity price. However, we continue to make strong progress on
costs and efficiency. We are now further stepping up our
improvement programme, and tightening our capital and exploration
expenditures. These are key elements in navigating the business
during a period of low oil prices", says president and CEO of
Statoil ASA, Eldar Sætre.
"Statoil is well positioned to capture value from an expected
upturn in the market. We have substantially improved our
non-sanctioned project portfolio. More than 80% of the operated
projects, with start-up by 2022, have a break-even oil price below
USD 50 per boe, says Sætre.
The Board of Directors will propose to the Annual general
meeting (AGM) to maintain a dividend of USD 0.2201 per share fourth
quarter 2015 and the introduction of a two-year scrip dividend
programme starting from the fourth quarter 2015. The scrip
programme will give shareholders the option to receive quarterly
dividends in cash or in newly issued shares in Statoil, at a 5%
discount for the fourth quarter 2015. The Norwegian Government, as
majority shareholder, supports the proposal and will seek the
Norwegian Parliament's approval to vote in favour of the proposal
at the Annual general meeting. The Norwegian government will match
subscription of shares by minority shareholders, and thereby
maintain its ownership share at 67% throughout the programme.
"We are firmly committed to maintain a competitive capital
distribution, in line with our dividend policy. The proposal is to
maintain the dividend, while offering shareholders an option to
reinvest their dividend in newly issued shares. We are pleased to
introduce the scrip programme as an additional tool, strengthening
the company's financial flexibility to invest in high-quality
projects in a timely manner", says Sætre.
Adjusted earnings in the fourth quarter of 2015 were NOK 15.2
billion, down 44% compared to NOK 26.9 billion in the fourth
quarter of 2014. Realised average liquids prices in the quarter
were down 29% measured in NOK compared to the fourth quarter last
year. Adjusted earnings after tax were NOK 1.6 billion, compared to
NOK 4.3 billion in the same period last year.
Statoil's net operating income according to IFRS for the quarter
was NOK 1.7 billion, compared to NOK 9.0 billion in the same period
in 2014. Net impairment charges of NOK 10.1 billion related to
impairment of various assets, provisions of NOK 4.8 billion and
gain on sale of assets of NOK 3.2 billion impacted the IFRS
results. Earnings per share in the period were negative NOK 2.89
compared to negative NOK 2.81 in the same period last year.
Statoil delivered equity production of 2,046 mboe per day in the
fourth quarter, a reduction of 3% compared to the same period in
2014. Adjusting for divestments, the underlying production was at
the same level as in the fourth quarter last year.
Statoil reported cash flow from operations in 2015 of NOK 165.8
billion before taxes paid and working capital items. At year-end,
Statoil's net debt to capital employed was 26.8%. Organic capital
expenditure was USD 14.7 billion in 2015.
Statoil completed 39 exploration wells during 2015, with three
wells on-going at year-end. Adjusted exploration expenses in the
quarter were NOK 4.2 billion, down from NOK 7.5 billion in the
fourth quarter of 2014, mainly as a result of lower drilling
activity and less expensive wells being drilled.
Statoil experienced three contractor fatalities related to our
activities in the fourth quarter; one on the NCS and two in our US
onshore operations.
"These fatalities are clear reminders that the safety and
security of our people, and the integrity of our operations, must
remain our top priority", says CEO Eldar Sætre.
The Serious Incident Frequency (SIF) was 0.6 in 2015.
Capital Markets Update
Today, Statoil presents its strategy to the capital market,
focusing on three priorities:
- Delivering faster and deeper cost reductions: Stepping up the
improvement programme by 50% to USD 2.5 billion annually in
2016
- Preparing to invest in the next generation portfolio: Investing
in a radically improved project portfolio, with an average
break-even of USD 41 per boe
- Capturing the upturn in oil and gas prices: Sustaining the
efficiency gains and investing in attractive projects to benefit
from the expected price recovery
"Resetting costs - capturing opportunities, that's the core of
our strategy. As an early mover on cost efficiency, we are now
shaping our next generation portfolio. Statoil is positioned for
value creation in a low price environment, and well placed to
capture the gains when the oil price recovers", says Eldar
Sætre.
Furthermore, Statoil announces its updated outlook for
2016-2019:
- Statoil will invest around USD 13 billion in 2016
- From 2014 to 2017, Statoil estimates an annual organic
production growth of around 1% from a rebased equity production
level. From 2017 to 2019 Statoil expects 2-4% organic annual
production growth
- The exploration spend in 2016 will be around USD 2 billion
Key events since third quarter 2015:
- The plan for development and operation (PDO) of the North Sea
Oseberg Vestflanken 2 was submitted to the authorities
- Gas production started from the Corrib field off the northwest
coast of Ireland
- To optimise its exploration portfolio Statoil decided to exit
Alaska following recent exploration results in neighbouring
leases
- Statoil was awarded interest in 24 licences on the NCS in the
2015 APA round
- Statoil entered into a transaction on the UK shelf, where
Statoil acquired First Oil's 24% share in the UK licence for the
Alfa Sentral field
- The 20% interest in Trans Adriatic Pipeline AG was divested to
the Italian gas infrastructure company Snam SpA for a total
consideration of EUR 208 million
- Statoil and Repsol entered into transactions that saw Statoil
farming down a 15% interest in the Gudrun field on the NCS to
Repsol, in return for a 13% interest and operatorship in Eagle Ford
and operatorship of the BM-C-33 licence in Brazil
- In November, Statoil made the final investment decision to
build Hywind pilot park in Scotland, the world's first floating
wind farm
- In January Statoil acquired 11.93% of Lundin Petroleum,
increasing the company's exposure to core field development
projects and growth assets on NCS, including Johan Sverdrup and
Edvard Grieg
Further information from:
Investor relationsPeter Hutton, senior vice
president Investor relations,+44 7881 918 792 (mobile)
Morten Sven Johannessen, vice president Investor relations US,+1
713 485 2276 (mobile)
PressBård Glad Pedersen, vice president Media
relations,+47 9180 1791 (mobile)
This information is subject of the disclosure requirements acc.
to §5-12 vphl (Norwegian Securities Trading Act)
4th quarter 2015 Financial statements and review
http://hugin.info/132799/R/1983612/727010.pdf 4th quarter 2015
press release http://hugin.info/132799/R/1983612/727011.pdf CEO and
CFO presentations 4Q 2015 and Capital Markets Update
http://hugin.info/132799/R/1983612/727012.pdf
HUG#1983612
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