This summary is based on the third quarter fiscal 2007 earnings call conducted by StatoilHydro ASA (STO) on October 29, 2007.
Management:
Sr. VP, IR: Lars Troen Sørensen
CFO: Eldar Sætre
Key Investors Issues
- Profit was NOK10.7 billion compared with NOK8.5 billion in the same period a year earlier.
- Total revenue rose to NOK109.5 billion from NOK108.1 billion a year earlier.
- Total production, oil and gas production was 1,056,000 barrels a day, which is down 2% from the same quarter last year.
Third Quarter Highlights
StatoilHydro, excluding Hydro oil and gas, had a net operating income of NOK24.4 billion compared to NOK30.2 billion in the same quarter last year.
This 19% decrease was mainly due to lower downstream resource, a 15% decrease in gas prices measured in Norwegian kroner and increasing cost both related to operational activities, depreciations, and increased exploration activities.
The net income was 26% higher than last year and this is primarily due to higher income from financial items.
The company had a lower tax rate of 64.3% compared to 69.5% in the same quarter last year.
The income on net financial items is mostly due to the lower U.S. dollar exchange rate to the Norwegian kroner. The U.S. dollar fell from NOK5.90 Norwegian Kroner per dollar at the beginning of the third quarter to 5.44 at the end of the quarter, a difference of almost 8%, generating a positive P&L effect both on the long-term debt, which is all kept in U.S. dollar, and the short-term debt and liquidity positions.
This quarter the net financial items provided an income of NOK5.5 billion, while the company had a cost of 2.3 in the same quarter last year.
Earnings per share increased by 29%, as a result of the growth in net earnings and the released number of shares due to the share buyback program.
- Total production, oil and gas production was 1,056,000 barrels a day, which is down 2% from the same quarter last year.
- Oil production was down 4% while gas production was up 2%.
- The international production grew by 19% on a quarter-to-quarter basis.
- Total oil and gas liftings was up 2% compared to last year, indicating an over lift in this quarter of approximately 22,000 barrels a days.
- Turnaround activities had an impact, both from the international and the Norwegian activities of approximately 45,000 barrels a day, which is exactly in line with what the company guided on in the previous quarter. Based on the total oil and gas production and then again excluding the Hydro oil and gas portfolio, the company maintains the guiding of an average full year production for 2007, or between 1,150,000 and 1.2 million barrels a day. The company expects to end in the low end of this range.
Net operating income from E&P Norway was NOK21.9 billion, which is unchanged from the same quarter of last year.
There was a decrease in the transfer price of natural gas by 4%, and a minor decrease in lifted volumes of oil and gas. These decreases were partly offset by increase in other income of NOK1.8 billion, mainly due to change in fair value of some derivatives.
Operating expenses increased by NOK5.6 billion, mainly due to the overall industry cost inflation, but new fields and increased maintenance activities, and well related activities.
Depreciation increased with approximately NOK500 million due to higher asset retirement cost from 2007.
Net operating income from the international E&P was at NOK2.8 billion compared to NOK2.5 billion in the same quarter last year.
