Statoil Lifts Dividend Amid Forecast-Beating Fourth Quarter
By Dominic Chopping
Norway's Statoil ASA (STO) on Wednesday raised its dividend and delivered a forecast-beating fourth-quarter after the oil-and-gas major posted record production and benefited from higher oil prices and lower capital expenditure.
"In a recovering market, we delivered strong earnings and cash flow from all business segments," said Chief Executive Eldar Saetre. "We had record high production both in the fourth quarter and for the full year, supported by continued solid operational performance."
After guiding for capital expenditure of $11 billion in 2017, the company said it managed to bring it down to $9.4 billion.
"In cooperation with our suppliers and partners, we are getting more for less," Mr. Saetre said.
The average price of Brent crude rose to $61.3 a barrel in the quarter, up from $49.3 in the same period a year earlier.
Statoil delivered equity production of 2.134 million barrels of oil equivalent a day in the fourth quarter, an increase from 2.095 million in the same period in 2016. The increase was primarily due to higher flexible gas production to capture higher prices, increased U.S. onshore production and ramp-up of new fields.
"We expect to increase returns and can deliver $12 billion in free cash flow from 2018 to 2020," Mr. Saetre said. "We have radically improved our next generation portfolio, and Johan Sverdrup phase 1, has now a break-even below $15 per barrel. We will profitably grow production, strengthen our balance sheet, and increase the cash dividend."
Statoil estimates 1% to 2% production growth in 2018 and organic annual production growth of around 3% to 4% from 2017 to 2020. Exploration activity in 2018 will be around $1.5 billion, it said.
Organic capital expenditure this year will total around $11 billion.
The 67% state-owned company said its net profit for the three months through Dec. 31 was $2.58 billion, compared with a net loss of $2.79 billion a year earlier. Analysts had expected a net profit of $1.23 billion. Revenue rose 35% on the year to $17.11 billion, against expectations of $16.01 billion.
The company raised its quarterly dividend 4.5% to $0.23 a share.
Statoil's adjusted earnings before interest and taxes, which excludes one-off items to show the company's underlying performance, more than doubled on the year to $3.96 billion, against analysts' expectations of $3.75 billion.
It said it expects to invest 15% to 20% of total capital expenditure in new energy solutions by 2030.
Write to Dominic Chopping at firstname.lastname@example.org; Twitter: @domchopping @WSJNordics
(END) Dow Jones Newswires
February 07, 2018 02:03 ET (07:03 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.