Repsol, the worst-performing major European oil stock over the past year, beat analysts’ estimates as the performance at the refining and chemicals division compensated for low oil prices.
First-quarter adjusted net income dropped to 572 million euros ($657 million) from 928 million euros a year earlier, the Madrid-based producer said Thursday in a statement.
The exploration and production division, which pumped 714,000 barrels of oil equivalent per day in the quarter, posted a 17 million-euro profit, up from a 190 million-euro loss a year earlier.
Like most of the oil industry, Repsol is slashing costs, cutting staff and seeking to divest assets to weather the slump in crude to a 12-year low.
Things have been made worse by the $13 billion acquisition last May of Talisman Energy, which burdened it with debt and extra assets to offload. To cut costs further, Repsol in February announced it will cut its dividend.
Since oil began its slide in 2014, Repsol has leaned on downstream operations, including refining and petrochemicals, to boost its results, a strategy that also helped Total, BP and Shell beat quarterly estimates. Last year, the division posted the best refining margins, a measure of profitability, among European competitors.
On the production side, the company has become more reliant on natural gas over the past decade but gets paid less for it than most of its peers, with the second-lowest realized gas price among 12 companies tracked by Bloomberg Intelligence.
Gas accounted for 59 percent of Repsol’s output last year, up from 50 percent a year earlier and more than any other European integrated oil company tracked by BI.
