Aker BP (OSLO:AKRBP) has posted its first results since the acquisition of Lundin’s oil and gas business, with profits up nearly four times on the previous quarter.
The newly enlarged group reported pre-tax earnings of nearly $3.8 billion, compared with some $1.06bn for Q2, on income of more than $4.8bn.
Net profits also soared proportionally to $783 million after tax, while earnings more than doubled to $4.8bn.
Aker BP completed its acquisition of Lundin Energy’s E&P business in June, in a deal it has said will create “the leading European independent E&P.”
Chief executive Karl Johnny Hersvik said the last few months had seen the two businesses “successfully integrated”.
“At the same time, we maintained momentum in our operations and project development activities. Aker BP is well underway towards our goal of becoming an industry-leading low cost, low emissions company, positioned to deliver profitable growth into the next decade,” he added.
The company is now set to be the second largest oil and gas producer on the Norwegian Continental Shelf (NCS), with a combined oil and gas production of approximately 400,000 barrels of oil equivalent per day (boepd).
True to its word, net production for the quarter amounted to some 37.9 million boe, or an average of 411,700 boe per day.
However, it narrowed its guidance range for full-year 2022 to 410-420,000 boepd, down from an upper limit of 435,000.
This is largely the result of a delay to output from the second phase of the giant Johan Sverdrup field.
Aker BP said development at the project had progressed “safely according to plan and cost” as offshore hook-up and commissioning of the second processing platform.
On a call with investors, Mr Hersvik said the group now expected output from the Phase 2 well in December.
Tax benefits
Mr Hersvik said the group was now working to mature field development projects with combined resources of around 900 million boe net to the company.
“This work is now nearing completion, and we are currently aiming to submit [plan for development and operation] PDOs for these projects by the end of 2022, and hence qualify for the temporary tax rules which were introduced in 2020.”
Those plans include the 600m boe NOAKA development, located between Oseberg and Alvheim in the Norwegian North Sea, for which a PDO is billed for submission during Q4 this year.
Furthermore, environmental assessments for Fulla and Krafla were published during Q2, and partners are preparing for an FID on these by the end of the year.
Another PDO, for the Trell & Trine project, was also submitted in August.
“The world is characterised by geopolitical instability, inflation and increasing interest rates, supply chain constraints and high volatility in energy and commodity prices. In addition, the Norwegian government has proposed a tightening of the temporary tax rules. Aker BP will take all these factors into account before making final investment decisions,” he said.
Aker BP paid a dividend of $0.525 per share during the third quarter, with its board committing to disbursing the same amount for Q4, bringing total dividends for 2022 to $2 per share.
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