Statoil ASA, Norway’s biggest oil producer, reported its first adjusted loss following the plunge in crude prices that has roiled the industry for nearly two years. The company also deepened spending cuts.
Adjusted earnings after tax, which excludes financial and other items, dropped to a loss of $28 million from a $929 million profit a year earlier, the Stavanger-based company said Wednesday. That missed the $294 million average estimate in a Bloomberg poll of 16 analysts.
“Our financial results were affected by low oil and gas prices in the quarter,” Statoil’s Chief Executive Officer Eldar Saetre said in a statement. “Strict prioritization, good results from our improvement program and more effective drilling operations allow us to lower our 2016 capex and exploration guidance.”
Statoil, which is 67 percent owned by the Norwegian government, has followed rivals such as BP Plc in slashing spending and reducing costs to protect cash flow and preserve shareholder payouts. The company cut its capital expenditure to about $12 billion this year from an earlier target of $13 billion. That’s 40 percent lower than record spending of $20 billion in 2014.
Statoil will pay a dividend of 22 cents a share for the second quarter, in line with the board’s intention of keeping payouts flat for the first three quarters of the year, and continuing a scrip program allowing owners to take payouts in shares.
The company, which dominates oil and gas production in its home country even as it has expanded internationally, produced 1.959 million barrels equivalent a day of oil and natural gas in the second quarter. That compares to 1.873 million a year ago and a forecast of 1.915 million in an analyst survey conducted by Statoil.
BP on Tuesday reported a 45 percent slump in earnings and missed analyst estimates, hurt by weaker refining margins in addition to lower oil prices. Royal Dutch Shell Plc and Total SA will publish earnings on Thursday, and Exxon Mobil Corp. and Chevron Corp. on Friday.
Statoil’s adjusted loss was the first since the company started using that earnings measure in 2008. Even as oil prices rebounded in the second quarter to average $47.03 a barrel for the Brent benchmark, up from a 12-year low of $27.10 in January, crude’s recovery has showed signs of fading over the past weeks as huge stockpiles remain. The International Energy Agency said earlier this month that “the road ahead is far from smooth.”
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