Oil majors could feel the pinch in Q2 results due to routine maintenance hitting production levels, according to one financial services firm.
RBC Europe Limited made the prediction ahead of certain Q2 results, due out on Thursday.
It comes after another expert predicted that majors Shell and BP may face further cuts.
Statoil are also due to release a financial update tomorrow. According to RBC, Statoil’s results should show a “sequential improvement in earnings”. However, they added, this would largely driven by a one-off positive reversal of accruals in the international segment.
The forecast report states: “We see production volumes down c3% qoq driven by higher maintenance levels and lower seasonal gas production.
“Looking at cash flow generation, following a very strong performance in Q1, we expect sequential cash flows to be much weaker driven by two cash tax payments (c$1.3bn), lower gas realisations, capex catch up and two c$400m dividend payments.
“That said, we forecast c$3.2bn in operating cash flows in Q2, vs capex at $2.7bn. For the conference call, we expect management to confirm its commitment to removing the scrip dividend later this year, as well as potentially hinting at capex levels for 2018 in a lower oil price environment.”
French supermajor Total is also to update investors on Thursday.
RBC analysts expect a “reasonable quarter” from the Gallic giant, although planned maintenance at multiple refineries, as well as the integrated petrochemical complex at Antwerp, is “likely” to limit Total’s ability to capture the sequentially higher marker margins.
The RBC report adds: “In the upstream, we expect volumes flat qoq as the ramp ups at Laggan-Tormore, Vega Pleyade and Moho Nord are offset by maintenance and the full implementation of OPEC quotas.
“We forecast cash flow generation of $5.2bn vs capex at $4bn in the quarter, with a slight increase in gearing as Total pays two dividend instalments. On the call we do not expect material changes to Total’s outlook or guidance as most strategic answers are likely to get get deferred to Total’s strategy day in September.”
Finally Repsol is also set to unveil Q2 results on the same day.
RBC said: “Relative to Repsol’s recent quarters, we expect a weaker set of results as maintenance, lower refining margins and higher exploration charges weigh on the numbers.
“However, given Repsol only accounted for 11-12kboed of Libya volumes in its production guidance, there are potential for some upgrades to guidance on volumes and EBITDA.
“For the conference call, we expect the focus to be on Venezuela, where the risk of disruptions appear to be rising, as well as refining, which appears to have been negatively impacted by the recent OPEC quotas narrowing heavy crude spreads.
“In addition, as in recent quarters, we expect an update on Repsol’s talks with the credit rating agencies, with potential implications for the scrip dividend.”
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