Apache, operator in the UK North Sea of the Forties oil field, said yesterday that net income nosedived to £497million in 2008, compared with £1.97billion the year before.
The US company said the 2008 results included a £2.53billion non-cash reduction in the carrying value of its oil and gas properties, stemming from significantly lower commodity prices at the year-end.
Revenue for 2008 was £8.725billion, compared with £7.04billion in 2007.
Chief executive Steven Farris said the writedown was large, but considering oil prices had collapsed from a peak of more than $140 a barrel last July to less than $45 a barrel at year-end, it was not unexpected.
He said: “This is a non-cash event that we expect will have no impact on our operations or financial flexibility. With a number of development projects coming on line in the first half of 2009, we are projecting production growth of 6% to 14% in 2009, depending on capital availability.”
In 2008, production declined 5% on the previous year to 534,000 barrels of oil equivalent per day as a result of a pipeline explosion and fire at Apache’s Varanus Island hub offshore Western Australia plus the impact of two hurricanes in the Gulf of Mexico.
Apache said it had replaced 122% of production last year, including 118% through the drill bit.
Mr Farris said: “We’ve been through down-cycles before. Although these periods are painful, they ultimately present excellent acquisition opportunities. We are well positioned entering 2009, with projected production growth and ample liquidity to pursue transactions.”
Apache has operations in America, Canada, Egypt, the UK North Sea, Australia and Argentina.
Oil and gas industry engineering and construction contractor Technip said yesterday the recent decrease in energy demand coupled with uncertain commodity prices and project costs was affecting the entire supply chain. The French company said projects in the procurement or construction phase were continuing to advance, but some early-stage developments were being deferred.
Technip said net profits for 2008 were £394.24million, up from £111.14million the previous year. Full-year revenue was £6.58billion, down from £6.94billion the year before.
Meanwhile, subsea-engineering service company Oceaneering International reported record earnings and a fifth successive year of increased profits.
The Houston-based firm, whose Aberdeen division, Oceaneering Intervention Engineering has its base at Pitmedden Road, Dyce, posted 2008 net income of £140.4million yesterday on revenue of £1.39billion, up from £127million and £1.23billion respectively the year before.
Chief executive Jay Collins said the group’s belief remained that the oil and gas industry would continue to invest in deepwater, adding: “We anticipate demand for our deepwater services and products will remain promising for . . . several years.”
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