Oil and gas operator and explorer Nexen saw its second-quarter profits tumble as crude oil and gas prices plunged from the record levels of last July.
The company, operator in the UK North Sea of the giant Buzzard oil field, reported net income for the quarter of just £10.87million compared with £206.52million a year earlier. Revenue for the period was £652million, down from £1.12billion the year before.
Cash flow, a measure of an oil company’s ability to fund exploration and other activities, also slumped during the quarter to £240.76million, less than half the £514.13million achieved a year earlier.
Nexen said production averaged 208,000 barrels of oil equivalent per day (boepd) after royalties, down 1.4% from 211,000boepd in the second quarter of last year.
It added that in the third quarter, it expected production to be temporarily lower because of maintenance downtime at fields including Buzzard and Scott/Telford, also in the UK North Sea.
Nexen highlighted its continuing exploration successes in the North Sea in the Golden Eagle area, close to Buzzard, and said the area was a potentially significant development opportunity.
It has followed success with the initial Golden Eagle discovery well in 2007 by making its Pink discovery, between Golden Eagle and Buzzard, in 2008, and added to its portfolio of finds in the area with the Hobby discovery in January this year.
The company has a 34% operated interest in both Golden Eagle and Hobby and a 46% in Pink.
Nexen also said it expected to start production from its operated Ettrick field in the North Sea within weeks.
It said this would add 12-16,000boepd to its volume for the rest of this year. The company has a 79.73% stake in Ettrick.