Strong results and project deliveries
In the first nine months of 2007, net income was NOK 29.5 billion compared to NOK 29.1 billion in the first nine months of 2006.
The 26% increase in net income from the third quarter of 2006 to the third quarter of 2007 was mainly due to an increase in net financial items from currency gains, and partly offset by lower downstream results.
As of 1 October, 2007 Statoil ASA’s merger with Norsk Hydro’s oil and gas operations became effective. Consequently, StatoilHydro ASA’s financial statements for the third quarter of 2007 comprise the financial results for only former Statoil group. From the fourth quarter of 2007, StatoilHydro ASA will report the results of the merged company. StatoilHydro will issue pro-forma financial information on 12 November 2007.
“We continue to deliver strong financial results,” says Helge Lund, StatoilHydro’s chief executive officer. “On 1 October we completed the merger between Statoil and Hydro’s oil and gas activities. I am very pleased to see that we have established a global, competitive energy company while delivering safe and efficient day to day operations.”
On 25 October StatoilHydro signed an agreement with Gazprom to become partner in the first phase of the Shtokman development in the Russian part of the Barents Sea.
“The agreement is an important milestone for us. We are looking forward to cooperating with Gazprom and Total to realise this frontier project,”
says Mr Lund.
The CEO is also satisfied with significant project deliveries and continued high exploration activity.
“We have completed the Snøhvit, Ormen Lange and Statfjord Late Life projects, strengthening StatoilHydro’s strategic position in the European and US gas markets. StatoilHydro has also been successful in both licensing rounds in the Gulf of Mexico, adding valuable exploration acreage for future activities,” Mr Lund notes.
Net operating income in the third quarter of 2007 was NOK 24.4 billion compared to NOK 30.2 billion in the third quarter of 2006. The decrease was mainly due to lower downstream results, a 15% decrease in gas prices measured in NOK, an increase in unrealised profit on inventories of NOK 1.9 billion and higher total operating expenses. The decrease in net operating income was partly offset by increased lifted volumes of oil and gas in International E&P.
Total oil and gas production in the third quarter of 2007 was 1,056,000 barrels of oil equivalent (boe) per day, compared to 1,076,000 boe per day in the third quarter of 2006. The 2% decrease was mainly related to reduced production on the Norwegian continental shelf (NCS), and was partly offset by higher production from new fields in International E&P.
Total oil and gas liftings in the third quarter of 2007 were 1,078,000 boe per day, compared to 1,054,000 boe per day in the same period of 2006. This is equivalent to an overlift of 22,000 boe per day in the third quarter of 2007.
Exploration expenditure in the third quarter of 2007 was NOK 2.3 billion, compared to NOK 2.0 billion in the third quarter of 2006.
Exploration expenses for the period consist of exploration expenditure adjusted for the period’s change in capitalised exploration expenditure. Exploration expenses in the third quarter of 2007 amounted to NOK 1.8 billion compared to NOK 1.5 billion in the third quarter of 2006.
A total of 11 exploration and appraisal wells were completed in the third quarter of 2007, seven on the NCS and four internationally. Eight wells are confirmed discoveries. The number of exploration wells completed in the third quarter of 2006 was 16.
Production cost per boe was NOK 31.5 for the 12 months ended 30 September 2007, compared to NOK 26.6 for the 12 months ended 31 December 2006 (*).
Net financial items amounted to an income of NOK 5.5 billion in the third quarter of 2007, compared to a cost of NOK 2.3 billion the third quarter of 2006. Net financial items in the first nine months of 2007 amounted to an income of NOK 8.9 billion, compared to an income of NOK 1.3 billion in the first nine months of 2006.
* See end notes in the complete quarterly report.
Further information from:
Lars Troen Sørensen, senior vice president investor relations, + 47 90 64 91 44 (mobile)
Geir Bjørnstad, vice president, US investor relations, + 1 203 978 6950
Ola Morten Aanestad, vice president media relations, +47 48 08 02 12 (mobile)
FORWARD LOOKING STATEMENTS
Use and reconciliation of non-GAAP financial measures
The following financial measures may be considered non-GAAP financial measures: