In the first six months of 2007, net income was NOK 18.8 billion compared to NOK 20.6 billion in the first six months of 2006.
The 11% increase in net income from the second quarter of 2006 to the second quarter of 2007 was mainly due to lower income taxes and higher sales volumes of natural gas. The increase in net income was partly offset by a decrease in the natural gas price and in the average realised oil price, both measured in NOK.
”We deliver strong results and a record high international oil production, while continuing our efforts to position the group for future growth. Our acquisition of North American Oil Sands Corporation was approved by the Canadian authorities in June. In July the shareholders of Statoil and Hydro approved the merger of Statoil and Hydro’s oil and gas activities, and the integration planning is on track,” says Helge Lund, Statoil’s chief executive officer.
The CEO is also pleased with the continued high exploration and project activity.
“As operator and partner we have announced five discoveries, four on the Norwegian continental shelf and one internationally. In addition, we recently announced a successful appraisal well and production test at Rosebank on the UK continental shelf.”
”Three new projects have come on stream and the first delivery of gas from Shah Deniz to Turkey in July represents another milestone for Statoil,” Mr Lund notes.
PICTURE (graphs):
..............
Return on average capital employed after tax (ROACE) (*) for the 12 months ended 30 June 2007 was 23.6%, compared to 26.4% for the 12 months ended 31 December 2006. The decrease was mainly due to lower oil and gas prices measured in NOK. ROACE is defined as a non-GAAP financial measure (*).
In the second quarter of 2007, earnings per share were NOK 5.00 compared to NOK 4.42 in the second quarter of 2006. For the first six months of 2007, earnings per share were NOK 8.58, compared to NOK 9.33 for the same period in 2006.
Net operating income in the second quarter of 2007 was NOK 26.0 billion compared to NOK 29.9 billion in the second quarter of 2006. The decrease was mainly due to a 13% decrease in gas prices and a 3% decrease in the average realised oil price, both measured in NOK, an 11% decrease in liftings of oil on the Norwegian continental shelf (NCS), and a net increase in operating expenses and selling, general and administrative expenses of NOK 1.0 billion mainly due to higher activity. The decrease in net operating income was partly offset by a change in unrealised profit on inventories of NOK 1.5 billion, higher sales volume of gas of NOK 1.3 billion and an increase of 13% in liftings of oil in International E&P.
In the first half of 2007, net operating income was NOK 49.8 billion compared to NOK 62.9 billion in the first half of 2006. The decrease was mainly due to an 8% decrease in the average oil price and a 14% decrease in gas prices, both measured in NOK, negative changes in derivatives amounting to NOK 3.3 billion, an increase of net NOK 1.7 billion in operating, general and administrative expenses, mainly due to higher activity, and a decrease in other income of NOK 1.1 billion related to sales and exchanges of assets in the first half of 2006. The decrease in net operating income in the first half of 2007 was partly offset by a change in unrealised profit on inventories of NOK 0.7 billion.
| Consolidated statements of income - IFRS |
|||||||
| |
|
|
|
|
|
|
|
| |
Second quarter |
|
First half |
|
Full year |
||
| (in millions) |
2007 |
2006 |
Change |
2007 |
2006 |
Change |
2006 |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Revenues |
108,883 |
107,610 |
1% |
209,053 |
219,342 |
(5%) |
431,757 |
| Net income (loss) from equity accounted investments |
137 |
136 |
1% |
381 |
223 |
71% |
408 |
| Other income |
23 |
642 |
(96%) |
108 |
1,175 |
(91%) |
1,801 |
| |
|
|
|
|
|
|
|
| |
109,043 |
108,388 |
1% |
209,542 |
220,740 |
(5%) |
433,966 |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Cost of goods sold |
65,782 |
62,496 |
5% |
124,766 |
124,946 |
0% |
245,492 |
| Operating expenses |
9,209 |
7,827 |
18% |
18,735 |
15,915 |
18% |
33,653 |
| Selling, general and administrative expenses |
1,544 |
1,957 |
(21%) |
3,131 |
4,295 |
(27%) |
8,486 |
| Depreciation, amortisation and impairment |
5,334 |
5,020 |
6% |
10,772 |
10,438 |
3% |
21,714 |
| Exploration expenses |
1,187 |
1,167 |
2% |
2,364 |
2,233 |
6% |
5,664 |
| |
|
|
|
|
|
|
|
| |
83,056 |
78,467 |
6% |
159,768 |
157,827 |
1% |
315,009 |
| |
|
|
|
|
|
|
|
| |
25,987 |
29,921 |
(13%) |
49,774 |
62,913 |
(21%) |
118,957 |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Net foreign exchange gains and losses |
2,837 |
3,049 |
(7%) |
4,408 |
4,596 |
(4%) |
3,285 |
| Interest income and other financial items |
453 |
(300) |
251% |
734 |
154 |
377% |
2,882 |
| Interest and other finance expenses |
(948) |
(482) |
97% |
(1,797) |
(1,131) |
59% |
(2,370) |
| |
|
|
|
|
|
|
|
| |
2,342 |
2,267 |
3% |
3,345 |
3,619 |
(8%) |
3,797 |
| |
|
|
|
|
|
|
|
| |
28,329 |
32,188 |
(12%) |
53,119 |
66,532 |
(20%) |
122,754 |
| |
(17,378) |
(22,346) |
(22%) |
(34,334) |
(45,911) |
(25%) |
(81,889) |
| |
|
|
|
|
|
|
|
| |
10,951 |
9,842 |
11% |
18,785 |
20,621 |
(9%) |
40,865 |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Equity holders of the company |
10,723 |
9,560 |
12% |
18,403 |
20,203 |
(9%) |
40,135 |
| Minority interest |
228 |
282 |
(19%) |
382 |
418 |
(9%) |
730 |
| |
10,951 |
9,842 |
11% |
18,785 |
20,621 |
(9%) |
40,865 |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Net operating income |
Second quarter |
|
First half |
|
Full year |
||
| for the segments |
2007 |
2006 |
Change |
2007 |
2006 |
Change |
2006 |
| |
|
|
|
|
|
|
|
| |
18,864 |
21,837 |
(14%) |
39,624 |
46,771 |
(15%) |
89,910 |
| International E&P |
3,132 |
3,375 |
(7%) |
6,613 |
7,052 |
(6%) |
10,757 |
| Natural Gas |
675 |
2,924 |
(77%) |
642 |
6,730 |
(90%) |
12,003 |
| Manufacturing & Marketing |
2,583 |
2,461 |
5% |
3,722 |
4,019 |
(7%) |
6,569 |
| Other |
(85) |
(16) |
(431%) |
(258) |
(418) |
38% |
(597) |
| Eliminations of internal unrealised profit on inventories |
818 |
(660) |
n/a |
(569) |
(1,241) |
n/a |
315 |
| |
|
|
|
|
|
|
|
| |
25,987 |
29,921 |
(13%) |
49,774 |
62,913 |
(21%) |
118,957 |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Second quarter |
|
First half |
|
Full year |
||
| |
2007 |
2006 |
2007 |
2007 |
2006 |
Change |
2006 |
| |
|
|
|
|
|
|
|
| |
2,144,705,762 |
2,165,208,287 |
|
2,144,794,032 |
2,165,262,582 |
|
2,161,028,202 |
| Earnings per share |
5.00 |
4.42 |
13% |
8.58 |
9.33 |
(8%) |
18.57 |
| ROACE (last 12 months) |
23.6% |
n/a |
|
23.6% |
n/a |
|
26.4% |
| Cash flows provided by operating activities (billion) |
11.7 |
16.8 |
(30%) |
36.9 |
35.2 |
5% |
60.6 |
| Gross investments (billion) |
23.1 |
11.0 |
110% |
36.9 |
20.6 |
79% |
46.2 |
| Net debt to capital employed ratio |
26.2% |
10.6% |
|
26.2% |
10.6% |
|
16.3% |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Second quarter |
|
First half |
|
Full year |
||
| |
2007 |
2006 |
Change |
2007 |
2006 |
Change |
2006 |
| |
|
|
|
|
|
|
|
| |
68.8 |
68.5 |
0% |
62.8 |
64.5 |
(3%) |
64.4 |
| USDNOK average daily exchange rate |
6.01 |
6.23 |
(4%) |
6.13 |
6.46 |
(5%) |
6.42 |
| Average oil price (NOK/bbl) [*] |
413 |
427 |
(3%) |
385 |
417 |
(8%) |
413 |
| Gas prices (NOK/scm) |
1.53 |
1.77 |
(13%) |
1.63 |
1.91 |
(14%) |
1.91 |
| Refining margin, FCC (USD/boe) [*] |
11.7 |
9.7 |
21% |
9.3 |
7.8 |
19% |
7.1 |
| Total oil prodction (1,000 boe/day) |
666 |
643 |
4% |
674 |
678 |
(1%) |
670 |
| Total gas production (1,000 boe/day) |
446 |
433 |
3% |
481 |
478 |
1% |
465 |
| Total oil and gas production (1,000 boe/day) [*] |
1,112 |
1,076 |
3% |
1,155 |
1,156 |
0% |
1,135 |
| Total oil liftings (1,000 boe/day) |
633 |
671 |
(6%) |
684 |
690 |
(1%) |
668 |
| Total gas liftings (1,000 boe/day) |
446 |
433 |
3% |
482 |
478 |
1% |
465 |
| Total oil and gas liftings (1,000 boe/day) [*] |
1,079 |
1,104 |
(2%) |
1,166 |
1,168 |
0% |
1,133 |
| Production cost (NOK/boe, last 12 months) [*] |
29.4 |
n/a |
n/a |
29.4 |
n/a |
n/a |
26.6 |
| Production cost normalised (NOK/boe, last 12 months) [*] |
29.1 |
n/a |
n/a |
29.1 |
n/a |
n/a |
26.2 |
| |
|
|
|
|
|
|
|
Total oil and gas production in the second quarter of 2007 was 1,112,000 barrels of oil equivalent (boe) per day, compared to 1,076,000 boe per day in the second quarter of 2006. The 3% increase of was mainly related to increased oil production from International E&P due to start-up of new fields, and increased gas production from the Sleipner, Åsgard and Gullfaks fields on the NCS. The increases were partly offset by reduced gas entitlement from the In Salah field due to production sharing agreements (PSA) effects, and lower production at the Kvitebjørn field.
In the first half of 2007 total oil and gas production was 1,155,000 boe per day, compared to 1,156,000 boe per day in the first half of 2006.
Total oil and gas liftings in the second quarter of 2007 were 1,079,000 boe per day, compared to 1,104,000 boe per day in the same period of 2006. This is equivalent to an underlift of 33,000 boe per day in the second quarter of 2007. In the first half of 2007, total oil and gas liftings were 1,166,000 boe per day compared to 1,168,000 boe per day in the corresponding period of 2006.
Exploration expenditure in the second quarter of 2007 was NOK 2.3 billion, compared to NOK 1.9 billion in the second quarter of 2006. In the first half of 2007 the exploration expenditure was NOK 4.2 billion, compared to NOK 3.5 billion in the first half of 2006. The increase in exploration expenditure was mainly due to higher activity and generally more expensive wells in both periods. Exploration expenditure reflects the period’s exploration activities.
Exploration expenses for the period consist of exploration expenditure adjusted for the period’s change in capitalised exploration expenditure. Exploration expenses in the second quarter of 2007 amounted to NOK 1.2 billion, the same as in the second quarter of 2006.
| |
|
|
|
|
|
|
|
| |
Second quarter |
|
First half |
|
Full year |
||
| Exploration |
2007 |
2006 |
|
2007 |
2006 |
|
2006 |
| (in millions) |
NOK |
NOK |
Change |
NOK |
NOK |
Change |
NOK |
| |
|
|
|
|
|
|
|
| |
2,339 |
1,857 |
26% |
4,208 |
3,512 |
20% |
7,451 |
| Expensed, previously capitalised exploration expenditure |
104 |
106 |
(2%) |
303 |
180 |
68% |
667 |
| Capitalised share of current period’s exploration activity |
(1,256) |
(796) |
(58%) |
(2,147) |
(1,459) |
(47%) |
(2,454) |
| |
|
|
|
|
|
|
|
| |
1,187 |
1,167 |
2% |
2,364 |
2,233 |
6% |
5,664 |
| |
|
|
|
|
|
|
|
A total of 10 exploration and appraisal wells were completed in the second quarter of 2007, five on the NCS and five internationally. Five wells are confirmed discoveries. One exploration extension well on the NCS was also completed in the second quarter of 2007 and resulted in a discovery. Drilling in nine additional wells was ongoing at the end of second quarter 2007. The number of exploration wells completed in the second quarter of 2006 was seven.
In the first half of 2007 a total of 23 exploration and appraisal wells were completed, 11 on the NCS and 12 internationally. One exploration extension well was drilled in the same period. Eleven of the exploration and appraisal wells are confirmed discoveries, seven on the NCS and four internationally. The exploration extension well also resulted in a discovery. The number of exploration wells completed in the first half of 2006 was 13.
Production cost per boe was NOK 29.4 for the 12 months ended 30 June 2007, compared to NOK 26.6 for the 12 months ended 31 December 2006 (*).
Normalised at a USDNOK exchange rate of 6.00, the production cost for the 12 months ended 30 June 2007 was NOK 29.1 per boe, compared to NOK 26.2 per boe for the 12 months ended 31 December 2006 (*). Normalised production cost is defined as a non-GAAP financial measure (*).
The production unit cost, both actual and normalised, has increased, mainly due to increased maintenance cost and cost pressure in the industry.
Net financial items amounted to an income of NOK 2.3 billion in the second quarter of 2007, the same as in the second quarter of 2006. Net financial items in the first half of 2007 amounted to an income of NOK 3.3 billion, compared to an income of NOK 3.6 billion in the first half of 2006.
| |
|
|
|
|
|
|
| Exchange rates |
30.06.2007 |
31.03.2007 |
31.12.2006 |
30.06.2006 |
31.03.2006 |
31.12.2005 |
| |
|
|
|
|
|
|
| |
5.90 |
6.10 |
6.26 |
6.24 |
6.58 |
6.77 |
| |
|
|
|
|
|
|
Income taxes in the second quarter of 2007 were NOK 17.4 billion, equivalent to a tax rate of 61.3%. Income taxes in the second quarter of 2006 were NOK 22.3 billion, equivalent to a tax rate of 69.4%. The tax rate was reduced in the second quarter of 2007 mainly due to changes in the tax level of financial items, an increased relative share of income generated outside the NCS, which is generally subject to lower rates of taxation, and an increased effect of the uplift tax deduction on the NCS.
For the first half of 2007 income taxes were NOK 34.3 billion, with a corresponding tax rate of 64.6%. In comparison, income taxes in the first half of 2006 were NOK 45.9 billion with a corresponding tax rate of 69.0%. The reduced tax rate is mainly due to changes in the tax level of financial items and an increased effect of the uplift tax deduction on the NCS.
Health, safety and the environment (HSE)
Overall, Statoil’s total recordable injury frequency has improved slightly while the number serious frequency has increased in the second quarter of 2007 compared to the corresponding period in 2006. Serious incidents in the second quarter of 2007 included a fatality at Mongstad port at the end of May. There have been no serious gas leaks at our offshore or land facilities during the first half of 2007.
| |
|
|
|
|
|
| |
Second quarter |
First half |
Year |
||
| HSE |
2007 |
2006 |
2007 |
2006 |
2006 |
| |
|
|
|
|
|
| |
5.3 |
5.8 |
5.2 |
5.4 |
5.7 |
| Serious incident frequency |
2.6 |
2.0 |
2.4 |
2.1 |
2.1 |
| Unintentional oil spills (number) |
77 |
69 |
146 |
156 |
292 |
| Unintentional oil spills (volume, scm) |
8.8 |
41.4 |
33.3 |
77.5 |
156.7 |
| |
|
|
|
|
|
Important events
Recent important events include the following:
- At an extraordinary general meeting on 5 July, Statoil ASA shareholders approved the merger between Statoil ASA and the oil and gas activities of Norsk Hydro ASA. The merger was also approved by the shareholders of Norsk Hydro ASA and is expected to be effective from 1 October 2007 with financial effect from 1 January 2007.
- On 26 June, Statoil announced that the company had received final approval for the acquisition of North American Oil Sands Corporation (NAOSC) from the Canadian Ministry of Industry. The total transaction value is approximately CAD 2.2 billion, equivalent to about USD 2.0 billion.
- On 26 June, Statoil, as a partner in Sincor, announced that it had agreed with the Venezuelan government on the main terms and conditions for its participation in the new mixed company to be created from the Sincor joint venture. The terms and conditions are subject to approval by the Venezuelan National Assembly.
- The Rosa deepwater field in block 17 off the Angolan coast, in which Statoil has a 13.33% interest, came on stream on 29 June.
- On 5 July, Statoil announced that gas export to Turkey had commenced from the Shah Deniz gas and condensate field in Azerbaijan.
- The plan for development and operation (PDO) for the Gjøa field in the North Sea was approved by the Norwegian parliament on 15 June.
- On 29 June, the Skarv and Idun field licence owners submitted to the Norwegian Ministry of Petroleum and Energy a joint PDO and a plan for installation and operation (PIO) of a pipeline tie-in.
- Production started on the Enoch and Huldra Compression on 31 May and 28 June, respectively.
* See end notes in the complete quarterly report.
Further information from:
Investor relations
Lars Troen Sørensen, senior vice president investor relations, + 47 90 64 91 44 (mobile), +47 51 99 77 90 ( office)
Geir Bjørnstad, vice president, US investor relations, + 1 203 978 6950
Press
Ola Morten Aanestad, vice president media relations, +47 48 08 02 12 (mobile), +47 51 99 13 77 (office)