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Eni Misses Q3 Forecasts As Low Oil Price Still Bites

Eni offshore rig

Italy’s oil major Eni (NYSE:E) reported on Friday an adjusted net loss for the third quarter that was worse than analysts had expected, due to low crude oil prices that weighed on its operating income.

Eni’s adjusted net loss came in at around US$528 million (484 million euro), compared to a consensus estimate for an adjusted net loss of US$76.3 million (70 million euro) that the company itself had provided based on broker forecasts.

The group’s hydrocarbon production stood at 1.71 million boed in the third quarter, up by 0.4 percent in the quarter, but below the analyst projection of 1.727 million boed.

Regarding its mid-downstream business, Eni said that it was free-cash-flow positive despite the unfavorable trading environment.

The Italian group, like many other oil majors, is also cutting capital expenditure, and confirmed its target to reduce capex by around 20 percent this year compared to last year “in order to cope with the slump in crude oil prices”.

Initiatives to reduce spending include re-phasing and rescheduling capital projects, selection of exploration plays and contract renegotiation for the supply of capital goods, Eni noted.

Looking ahead, Eni sees its oil and gas production this year flat on 2015, as planned ramp-ups and start-ups of new fields in Egypt, Norway, Angola, Venezuela, Congo, and the United States would be just enough to offset a four-month production shutdown at one of its domestic facilities, and lowered output attributable to geopolitical factors and production declines in mature fields.

Eni was not the only European major that had suffered the low-oil-price blow through the third quarter. Norway’s Statoil (NYSE:STO) reported on Thursday an unexpected third-quarter loss that missed by a mile analyst estimates for a profit, vowing to shave another US$1 billion off its capital expenditure plan this year.

By Tsvetana Paraskova for Oilprice.com

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