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EIA: Gulf Of Mexico Oil And Gas Production Remains Strong

EIA: Gulf Of Mexico Oil And Gas Production Remains Strong

Though the EIA predictions continuous…

The Last Oil Frontier In The Gulf Of Mexico

The Last Oil Frontier In The Gulf Of Mexico

The potential of the U.S.…

Eni Returns To Profit On Higher Oil Prices, New Projects

Offshore rig

New oil and gas project startups and higher oil prices helped Italy’s oil major Eni (NYSE:E) to return to profit in 2017 and more than double fourth-quarter earnings on the back of record oil and gas production.

Eni reported on Friday an adjusted net profit of US$3.023 billion (2.411 billion euro) for full-year 2017, compared to a loss of US$426 million (340 million euro) for 2016. Fourth-quarter adjusted earnings jumped 112 percent to US$1.22 billion (975 million euro), well ahead of the analyst consensus estimate of US$715 million (570 million euro) provided by the company.

Eni’s production of oil and gas reached an all-time high of 1.92 million boe/d in December 2017, while Q4 average production was 1.89 million boe/d, the highest quarterly production in the last seven years. Full-year oil and gas production increased 3.2 percent to average 1.82 million boe/d, the highest ever annual production for Eni.

Last year, Eni added 243,000 boe/d of production as it started four projects, including the giant Zohr gas field offshore Egypt, as well as projects in Angola, Ghana, and Indonesia.

Eni was also one of the most successful explorers among the oil majors recently, and it discovered 1 billion barrels of oil equivalent of new resources last year.

Looking ahead, Eni expects its 2018 production to rise by 3 percent, thanks to ramp-ups of fields put into operation in 2017, mainly in Egypt, Angola, and Indonesia, and start-up of a number of satellite phases at giant producing fields—in Libya, Angola, and Ghana.

This year’s capital expenditures are planned at around US$10 billion (8 billion euro), up from US$9.53 billion (7.6 billion euro) spent in 2017.

Related: WTI-Brent Spread Close To Narrowest In Six Months

Eni estimates that it currently needs Brent at $57 a barrel in order to cover capital expenditures and dividends with cash flows, better than the management’s expectations for a cash break-even point of oil at $60, but still higher than the cash break-even oil price of the other majors.

“Looking to the future, we see excellent growth prospects for all of our businesses. However, growth must be sustainable and we will pursue it in a disciplined way with great respect for the possibility of the most difficult operating conditions. Nevertheless, should conditions be more favourable, we will be in a position to create substantial surplus value for our shareholders,” Eni’s chief executive Claudio Descalzi said.

By Tsvetana Paraskova for Oilprice.com

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