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India, China Look To Form ‘Oil Buyers Club’

India, China Look To Form ‘Oil Buyers Club’

Amid rising oil prices, India…

Statoil Cuts Spending As It Posts Unexpected Q3 Loss

Statoil infrastructure

In a sign that major oil producers continue to suffer from low crude prices, Norway’s Statoil (NYSE:STO) reported on Thursday a third-quarter loss, missing by a mile analyst estimates for a profit, and saying it would further cut capital expenditure by US$1 billion this year amid continued weak markets.

Statoil, the first major oil company to report earnings this third-quarter earnings season, said it posted an adjusted loss after tax of US$261 million, compared with adjusted earnings after tax of US$445 million for the third quarter last year. The group attributed the losses to the low oil and gas prices, and to maintenance and exploration expenses.

Loss per share was US$0.14, while analysts had widely expected the Norwegian company to book a profit for the third quarter. Jefferies Group had projected Statoil to report earnings per share (EPS) of US$0.09 while the Zacks Investment Research consensus forecast was for EPS of US$0.08. This was the second quarter in a row in which the company has posted a loss, following the US$300-million loss for the second quarter. Back then, Statoil said it would slash capital expenditures for this year, by 8 percent to US$12 billion.

Obviously market and price conditions had not materially improved for the Norwegian group in one quarter’s time and today, it cut again its capital expenditure guidance for 2016, from US$12 billion to around US$11 billion. On top of that, Statoil also cut its exploration guidance for this year, to some US$1.5 billion from US$1.8 billion.

What the company did not change was production guidance and dividends. Statoil reiterated its expectation for annual organic production growth of 1 percent between 2014 and 2017. Dividends were kept at US$0.2201 per ordinary share for the third quarter, the same as the dividend paid for the third quarter last year.

By Tsvetana Paraskova for Oilprice.com

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