Statoil Slips, but Volumes up – Analyst Blog

Zacks Market Commentaries — Fri, 06 Nov 2009 16:17:48 +0000

Statoil ASA (STO) reported its third quarter results of 38 cents per share, compared to the Zacks Consensus Estimate of 40 cents and in line with the year-earlier quarter earnings. Revenue for the quarter was NOK 123.1 billion ($20.1 billion), down 29% year over year.

Though the company’s results were hurt by lower commodity prices, Statoil continues to maintain a high activity level both in Norway and internationally. Equity and entitlement productions were up 8% and 10% year over year, respectively, with the start-up of operations on several new oil and gas fields such as Tyrihans in the Norwegian Sea, Tune Sor in the North Sea and Thunder Hawk in the Gulf of Mexico.

Total oil and gas entitlement production during the quarter averaged 1.71 million barrels of oil equivalent per day (MMBOE/d), 62% of which was oil and 38% natural gas, compared to 1.55 MMBOE/d in the year-earlier period. Total oil and gas liftings in the quarter were 1.66 MMBOE/d, compared to 1.50 MMBOE/d in the year-earlier period. During the quarter, the company’s realized oil prices averaged NOK 400 ($65.5) per barrel, down approximately 39% year over year, while realized natural gas prices averaged NOK 1.61 (26 cents) per standard cubic meter, down approximately 32% from the year-ago level.

Net adjusted operating income during the quarter was NOK 31.2 billion ($5.1 billion), down by 41% from the year-earlier quarter. The decrease was primarily caused by the reduction in prices for both liquids and gas, partly compensated by increased sales volumes of liquids and gas.

During the quarter, total capital investment was NOK 25 billion ($4.1 billion) and operating cash flows were NOK 22.5 billion ($3.7 billion). Net debt-to-capitalization ratio stood at 27.1%.

Statoil expects its 2009 equity production to be 1.95 MMBOE/d. Capital expenditures for 2009 are expected to be around US$13.5 billion. Excluding purchases of fuel and gas for injection, unit production cost for equity volumes in 2009 to 2012 is expected to be in the range of NOK 33 to 36 per barrel. The company expects to complete around 70 exploration and appraisal wells in 2009.

Statoil is gaining momentum with the start-up of operations on several new oil and gas fields. A sharp rise in production is offsetting the fall in oil and gas prices, which helps the company to experience smaller profit declines than other large European oil companies such as Royal Dutch Shell (RDS.A) and BP plc (BP).
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Denbury Net Plunges – Analyst Blog

Zacks Market Commentaries — Wed, 05 Aug 2009 17:37:47 +0000

Denbury Resources Inc. (DNR) reported second-quarter earnings of 16 cents per share, compared with the Zacks Consensus Estimate of 17 cents and the 55 cents reported in the year-ago period. The steep decline in commodity prices was the main factor behind the negative year-over-year earnings comparison.

Including one-time items, Denbury posted a loss of 35 cents per share versus a profit of 47 cents a year earlier. Total quarterly revenue was $217 million, down 48% from last year.

Production

Production during the quarter averaged 52.3 thousand oil-equivalent barrels per day (MBOE/d), an increase of approximately 13% year over year and a decrease of 2% sequentially. Of the total quarterly production, approximately 73% was oil. The year-over-year production increase was driven by the recently acquired Hastings Field and a 29% tertiary oil production increase. Tertiary production for the quarter averaged at 24.1 thousand barrels per day (MBbl/d). The Heidelberg, Tinsley, Eucutta and McComb fields were the main contributors for the tertiary production increase.

Realizations

Denbury’s realized oil prices (including the impact of hedges) averaged $66.70 per barrel, down. 40% year over year. Realized natural gas prices for the quarter was $2.98 per Mcf, a decrease of 65% year over year.

Expenses

Lease operating expenses on a per BOE basis decreased more than 3% year over year to $17.59. G&A expenses per BOE increased significantly year over year to $6.97, mainly due to incentive compensation awards for the management of Genesis and retirement compensation to the CEO and president of the company. DD&A expenses on a per BOE basis declined slightly year-over-year to $11.42.

Capital budget & Guidance

Denbury reiterated its 2009 capital budget at $750 million, of which approximately 90% will go to the company’s tertiary operations. As a result of the Barnett Shale assets divestment, the company decreased its 2009 production guidance to 47.5 MBOE/d. However, Denbury reaffirmed its tertiary production guidance of 24.5 MBbl/d.

Outlook

Our Neutral recommendation for Denbury shares reflects the company’s low-risk profile and oil-centric niche business model. With oil representing about three quarters of the total production, the company is experiencing an enviable position in the industry, given the higher realizations and margins that presently exist in oil than gas.

Denbury recently completed the sale of its 60% interest in Barnett Shale. We consider this as a prudent step that will bring the company greater liquidity and flexibility to focus on its core tertiary oil operations. While tertiary production continues to grow, Denbury’s solid hedging position at attractive prices will help the company to operate in the current low commodity price environment.

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Statoil Slips, but Volumes up – Analyst Blog

Denbury Net Plunges – Analyst Blog