Eni Posts Loss Amid Oil Price Rout

MILAN—Italian oil company Eni SpA plunged to a net loss in the first quarter, hurt by accounting changes related to disposals and low crude oil prices.

It posted a net loss for the quarter of €792 million ($897.8 million) compared with a net profit of €832 million in the same period a year earlier. It also reported a loss on its continuing operations of €803 million, down from a profit of €617 million in the first quarter of 2015.

Adjusted operating profit from continuing operations was down 69% compared with the same period last year at €472 million, pressured by lower commodity prices.

Eni, along with other energy companies world-wide, has been hampered by an oil price slump that started in 2014 and hit a 13-year low at the beginning of the year of less than $30 a barrel.

Despite a recent recovery, Eni said the oil market remains weak, with crude prices "exposed to possible negative pressure," caused by uncertainties about energy demand growth in the short and medium term.

To cope with further price slides, Eni said it would increase efforts to reduce operating costs. It will also renegotiate long-term supply contracts "in order to align the supply terms with market conditions as well as boost profitability in its high-value businesses."

Eni said production grew 3.4% in the quarter to 1.75 million barrels of oil equivalent a day as it added new fields such as Goliat in the Norwegian sector of the Barents Sea, and three others. It took a final investment decision for the Zohr gas field in the Mediterranean Sea and obtained approval for the Coral field in Mozambique.

"We are therefore progressing in promoting also in 2016 significant volumes of new proved reserves," Chief Executive Claudio Descalzi said.

Production for the full year, however, is expected to be in line with last year, the company said.

Write to Manuela Mesco at [e-mail]

(END) Dow Jones Newswires

April 29, 2016 04:35 ET (08:35 GMT)

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