Statoil to Keep Capital Expenditures at 2016 Level as Net Loss Widens

By Dominic Chopping

Norway's Statoil ASA said Tuesday capital expenditure in 2017 will remain at the 2016 level of around $11 billion while targeting a further $1 billion in savings after the oil-and-gas producer posted a huge loss in the fourth-quarter amid extensive maintenance, expensed exploration wells and high impairments.

The company posted net impairment charges of $2.3 billion, mainly due to reduced long-term price assumptions, with the largest effect on unconventional onshore assets in North America, and unrealized losses on derivatives and inventory hedge contracts of $765 million.

Statoil estimates 4%-5% production growth in 2017 and organic annual production growth of around 3% from 2016 to 2020. Exploration activity in 2017 will be around $1.5 billion, it said.

The 67% state-owned company said its net loss for the three months through Dec. 31 was $2.79 billion, compared with a net loss of $1.13 billion a year earlier. Analysts had expected a net profit of $564 million. Revenue fell 1% on the year to $12.7 billion, against expectations of $13.47 billion.

The company maintained its quarterly dividend at $0.2201 a share.

Statoil's adjusted earnings before interest and taxes, which excludes one-off items to show the company's underlying performance, dropped 6% on the year to $1.66 billion, against analysts' expectations of $2.09 billion.

Write to Dominic Chopping at [e-mail]; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

February 07, 2017 01:49 ET (06:49 GMT)

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