Aker BP quarterly revenues lifted by swelling production

Norwegian exploration and production company Aker BP more than doubled its second quarter 2017 production and revenues, compared to last year’s quarterly result, due to inclusion of BP Norge’s activities. 

To remind, Aker BP was formed in September 2016 through a merger between Det norske oljeselskap and BP Norge.

In its quarterly financial report on Friday, Aker BP posted a net profit for the second quarter 2017 of $60 million, which increased compared to $6 million profit in the prior-year quarter.

The oil company’s total income for the second quarter of 2017 also increased amounting to $595 million versus $256 million in the same period of 2016, mainly due to inclusion of BP Norge activities. For the 2Q 2017, petroleum revenues accounted for $590 million, versus $271 million in the corresponding period of 2016, while other income was $4 million (-$16 million in 2Q 2016), primarily relating to realized and unrealized gains and losses on commodity hedges.

Aker BP produced 13 mmboe in the second quarter of 2017, corresponding to 142.7 mboepd. This compares to 5.7 mmboe and 62.4 mboepd in the same period of 2016.

During the second quarter 2017, the average realized oil price was $51 per barrel, compared to $49 per barrel in 2Q 2016, while gas revenues were recognized at market value of $0.18 per standard cubic metre (scm), compared to 0.17 scm in 2Q 2016.

Going forward, the company will have four rigs in operation in the third quarter. Operations include completion of the PDO scope at Ivar Aasen, new production wells and P&A activity at Valhall, plus drilling of the operated Hyrokkin and Nordfjellet/Delta prospects in the North Sea.

Aker BP is in the process of preparing to submit three PDOs during 2017, relating to the Valhall West Flank, Snadd and Storklakken projects.

Also in the report, Aker BP updated its production guidance, now expecting to produce between 135 and 140 mboepd in 2017 (previously 128 – 135 mboepd) with a production cost of approximately 10 USD/boe (previously approximately 11 USD/boe).

The full year 2017 capex guidance is unchanged and expected to be between $900 – 950 million, guidance for 2017 exploration expenditures is unchanged at $280 – 300 million and no change has been made to the expected 2017 decommissioning costs, between $100 – 110 million.

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