Norwegian oil and gas company Aker BP saw a decrease in its quarterly profit and revenues due to a combination of factors including lower sales volume and prices and higher costs.
According to Aker BP’s financial statements published on Friday, the company’s total income in 1Q 2019 was $836 million compared to $944 million in the corresponding period of 2018.
The decrease was driven by lower sales volume and realized prices, and by non-cash losses on oil price hedging.
Profit before taxes amounted to $249 million compared to $458 million in the same period last year. Tax expense was $239 million, as opposed to $290 million in the prior year quarter, representing an effective tax rate of 96 per cent.
The main reason for the high effective tax rate was the impairment of technical goodwill which is not deductible for tax purposes. Net profit was $10 million, a significant decrease from a profit of $169 million in the same period last year.
The company’s oil and gas production was nearly unchanged and net production in the first quarter was 158.7 thousand barrels of oil equivalents per day (mboepd) and 158.6 mboepd in 1Q 2018. However, the sold volume decreased to 162.0 mboepd from 167.3 mboepd due to lifting schedules.
Production costs related to oil and gas sold in the quarter amounted to $200 million compared to $195 million in 1Q 2018. Production cost per produced unit in the quarter increased to $13.4 per boe from $12.1 per boe. The increase was mainly caused by high maintenance activity particularly at Valhall and Ula.
Realized oil and gas prices were six per cent lower in the first quarter 2019 than in the same period last year. Average realized liquids price was $63.9 (67.4) per barrel, while the realized price for natural gas averaged $0.24 (0.28) per standard cubic meter (scm).
Total exploration spend in the first quarter was $159 million versus $55 million in the same period last year. Of this, $90 million was recognized as exploration expenses in the period, relating to dry wells, area fees, field evaluation and G&G costs.
For 2019 Aker BP expects production of 155-160,000 boe per day and capex of $1.6 billion – of which the main drivers are Valhall and Johan Sverdrup.
Offshore Energy Today Staff
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