Norwegian oil company Statoil widened its loss during the fourth quarter of 2016 mainly due to impairment charges.
The company on Tuesday reported that its net loss was $2.79 billion during the fourth quarter 2016, compared to $1.12 billion loss in the fourth quarter of 2015.
Statoil’s net operating income was negative $1.897 billion in the fourth quarter 2016 compared to positive $152 million in the same period of 2015. The result was impacted by $2.3 billion in net impairment charges mainly due to reduced long-term price assumptions.
Adjusted earnings were $1.664 billion in the fourth quarter, down 6% from $1.78 billion in the same period in 2015. Adjusted earnings after tax were negative $40 million in the fourth quarter, down from positive $185 million in the same period last year.
Statoil delivered equity production of 2,095 mboe per day in the fourth quarter compared to 2,046 mboe per day in the same period in 2015. According to the company, the increase was primarily due to ramp-up of new fields and strong operational performance.
Statoil’s revenues dropped 3% during the fourth quarter 2016 to $12.76 billion, compared to $13.09 billion in the same period of 2015.
“Our result was impacted by the negative result from our international operations due to expensed exploration wells, high maintenance activity and impairment charges,” says Eldar Sætre, President and CEO of Statoil.
“We achieved strong results from our improvement program, 700 million dollars above our target of 2.5 billion dollars in annual savings. These are lasting effects, and we target an additional 1 billion dollars in 2017,” says Sætre.
Looking ahead, the company’s organic capital expenditures for 2017 (i.e. excluding acquisitions, capital leases and other investments with significant different cash flow pattern) are estimated at around $11 billion.
Statoil intends to continue to mature its large portfolio of exploration assets and estimates a total exploration activity level of around $1.5 billion for 2017, excluding signature bonuses.
The equity production for 2017 is estimated to be around 4-5% above the 2016 level.