The Statoil ASA (OSE: STL, NYSE:STO) had a net income of NOK 40.6 billion in 2006, compared to NOK 30.7 billion in 2005. Net income for the fourth quarter of 2006 was NOK 12.0 billion, compared to NOK 8.5 billion for the same period of 2005.
The increase in net income of NOK 3.5 billion from the fourth quarter of 2005 to the fourth quarter of 2006 was mainly due to higher financial income and lower income taxes.
"The annual income for 2006 is the best ever for Statoil. We maintain strong earnings and competitive returns, despite temporarily lower production overall," says chief executive Helge Lund.
"Through the acquisition of two deepwater portfolios in the Gulf of Mexico (GoM) from Anadarko and Plains and the subsequent divestment of the retail operation in Ireland we have further upgraded our portfolio," states the CEO.
"Both the fourth quarter and the year as a whole have been characterised by high exploration activity, both on the Norwegian continental shelf (NCS) and internationally. At the same time we have also secured new exploration acreage, put new fields on stream and launched new field development plans that support the group's long-term growth ambition," says Mr Lund.
The CEO points to the field development plans for Gjøa and Alve as good examples of the group's efforts in further developing the NCS. During 2006, nine new fields came on stream. On the NCS, Statoil's portfolio has been strengthened with the Norne K-template, Gimle, Fram East, Oseberg West Flank and Ringhorne East, while the international upstream position has been strengthened with production from In Amenas in Algeria, Dalia in Angola and East Azeri and Shah Deniz in Azerbaijan.
"On 18 December it was announced that the boards of directors of Statoil and Hydro recommend a merger of Hydro's oil- and gas activities with Statoil. The processes that lead up to the necessary approvals of the merger are well under way. By combining the strengths from both companies, we will build a strong Norwegian based energy company, well positioned to succeed even better in the global competition," says Mr Lund.
In 2006, earnings per share were NOK 18.79 (USD 3.02) compared to NOK 14.19 (USD 2.10) in 2005. In the fourth quarter of 2006, earnings per share were NOK 5.58 (USD 0.90) compared to NOK 3.94 (USD 0.59) in the fourth quarter of 2005.
Statoil's board of directors will propose to the annual general meeting an ordinary dividend of NOK 4.00 per share for 2006, as well as NOK 5.12 per share in special dividend. In 2005 the ordinary dividend was NOK 3.60 per share, while the special dividend amounted to NOK 4.60 per share.
Income before financial items, income taxes and minority interest in 2006 was NOK 116.9 billion compared to NOK 95.0 billion in 2005. The increase was mainly due to a 20% increase in the average oil price measured in NOK and a 32% increase in the gas price measured in NOK. The increase was partly offset by a reduction in lifted oil volumes and an increase in cost items.
Income before financial items, income taxes and minority interest decreased from NOK 27.8 billion in the fourth quarter of 2005 to NOK 26.1 billion in the same period of 2006.
Total oil and gas production in 2006 was 1,135,000 barrels of oil equivalent (boe) per day, compared to 1,169,000 boe per day in 2005. In the fourth quarter of 2006 total oil and gas production amounted to 1,153,000 boe per day, compared to 1,232,000 boe per day in the fourth quarter of 2005. Statoil's guiding on production for 2006 at 1,140,000 boe per day was based on an oil price of USD 60 per bbl. A realised oil price of USD 60 per bbl would have resulted in an estimated production of 1,139,000 boe per day. The difference from reported production is due to production sharing agreements (PSA) effects.
Exploration expenditure in 2006 was NOK 7.5 billion, compared to NOK 4.3 billion in 2005. Exploration expenditure in the fourth quarter of 2006 amounted to NOK 2.0 billion, compared to NOK 1.1 billion in the fourth quarter of 2005.
Exploration expenses for the period consist of exploration expenditure adjusted for the period's change in capitalised exploration expenditure. Exploration expenses in 2006 amounted to NOK 5.7 billion, compared to NOK 3.3 billion in 2005. In the fourth quarter of 2006 exploration expenses amounted to NOK 1.9 billion, compared to NOK 0.7 billion in the fourth quarter of 2005.
A total of 37 exploration and appraisal wells were completed in 2006, 17 on the NCS and 20 internationally. Of these wells, 19 resulted in discoveries, while six wells await final evaluation. In addition, four exploration extensions on the NCS were completed in 2006, two of which resulted in discoveries. The number of exploration wells completed in 2005 was 20.
In the fourth quarter of 2006, a total of seven exploration and appraisal wells were completed, four on the NCS and three internationally. Four wells resulted in discoveries, while one well awaits final evaluation. In addition, one exploration extension on the NCS was completed in the fourth quarter of 2006 and resulted in a discovery. Four exploration wells were completed in the fourth quarter of 2005.
Proved reserves at the end of 2006 were 4,185 million boe, compared to 4,295 million boe at the end of 2005.
Production cost per boe was NOK 26.6 for the 12 months ended 31 December 2006, compared to NOK 22.3 for the 12 months ended 31 December 2005 (*).
Normalised at a USDNOK exchange rate of 6.00 and adjusted for the estimated volume due to PSA effects based on an average oil price of USD 60 per bbl, the production cost for the 12 months ended 31 December 2006 was NOK 26.2 per boe, compared to NOK 22.0 per boe for the 12 months ended 31 December 2005 (*).
Net financial items amounted to an income of NOK 4.8 billion in 2006 compared to an expense of NOK 3.5 billion in 2005. In the fourth quarter of 2006 net financial items were an income of NOK 2.8 billion, compared to an expense of NOK 1.5 billion in the fourth quarter of 2005.
Income taxes in 2006 were NOK 80.4 billion, with a corresponding tax rate of 66.0%, compared to income taxes in 2005 of NOK 60.0 billion with a corresponding tax rate of 65.6%. In the fourth quarter of 2006 income taxes were NOK 16.8 billion, equivalent to a tax rate of 58.1%. Income taxes in the fourth quarter of 2005 were NOK 17.6 billion, equivalent to a tax rate of 66.9%.
- See end notes in the complete quarterly report.
Attachments:
- Press release
- Financial statements and review
Further information from:
Investor relations
Lars Troen Sørensen, senior vice president investor relations, + 47 90 64 91 44 (mobile), +47 51 99 77 90 ( office)
Geir Bjørnstad, vice president, US investor relations, + 1 203 978 6950
Media
Ola Morten Aanestad, vice president media realtions, +47 48 08 02 12 (mobile), +47 51 99 13 77 (office)
Disclaimer:
This document does not constitute an offer to exchange or sell or an offer to exchange or buy any securities.
An offer of securities in the United States pursuant to a business combination transaction will only be made through a prospectus which is part of an effective registration statement filed with the US Securities and Exchange Commission. Norsk Hydro shareholders who are US persons or are located in the United States are advised to read the registration statement when and if it is declared effective by the US Securities and Exchange Commission because it will contain important information relating to the proposed transaction. You will be able to inspect and copy the registration statement relating to the proposed transaction and documents incorporated by reference at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Statoil's SEC filings are also available to the public at the SEC's web site at http://www.sec.gov. In addition, Statoil will make the effective registration statement available for free to Norsk Hydro's shareholders in the United States.
This document does not constitute an offer to exchange or sell or an offer to exchange or buy any securities.
An offer of securities in the United States pursuant to a business combination transaction will only be made through a prospectus which is part of an effective registration statement filed with the US Securities and Exchange Commission. Norsk Hydro shareholders who are US persons or are located in the United States are advised to read the registration statement when and if it is declared effective by the US Securities and Exchange Commission because it will contain important information relating to the proposed transaction. You will be able to inspect and copy the registration statement relating to the proposed transaction and documents incorporated by reference at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Statoil's SEC filings are also available to the public at the SEC's web site at http://www.sec.gov. In addition, Statoil will make the effective registration statement available for free to Norsk Hydro's shareholders in the United States.
