StatoilHydro Achieves Milestone with First Delivery of Liquefied Natural Gas to U.S.

We raise estimated net present value [NPV] of buy-recommended StatoilHydro (STO) to $52 a share up from $41, presuming a long-term oil price of $100 a barrel, up from $80. First quarter results released today scored higher on volume, price, cash flow and earnings than our estimates from three months ago.

Projected volumes along with current futures prices promise a continuing high level of unlevered cash flow (Ebitda). Projected cash flow capitalized at unlevered multiples (PV/Ebitda) related to reserve life (Adjusted R/P) supports NPV. The company’s dividend and cash flow outlook is boosted by a continued uptrend for oil price and more recently natural gas price.

StatoilHydro achieved a global energy milestone in 2008 with the first delivery of liquefied natural gas [LNG] to the U.S. from Norway. The LNG was produced from STO’s liquefaction plant at Snohvit (Snow White), the world’s first above the Arctic Circle.

Originally published on May 13, 2008.

Comments

[Ozarker:]

Who are they going to sell it to when all the natural gas you want is coming out of the ground under the DFW airport? Seems like a lot of trouble when we already have somewhere between a 60 and 300 year supply under the friendly confines of good ole North America and we don't have to freeze, ship and reprocess it to sell it.

2008 Jun 16 09:07 AM

[Old Trader:]

Ozarker.....that assumes the Dems/greenies will let the energy companies at it, which seems questionable.

jan

2008 Jun 16 08:38 PM

[Mmarrkk:]

You do realize we have been importing LNG for many years now, don't you? and that the drop in our current storage of NG is largely due to a reduction in the amount of LNG imported this past year as prices in Europe and the Far East have attracted large amounts of LNG? They are paying $15/MMBTU for the gas while our market was $9 and is now $13.

2008 Jun 17 08:34 AM