Statoil Results Show The Price Of Value
Stephen Simpson, CFA
Stephen Simpson, CFA
Statoil: Shares To Remain Weak Short Term, May Interest Long-Term Buyers
Power Hedge • 35 Comments
Power Hedge • 35 Comments
Today, 8:04 AM
Today, 7:58 AM
- Statoil (NYSE:STO) -3.9% premarket after reporting an unexpected Q2 loss of $28M vs. a $929M profit in the year-ago quarter, its first adjusted loss since 2008.
- STO’s adjusted net loss at its international unit tripled to $549M from a year ago, while profit at its Norwegian unit fell to $436M from $705M.
- STO says it will cut full-year capex by 8% to $12B compared with previous guidance, partly due to successful cost cuts, notably a reduction in the average time required to drill an offshore exploration well to 22 days from 46 days three years ago.
- STO's net debt to capital employed rose to 31.2% from 28.1% at the end of Q1 and 22.4% a year ago; the company previously had found unacceptable a reading above 30%, but CEO Eldar Saetre now says he is “comfortable” with it.
Today, 7:00 AM
Today, 2:15 AM
- Deutsche Bank's (NYSE:DB) net income fell nearly 100% in Q2, prompting the lender to promise a more aggressive overhaul.
- Santander's (NYSE:SAN) profits fell on forex swings and a restructuring charge related to branch closures and employee layoffs.
- Pointing to continued pressure on refining margins and prices, Statoil (NYSE:STO) missed expectations on both the top and bottom line.
- Airbus (OTCPK:EADSY) took over €1.4B in fresh charges for its troubled A400M and A350 programs, but reaffirmed targets as it posted lower quarterly earnings.
- Telecom Italia (NYSE:TI) raised its full year domestic profit outlook after beating expectations and agreed to invest $1.2B with Fastweb across 29 Italian cities.
- ARM Holdings (NASDAQ:ARMH) posted a profit and sales rise, but was unable to provide full year guidance given restrictions related to its takeover by Softbank (OTCPK:SFTBY).
Fri, Jul. 22, 11:59 AM
- Statoil (STO -2.5%) is downgraded to Equal Weight from Overweight at Morgan Stanley, as shares have sharply outperformed peers YTD; the firm prefers Royal Dutch Shell (RDS.A, RDS.B) within the space.
- STO's strong showing has left shares trading at a ~5% forward yield, the lowest among the European majors; STO shares historically have traded at a 4%-6% dividend yield with few exceptions, "hence valuation now appears less compelling in both absolute and relative terms," the firm says.
- The pace of project delivery moving forward likely will slow before another wave of startups in H2 2017 into 2018, Stanley says, believing this will limit further upside to consensus free cash flow expectations in the near term; meanwhile, the firm predicts Shell will enjoy a period of strong FCF growth over the next 12 months.
Fri, Jul. 8, 12:23 PM
- The U.S. Interior Department yesterday issued final regulations governing future oil and natural gas drilling in the Arctic Ocean that will require extensive contingency plans to ensure companies could swiftly contain any potential oil spill.
- Last September, Royal Dutch Shell (RDS.A, RDS.B) abandoned its plan to drill in the Chukchi and Beaufort Seas off Alaska’s northern coasts, and Conoco Phillips (NYSE:COP) and Statoil (NYSE:STO) also recently abandoned leases they had owned in the Arctic.
- No companies currently are trying to tap oil or gas in the area and, because of weaker oil prices around the world, none have immediate plans to do so.
Fri, Jul. 1, 11:03 AM
- Exxon Mobil (XOM -0.5%) and BP (BP +1.2%) are at odds over a giant oil production deal with Azerbaijan, blocking renewal of what was once called "the contract of the century," Reuters reports, citing three high-level industry sources.
- BP, which operates the Azeri-Chigar-Guneshli fields in the Caspian Sea and relies on them for 10% of its global output, is said to have tentatively agreed to terms with the Azeri government on extending the 30-year contract, but XOM, which also has a stake in the ACG consortium, is holding out for a better deal.
- The result is a deadlock in talks over a project that could produce another $100B worth of oil at current prices and has exacerbated old tensions between XOM CEO Rex Tillerson and BP's Bob Dudley, according to the report.
- BP holds a 35.8% interest stake in the project, and XOM owns only 8%; other members include Azeri state oil firm Socar and Chevron (CVX -0.7%) each with more than 11%, Japan's Inpex with 11%, and Norway's Statoil (STO +0.4%) with 8.6%.
Tue, Jun. 28, 2:29 PM
- Statoil (STO +3.3%) must not attempt to scale back existing labor agreements if it wants to prevent a strike by Norwegian oil and gas workers beginning July 2, says the Industri Energi union, which represents two-thirds of the workers that would strike.
- Three unions said yesterday that 755 Norwegian workers on seven oil and gas fields operated by STO, Exxon Mobil (XOM +1.2%) and Engie (OTCPK:ENGIY) will strike unless a deal on wages and other working conditions is agreed; Reuters says the fields account for ~18% of Norway's combined output of crude oil, natural gas and natural gas liquids.
- XOM and Engie have said a conflict would cut output at the fields they operate, while STO has declined to comment on all aspects of the negotiations.
- Crude oil prices today are ~3% higher, bouncing off their Brexit-fueled selloff, and the threat of the Norway strike is said to be one of the causes.
- ETFs: USO, OIL, UWTI, UCO, DWTI, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM
Thu, Jun. 23, 7:47 AM
- Statoil (NYSE:STO) says 43% of shareholders chose to take their Q4 dividend in shares instead of cash, reducing its cash dividend payout by $292M.
- To free up cash, STO had offered shareholders the chance to take shares instead of a cash dividend in Q4 at a 5% discount to market; some analysts had predicted that a majority of shareholders would choose the scrip dividend, given the discount.
- STO says nearly 18.3M new shares would be issued and delivered to shareholders on June 24.
- STO +4.4% premarket.
Wed, Jun. 22, 7:52 AM
- Workers on Norwegian offshore oil drilling rigs sign a new wage agreement, beating today's deadline and avoiding a strike.
- Nearly 300 rig workers had threatened to strike if the talks failed, including staff on Rowan's (NYSE:RDC) Viking and Gorilla rigs, and on the Statoil-operated (NYSE:STO) Heidrun, Statfjord, Aasgard, Volve and Oseberg fields.
- Workers will get only a small pay raise but those being laid off will have the right for a two-year period to be rehired if an employer increases staffing.
Thu, Jun. 16, 12:19 PM
- North Dakota’s crude oil production fell by the largest amount ever for a single month, sinking 6.3% to 1.04M bbl/day in April from a revised 1.11M bbl/day in March.
- The North Dakota Department of Mineral Resources cites low crude oil prices but also windy weather throughout much of the month, which delays the fracking of wells, adding that it expects the slide to accelerate through May and into the summer.
- There are 28 drilling rigs currently active in the state, up from 27 in May which was the fewest since July 2005; at its peak, North Dakota had 218 rigs drilling in May 2012.
- Companies with a Bakken presence include: CLR, ERF, EOG, HK, HES, MRO, OAS, QEP, SM, STO, TPLM, WLL.
Mon, Jun. 13, 2:19 PM
- Statoil (STO -0.8%) may seek to partner with Pemex in Mexico’s deepwater fields as it looks to gain a foothold in the country’s recently opened energy market, says Tore Loseth, the company's VP of exploration in the U.S. and Mexico.
- STO, which failed to win areas in Mexico’s shallow-water auctions last year, is among 23 companies that have registered to pre-qualify to participate in the deepwater oil auction on Dec. 5; the list includes the likes of Chevron, Exxon and Total, all of whom are now in talks to secure partnership deals with Pemex.
- Loseth does not say whether STO plans to bid on the Trion field in the Gulf of Mexico; Pemex and Mexico’s energy ministry announced plans last week to farm out the Trion field, which is believed to contain ~485M barrels of reserves and estimated to cost $11B to develop.
Mon, Jun. 13, 10:57 AM
- The value of Norway's state-owned oil and gas fields has fallen by about a third in two years, or by more than $50B, mostly reflecting lower oil and gas prices, the country's government says.
- A new report estimates the value of Norway's direct ownership in oil and gas fields at 810B kroner ($97.9B), down from 1.23T kroner in a similar estimate two years ago.
- Last year, Norway government's derived half of its oil and gas revenue from production taxes, 43% from direct ownership in oil and gas assets, and 7% from dividends paid by Statoil (STO +0.4%), in which the government owns a 67% stake; government-owned fields contributed 27% of Norway's total oil and gas output, or ~1M boe/day.
Fri, Jun. 10, 8:05 AM
- Statoil (NYSE:STO) -1.9% premarket after saying that a 19-month drilling campaign had found that the size of the Bay du Nord discovery off Newfoundland could be at the lower end of a previous estimate.
- STO says its nine-well drilling campaign confirmed that Bay du Nord's volumes likely are within the 2013 estimate of 300M-600M boe; the company kept the range, but says the recoverable volumes potentially are at the lower end and that it is assessing whether the field is commercial
- STO has a 65% stake in Bay du Nord, while partner Husky Energy (OTCPK:HUSKF) owns 35%.
Fri, Jun. 3, 7:40 AM
- Statoil (NYSE:STO) says it has taken control of the U.K. part of the Utgard gas field in the North Sea by acquiring a 45% stake from Japan's JX Nippon for an undisclosed amount.
- STO reportedly plans to invest NOK4B-NOK4.5B in the development of the field, and expects to make a final investment decision later this year and to start production in 2020.
- The company plans to pump Utgard's gas and condensate to the nearby Sleipner field that has become a key hub for processing North Sea gas and exporting it by pipeline to the European market.
Thu, Jun. 2, 7:12 PM
- GE Oil & Gas (NYSE:GE) secures a major deal with Statoil (NYSE:STO) to supply surface wellhead and christmas tree equipment for the giant John Sverdrup field in the North Sea; the value of the agreement is not disclosed.
- Under the new multi-year agreement, GE will manufacture, deliver and install its standardized surface wellhead and christmas tree systems at multiple wells that make up part of the field.
- GE, which has collaborated with STO on previous technology projects. says the latest deal opens opportunities for the Norwegian company to use GE's digital solutions to drive higher productivity and create "smarter” wells.
- Johan Sverdrup is one of the five biggest oil fields on the Norwegian continental shelf, with expected resources of 1.7B-3B boe.
Statoil ASA explores, produces, transports, refines and markets petroleum and petroleum-derived products. The company operates through four segments: Development & Production Norway, Development & Production International, Marketing Processing & Renewable Energy and Other. The Development &... More
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Industry: Major Integrated Oil & Gas
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