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
Nov. 12, 2015, 6:34 PM
- Statoil (NYSE:STO) is awarded two deepwater exploration licenses offshore Nova Scotia totaling C$82M by the Canada-Nova Scotia Offshore Petroleum Board.
- STO becomes the third company interested in hunting for oil offshore Nova Scotia after Royal Dutch Shell began exploratory drilling this month and with BP planning to follow suit in 2017; the Shell and BP planned programs are much larger, with a price tag of ~$1B each.
- The federal natural resources minister and province energy minister must still sign off on the newest licenses.
Nov. 4, 2015, 10:18 AM
- An unusually high 13 rigs competing for a Det Norske drilling contract on the Alvheim oil field in the North Sea provides an illustration of how rig companies are desperate for business as producers cut spending to cope with weak crude oil prices, Blomberg reports.
- Offshore drillers such as Transocean (NYSE:RIG), Seadrill (NYSE:SDRL) and Fred Olsen Energy (OTC:FOEAF) have been caught by falling demand for their services as well as a glut of new rigs coming into the market, while Statoil (NYSE:STO), Norway's dominant oil company, has cut the equivalent of four years of drilling by terminating and suspending rig contracts over the past 18 months.
- Analysts say the daily rental rate for Det Norske’s rig will be lower than a recent award to Odfjell Drilling, which will get ~$300K/day to drill on STO’s Johan Sverdrup field for three years.
Nov. 3, 2015, 12:54 PM
- Statoil (STO +4.3%) must make a decision to move forward with the Johan Castberg oil project in Norway’s Arctic next year after a series of delay, Norway's state-owned Petoro oil company says.
- STO has postponed the project three times since 2013 to make it more profitable, and has managed to lower the project’s break-even price to $60/bbl from $80 and seeks to cut costs even further; a decision on the development concept is planned for H2 2016 and an investment decision for 2017.
- The project encompasses the Skrugard and Havis finds, which hold as much as as 650M barrels of oil, but the frontier area in the Barents Sea lacks production infrastructure such as pipelines, making it expensive to develop the deposits.
Nov. 3, 2015, 9:59 AM
- Statoil (STO +1.6%) says it will invest ~NOK2B ($236M) to build a floating wind farm off the Scottish coast, in what the Norwegian company says would be the first of its kind in the world.
- STO, which has run a single floating offshore turbine for several years in Norway, is planning to build a pilot project consisting of five floating turbines, each with 6 MW of capacity, off the coast near Aberdeen.
- STO does not disclose the forecast cost of energy from the project but says it expects to make floating offshore wind competitive without government support by 2030.
Nov. 2, 2015, 3:45 PM
- Statoil's (STO +0.8%) cancellation of a contract for a Songa Offshore (OTC:SGAZF) rig four months early is the latest blow for North Sea-focused companies including Transocean (RIG +5.8%), Seadrill’s (SDRL +4.2%) North Atlantic Drilling (NADL +4.2%) unit and Fred Olsen Energy (OTC:FOEAF), which have floating rigs idling or completing offshore contracts in the country in the coming year.
- By the time the market turns, as many as 20 units in Norway and the U.K. may be scrapped, Janne Kvernland of Nordea Markets tells Bloomberg.
- Investment by oil companies in Norway is expected to fall 11% this year and another 8% next year, according to the Finance Ministry, and demand for offshore rigs in Norwegian waters likely will total 18-20 units next year, with the equivalent of 27 rigs available.
Oct. 29, 2015, 8:57 AM
- Statoil (NYSE:STO) agrees to acquire a 35% stake in the Tugela South exploration license offshore South Africa from Exxon Mobil (NYSE:XOM), in the Norwegian company's first venture in the country.
- Tugela South spans nearly 3,500 sq. miles off South Africa's east coast, with water depths at up to 5,905 ft.; the license is in an early exploration phase, with seismic data gathering occurring through 2017, followed by geology and geophysics studies, before any drilling starts.
- Tugela South is operated by XOM, which acquired a 75% stake in the license in 2012 and will retain 40% following the deal with STO.
Oct. 28, 2015, 6:26 PM
- Mozambique’s government awards six licenses to search for oil and gas, including three licenses for offshore blocks to Exxon Mobil (NYSE:XOM) in partnership with Rosneft (OTC:RNFTF), and one to a consortium led by Eni (NYSE:E) that includes Sasol (NYSE:SSL) and Statoil (NYSE:STO), Bloomberg reports.
- The government says the proposed exploration programs have the potential for investments of up to $700M, with the opening of a minimum of 10 wells.
- Mozambique hopes to attract investments to exploit huge gas finds in the offshore northern Rovuma basin that could help turn the country into the world’s third-biggest liquefied natural gas exporter in a decade.
Oct. 28, 2015, 7:52 AM
- Statoil (NYSE:STO) -3.1% premarket after reporting a NOK2.8B net loss ($330.3M) on NOK112.2B in revenues, a narrower loss than a year ago but below analyst expectations for a net profit of NOK4.9B on revenues of NOK119.5B.
- STO says it will delay the production start at the Aasta Hansteen gas field in Norway and the U.K. Mariner field to H2 2018 from 2017.
- STO says costs had increased by ~9% at Aasta Hansteen and by more than 10% at Mariner since the planning stage, while costs had been reduced by 7% at the giant Johan Sverdrup field off Norway.
- STO's overall production for Q3 rose 4% Y/Y to 1.9M boe/day.
- Says its capex for the current year will total $16.5B, down from a previous forecast of $17.5B, and that it is seeking to save $1.7B/year through a cost-cutting plan that includes thousands of job cuts.
Oct. 28, 2015, 6:51 AM
- Statoil (NYSE:STO): Q3 EPS of -NOK0.89 may not be comparable to consensus of NOK0.16.
- Revenue of NOK112.2B (-23.9% Y/Y)
Oct. 19, 2015, 9:48 AM
- Total (TOT -2%) agrees to sell a 15% stake in the Gina Krog field in Norway to a unit of Sequa Petroleum for NOK1.4B, or ~$170M, as part of an asset sale program aimed at improving cash flow.
- The Gina Krog project is currently under development in the Norwegian North Sea and is expected to start up in 2017.
- TOT, which sold an 8% stake in Gina Krog last year, will retain a 15% stake in the field; Statoil (STO -2.7%) is the operator with a nearly 59% stake.
Oct. 16, 2015, 4:46 PM
- The Obama administration today closed off two avenues for new oil drilling in the Arctic Ocean, weeks after Royal Dutch Shell (RDS.A, RDS.B) said it was abandoning the area.
- The Interior Department said it was canceling scheduled auctions of drilling rights in the Chukchi and Beaufort seas, citing low industry interest, and it formally rejected bids by Shell and Statoil (NYSE:STO) for more time to search for crude under their existing Arctic leases.
- The decision to deny lease suspension requests from Shell and Statoil mirrors a similar rejection of a ConocoPhillips (NYSE:COP) request for more time on its own Arctic leases; COP has challenged the decision before an Interior Department appeals board, and settlement talks are underway.
Oct. 16, 2015, 10:38 AM
- Executives of 10 of the world's largest oil and gas companies declare their support for a climate agreement to be reached at an upcoming UN summit in Paris, but are unable to agree on a common position for carbon pricing.
- Producers including BP, Total (NYSE:TOT) and state-run Saudi Arabian and Mexican companies agree to support policies consistent with the goal of keeping the increase in average global temperatures to within 2 degrees Celsius (3.6 degrees Fahrenheit).
- The group also included BG Group (OTCQX:BRGXF, OTCQX:BRGYY), Eni (NYSE:E), Reliance Industries, Repsol (OTCQX:REPYF, OTCQX:REPYY), Royal Dutch Shell (RDS.A, RDS.B) and Statoil (NYSE:STO).
Oct. 13, 2015, 12:54 PM
- Statoil (STO -1%) is looking to make a decision to go ahead with its Hywind floating wind power farm offshore Scotland within the six next weeks, the company's senior VP for wind power projects tells Bloomberg.
- The Hywind park, which will consist of five 6 MW floating turbines, is a pilot project designed to demonstrate the technology on a commercial scale and is the company's first such commitment since creating a separate renewable energy unit.
- "Offshore wind has a strong potential" along the coast of the U.K., the exec says while declining to provide a spending estimate; STO plans construction to start as early as next year with final commissioning in 2017.
Oct. 12, 2015, 9:57 AM
- Statoil (NYSE:STO) and its partners at the Gullfaks field in the North Sea begin what they say is the world´s first wet gas compression system on the seabed, which they say may be able to boost recovery by 22M boe and extend plateau production by roughly two years from the Gullfaks South Brent reservoir.
- STO says the recovery rate may be increased from 62% to 74% by applying the compression method in combination with other measures.
- STO submitted production plans to Norway's government in July for early-stage developments at the Gullfaks region, which the company said could add another 18M boe to net Norwegian production.
Oct. 8, 2015, 8:26 AM
- Statoil (NYSE:STO) -2% premarket after reporting an oil spill near its Statfjord A platform in the North Sea that has halted crude loading operations.
- Statfjord is one of the oldest producing fields on the Norwegian continental shelf, and the largest oil discovery in the North Sea; the field's oil is loaded onto tankers and shipped to ports in northwestern Europe.
- STO says it is too early to determine how much oil had leaked.
Oct. 7, 2015, 4:59 PM
- Investors should stick with big oil companies such as Total (NYSE:TOT), ConocoPhillips (NYSE:COP) and Statoil (NYSE:STO) who have the most room for self-help, Citigroup analysts say.
- The firm believes the messaging in Q3 results could prove more important for equity performance than the numbers themselves, and managements need to be seen to be responding to current low return on equity and other factors such as recent debt downgrades; bigger cuts to costs and capital seem inevitable as the oil and gas industry looks to deepen its commitment to repair.
- Citi cites TOT as an industry-leader on a self-help agenda, and at its recent strategic update set a benchmark for what the industry needs to achieve; the firm says it continues to see value in "self-help winners" TOT, STO and COP, while also recommending BG Group (OTCQX:BRGXF, OTCQX:BRGYY) as a cheaper way into Royal Dutch Shell (RDS.A, RDS.B).
Statoil ASA engages in the exploration,. production, transport, refine, and market of petroleum and petroleum-derived products. It operates through the following segments: Development and Production Norway; Development and Production USA; Development and Production International; Marketing,... More
Sector: Basic Materials
Industry: Major Integrated Oil & Gas
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