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Statoil ASA (STO)

- NYSE
  • Yesterday, 2:51 PM
    • The Obama administration will decide soon whether to grant Royal Dutch Shell’s (RDS.A, RDS.B) request for extra time to hunt for oil in Arctic waters, Interior Secretary Sally Jewell said yesterday.
    • Without action, Shell’s oil and gas leases in the Beaufort Sea will begin expiring in 2017, followed by its drilling rights in the neighboring Chukchi Sea two years later; the same fate awaits Chukchi Sea leases sold in 2008 to Statoil (NYSE:STO) and ConocoPhillips (NYSE:COP), which have made similar appeals for more time, citing regulatory uncertainty, legal challenges and other obstacles.
    • The companies’ bids for “suspensions of operation” would effectively stop the clock ticking on their 10-year leases.
    • STO and COP have no active plans to drill in U.S. Arctic waters, but Shell is preparing to resume exploration in the Chukchi Sea this summer.
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  • Mon, Feb. 23, 8:57 AM
    • Statoil (NYSE:STO) says it has started up production at its Oseberg Delta 2 development in the North Sea, expecting to produce ~77M boe from the field.
    • Completed at a cost of slightly less than NOK7B ($926M), below initial spending plans for nearly NOK8B, STO expects the prospect to remain in production for ~20 years.
    • Oseberg Delta 2 is STO's tenth fast-track portfolio project; ConocoPhillips (NYSE:COP) and Total (NYSE:TOT) are among the minority stakeholders.
    | 1 Comment
  • Fri, Feb. 20, 4:43 PM
    • The Obama administration moves to tighten requirements for drilling in U.S. Arctic waters and force oil companies looking for crude there to have critical emergency equipment nearby.
    • The proposed rules will not technically apply to Shell’s (RDS.A, RDS.B) current plans to drill in the Chukchi Sea this summer, since they would not be final by then and only apply to future drilling operations, but they codify much of what Shell agreed to do following missteps in 2012 when the company’s first Arctic drilling attempt failed amid bad weather and mechanical failures.
    • ConocoPhillips (NYSE:COP) and Statoil (NYSE:STO) also own leases in the Arctic, though neither company has immediate plans to drill there.
    | 9 Comments
  • Fri, Feb. 13, 8:27 AM
    • Statoil (NYSE:STO) +3.5% premarket on news it will move forward with plans to develop the giant Johna Sverdup oil field in the North Sea, which is expected to produce up to 3B boe over 50 years and give Norway's fading oil industry a second life.
    • Sverdrup's first phase is expected to cost $15.4B, at the top end of the previous estimate range but only marginally ahead of analyst expectations; STO plans to start production by 2019.
    • The project is expected to break even at under $40/bbl, with operating costs seen at below $5/bbl once the project is up and running.
    • STO's partners in the project failed to agree on ownership stakes and are asking the Norwegian government to divide the project; STO says it has submitted a plan to the government asking for a ~40% share.
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  • Tue, Feb. 10, 3:42 PM
    • Bulgaria says it is in talks with Royal Dutch Shell (RDS.A, RDS.B), Statoil (NYSE:STO), BP and other oil companies to explore two new deepwater oil and gas blocks in the Black Sea, in a bid to reduce the country's dependence on Russian energy.
    • Bulgaria plans to launch the tender process for the blocks in the next few weeks, despite the current weak oil market, one of the country’s top energy officials tells WSJ.
    • In 2012, Bulgaria issued an exploration permit for another nearby Black Sea field to a consortium led by Total (NYSE:TOT), which recently postponed work on the area because of the drop in global oil prices.
    | 1 Comment
  • Tue, Feb. 10, 2:57 PM
    • Norway’s government warns Statoil (STO -2.8%) against sacrificing the 300M-barrel Snorre oil project in the North Sea, after the company said the project was among those that could provide flexibility in the event of further spending cuts in coming years.
    • The Snorre 2040 project, aimed at prolonging the field’s lifetime and boosting extraction by adding a new platform, is more “time critical” than other ventures such as new developments, Norway’s energy minister says.
    • Norwegian companies including STO and global majors with Norwegian units are gearing up for sharp investment cuts that could sacrifice as many as 40K jobs nationwide.
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  • Mon, Feb. 9, 10:13 AM
    • Statoil (STO +5.4%) and its partners say they have completed a two-well program in the Krafla area in the North Sea, and they now expect discovered recoverable resources of 140M-220M boe.
    • STO says it has made five discoveries in the Krafla area since 2011.
    • Separately, STO says it has chosen an unmanned wellhead platform as the concept for the Oseberg Future development phase I project in the North Sea.
    • STO says the jacket-based unmanned wellhead platform will reduce costs by several hundred million Norwegian crowns.
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  • Fri, Feb. 6, 8:33 AM
    • Statoil (NYSE:STO) +1.7% premarket despite announcing Q4 results that showed a $1B-plus net loss, missing analyst expectations.
    • CEO Eldar Saetre says at STO's Capital Markets day that the company cut its U.S. onshore spending by 20%-25%, and has the flexibility to delay upcoming projects to maintain its dividend while avoiding loading on much more debt.
    • "We haven't stopped any of our ongoing projects, they're moving forward, but we've reduced activity quite significantly, including U.S. onshore," the CEO says.
    • At current oil prices, STO needs to take on more debt to cover its dividend and capital spending, but the company believes it could keep its debt as a share of its capital at a comfortable level even if the oil price stays at $60/bbl.
    • "Even in a $60 scenario, we operate within a debt ratio of 15%-30%, while increasing our production and investing heavily in Johan Sverdrup, and paying a competitive dividend," CFO Torgrim Reitan says.
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  • Fri, Feb. 6, 4:35 AM
    • Reporting a sharp slide in fourth-quarter profits, Statoil (NYSE:STO) became the latest oil company to slash spending this year and signal project delays after the plunge in crude prices.
    • The company will raise spending cuts by 30% to $1.7B from 2016 and lower capex to $18B this year from previous guidance of $20B.
    • Net loss for the three months through December was 8.9B kroner ($1.18B) compared with a net profit of 14.8B kroner a year earlier.
    • STO +3.3% AH
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  • Wed, Feb. 4, 2:58 PM
    • Halliburton (NYSE:HAL), Whiting Petroleum (NYSE:WLL), Hess (NYSE:HES) and other energy companies with a presence in North Dakota have decided, at least for now, not to lay off staff in the state, hoping to be prepared for any prolonged rebound in crude prices.
    • By almost any metric - the jobless rate, payrolls, claims for unemployment benefits - there is little evidence to indicate the state at the center of the U.S. shale oil boom is about to suffer anything resembling a bust.
    • Other large North Dakota producers, including Oasis Petroleum (NYSE:OAS), Statoil (NYSE:STO) and EOG Resources (NYSE:EOG), also have said they have no plans to reduce their workforce.
    • Continental Resources (NYSE:CLR), the state's second largest oil producer, has not commented on staffing levels, but CEO Harold Hamm bragged in a press release yesterday that CLR's North Dakota acreage continues to "provide exceptional results."
    | 11 Comments
  • Wed, Feb. 4, 7:57 AM
    • Statoil (NYSE:STO) appoints interim CEO Eldar Saetre to permanently fill the position; shares -3.6% premarket.
    • The appointment is a surprise, since Saetre, who has run the company since Helge Lund left in October to lead BG Group, had said he was not a candidate for the job on a permanent basis.
    • Saetre has worked for STO for 35 years and served as both CFO and head of the company’s marketing, processing and renewable energy unit.
    • The new CEO says STO’s strategy will remain largely unchanged, maintaining spending cuts begun last year to protect shareholder returns amid rising costs; he also says the company will strengthen its efforts in the "transition toward a low carbon society."
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  • Mon, Feb. 2, 12:59 PM
    • Exxon Mobil (XOM +0.9%) is downgraded to Sector Perform from Sector Outperform with a $91 price target, cut from $99, at Howard Weil after today's Q4 earnings report.
    • The firm believes that while U.S. oil firms have appeared to receive the lion’s share of capital inflows given their defense positioning amid an ongoing downturn in commodity prices, but capital should begin to flow to higher beta and underperforming stocks that represent more attractive value.
    • Weil also cuts its price targets across the board for the integrated oil companies: BP by $5 to $41, ConocoPhillips (NYSE:COP) by $4 to $68, Chevron (NYSE:CVX) by $4 to $104, Shell (RDS.A, RDS.B) by $6 to $69, Statoil (NYSE:STO) by $4 to 427, and Total (NYSE:TOT) by $2 to $59.
    | 46 Comments
  • Thu, Jan. 29, 10:57 AM
    • Statoil (STO -1.3%) calls off further drilling in the Barents Sea off Norway this year as the world’s most active explorer in Arctic waters last year scales back on exploration amid low oil prices.
    • STO says it is still planning a “strong” application in Norway’s current licensing round, which offers its northernmost blocks ever in a new area of the Barents Sea formerly disputed by Russia.
    • Plunging oil prices have pushed companies to rein in spending on already marginally profitable projects such as Arctic developments; STO already had signaled that it may be forced to delay its Johan Castberg oil project in the Barents for a third time.
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  • Wed, Jan. 28, 2:54 PM
    • GE and Statoil (NYSE:STO) launch an R&D partnership to work on ways to cut greenhouse gas emissions, in a bid to show that fossil fuels can have a long-term future under increasingly tough climate regulations.
    • The two companies are seeking technologies that can reduce emissions and cut costs, for example by reducing the wasteful flaring of associated gas released during oil production, FT reports.
    • The partnership is a first for GE’s oil and gas services division, which believes technologies to cut the use of fuel and other resources will prove commercially attractive at a time of weak oil prices.
    | 19 Comments
  • Mon, Jan. 26, 7:27 PM
    • The Obama administration will propose laws preserving almost 13M acres of land in the 19.8M-acre Arctic National Wildlife Refuge, including 1.5M acres of coastal plains believed to have rich oil and natural gas resources, and says it is drafting an offshore leasing plan expected to include more limits on future Alaska oil and gas output.
    • Alaska's governor and congressional delegation were harshly critical of what they consider an unprecedented assault on the state that would have long-lasting impacts on its economy and U.S. energy security.
    • The action would effectively ban oil and gas activity in major portions of the Beaufort and Chukchi seas, although its impact on areas where Shell (RDS.A, RDS.B), ConocoPhillips (NYSE:COP) and Statoil (NYSE:STO) already have leases is not clear.
    | 60 Comments
  • Thu, Jan. 22, 5:58 PM
    • Even though it vowed last February to cut costs by $1.3B by 2016, Statoil (NYSE:STO) is getting severely squeezed by the fall in oil prices; Oslo-based Sparebank1 Markets estimates that as long as oil prices stay below $90/bbl, STO must borrow money to pay its dividends and capital expenditure, and if oil averages $60/bbl this year, the company would need to borrow NOK56B ($7.3B) to meet those obligations.
    • STO’s current debt stands at NOK86.8B, up from 30.2B three years ago; Citi analysts say STO’s capex and dividend commitments are set to outstrip cash flow by 23% in 2015.
    • STO has reduced capex by selling more than $20B worth of assets over the last five years, and the company’s director of development and production in Norway says the cost cutting "must be intensified."
    | 2 Comments
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Company Description
Statoil ASA is an integrated oil and gas company. It explores, produces, transports, refines, and markets petroleum and petroleum-derived products. It has operations in Norway, rest of Europe, and North America.