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Statoil ASA (STO)

  • Dec. 5, 2014, 4:30 AM
    • Global oil and gas exploration projects worth more than $150B are likely to be put on hold next year as plunging oil prices render them uneconomic, shows data from Oslo-based research firm Rystad Energy.
    • With rising costs of production and analysts forecasting oil to average $82.50 a barrel next year, around one third of the spending on a total of 800 oil and gas projects worth $500B, is unlikely to be approved.
    • Related tickers: CVX, TOT, STO, BP, RDS.A
  • Dec. 2, 2014, 12:15 PM
    • Chevron (CVX +1.8%) says oil and natural gas production has begun from the Jack and St. Malo fields development project in the deepwater Gulf of Mexico, 10 years after the fields were first discovered.
    • CVX expects total production from the $7.5B project - its costliest active investment in the Americas - to ramp up to 94K bbl/day of crude and 21M cf/day of gas by 2020, with 500M boe from the two fields over their 30-year lifespan.
    • CVX has a 50% interest in the Jack field, with Statoil (NYSE:STO) and Maersk splitting the remaining half, and it owns 51% of St. Malo, with co-owners Petrobras (NYSE:PBR), Statoil, Exxon (NYSE:XOM) and Eni (NYSE:E).
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  • Dec. 1, 2014, 6:54 PM
    • Statoil (NYSE:STO) says it is postponing a decision to invest $5.7B in a new platform at the Snorre field in the Norwegian Sea that would extend the field's lifetime until 2040, needing more time to assess the project as its profitability comes under threat.
    • STO says it will decide in October next year instead of March whether to go ahead with the project, which could squeeze another 240M barrels of oil out of the field; high costs and uncertainty amid tumbling oil prices has thrown the project into doubt.
    • The company has gone into full-fledged cost-cutting mode to preserve cash for paying dividends, but some analysts believe it may be jeopardizing future production in doing so.
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  • Nov. 28, 2014, 10:05 AM
    • With OPEC having seemingly handed the market responsibility for removing the ~1mb/d of supply needed to achieve balance into 2015, our concern is that the lack of transparency around the price at which supply breaks and speed/scale of a non-OPEC response leaves oil equities facing a period of uncertainty," writes analyst Lucas Hermann, downgrading Statoil (STO -13.2%) to Hold.
    • On a brighter note for the oil majors, Hermann notes on a 12-month view, the sector's relative valuation is at levels last seen in 2009, maybe meaning "absolute support" for names like Shell (RDS.A -6.2%) "where we have real conviction in the solidity of distributions."
  • Nov. 28, 2014, 9:17 AM
  • Nov. 27, 2014, 1:51 PM
    • Arctic Securities maintains its Sell rating and lowers its price and dividend targets on Statoil (NYSE:STO).
    • Notes that “run rate” 2015 operational cash flow is currently at NOK 104B while CAPEX is currently guided at NOK 138B. Consensus dividend expectation is NOK 7.54/share, or NOK 24B. "Statoil will hence before any divestments have to borrow NOK 58B next year to bridge the funding gap."
    • "Statoil is not in a position to continue the current dividend policy." Says oil prices would need to rise to $130/bbl for 2015 and $115/bbl for 2016 to make dividend sustainable.
    • Lowers price target to NOK 115 and dividend estimate by NOK 1.75/share to NOK 5.75 and NOK 6.00 in 2015 and 2016.
    • Shares are -24.6% since Arctic first pegged STO with a Sell rating on July 23. They fell 4.75% today to NOK 142.30.
    • Previously: Crude now -7.6% on OPEC rollover
  • Nov. 21, 2014, 8:29 AM
    • Statoil (NYSE:STO) says it is halting its exploration campaign offshore Angola after several disappointing well results in the Kwanza basin, and will book a $350M expense in Q4 after canceling a rig contract.
    • STO says its 2014 guidance for exploration costs at $3.5B remains unchanged.
    | 1 Comment
  • Nov. 20, 2014, 5:58 PM
    • It’s time for the medium-term investor to start buying the biggest of big oil companies, HSBC says, as the market seems to have capitulated on the sector.
    • HSBC views BP and Total (NYSE:TOT) as clearly the cheapest of the oil supermajors, with share price discounts to sum-of-the-parts valuation for BG Group (OTCPK:BRGXF, OTCQX:BRGYY), Statoil (NYSE:STO) and Repsol (OTCQX:REPYY, OTCPK:REPYF); Exxon Mobil (NYSE:XOM) still trades at small premium to the SoP valuation, and the firm likes Chevron (NYSE:CVX), which was penalized in its valuation by its ongoing capital intensity in 2017.
    • The stocks also offer average prospective dividend yields of 5%-plus for 2015, and the dividends look robust as they are supported by strong balance sheets, more active asset disposal programs, and strong new project cash margins.
  • Nov. 18, 2014, 7:59 AM
    • Statoil (NYSE:STO) says its Johan Castberg oil discovery in the Arctic Barents Sea can be developed profitably even after Brent crude prices have tumbled more than $35 to below $80/bbl from a June high.
    • Developing Castberg with an FPSO unit remains the cheapest option, according to a STO exec, who adds that nearby finds by Lundin Petroleum (OTCPK:LNDNF) have raised the possibility that a combined development including a new onshore oil terminal at North Cape can be commercially viable.
    • Norway's Barents Sea, estimated to hold 40% of Norway’s undiscovered resources and seen as key to halt a long decline in the country’s crude production, lacks infrastructure including terminals and pipelines.
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  • Nov. 11, 2014, 12:33 PM
    • Algeria's In Amenas gas plant is on track to return to full output capacity in early 2015 following an attack last year by Islamist militants, according to a report citing the country's energy minister.
    • Three processing plants were damaged in the attack which left 40 workers dead and several hundred taken hostage; two of the trains already have resumed production.
    • Operating partners BP and Statoil (NYSE:STO) have been working towards returning full capacity to the plant, which had totaled 9B cm/year prior to the attack and accounted for ~11.5% of Algeria's natural gas output.
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  • Nov. 11, 2014, 11:59 AM
    • Investment in Norway's oil sector will fall sharply next year before leveling out as energy firms grapple with lower oil prices, Norway's Oil & Gas Association says.
    • Oil investments will fall to ~NOK197B ($28.9B) next year from NOK221B in 2014, and then hold at 190B-205B/year through to 2019, according to the trade association.
    • Erik Bruce, chief analyst at Nordea Markets, says the report argued the decline in investment would be less than feared, even with oil prices down to $85/bbl.
    • Several oil and gas fields coming up for development remain attractive projects, the group says, including Statoil's (STO -0.9%) giant Johan Sverdrup field, which could contain up to 2.9B barrels of oil and has an estimated breakeven price as low as $37/bbl.
    | 1 Comment
  • Nov. 6, 2014, 8:33 AM
    • Statoil (NYSE:STO) says it will suspend operations of two offshore drilling rigs for at least the rest of the year, with no plans for redeployment, citing overcapacity.
    • The Transocean Spitsbergen and Songa Trym rigs will be suspended through 2014, but the period "might be extended," STO says.
    • STO's action is "another negative for the North Sea drilling market,” Nordea's Janne Kvernland says, especially for drillers with rigs ending contracts in Norway next year, including Transocean, Seadrill (NYSE:SDRL) subsidiary North Atlantic Drilling (NYSE:NADL) and Fred Olsen Energy (OTC:FOEAF).
  • Nov. 4, 2014, 8:59 AM
    • Stocks in European energy companies are hit hard following Saudi Arabia's move yesterday to cut prices for crude sold in the U.S., sending oil prices tumbling.
    • Seadrill (NYSE:SDRL) sank more than 6% to the bottom of the Stoxx Europe 600 index; BP, Royal Dutch Shell (RDS.A, RDS.B), Total (NYSE:TOT), Statoil (NYSE:STO), Tullow Oil (OTCPK:TUWLF, OTCPK:TUWOY) and BG Group (OTCPK:BRGXF, OTCQX:BRGYY) are all more than 2% lower.
    • Oil prices are sharply lower again today, with Brent crude falling to four-year lows near $82/bbl and U.S. crude touching a session low of $75.84, its weakest since Oct. 2011.
  • Nov. 3, 2014, 8:26 AM
    • Statoil (NYSE:STO) says the giant Johan Sverdrup oil field in the North Sea could generate NOK1.35T (~$205B) in revenue over the next five decades.
    • The field, estimated to hold ~1.8B barrels of oil, is expected to produce 315K-380K bbl/day in the first phase and could produce as much as 650K bbl/day in later development stages.
    • STO says the Norwegian government would take NOK670B in corporation taxes alone, based on its latest projections.
  • Oct. 30, 2014, 3:34 PM
    • Statoil (STO -2%) says it will invest $1.5B on development of the Stampede development in the Gulf of Mexico, sanctioning the project along with co-owners Hess (HES -0.1%), Chevron (CVX -0.3%) unit Union Oil of California and Cnooc's (CEO -1.4%) Nexen.
    • STO estimates the reservoir contains ~350M barrels of recoverable oil; total project development is expected to cost $6B.
    • Earlier: Hess to develop Stampede field in deepwater Gulf of Mexico
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  • Oct. 29, 2014, 8:26 AM
    • Statoil (NYSE:STO) +0.4% premarket despite reported its first quarterly loss since listing in 2001, mostly because of impairments amid a weaker market outlook and lower oil and gas prices.
    • The net loss was 4.7B kroner ($727M) compared with a profit of 14.3B kroner a year ago; adjusted net income, which excludes financial items, fell to 9.1B kroner from 12.1B kroner, missing the 9.3B kroner analyst consensus estimate.
    • STO booked impairments of 13.5B kroner, mainly relating to the delay of the Corner field at the Kai Kos Dehseh oil sands project in Canada, impairments on midstream assets amid reduced expectations for trading activities, and exploration assets in Angola and the Gulf of Mexico because of disappointing discoveries.
    • STO got an average of $91.2/bbl for oil in the quarter, down from $102.9 a year ago.
    • Although the negative result "is close to sensational, we think substantial impairments on particularly the oil sand assets have been expected by the market," a Swedbank analyst says.
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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, North America, Africa, Asia and South America.