Statoil shares rise on forecast beating earnings, dividend increase

on Feb 7, 2018

Statoil shares are trading higher Wednesday, as the Norwegian oil and gas firm reported its fourth quarter results and announced it was raising its dividend amid record high production in the final months of 2017.

By around 1235 BST, Statoil shares were trading 3.01% higher at NKR179.80. That marks a welcome move higher for the Statoil stock after a mixed couple of weeks.

Statoil’s upbeat earnings

Statoil said earlier Wednesday that it’s fourth quarter revenues surged to $4 billion from $1.7 billion a year earlier. Meanwhile, Q4 profits after tax hit $1.3 billion, up from -$40 million in Q4 2016.

The oil firm also said it’s capital expenditure was lower than anticipated at $9.4 billion. Statoil had previously said it expected capital expenditure of $1 billion in 2017.

“In a recovering market, we delivered strong earnings and cash flow from all business segments,” said Statoil ASA president and CEO, Eldar Sætre.

“We had record high production both in the fourth quarter and for the full year, supported by continued solid operational performance. We expect long-term underlying earnings growth, and in line with our dividend policy the board proposes to increase the dividend by 4.5% to $0.23 per share,” Sætre added.

Oil production, future plans

Statoil said it’s equity production was 2.134 million barrels of oil equivalent a day in the fourth quarter, up from 2.095 million in the same period a year earlier. The increase was due largely to flexible gas production allowing it to achieve an all-time high production growth of over 6%.

Statoil also said it is well placed to deliver a 12% return on investment between 2018-20 and deliver $12 billion in free-cash flow. The Norwegian business also said it expects to increase production by between 1-2% in 2018 and annual production growth of 3-4% between 2017-2020.

“With solid operational performance and realised efficiencies, we are a stronger and more competitive company,” Sætre said. “We will profitably grow production, strengthen our balance sheet, and increase the cash dividend”.

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