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Norway's Aker BP operating profit misses as field maintenance hits volumes

By Reuters

OSLO -Norway’s Aker BP missed second-quarter operating profit expectations as field maintenance hit output and exploration costs rose, the independent oil and gas firm’s results showed on Thursday.

Earnings before interest and tax (EBIT) for April-June jumped to $614 million from $178.5 million a year earlier but were below the $668 million expected by analysts polled by Refinitiv.

Its quarterly oil and gas output fell to 199,000 barrels of oil equivalent per day (boepd) from 210,000 boepd a year ago due to field maintenance activities.

Output was also down on a quarter-on-quarter basis, with the average unit production cost rising to $9.0 per barrel of oil equivalent (boe) from $8.6 per boe in the first quarter, it added.

However, the company, which has an 11.6% stake in Equinor-operated Sverdrup, western Europe’s largest oilfield, kept its full-year production guidance unchanged at 210,000-220,000 boepd.

It planned to decide on a concept for its NOAKA development, the largest oil and gas project in the North Sea after Sverdrup, in the third quarter, and to submit a plan for its Frosk development in the same quarter.

Analysts at DNB said earnings were weighed by exploration expenses, including higher than expected field evaluation costs, such as the preparation of development concepts.

Aker BP said field evaluation costs stood at $62 million in the quarter, up from $6.8 million a year ago, with NOAKA accounting for about two-thirds of the total.

Aker BP, controlled by Norwegian billionaire Kjell Inge Roekke and partly owned by BP, also kept its quarterly dividend unchanged at $0.3124 per share, despite higher oil and gas prices boosting its cashflow.

“We have a heavy investment program going forward and we want to maintain the company’s financial robustness through the various price scenarios,” Chief Financial Officer David Toenne said.

Aker BP shares had dropped 3.2% by 0745 GMT, in line with the broader European oil and gas index which was down 2.9%.

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