Statoil's (STO) Earnings And Revenues Increase Y/Y In Q1

Statoil (OL:STL) ASA’s (NYSE:STO) first-quarter 2017 adjusted earnings of 33 cents per ADR increased 73.7% from the year-earlier adjusted earnings of 19 cents. The upside was primarily driven by significantly higher liquids and gas prices as well as increased production. Total revenue surged 53.3% year over year to $15.5 billion.

Operational Performance

In the reported quarter, total equity production of liquids and gas was 2,146 thousand barrels of oil equivalent per day (MBOE/d), up 4.5% from 2,054 MBOE/d in the year-ago quarter. New production from the start-up and ramp-up of various fields, effects of redetermination and stronger operational performance were offset by divestments as well as expected natural decline and cease of production from various fields

The underlying production growth in the quarter, after adjusting for divestments, was 5% year over year.

In the reported quarter, Statoil made seven discoveries from nine exploration wells drilled. Adjusted exploration expenses in the quarter were $202 million compared with $280 million in the first quarter of 2016.

In the reported quarter, total entitlement production of liquids and gas rose 5.1% to 2,007 MBOE/d. The increase was due to benefits from production sharing agreements (PSA effect).

Financials

Cash flow from operations amounted to $5,970 million in the reported quarter compared with $2,205 million in the last-year period. Statoil maintained a strong capital structure and net debt to capital employed at the end of the quarter was 30%. Organic capital expenditure was $2.2 billion in the first three months of 2017.

Outlook

Statoil expects organic capital expenditure of $11 billion in 2017. Organic production growth for the period 2016–2020 is expected at a CAGR of about 3%. The company expects equity production for 2017 to be about 4–5% above the 2016 levels. Total exploration activity level is expected to be around $1.5 billion in 2017.

Zacks Rank

Statoil currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are SunCoke Energy, Inc. (NYSE:SXC) , Gran Tierra Energy Inc (TO:GTE) and Global Partners L.P. (NYSE:GLP) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SunCoke Energy posted a positive earnings surprise of 120.0% in the preceding quarter. The company beat estimates in two of the four trailing quarters with an average negative earnings surprise of 35.78%.

Gran Tierra Energy posted a positive earnings surprise of 105.88% in the year-ago quarter. It posted an average positive earnings surprise of 18.63% in the four trailing quarters.

Global Partners posted a positive earnings surprise of 83.41% in the preceding quarter. It surpassed estimates in two of the four trailing quarters with an average positive earnings surprise of 96.55%.

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