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Image courtesy of Johan Anthoniussen/Statoil.

Norway’s Statoil reported fourth quarter and full year losses on Tuesday as low commodity prices impacted earnings.

The company posted fourth quarter adjusted earnings of $1.66 billion, down slightly from $1.77 billion for the year-ago period.

Full year 2016 adjusted earnings declined to $4.07 billion, down from $9.63 billion for the full year of 2015.

Fourth quarter 2016 net operating income fell to a loss of $1.89 billion compared to an income fo $152 million in the prior-year quarter.

Statoil said its fourth quarter net operating income was impacted by $2.3 billion in net impairment charges mainly due to “reduced long term price assumptions.”

Full year net operating income fell to $80 million compared to $1.36 billion for the full year of 2015.

The company said the full year operating income decline was driven by low commodity prices, lower refinery margins and lower gains on asset sales.

Adjusted earnings after tax fell to a loss of $40 million in the fourth quarter, down from earnings of $185 million in the fourth quarter of 2015.

Full year adjusted earnings after tax fell to a loss of $208 million compared to earnings of $2.46 billion for the full year of 2015.

Statoil delivered equity production of 2.095 mboe per day in the fourth quarter compared to 2.046 mmboe per day in the same period of 2015.

Full year equity production was nearly unchanged at 1.978 mmboe.

Statoil said the increase was primarily due to the ramp-up of new fields and strong operational performance.

Excluding divestments, Statoil saw underlying production growth rise 2 percent year-over-year in the fourth quarter.

Adjusted exploration expenses in the quarter were $607 million, up from $490 million in the fourth quarter of 2015.

As of year-end 2016, Statoil had completed 23 exploration wells.

Cash flow from operations came in at $10.7 billion after taxes paid for the full year of 2016 compared to $12.3 billion in 2015.

Statoil said that organic capital expenditure was reduced to $10.1 billion in 2016 due to improvement programme and strict capital discipline.

The company said its reduced organic capital expenditure marked a 20 percent reduction for its initial 2016 guidance.

Organic capital expenditures for 2017,excluding acquisitions, capital leases and other investments with significant different cash  flow pattern, are estimated at around $11 billion.

Statoil said it expects to achieve an additional $1 billion in efficiency improvements in 2017 with a total of $4.2 billion.

The company’s expect 2017 equity production to increased by about 4 percent to 5 percent above the 2016 level.

“In the current price environment, we delivered solid financial results from our Norwegian operations and from our marketing and trading  activity…. We achieved strong results from our improvement programme, 700 million dollars above our target of 2.5 billion dollars in annual savings. These are lasting effects, and we target an additional 1 billion dollars in 2017,” Statoil CEO and president Eldar Sætre said.