Boston, MA 04/30/2014 (wallstreetpr) – Statoil ASA (ADR) (NYSE:STO) strong project development and execution in Johan Sverdrup’s field turned the corner for the company’s first quarter upbeat result announcements despite fall in production. Along with this, higher gas prices boosted its bottom line numbers triggering a sharp jump in the stock price.
While releasing the company’s quarterly earnings, Statoil’s president and CEO Helde Lund said, “Continued strong project development and execution enabled concept selection for the Johan Sverdrup field and brought the Gudrun field on stream. Johan Sverdrup will be Statoil’s largest field development since the 1980s.” This field development will take place in more than one phase and the first phase is estimated to have 315 barrels of oil equivalent per day.
Statoil ASA (ADR) (NYSE:STO) could produce only 1,978 mboe per day, which is one percentage point down from the previous year’s first quarter as a result of divestment of assets to Azerbaijan in North Sea. However, higher price realization of gas in the U.S. has enabled Statoil’s to record 32% increase in post-tax adjusted earnings to Kroner 15.8 billion (approximately $2.6 billion) from Kroner 12 billion
Sales for the quarter jumped 35% to Kroner 51.4 billion from 38 billion in the previous year quarter.
Gas price in North America was 1.49 kroner per cubic meter in the latest quarter, which is nearly double from 0.55 krone last year. This was attributed to the cold winter where the company provides gas to the top markets.
Statoil ASA (ADR) (NYSE:STO)’s CEO was quick to say that the company will not reap the higher gas price in the coming quarters. However, some brokerages like Deutsche Bank and Sanford C. Bernstein & Co. see more activities in the company’s share counter. This is because they believe that the company’s quarterly earnings has not only swept past analyst estimation by about 26 percent, but also sees it as a multi-year stock as a result of expected benefits accrual in the outer years.
