Maersk Oil Profit Hit by Lower Prices and Output

Denmark’s Maersk Oil today reported net profit of $249 million, a drop from the $468 million achieved in the same period last year.

The result was negatively influenced by lower average oil price of USD 102 per barrel compared to last year’s USD 108 per barrel and lower entitlement production of 226,000  boepd (287,000 boepd), which was partly offset by insurance income regarding Gryphon of USD 133m after tax.

The Gryphon FPSO, UK, re-started production in late May and the ramp up of El Merk, Algeria, continued. Exploration costs amounted to USD 380m (USD 199m)  with the completion of five (five) exploration/appraisal
wells; including a successful appraisal well on Johan Sverdrup in Norway while the completed exploration

Related: VIDEO: Maersk Oil Gryphon FPSO – The Recovery Story

As for the full-year 2013 outlook, the company said it expects a result significantly below 2012 (USD 2.4bn), excluding one-off income of USD 1.0bn from the Algerian tax dispute and divestment gains.

Also, Maersk Oil still expects its entitlement production for 2013 to be 240,000-250,000 boepd, supported by higher expected entitlement production during the rest of year at an average oil price of USD 101 per barrel. The lower entitlement production compared to last year is predominantly caused by a natural production decline from mature fields and reduced ownership share in Denmark, partly offset by start-up in El Merk, Algeria, and the
Gryphon FPSO, UK. Exploration expenses are still expected to be above  USD 1.0bn

The company expects production level to increase in 2nd half of 2013 and is on track for the full year target of 240,000-250,000 boepd.

“Maersk Oil continues to develop the portfolio towards the 2020 production target of 400,000 boepd,” said the company in its quarterly report.