Photo: Illustration; Source: Aker BP

Aker BP books profit, higher income over price increase and sold volume

Norwegian oil and gas company Aker BP has booked a profit and saw higher income in the first quarter of the year due to higher realised prices and an increase in sold volume compared to the previous quarter.

Aker BP had a total income in the first quarter of 2021 of $1,133 million, a rise when compared to the fourth quarter of 2020 when the company had a total income of $834 million. This was driven by higher realised prices and an increase in sold volume compared to the previous quarter.

Sold volume was 223.2 mboepd in the quarter, also above 4Q 2020 which had 213.8 mboepd. Realised prices increased by 36 per cent for liquids and 21 per cent for natural gas.

According to Aker BP’s financial report, production costs related to oil and gas sold in the quarter amounted to $176 million, another rise when compared to the $142 million from the previous quarter. The increase was mainly driven by higher lifted volume.

Exploration expenses were higher by almost $30 million than in the previous quarter and stood at $71 million. This included field evaluation costs of $41 million related to concept studies for NOAKA and other future development projects.

Depreciation was almost $30 million lower than in 4Q 2020 and amounted to $258 million, with the reduction driven by increased reserves and decreased estimates for future abandonment cost on some fields.

The main reasons for the net impairment charge are the effect of updated cost and production profiles offset by the increase in short-term oil and gas prices”, Aker BP said.

Other operating expenses amounted to $8 million – more than three times less than in the final quarter of 2020.

Operating profit increased considerably in the first quarter of the year. The $591 million for 1Q 2021 was quite an increase when compared with the $278 million from the quarter before.

Profit before taxes amounted to $501 million, larger than the $236 million from 4Q 2020 while net profit for the first quarter of 2021 was $127 million, only $2 million less than in the quarter before.

At the AGM in April 2021, the Aker BP board was authorised to approve the distribution of dividends. Namely, the company disbursed dividends in February of $112.5 million.

On 27 April 2021, the board resolved to pay a quarterly dividend of $112.5 million on or about 11 May 2021. Aker BP’s goal is to pay total dividends in 2021 of $450 million.