Eni’s 3Q profit at $1.7 billion. Production flat

Italian oil company Eni posted a net profit of EUR 1.5 billion (USD 1.7 billion) in the third quarter of 2018, versus a net profit of 344 million euros in the corresponding quarter a year ago.

The company’s production was almost flat compared to last year. Eni said its production for the quarter was 1.8 million boe/d in the third quarter of 2018, up by 1.2% q-o-q net of price effects (stable on a reported basis).

Production growth was negatively affected by lower-than-expected produced gas volumes due to the impact of external factors in certain countries, the Italian company said.

Looking ahead when it comes to production, Eni expects a 3 percent growth in the FY 2018 vs. 2017, including the negative impact on gas production of external factors in certain countries, with an expected negligible effect on cash flow.

Eni expects production growth to be driven by the continuing production ramp-up at the fields started up in 2017, in Zohr and Noroos in Egypt, Jangrik in Indonesia and OCTP oil in Ghana, start-ups of the period (Ochigufu, OCTP gas phase, Bahr Essalam phase 2 and Wafa Compression), a larger contribution from the Kashagan, Goliat and Val d’Agri fields, as well as the contribution of the new venture in UAE.

Commenting on the results, Claudio Descalzi, CEO of Eni, remarked: “I am very pleased with our performance in the third quarter, which allowed us to record cash flow from operations of €4.1 billion, double the amount we achieved in the same period last year and, even more remarkable, 35% higher than the previous quarter with a Brent price broadly unchanged.

All the businesses have performed well, with the Upstream division showing that it can thrive either in an environment of increasing oil prices when compared with the third quarter 2017 and, above all, in an environment of flat oil prices when compared with the second quarter 2018.

“The Mid and Downstream businesses continue their recovery, demonstrating sustainable profitability despite an unfavorable environment. Net debt reduced €900 million from June to €9 billion following payment of the full year dividend. We are reaffirming our guidance of Group cash neutrality, including the funding of the dividend, at $55 per barrel, roughly $20 lower than the current Brent price. This is in line with the financial discipline we aim to maintain over time.”