Maersk Oil profit plunges 86 pct

Maersk Oil, a Danish oil firm, saw its profit for the third quarter slashed 86 percent, mainly hit by low oil prices. Also, the company on Friday said it would further reduce its exploration levels and costs in the upcoming period.

Net profit for the quarter was $32 million, down from $222 million a year ago. Revenue was also slashed to 1.3 billion, from 2.2 billion in the third quarter of 2014.

Production grew by 26% to 300,000 boepd, from 238,000 boepd in 3Q 2014, but at a 51 percent lower average oil price of $50 per barrel. Production was boosted by improved performance from the company’s UK assets and a higher share of output from Qatar due to the lower oil price.

Regarding the exploration costs, they were $82 million, 61 percent down from 210 million in the third quarter of last year.

The company will further scale back on exploration, and aims to reduce OPEX by 20% by the end of next year. The company has so far this year cut a total number of positions by 1250. For the exploration part, says Maersk Group CEO Nils S. Andersen said the company would be looking to increase its reserves base through acquisitions, and wouldn’t be returning to high-level exploration in the short term.

As for the remainder of the year, Maersk Oil continues to expect a positive underlying result for 2015, but significantly below $1.0bn achieved in 2014, at oil prices in the range of $45-55 from previously $55-60 per barrel.

Maersk Oil’s entitlement production is now expected at around 295,000 boepd – up from 251,000 boepd in 2014 – from previously around 285,000 boepd.
The exploration costs are expected to be around $500 million ($765 million in 2014) from previously approximately $700 million for the year due to the reduction of the exploration activity level.

Offshore Energy Today Staff