New E&P player Aker BP posts profit despite lower revenues
Aker BP, a new E&P player formed with BP Norge and Det norske merger, returned to profit during the third quarter of 2016 despite lower revenues when compared to the prior-year third quarter.
The merger between Det norske and BP Norge was closed on September 30, 2016, and the company changed its name to Aker BP with its headquarters moved to Fornebuporten outside Oslo.
The company’s net profit for the quarter was $63 million, after net financial items of $5 million and a tax income of $13 million, versus a loss of $166 million in the same quarter last year.
Aker BP reported revenues of $248 million in the third quarter of 2016, a decrease when compared to revenues of $316 million in the prior-year third quarter, mainly due to lower oil prices and production.
Petroleum revenues accounted for $247 million, while other revenues were $1 million, primarily relating to net realized and unrealized losses on commodity hedges.
Exploration expenses amounted to $31 million in the quarter, as opposed to $18 million in 3Q 2015, reflecting dry hole costs, seismic costs, area fees and G&G activities. Production costs were $32 million, equating to 5.8 (4.7) $/boe, including shipping and handling of 1.0 $/boe. Production costs in the corresponding period last year were $27 million. The increase from the third quarter 2015 is mainly due to a 13-day maintenance stop in August 2016 on the Alvheim field. Other operating expenses amounted to $6 million, a decrease from the third quarter 2015 and other operating expenses of $11 million due to one-off effects in 3Q 2015.
Aker BP produced 5.5 million barrels of oil equivalents (mmboe) in the third quarter of 2016 corresponding to 59.8 thousand barrels of oil equivalent per day (mboepd), realizing an average oil price of $47 per barrel, compared to 62.8 mboepd and average price of $52 per barrel in the same period last year.
Aker BP expects the full year 2016 (BP Norge included for 12 months) capex to be $910 – 930 million and exploration expenditures are expected to be $240 – 260 million. Production guidance for 2016 is expected between 118 and 120 mboepd and production cost is expected to average about $13 per barrel of oil equivalent.