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Aker BP releases 3Q19 results

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Oilfield Technology,

Aker BP has announced its 3Q19 results. The company said it had delivered strong operational performance and exploration success during the third quarter. The company’s field developments progressed as planned, paving the way for a significant increase in production in the coming months. Johan Sverdrup was brought on stream early October, and Valhall Flank West remains on track for first oil later this year. The company paid a dividend of US$187.5 million (US$0.52 per share) in the quarter.

Aker BP reported total income of US$723 (785) million and operating profit of US$196 (354) million for 3Q19. Net loss was US$43 million, compared to a net profit of US$62 million in the previous quarter.

The company’s net production in the third quarter was 146.1 (127.3) 000 boe/d. Net sold volume was 143.3 (140.7) 000 boe/d. The production volumes were below plan mainly due to delays in the stimulation programme at Valhall following the planned maintenance shutdown in June. Average realised liquids price was US$62.0 (69.3) per barrel, while the realised price for natural gas averaged US$0.16 (0.16) per m3.

Production costs for the oil and gas sold in the quarter amounted to US$167 (198) million. Production cost per produced unit in the quarter amounted to US$13.2 (15.4) per boe, negatively impacted by the costs of approximately US$14 million related to an incident with the Mid Water Arch (MWA) at Alvheim. Any related insurance recoveries will be recognised in future periods.

Exploration expenses amounted to US$70 (60) million. Total cash spend on exploration was US$144 (119) million. The company completed six exploration wells in the quarter, of which the Liatårnet and Ørn wells were classified as discoveries. The Shrek well was completed and classified as a discovery after the end of the quarter.

Depreciation amounted to US$206 (168) million, equivalent to US$15.3 (14.5) per produced boe. Impairments amounted to US$78 (0) million related to technical goodwill on Ula/Tambar, mainly triggered by decreased near-term oil and gas prices and updated cost and production profiles.

Profit before taxes amounted to US$143 (268) million. Tax expense was US$186 (206) million, representing an effective tax rate of 130 (77)%. The tax rate was negatively impacted by impairment of technical goodwill with no tax impact, and an increase in deferred tax primarily driven by currency movements. Overall, the company reported a net loss of US$43 million for the quarter.

Investments in fixed assets amounted to US$435 (414) million in the third quarter. All field development projects, including Johan Sverdrup, Valhall Flank West and Ærfugl progressed according to plan. Abandonment expenditures in the quarter were US$35 (40) million.

Net interest-bearing debt was US$3.3 (2.9) billion at the end of the quarter, including US$0.3 billion in lease debt. Total available liquidity at the end of the quarter was US$2.9 (3.3) billion.

In August, the company paid a quarterly dividend of US$0.5207 (NOK4.44) per share. The Board has resolved to pay a quarterly dividend of US$187.5 million (US$0.5207 per share) in November 2019, implying total annual dividends of US$750 million.

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