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Statoil (STO) Trumps Earnings and Revenue Estimates in Q1
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Statoil ASA’s first-quarter 2018 adjusted earnings of 45 cents per ADR beat the Zacks Consensus Estimate of 40 cents and improved 28.6% from the year-earlier quarter’s adjusted earnings of 35 cents. The upside was primarily driven by higher liquids and gas prices as well as increased production. Total revenues surged 28.1% year over year to $19.9 billion. Revenues also surpassed the Zacks Consensus Estimate of $17.6 billion.
In the reported quarter, total equity production of liquids and gas was 2,180 thousand barrels of oil equivalent per day (MBOE/d), up 1.6% from 2,146 MBOE/d in the year-ago quarter. New production from the start-up and ramp-up of various fields and commissioning of additional wells were offset by divestments as well as expected natural decline.
The underlying production growth in the reported quarter, after adjusting for divestments, was more than 2% year over year.
In the first quarter of 2018, Statoil made two discoveries and completed seven exploration wells. Adjusted exploration expenses in the quarter were $238 million compared with $202 million in the first quarter of 2017.
Total entitlement production of liquids and gas declined 0.7% to 1,993 MBOE/d. The downside was due to the negative effects from production sharing agreements (PSA effect) and U.S. royalties.
Financials
Cash flow from operations amounted to $7.1 billion in the reported quarter compared with $5.9 million in the prior-year quarter. Statoil maintained a strong capital structure and net debt to capital employed at the end of the quarter was 25.1%. Organic capital expenditure was $2.1 billion in the first three months of 2018.
Outlook
Statoil projects organic capital expenditure of $11 billion in 2018. Organic production growth for the period 2017-2020 is expected at a CAGR of about 3-4%. The company expects equity production for 2018 to be about 1-2% above the 2017 levels. Total exploration activity level is expected at around $1.5 billion in 2018.
Q1 Price Performance
During the January-to-March quarter, Statoil’s shares returned 10.4% versus the industry’s 4.1% decline.
Nine Energy Serviceis engaged in delivering onshore completion and production services to unconventional oil and gas resource development. The company posted a positive earnings surprise of 6.25% in the preceding quarter.
Baytex Energy is a conventional oil and gas income trust focused on maintaining its production and asset base through internal property development and delivering consistent returns to its unitholders. It pulled off an average positive earnings surprise of 77.3% over the last three quarters.
Houston, TX-based EOG Resources is a major independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 40.94% over the preceding four quarters.
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Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Statoil (STO) Trumps Earnings and Revenue Estimates in Q1
Statoil ASA’s first-quarter 2018 adjusted earnings of 45 cents per ADR beat the Zacks Consensus Estimate of 40 cents and improved 28.6% from the year-earlier quarter’s adjusted earnings of 35 cents. The upside was primarily driven by higher liquids and gas prices as well as increased production. Total revenues surged 28.1% year over year to $19.9 billion. Revenues also surpassed the Zacks Consensus Estimate of $17.6 billion.
Statoil ASA Price, Consensus and EPS Surprise
Statoil ASA Price, Consensus and EPS Surprise | Statoil ASA Quote
Operational Performance
In the reported quarter, total equity production of liquids and gas was 2,180 thousand barrels of oil equivalent per day (MBOE/d), up 1.6% from 2,146 MBOE/d in the year-ago quarter. New production from the start-up and ramp-up of various fields and commissioning of additional wells were offset by divestments as well as expected natural decline.
The underlying production growth in the reported quarter, after adjusting for divestments, was more than 2% year over year.
In the first quarter of 2018, Statoil made two discoveries and completed seven exploration wells. Adjusted exploration expenses in the quarter were $238 million compared with $202 million in the first quarter of 2017.
Total entitlement production of liquids and gas declined 0.7% to 1,993 MBOE/d. The downside was due to the negative effects from production sharing agreements (PSA effect) and U.S. royalties.
Financials
Cash flow from operations amounted to $7.1 billion in the reported quarter compared with $5.9 million in the prior-year quarter. Statoil maintained a strong capital structure and net debt to capital employed at the end of the quarter was 25.1%. Organic capital expenditure was $2.1 billion in the first three months of 2018.
Outlook
Statoil projects organic capital expenditure of $11 billion in 2018. Organic production growth for the period 2017-2020 is expected at a CAGR of about 3-4%. The company expects equity production for 2018 to be about 1-2% above the 2017 levels. Total exploration activity level is expected at around $1.5 billion in 2018.
Q1 Price Performance
During the January-to-March quarter, Statoil’s shares returned 10.4% versus the industry’s 4.1% decline.
Zacks Rank & Key Picks
Statoil currently carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Nine Energy Service, Inc (NINE - Free Report) , BaytexEnergy Corp (BTE - Free Report) and EOG Resources Inc (EOG - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Nine Energy Serviceis engaged in delivering onshore completion and production services to unconventional oil and gas resource development. The company posted a positive earnings surprise of 6.25% in the preceding quarter.
Baytex Energy is a conventional oil and gas income trust focused on maintaining its production and asset base through internal property development and delivering consistent returns to its unitholders. It pulled off an average positive earnings surprise of 77.3% over the last three quarters.
Houston, TX-based EOG Resources is a major independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 40.94% over the preceding four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>