StatoilHydro Q3 pretax ahead on currency gains, underlying weaker UPDATE

StatoilHydro Q3 pretax ahead on currency gains, underlying weaker UPDATE

	Published : Mon, 29 Oct 2007 13:49 By : Agencies Print this Story

(Updates with 2007 guidance from conference call)

OSLO (Thomson Financial) - StatoilHydro ASA posted third-quarter pretax profits that were ahead of expectations after benefiting from currency gains and other financial items, but at the operating level profits missed consensus estimates on lower downstream results.

For the third quarter, the Norwegian oil giant posted pretax profits of 29.919 bln nkr, up from 27.844 bln last year, and ahead of the 29.097 bln consensus forecast of analysts polled by TDN Finans.

At the operating level, however, profits came in at 24.383 bln nkr, down from 30.168 bln last year and below the 26.580 bln consensus forecast.

StatoilHydro said the better-than-expected pretax result was 'mainly related' to currency gains, with total net financial items amounting to an income of 5.5 bln nkr during the third quarter, up from a cost of 2.3 bln last year.

'The increase was mainly due to currency gains relating to StatoilHydro's short-term Norwegian kroner hedging policy and long-term funding, as a result of a strengthening of the nkr in relation to the usd,' it said.

Third-quarter sales, meanwhile, rose to 109.482 bln nkr from last year's 108.191 bln, but fell below the 110.144 bln figure penciled in by analysts.

Average daily oil and gas production during the third quarter came in at 1.056 mln barrels of oil equivalent, down from 1.076 mln at the same point last year.

'The 2 pct decrease was mainly related to reduced production on the Norwegian continental shelf (NCS), and was partly offset by higher production from new fields in International E&P,' StatoilHydro said.

Despite this drop in production, the firm said there has been no change to its full-year average production guidance of 1.15-1.2 mln boepd.

Speaking on a conference call this afternoon, however, chief financial officer Eldar Saetre said he expects production to come in 'at the low end of this range'.

In terms of third quarter performance, StatoilHydro said exploration expenditure rose to 2.3 bln nkr from 2.0 bln last year, largely due to 'higher drilling activity as well as extensive seismic activities internationally'.

Elsewhere, the production cost per barrel rose to 31.5 nkr for the 12 months to the end of September, up from 26.6 nkr last year.

'The production cost per boe, both actual and normalised, has increased, mainly due to start-up of new fields, increased maintenance cost and general industry cost pressure,' StatoilHydro said.

The third-quarter results are the last without the oil and gas assets of Norwegian peer Norsk Hydro, which Statoil took control of on October 1.

StatoilHydro said it will issue pro-forma financial information for the combined group on November 12.

alastair.reed@thomson.com

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