StatoilHydro ASA (STO) posted higher profit in its third quarter, helped by a net gain on net financial items and a lower effective tax rate. However, the company's operating results were lower, impacted mainly by declines in oil and natural gas prices.
Net income in the third quarter of 2009 rose to NOK 6.6 billion from NOK 6.3 billion last year. Third-quarter 2009 earnings per share based on net income were NOK 2.33, higher than NOK 2.04 in the comparable period.
The results reflected the net gain on net financial items and a lower effective tax rate, only partly offset by the reduction in net operating income caused by reduced prices.
Third-quarter adjusted earnings were NOK 31.2 billion. Adjusted earnings after tax was NOK 9.3 billion for the quarter, excluding the effect of tax on net financial items, and representing an effective adjusted tax rate of 70% in 2009 third quarter. Adjusted earnings after tax stood at NOK 15.4 billion in the third quarter of 2008.
Total revenues and other income declined to NOK 123.06 billion from NOK 174.48 billion in the prior year quarter.
Net operating income for the latest quarter dipped to NOK 28.3 billion from NOK 47.0 billion in the previous year, mainly attributable to lower prices for both liduids and gas, and to a lesser extent increased depreciation and impairment expense. In the third quarter of 2009, income before tax amounted to NOK 31.5 billion.
Total liquids and gas entitlement production in the third quarter of 2009 was 1,712 mboe per day compared with 1,550 mboe per day in the 2008 period. Total equity production was 1,874 mboe per day, higher than 1,733 mboe per day in the prior year quarter, primarily related to the start-up of new fields and ramp-up of production from existing fields, and only partly reduced by declining production from mature fields, maintenance activities and various operational issues.
For the nine-month period, the company reported a 74% plunge in net income to NOK 10.6 billion from NOK 41.2 billion a year ago, mainly due to reduced operating income caused by lower revenues from liquids and gas sales and a higher effective tax rate, only partly offset by reduced loss on net financial items.
Earnings per share based on net income for the nine-month period plummeted to NOK 3.50 from NOK 12.95 in the 2008 period.
Year-to-date, net operating income fell to NOK 88.1 billion from NOK 161.1 billion in the last year, mainly attributable to lower prices of oil and gas, and increased depreciation, amortisation and impairment losses, partly offset by income from higher volumes.
During the first nine months of 2009, both impairment losses net of reversals of NOK 11.0 billion and underlift of NOK 1.4 billion negatively impacted net operating income, while higher fair value of derivatives, higher values of products in operational storage, other accruals and gain on sale of assets all had a positive impact on net operating income.
Adjusted for these items and effects of inter-company eliminations of NOK 1.8 billion, nine-month adjusted earnings were down 40% to NOK 96.4 billion from NOK 160.3 billion in the same period last year, primarily due to the drop in both liquids and gas prices, partly offset by higher income from sales of liquids and natural gas.
For the first nine months of the year, total liquids and gas entitlement production increased to 1,791 mboe per day from 1,716 mboe per day a year earlier. Nine-month total equity production was 1,930 mboe per day, up 2% from 1,892 mboe per day in the first nine months of 2008, primarily due to increased production from start up of new fields and ramp up on existing fields, partly offset by declining production from mature fields, various operational issues and maintenance activities.
Also, Statoil's guiding for equity production is 1,950 mboe per day in 2009 and 2,200 mboe per day in 2012. The estimate for 2009 excludes any adverse effects of potential Opec quotas, the company added. Additionally, the company stated that its maintenance activity is not expected to materially influence its equity production in the fourth quarter of 2009, and is expected to be about 30 mboe per day for the full year. Also, Statoil anticipates that commodity prices will continue to be volatile, at least in the near term.
Statoil's shares, which have been trading between $12.86 and $25.79 in the past 52 weeks, closed Tuesday's trading session at $23.80 on the NYSE.
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