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Statoil (STO) Q4 Earnings Beat Estimates, Revenues Up Y/Y

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Statoil ASA posted fourth-quarter 2017 adjusted earnings of 39 cents per ADR, which beat the Zacks Consensus Estimate of 34 cents. The company reported adjusted loss of 2 cents per share in the year-earlier quarter.

In the fourth quarter, total revenues improved 13% year over year to $17.1 billion. In 2017, total revenues jumped 33.4% year over year to $61.2 billion.

The growth can be attributed to higher equity and entitlement production along with increased realized liquids prices.

Statoil ASA Price, Consensus and EPS Surprise


Statoil ASA Price, Consensus and EPS Surprise | Statoil ASA Quote


The company’s board of directors proposed to increase dividend for the fourth quarter by 4.5% to 23 cents per share. However, it is subject to approval in the annual general meeting .

Operational Performance

In the reported quarter, total equity production of liquids and gas inched up 1.9% year over year to 2,134 million barrels of oil equivalent per day (MMBOE/d). The improvement is attributable to the ramp-up of new fields and strong operational performance.

Total entitlement production of liquids and gas rose 1.4% to 1,962 MMBOE/d (50% liquids and 50% natural gas), primarily due to higher equity production.

The company's realized liquids prices averaged $56 per barrel, up 27.9% year over year.

As of Dec 31, 2017, Statoil completed 28 wells. Adjusted exploration expenses were $274 million compared with $607 million in the fourth quarter of 2016.


During the quarter, total capital investment was $10.8 billion. Of this, organic investments amounted to $9.4 billion. In 2017, the company generated cash flow from operations worth $20.7 billion. Net debt-to-capital employed ratio was 29% in the year.


For 2018, Statoil expects organic capital expenditure to be $11 billion. Production is estimated in the range of  1-2% above the 2017 level.

Organic production growth for 2017-2020 is expected at a CAGR of about 3-4%. Growth is expected from the commissioning of new projects.

In 2018, exploration activity is estimated at about $1.5 billion.

Q4 Price Performance

During the fourth quarter, Statoil’s shares and the industry's rally have been on par, at 6.6%.


Zacks Rank & Other Stocks to Consider

Statoil sports a Zacks Rank #1 (Strong Buy). A few other top-ranked players in the same sector are EOG Resources (EOG - Free Report) , Pioneer Natural Resources Company (PXD - Free Report) and Devon Energy (DVN - Free Report) . All these stocks flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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.

Headquartered at Irving, TX, Pioneer Natural Resources Company is an independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 67.62% over the preceding four quarters.

Devon Energy Corporation, based in Oklahoma City, is an independent energy company engaged primarily in the exploration, development and production of oil and natural gas. The company delivered a positive earnings surprise of 13.77% in the preceding quarter.

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