The Norwegian oil and gas company Aker BP has posted a net loss for the third quarter, and a below expected production due to delays in the Valhall field well stimulation program.
Aker BP reported revenues of $723 million for the quarter down from $966 million a year ago, and also down from 785 million in q2 2019, citing lower oil and gas prices, partly mitigated by an increase in sold volumes.
The company’s net loss for the quarter was $43 million, down from a $63 million profit in Q2 2019, and a drop compared to a net profit of $116 million in the third quarter of 2018.
Explaining the net loss, Aker BP said: “Profit before taxes amounted to USD 143 million. Taxes amounted to USD 186 million for the third quarter, representing an effective tax rate of 130 percent.
The tax rate was negatively impacted by the impairment of technical goodwill, which is not tax-deductible, in addition to currency movements during the quarter. This resulted in a net loss for the third quarter of 2019 of USD 43 million, compared to a net profit of USD 62 million in the previous quarter.”
The company’s net production in the third quarter was 146.1 (127.3) thousand barrels of oil equivalents per day (“mboepd”). Net sold volume was 143.3 (140.7) mboepd.
The production volumes, while higher than in the second quarter, were below Aker BP’s plan. The reason for this lays in delays in the stimulation program at the Valhall field in the Norwegian North Sea following the planned maintenance shutdown in June.
The average realized liquids price was $62.0 (2Q $69.3) per barrel, while the realized price for natural gas averaged $0.16 (Q2 0.16) per standard cubic meter (“scm”).
“Stimulation operations have been performed at the southern flank and the field center in order to bring new wells on stream. A second stimulation vessel was contracted in order to mitigate delays in the stimulation program. Slot recovery commenced on the field center in preparation for drilling operations and development of the lower Hod formation,” Aker BP said.
Looking ahead the company forecast full-year 2019 production would be circa 155 mboepd, around the low end of the previously communicated range of 155-160 mboepd mainly due to the delays in the stimulation of new wells at Valhall.
Further down the road, production is expected to be boosted significantly as the giant
Johan Sverdrup field was brought on stream early October, and Valhall Flank West remains on track for first oil later this year.