Italian oil and gas group Eni SpA kept to its full-year production outlook on Thursday after third-quarter results beat expectations, shrugging off falling oil prices.
Oil majors have seen their stock market values fall since mid-June, in step with a 25 percent drop in crude oil prices to four-year lows on slowing global demand and ample supplies.
State-controlled Eni said adjusted net profit reached 1.17 billion euros ($1.5 billion) in the three months to Sept. 30, above a consensus forecast of 861 million in a Reuters poll of six banks and brokerages.
Operating cashflow was 3.98 billion euros, which the company said was its best in a third quarter for five years.
“Crucially the upstream business is still expected to deliver stable volumes in 2014 and the company remains free cashflow positive,” Bernstein Research said in a note.
Some analysts have warned that lower oil prices could make it more difficult for Eni to sell the 11 billion euros of assets it has pledged to shed, adding pressure on its dividends.
Eni shares were up 0.4 percent at 1125 GMT while the European sector was down 1.3 percent.
European peers Royal Dutch Shell, BP, and Total have all met or beat anaylsts’ forecasts in the third quarter. Shell said quarterly profit rose by almost a third, beating forecasts.
Eni’s mature field declines and maintenance prompted a 4.7 percent fall in oil and gas production in the quarter to 1.58 million barrels of oil equivalent per day, but the company still sees output for the year in line with 2013.
“Our exploration is continuing to deliver extraordinary results which will drive future growth in our upstream portfolio,” Chief Executive Claudio Descalzi said.
Under Descalzi, Eni is shifting its focus to the bread-and-butter business of looking for oil and gas, investing heavily to secure reserves in costly projects such as Mozambique, the Baltic Sea and Kazakhstan.
The company, Africa’s biggest oil producer, also said on Thursday it had found about 1 billion barrels of oil equivalent off the coast of Congo.
Brokerage Equita said the discovery was important because of the short time-to-market timeframe. “Considering a recovery rate of 30 percent for oil and 70 percent for gas, the discovery could be worth about 750 million euros,” analyst Roberto Letizia said.
The decline in oil prices is piling pressure on oil companies to protect earnings by cutting investments and selling assets. Eni said it expected to spend less this year on capital expenditure than the 12.8 billion euros it invested in 2013.
Reuters
