OREANDA-NEWS. Yesterday, Eni’s Board of Directors approved group results for the first quarter 2016 (unaudited).

Highlights and outlook

  • Hydrocarbons production for the quarter grew 3.4% to 1.75 million boe/d. FY production is expected to be largely in line with 2015.
  • Achieved 4 out of the 6 main start-ups scheduled for 2016, among which was the Goliat oilfield in the Barents Sea. Confirmed contribution from new start-ups and ramp-ups of approximately 300 kboe/d for 2016.
  • FID taken for the development of the giant Zohr field with first gas expected in 2017; Coral field development plan approved by local Authorities.
  • Continued exploration success: 120 mmboe of resources discovered in the quarter mainly near- field. Expectations are for an increase to the original guidance of  400 million boe of new resources for the FY.
  • Capex optimization: confirmed 20% y-o-y reduction at constant exchange rates. 

Best proven reserves (P1) value of the industry as of January 1, 20161

  • Present value of Eni’s P1 reserves at $6/bl, the highest in the oil majors benchmark group.
  • Total present value of Eni’s P1 reserves: $41 billion, ranking 4th relating to dimension in the benchmark group, two positions above Eni’s reserve volume rank.


Results

  • Positive adjusted EBIT2 in all business segments, in spite of a depressed trading environment
  • Continuing operations3:
    • standalone adjusted operating profit: €0.47 billion (down 69%)
    • standalone adjusted net earnings: breakeven
    • reported earnings: loss of €0.8 billion
  • Group net earnings: loss of €0.79 billion
  • Cash flow4: €1.27 billion, down 56% from Q1 2015
  • Net borrowings: €12.21 billion at period-end; leverage at 0.23.

 

Claudio Descalzi, Eni’s Chief Executive Officer, commented:
"In the first  quarter  of 2016, despite the sharply  weaker  commodity price  environment,  Eni achieved outstanding results in executing its strategy of organic growth, capital expenditure optimization and efficiency enhancement. Hydrocarbon production grew, benefitting from the start-up of the Goliat oilfield and three other projects. At the same time, we strengthened the foundations for future growth as we took the final investment decision for the development of the giant Zohr gas field, we obtained approval for the development plan of Coral from the Mozambican Authorities and we achieved further exploration success. We are therefore progressing in promoting also in 2016 significant volumes of new proved reserves, whose per-barrel present value already at the end of 2015 leads those of our main competitors. In absolute terms, the present value of our reserves portfolio ranks fourth among the International Oil Majors. I am confident that, even in terms of reserves yet to mature, our portfolio is one of the most valuable in the industry thanks to its exposure to conventional assets and Eni’s continued exploration success. Finally, the G&P and the R&M segments also achieved positive results in the first quarter, benefiting from continuous optimization initiatives and cost efficiencies, despite a less favorable trading environment year on year. Overall, the Group's financial and operating results allow us to confirm our 2016 guidance of a 20% reduction in capex, organically financed at $50/bl, and our targeted leverage, which we monitor closely and is currently among the lowest in the industry." 

  1. Data disclosed in the "Standardized measure of discounted future net cash flows" of the Annual Report on Form 20-F. Peers group (Exxon, Chevron, Total, Statoil, BP, Shell) data extracted from either the 10-K or the 20-F files.
  2. Operating profit.
  3. In this press release adjusted results from continuing operations exclude as usual the items "profit/loss on stock" and extraordinary gains and losses (special items), while they reinstate the effects relating to the elimination of gains and losses on intercompany transactions with the Chemical sector which is in the disposal phase, represented as discontinued operations under the IFRS5. A corresponding alternative performance measure has been presented for the cash flow from operating activities. For further information, see "Disclaimer" on page 6 and the reconciliations and explanations on page 22.
  4. Net cash provided by operating activities of continuing operations on a standalone basis.