Norwegian oil exploration and development company Aker BP has announced its results for the first quarter (Q1) of 2019, reporting decreased profits caused by lower sales volume.
Aker BP’s net Q1 profit in 2019 was $10m, a decrease from $63m in Q4 2018 and $169m in Q1 2018. The company’s total income in Q1 2019 amounted to $836m, a decrease from $916m in Q4 2018 and $944m in Q1 2018.
Despite this decrease in profit, production levels across Aker BP’s portfolio remained consistent with a net production of 158.7 million barrels of oil per day (mboepd) compared to 2018’s Q4 and Q1 net production of 155.7mboepd and 158.6mboepd respectively.
Aker BP attributes its decrease in profit to lifting schedules driving lower sold volumes, as well as non-cash losses on oil price hedging.
The company also cited a high effective tax rate of 96% as a contributing factor, with “the impairment of technical goodwill, which is not deductible for tax purposes” resulting in a $10m net profit from $249 before taxes.
Exploration spending in Q1 2019 amounted to £154m, a significant increase compared to 2018’s Q4 and Q1 exploration spending of $84 and $80 respectively. Aker BP participated in three explorations wells in Q1 2019, including the Froskelår discovery in the North Sea.
Aker BP’s financial plan for 2019 includes production of 155-160,000 barrels of oil per day, a production cost of $12.5 per barrel of oil and an exploration spend of $150m.
The company said in its results report that “all field development projects, including Johan Sverdrup, Valhall Flank West and Ærfugl, progressed according to plans,” with first oil from the Johan Sverdrup and Valhall Flank West projects expected later in 2019.