Wintershall reports profit jump
In 2017, Germany’s largest internationally active oil and gas producer increased its income from operations (EBIT) before special items by 53 percent (€276 million) to €793 million (2016: €517 million). This is primarily attributable to the increase in oil and gas prices as well as the higher earnings contribution from our share in the Yuzhno Russkoye natural gas field. Comprehensive measures aimed at optimizing exploration and technology projects as well as the successful implementation of operational cost-saving measures also had a positive effect. EBIT rose by €544 million (plus 109 percent) to €1,043 million (2016: €499 million). This included special income from the reversal of impairments in Norway and the Netherlands as well as from the sale of shares in the Aguada Pichana concession in Argentina. This was partially offset by an impairment on the exploration potential in Norway. Net income increased by €357 million (plus 99 percent) to €719 million (2016: €362 million).
“Our goal of achieving significantly higher earnings for the BASF Group in 2017 with our oil and gas business was achieved thanks to the strong performance of the Wintershall team,”said the Wintershall CEO. For example, sales to third parties increased by €476 million (plus 17 percent) to €3,244 million over the previous year (2016: €2,768 million) as a result of higher prices and volumes. The price of a barrel of Brent crude oil averaged $54 in 2017 (2016: $44). Gas prices on the European spot markets rose by around 24 percent compared with the previous year. Volumes growth was mainly driven by higher gas sales volumes. Oil and gas production maintain record levels The company managed to maintain its crude oil and natural gas production at the previous year’s level (2016: 165 million barrels of oil equivalent). In the search for new oil and gas reservoirs, Wintershall completed a total of seven exploration and appraisal wells in 2017, of which three were successful. Our proven oil and gas reserves rose by 3 percent compared with the end of 2016 to 1,677 million barrels of oil equivalent (2016: 1,622 million boe). Wintershall replenished 133 percent of the volumes produced in 2017. The reserves-to-production ratio is around 10 years (2016: 10 years). This is based on Wintershall’s production in 2017 and the reserves at year-end. “We have increased our production by around 50 percent since 2011 alone, whereby we have not lived at the expense of the future,” said Mehren. This is because in the same period Wintershall also successfully increased its reserves by almost 50 percent. Overall, Wintershall plans to invest around €3.5 billion in expanding its oil and gas activities by 2022. This is about one fifth (18 percent) of the BASF Group’s total investment for the period from 2018 to 2022. Wintershall DEA to become key player in Europe In December 2017, fundamental changes were announced: BASF and the LetterOne group plan to merge their respective oil and gas businesses in a joint venture. The new company, Wintershall DEA, would be one of the largest independent exploration and production companies in Europe, with excellent growth prospects. The medium-term plan is to list the n joint venture on thestock exchange. “The portfolios of the two companies complement each other perfectly. We could further strengthen our European production and expand our production regions in South America and North Africa,” explained Mehren.
“Wintershall DEA’s annual production would exceed 215 million boe. That’s around 600,000 barrels per day”Mehren said. Three quarters of the production would come from Wintershall. Source / Further information : Wintershall, Financial Summary Oil and Gas News Undiluted !!! “The squeaky wheel gets the oil” Please email us your industry related news for publication info@OilAndGasPress.com Follow us: @OilAndGasPress on Twitter | OilAndGasPress on Facebook]]>