StatoilHydro Profit Rises 37% on Record Crude, Output

By Marianne Stigset

Aug. 1 (Bloomberg) -- StatoilHydro ASA, Norway's largest oil and gas company, said second-quarter profit rose 37 percent as production gained amid record crude prices.

Net income climbed to 18.8 billion kroner ($3.7 billion), or 5.89 kroner a share, from 13.7 billion kroner, or 4.28 kroner a share, a year earlier, the Stavanger-based company said in a statement distributed by Hugin today. That beat the 17.8 billion-kroner median estimate of nine analysts surveyed by Bloomberg.

``The second quarter result is primarily influenced by high oil and gas prices,'' Chief Executive Officer Helge Lund said in the statement. ``Our record earnings are also coming as a result of operational focus contributing to high production.''

Oil prices almost doubled from a year earlier, climbing above $140 a barrel for the first time in June, and gas gained 50 percent. The company, which last year bought the oil and gas unit of local rival Norsk Hydro ASA, is expanding outside its home market where reserves are dwindling to Libya, Angola and Canada and in the Gulf of Mexico.

Sales rose 34 percent to 170.6 billion kroner in the quarter. The company completed 49 exploration wells in the first half of the year, of which 18 have been declared discoveries.

Output

Oil and gas output rose to an average 1.710 million barrels of oil equivalent a day from 1.671 million barrels a day a year earlier. That missed the average 1.72 million-barrel estimate of 16 analysts polled by SME Direkt for TDN Finans.

StatoilHydro gained access to 15 new licenses in the Gulf of Mexico, Alaska and Brazil in the first six months of the year. This comes in addition to the acquisition of the remaining 50 percent of the Peregrino project offshore Brazil. Another five wells have been completed since June 30 and the company plans to drill at least 70 by the end of the year, it said.

Exploration expenditure rose to 3.7 billion kroner in the second quarter of 2008, up from 3 billion kroner a year earlier.

The shares rose 5.3 kroner, or 3.2 percent, to close at 168.8 kroner in Oslo yesterday, extending this year's gain to 2 percent and valuing the company at 538 billion kroner. Of the 29 analysts tracked by Bloomberg who cover StatoilHydro, 19 recommend buying the shares, 6 advise holding and 4 have a ``sell.''

There's a ``huge gap between the oil price in the futures market and the one reflected in the company's share price,'' Orion Securities analyst Vytautas Bagdonas in Vilnius, Lithuania, said in a July 29 report. He rates the stock a ``strong buy.''

Royal Dutch Shell Plc, Europe's biggest oil company, said second-quarter profit climbed 33 percent to $11.6 billion yesterday, boosted by higher crude and natural gas prices. Exxon Mobil Corp., the world's biggest oil company, posted 14 percent profit increase yesterday, less than analysts had estimated, after output dropped the most in at least a decade.

((StatoilHydro will hold an analyst conference call at 1:30 p.m. Oslo time, which can be heard by dialing +44 (0)20- 7806-1967.))

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net