By Gene Laverty
July 16 (Bloomberg) -- Nexen Inc., the Canadian oil company that operates in the North Sea and Yemen, said second-quarter profit fell 95 percent after crude prices tumbled and output slipped from its Buzzard and Syncrude projects.
Net income dropped to C$20 million ($18 million), or 4 cents a share, from C$380 million, or 70 cents, a year earlier, the Calgary-based company said today in a statement. Excluding changes in the value of derivatives contracts, the company had been expected to earn 29 cents a share, the average of 14 analyst estimates compiled by Bloomberg.
Nexen’s crude-oil output was hampered by maintenance at the Buzzard field in the U.K. North Sea and at the Syncrude Canada Ltd. oil-sands plant in Alberta. Production after royalties slipped 1.4 percent to the equivalent of 208,000 barrels a day. Sales declined 39 percent to C$1.3 billion.
The company expects output to be lower in the third quarter on planned maintenance downtime and increase by the fourth as new fields ramp up.
New York oil futures averaged 52 percent lower in the second quarter than a year earlier as the global recession sapped energy demand. About 85 percent of Nexen’s output is crude oil.
Nexen rose 49 cents, or 2.2 percent, to C$23.15 yesterday in trading on the Toronto Stock Exchange.
(Nexen will hold an earnings conference call for investors and analysts starting at 9 a.m. New York time. To listen, go to http://www.nexeninc.com or dial +1-877-240-9772.)
To contact the reporter on this story: Gene Laverty in Charlotte, North Carolina, at glaverty@bloomberg.net.
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