October 26, 2017 / 6:09 AM / 2 years ago

CORRECTED-UPDATE 2-Statoil earnings lag forecasts as North American output weakens

(Corrects production volume to million from billion in 12th para)

* Q3 adjusted operating profit $2.3 billion vs f’cast $2.45 bln

* International division posts loss of $27 million

* To cut 2017 capex to $10 bln from earlier $11 bln

* Will revert to full cash dividend payments from Q4

* Shares down 3.7 percent

By Nerijus Adomaitis

OSLO, Oct 26 (Reuters) - Norwegian oil firm Statoil has reported lower than expected earnings, due to impairment charges mainly related to lower output from some of its North American shale oil and gas assets.

Operating profit reached $2.3 billion in the third quarter, the company said on Thursday, up from $0.6 million a year ago but against an average expectation of $2.45 billion.

Shares in Statoil were down 3.7 percent at 0751 GMT, lagging the European sector which was down 0.2 percent.

Statoil’s international division posted a loss of $27 million, against expectations for a profit of 73 million, impacted by net impairment charges of $0.8 billion mainly related to its Eagle Ford asset in North America.

The result, however, was an improvement from an adjusted loss of 596 million in the third-quarter 2016.

Over the past year Statoil has been trying to turn around its operations in North America, which mostly consist of offshore production in the Gulf of Mexico, as well as shale oil and gas in Texas, North Dakota, Pennsylvania, Ohio and New York.

Statoil CEO Eldar Saetre told Reuters the impairment related to faster than expected declines in production from some wells in Eagle Ford and the company was trying to address the issue.

The company still expected its U.S. onshore operations to break even at an oil price of $50 a barrel in 2018.

“The market rebalancing is quite robust now, but there is a lot of uncertainty related to shale (oil) and geopolitical factors may play a bigger role than they did in the past,” Saetre told Reuters.

Statoil’s results were boosted due to higher prices for both oil and gas, high production levels and strong refinery margins, the company said.

The company has further reduced its capital spending guidance for 2017 by $1 billion, to $10 billion, while revising up annual organic production growth guidance for 2017 to 6 percent from 5 percent.

In the third quarter, production was up 13 percent to 2.05 million barrels of oil equivalent per day, helped by higher gas output, lower maintenance and the ramp-up of new fields.

The company said it would pay a maintained dividend of 22.01 U.S. cents per ordinary share for the quarter. It confirmed plans to end its scrip dividend programme and revert to a full cash dividend from the fourth quarter.

“With an oil price below $52 per barrel, we have generated $3.6 billion in free cash flow so far this year .... This has further strengthened our financial position,” Saetre said in a statement. (Writing by Gwladys Fouche; Editing by David Holmes)

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