Oil earnings resilient despite oil price collapse

LONDON (Reuters) - The oil and gas industry showed resilience to a collapse in crude prices, with most producers and service companies reporting better-than-expected profits on Thursday, leaving only Exxon Mobil to disappoint.

Exxon, the world's largest listed oil company by market capitalization, said profits fell 58 percent to $4.55 billion in the first quarter and missed forecasts, after oil prices fell $100 a barrel since July.

British gas producer BG Group continued a trend of oil and gas producers, including BP and Royal Dutch Shell , reporting smaller than expected drops in first quarter profits.

BG's first-quarter profit, excluding one-off items, fell 13 percent to 690 million pounds ($1.0 billion), due to lower oil prices, but was ahead of a forecast of 613 million pounds from a Reuters Estimates analysts poll.

BG's shares rose 2.7 percent to 1,106 pence at 1251 GMT (8:51 a.m. EDT) outperforming a 1.3 percent rise in the DJ Stoxx European oil and gas sector index <.SXEP>.

Exxon's shares lagged industry rivals, rising just 0.5 percent to $68.75 in premarket trade.

Norwegian oil industry suppliers Aker Solutions and Fred. Olsen Energy posted bigger-than-expected profit rises, despite investors' fears the oil services sector would be hardest hit by the drop in oil prices.

France's Technip , which builds oil rigs and deepwater pipelines, also reported a forecast-beating rise in first-quarter profit and confirmed its outlook for 2009.

UPSTREAM WEAK

Exxon and BG's core oil and gas production units suffered big profit falls due to lower prices. BG's performance was compounded by a 5 percent fall in oil and gas production, while Exxon said output rose 2 percent to 4.2 million barrels of oil equivalent per day.

BG's relatively strong results were largely driven by a big jump in profits from shipping liquefied natural gas around the world.

"BG Group's integrated gas business is reflected in the distinctive resilience of our profits and cash flow in this challenging economic environment," Chief Executive Frank Chapman said in a statement.

Analysts agreed.

"BG's strategy to hedge and protect its LNG profits has paid off," Richard Griffith, analyst at Evolution Securities said.

French oil services company Technip said first-quarter net income rose 10 percent to 99 million euros and held firm on its target for full-year revenue of between 6.1 billion and 6.4 billion euros, sending its shares 8.8 per cent higher at 33.16 euros.

Engineering group Aker Solutions said earnings before interest, tax, depreciation and amortization (EBITDA) rose 12 percent to 1.12 billion Norwegian crowns ($170.3 million).

Offshore services company Fred. Olsen Energy posted a 147 percent rise in earnings before interest and tax (EBIT) to 1.20 billion crowns ($184 million) in the period January to March.

Olsen shares rose 6.4 percent to 213.50 crowns while Aker Solutions shares dropped 1.2 percent to 41.30 crowns.

Aker Solution's order backlog stood at 52.32 billion crowns at the end of March, missing the market view at 56.4 billion.

(Additional reporting by Wojciech Moskwa in Oslo; Editing by Jon Loades-Carter and Rupert Winchester)

WhatsAppFacebookTwitterLinkedinBeloudBluesky