UPDATE 2-Statoil cuts 2010 output after Q3 hit, shares slide

(Corrects first paragraph, adding dropped word ‘gas’)

* Cuts 2010 “equity” output view to 1.9 mln boed

* Q3 profit off 14% at 26.7bln NOK, average forecast 31 bln

* High maintenance hit Q3 results, pulled down 2010 output

* Keeps 2012 2.06-2.16 mln boed goal, 2011 growth seen weak

* Shares fall 4 pct in early trade to one-month low

(Adds analyst’s comment, further details, share price reaction)

By Wojciech Moskwa and Joachim Dagenborg

OSLO, Nov 3 (BestGrowthStock) – Norway’s Statoil (STL.OL: ) slashed
its 2010 oil and gas production target on Wednesday after
extensive maintenance during the third quarter weakened earnings
and cast doubt on its plans to boost production by up to 14
percent by 2012.

Statoil, one of Europe’s largest oil companies by market
capitalisation and the continent’s second biggest supplier of
natural gas, cut its 2010 production forecast, as measured on
its own “equity production” basis to 1.9 million barrels per day
of oil equivalent from an early 1.925 million to 1.975 million

It stuck to its 2012 equity production target of 2.06
million to 2.16 million boed but said that it expected limited
output growth in 2011.

“It’s true they held onto their 2012 guidance but the
question is whether continued problems will lead to pressure on
this target,” said Endre Storloekken, an analyst at Danske Bank,
calling third-quarter results “sharply below expectations”.

Statoil’s chief executive Helge Lund said that the cut in
the 2010 output view reflected longer maintenance shutdowns and
delayed production, not a deterioration in reservoir quality.

“Equity production” is a term used by Statoil to reflect the
volumes it would have received if its oil and gas contracts gave
the rights to a share of production equivalent to its share of

It is a measure not used by other major companies and actual
production is usually considerably lower. Actual or entitlement
production was down 19 percent year-on-year in the third quarter
at 1.4 million boed, while equity output was 1.6 million boed.

The company’s adjusted operating profit in the third quarter
fell to 26.7 billion crowns ($4.57 billion) from 31.1 billion in
the same period last year and missed all 19 analysts’
predictions given in a Reuters poll which ranged from 28.4
billion to 34.2 billion crowns.

Oil majors such as Exxon Mobil Corp (XOM.N: ) and Royal Dutch
Shell (RDSa.L: ) have already reported strong third-quarter
earnings as rising energy demand drove up oil and gas prices.

Statoil said its quarterly result was positively affected by
a 14 percent increase in liquids prices and an 8 percent
increase in gas prices compared with the third quarter of 2009.

The shares were down 4.33 percent at 123.8 crowns at 0805
GMT — their lowest level since Sept. 30, while the STOXX 600
European oil and gas sector index (.SXEP: ) was off 0.13 percent.
($1=5.837 Norwegian Crown)
(Reporting by Oslo newsroom; Additional reporting by Tom Bergin
and Camilla Knudsen; Editing by Greg Mahlich)

UPDATE 2-Statoil cuts 2010 output after Q3 hit, shares slide