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OMV’s Q3 output up 19%, boosted by Russia

OMV reported a 19% increase on its total output during the Q3.

OMV’s Q3 output up 19%, boosted by Russia

Vienna, November 1 - Neftegaz.RU. Austrian OMV reported a 19% increase on its total output during the 3rd-quarter boosted by contribution from its Russian assets, Kallanish Energy reports.


The firm produced an average of 406,000 barrels of oil-equivalent per day (Boe/d), an increase of 65,000 Boe/d year-over-year. The 89,000 Boe/d produced in Russia in the period helped the company to partially offset declines in Norway due to maintenance work, as well as lower production from Romania and Austria due to natural decline.


The production target for this year is an average of 420,000 Boe/d, with some 100,000 Boe/d coming from Russia. Output in Libya should be higher than in 2017, the company said, without specifying targets. It noted, however, it previously expected Libyan production to be similar or below 2017 levels.


OMV managed to reduce its production cost by 22%, to $6.80 per barrel of oil-equivalent (Boe) and saw its realized crude prices increase 43% to $67.75/Bbl. Realized natural gas prices were down 12% y-o-y at $4.56 per thousand cubic feet.

CEO Rainer Seele said on an earnings call OMV was posting its most profitable quarter results in a decade, referring to its preferred financial unit of clean operating current cost of supply at €1.05 billion ($1.19 billion) in the 3rd quarter of 2018 – an increase of 31% year-over-year.


With such results, «OMV has entered a new league in terms of earnings power,» added Seele. «Oil prices have of course played a role, but this was not the only driver given that Brent was much higher few years ago,» he said. «The main reason for this excellent result was our strong operational performance.»


Looking at the company’s net income, profit in the quarter was halved to €221 million, compared to €439 million in Q3 2017. OMV didn’t directly explain said drop, but said higher oil prices were partially offset by hedging losses and higher group taxes in the period.


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