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Eni Returns to Profit
Eni Returns to Profit

Eni Returns to Profit

Eni Returns to Profit

New oil and gas project startups and higher oil prices helped Italy’s oil major Eni to return to profit in 2017 and more than double fourth-quarter earnings on the back of record oil and gas production. Eni reported on Friday an adjusted net profit of $3.023 billion for 2017, compared to a loss of $426 million for 2016. Fourth-quarter adjusted earnings jumped 112% to $1.22 billion, well ahead of the analyst consensus estimate of $715 million provided by the company, Oil Price reported.
Its oil and gas production reached an all-time high of 1.92 million barrels of oil equivalent per day in December 2017, while Q4 average production was 1.89 million boe/d, the highest quarterly production in the last seven years. 
Full-year oil and gas production increased 3.2% to average 1.82 million boe/d, the highest ever annual production for Eni.
Last year, Eni added 243,000 boe/d of production as it started four projects, including the giant Zohr gas field offshore Egypt, as well as projects in Angola, Ghana and Indonesia.
Eni was also one of the most successful explorers among the oil majors recently and it discovered 1 billion barrels of oil equivalent of new resources last year.
Looking ahead, Eni expects its 2018 production to rise by 3%, thanks to ramp-ups of fields put into operation in 2017, mainly in Egypt, Angola and Indonesia, and the launch of a number of satellite phases at giant producing fields—in Libya, Angola and Ghana. This year’s capital expenditures are planned at around $10 billion, up from $9.53 billion spent in 2017.
Eni estimates that it currently needs Brent at $57 a barrel to cover capital expenditures and dividends with cash flows, better than the management’s expectations for a cash breakeven point of oil at $60, but still higher than the cash breakeven oil price of other majors.
“Looking to the future, we see excellent growth prospects for all of our businesses. However, growth must be sustainable and we will pursue it in a disciplined way with great respect for the possibility of the most difficult operating conditions,” Eni’s chief executive Claudio Descalzi said.
"Nevertheless, should conditions be more favorable, we will be in a position to create substantial surplus value for our shareholders."

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