VIENNA (Reuters) - Austrian oil and gas group OMV (OMVV.VI) lifted third-quarter profit by 31 percent, largely thanks to higher oil prices and lower production costs, and said it expects a strong rise in output for the rest of the year.
Unlike other European energy groups, OMV is sticking with fossil fuels but shifting its focus from oil to gas because of its lower carbon dioxide emissions.
The jump in third-quarter earnings announced on Wednesday echoed soaring profits at oil majors BP (BP.L), Total (TOTF.PA) and Repsol (REP.MC), all boosted by oil prices that hit a four-year high in the period.
OMV said it now expects the Brent oil price to average $74 a barrel in 2018, up from a previous forecast of $70.
Shares in the company were up 3.3 percent at 48.50 euros in early trade.
OMV said that daily production in the fourth quarter will be “slightly higher” than the 437,000 barrels of oil equivalent (boe) in the first quarter, its strongest this year, OMV said.
The company produced 406,000 boe/day in the third quarter, down from 419,000 boe/day in the second quarter, largely because of maintenance work in Russia and Austria and the sale of its Pakistan exploration business.
However, it forecast output to reach 500,000 boe/day by the end of the year, helped by the start-up of production at Abu Dhabi’s SARB and Umm Lulu offshore oilfields and at the Aasta Hansteen gas field in Norway.
Its main profit measure, which excludes special items and inventory gains or losses, rose nearly a third year on year to 1.05 billion euros ($1.19 billion) in the third quarter, beating the average forecast of 929 million euros in a Reuters poll of analysts.
However, net income attributable to stockholders declined to 221 million euros from 439 million a year earlier, largely due to a significant increase in taxes, the group said. Its tax rate rose to 46 percent from 21 percent, largely because of high taxes in Norway and Libya.
OMV, which targets growth in low-cost countries outside Europe and has declared Southeast-Asia a new core market, confirmed that it expects to close the purchase of gas fields in New Zealand at the end of the year.
It also said it was continuing negotiations with Malaysian Sapura Energy (SAEN.KL), in which it wants to purchase a 50 percent stake.
($1 = 0.8819 euros)
Reporting by Kirsti Knolle; Editing by David Goodman