Eni swings to Q3 profit on firmer oil but misses expectations

MILAN - 27 October 2017: Italian oil major Eni swung to a profit in the third quarter thanks to stronger oil prices and higher production, but fell short of expectations.

Its shares were down 1.2 percent at 13.75 euros in the first few minutes of trading, while the European sector was up 0.1 percent.

Adjusted net profit reached 229 million euros ($267 million), compared with an adjusted loss of 484 million last year, below an analyst consensus provided by the company of 0.35 billion.

Adjusted operating cash flow was 1.72 billion euros against 2.28 billion in the second quarter.

“In 2017 we expect to achieve organic coverage of investments and dividends, entirely paid in cash, at a Brent price of $60 a barrel,” Chief Executive Claudio Descalzi said in a statement.

The state-controlled company confirmed its production would grow by 5 percent this year to 1.84 million barrels of oil equivalent per day (mboe/d), while investments will fall 18 percent.

Production in the third quarter rose 5 percent to 1.80 mboe/d, lifted in part by the restart of fields in Libya as security in the country improves.

The company said it had resumed work on the second phase of its giant offshore Libyan field Bahr Essalam where first gas is expected in 2018.

Eni is the biggest foreign oil and gas producer in Africa and confirmed production would start at its supergiant Zohr field in Egypt by year end.

The group also said it expected to close the announced sale of a 25 percent stake in its Area 4 field in Mozambique to Exxon Mobil by the end of the year.

It said it would raise 3.7 billion euros from disposals this year, 1.5 billion of that total in the first nine months.