In an Oct. 15 research note, Pareto Securities analyst Tom Erik Kristiansen
reported that Aker BP ASA's (AKRBP:Oslo; DETNF:OTCMKTS) self-reported Q3/21 production total falls short of estimates and the energy firm expects full-year production to be on the lower end of guidance.
"The company expects to take a US$150 million impairment due to revised production and cost profiles at the Ula area."
Specifically, Aker's Q3/21 production averaged 210,000 barrels of oil equivalent per day (210 Mboe/d), about 2–3% lower than the Street and Pareto's forecasts. As for this entire year, production will likely be between 210 Mboe/d and 220 Mboe/d, according to Aker. This year's production has been weakest in Norway's Ula field.
Aker will release full Q3/21 financial and operational results on Oct. 28, but Pareto expects production cost and realized prices during the third quarter to be lower than it projected, Kristiansen indicated. These figures should be offset, though, by better-than-expected sales, of 224.8 Mboe/d.
"The company expects to take a US$150 million impairment due to revised production and cost profiles at the Ula area," Kristiansen wrote.
The analyst noted that despite dampened production in 2021, Aker's share price surpassed Pareto's NOK280 target price on it, but the investment bank still considers the Norway-based company a Top Pick among large-cap oil and gas explorers and producers.
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Disclosures from Pareto Securities Research, Aker BP, Oct. 15., 2021
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