May 11 (UPI) -- Austrian energy group OMV said Thursday that net production during the first quarter hit a 10-year high on strong gains from Norway and Libya.
The company announced strong results for a first quarter that saw crude oil prices peak in the upper $50 per barrel range, after slumping below $30 per barrel the previous year. Profits for the first quarter more than doubled from the fourth quarter.
Chairman and CEO Rainer Seele said the operating results of $875 million were the results of both strong exploration and production results as well as sound downstream performance. For gas supplies to its European consumers, however, he said the market was saturated and he tempered his optimism for crude oil prices.
"For the year 2017, OMV expects the average Brent oil price to be at $55 per barrel," he said in a statement.
Crude oil prices posted strong gains in the Wednesday session and were gaining ground ahead of the start of U.S. trading. The price for Brent crude oil was moving toward $51 per barrel, after lingering in the upper $40 range early this week.
Oil prices late in the first quarter came under pressure from production strength in the United States and from Libya, a member of the Organization of Petroleum Exporting Countries exempt for a multilateral agreement to curb output. Seele said net daily production of 335,000 barrels of oil equivalent per day was a 7 percent increase from the previous quarter and a 10-year high. The company said the gains were "supported by the production contribution from Libya and higher production from Norway."
Norway is a lead oil and gas supplier to the European market. Libya holds, by OMV's estimate, around 47 billion barrels of oil. Onshore areas are considered mature, though the company said that's where it's positioned best.
Looking ahead, the company said it was moving on the side of caution with a cost reduction goal of $270 million, when compared with 2015 spending levels. Compared with the first quarter, production is expected to move lower because of planned maintenance work.