May 15 (UPI) -- A 30 percent cut in operational expenses helped Maersk Oil turn a profit, though production guidance was lower, the company's CEO said Monday.
The Danish energy company said it posted a profit of $328 million, against a $29 million loss one year ago. The company attributed the gain to improved market conditions and better operational performance.
"We also continue to capture the benefits of increased organizational efficiency, with a more than 30 percent year-on-year reduction in operating expenses," CEO Gretchen Watkins said in a statement.
Maersk said the price of oil averaged $54 per barrel during the first quarter, against $34 last year. The oil division grew out of the split last year of A.P. Moeller-Maersk and the company started 2017 by saying it was working to improve its efficiency under the reorganization by cutting about 160 positions from one of its Danish business units
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Calling it a driver for value, Maersk Oil in March said oil started flowing from its Flyndre field in the British and Norwegian waters of the North Sea for the first time.
The life of Flyndre is expected to extend until at least 2023. Peak production is estimated at around 10,000 barrels of oil per day.
"The North Sea is the heartland of our activities," Watkins said.
Maersk is also a player in the Johan Sverdrup field, a flagship North Sea oil development led by Norwegian energy company Statoil.
The company said its share of net portfolio production was 275,000 barrels of oil equivalent per day, down from the 350,000 barrels from oil equivalent per day during first quarter 2016. The downturn was due in part to a departure from Qatar and the company said its full-year production should be around 225,000 barrels of oil equivalent per day at the high end.
