July 27 (UPI) -- Norwegian energy company Statoil said Thursday improved market conditions led to a 231 percent increase in adjusted earnings for the second quarter.
Statoil reported adjusted earnings for the second quarter of $3 billion, up from the $913 million reported in the same period last year. The company attributed the gains to strong operational performance, improved production and higher prices for oil and natural gas.
"At oil prices around $50 per barrel, we have generated $4 billion in free cash flow, and reduced our net debt ratio by 8.1 percentage points since the start of the year," President and CEO Eldar Saetre said in a statement.
The Norwegian government reported a preliminary rate of oil production at 1.55 million barrels per day, lower than expected. Total oil production to June, however, was 1.3 percent higher than expected, based on the preliminary figures.
Statoil's equity production was about 2 percent higher than second quarter 2016. The company said it expected production growth of around 5 percent for the year.
For the region as a whole, sector consultant group Rystad Energy, which has headquarters in Oslo, said total production from Western Europe should start to decline starting next year and flatten out at around 6 million barrels of oil equivalent per day by 2021. After that, new gains come mostly from offshore Norway.
From 2020, most of the gains will come from Statoil's giant Johan Sverdrup oil field, one of Norway's five largest offshore oil fields with an estimated 3 billion barrels of oil. For the year, Statoil said its drilled 14 exploration wells and made nine wells, several of which could be turned quickly into commercial operations.
"We expect to drill around 30 exploration wells in 2017," Saetre said.