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April 27 (UPI) -- Italian energy company Eni said it would be cash neutral so long as oil prices hold above $55 per barrel, boasting its own net production was up from last year. "I confirm the objective of cash neutrality for 2018 at a Brent price of $55 per barrel," CEO Claudio Descalzi said in a statement Friday.
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For the first quarter, the Italian company reported its adjusted net profit was up 31 percent from the last period to $1.2 billion. Crude oil prices are up from the upper-$50 range in the fourth quarter to around $74 per barrel. Since the start of the second quarter, the price for Brent crude oil is up about 8 percent.
Crude oil prices are supported by a geopolitical risk premium and a supply crunch attributed to voluntary production cuts from the Organization of Petroleum Exporting Countries. Those cuts are offset somewhat by strong gains in the United States.
Commenting on the earnings report, RBC Capital Markets said Eni "remains one of the better performers year-to-date."
Eni reported total hydrocarbon production was up 4 percent from the fourth quarter to 1.87 million barrels oil equivalent and in line with its guidance for the year. Gains were supported by assets in Kazakhstan, notably the giant Kashagan oil field, and new start ups in Ghana, a focal point for an emerging West Africa.
The company in March started production at the deepwater Ochigufu project offshore Angola, which would add another 25,000 barrels to current levels. The new start up comes roughly a year after Eni operations began at the East Hub project in deep Angolan waters using an offshore floating production vessel capable of generating up to 80,000 bpd.
The "jewel" for the company, the Zohr natural gas field off the coast of Egypt is in production already. Its the largest gas discovery ever made in Egyptian waters, with an estimated 5.5 billion barrels of oil equivalent reserves. Eni said in its quarterly report that a recent discovery off the coast of Cyprus is "Zohr-like."
