April 25 (UPI) -- Norwegian energy major Statoil said its average equity production for the first quarter was up 6 percent year-on-year, driven mostly by its U.S. work.
The company, co-owned by the government, reported net operating income of $5 billion, up from the $4.3 billion during the first quarter of 2017, but below analyst's expectations. Earnings after tax were $1.5 billion, up about 35 percent from the same period last year.
"Higher prices for both oil and gas, coupled with high production, contributed to the increase," the company's quarterly statement read.
Energy prices are edging higher as the global glut that pummeled the market two years ago evaporates. The Organization of Petroleum Exporting Countries is contributing to balance through voluntary production cuts, though that's been offset somewhat by gains in the United States.
The Norwegian company said Wednesday its equity production increased 1.5 percent from last year, led primarily by higher production in the United States.
"We continue our strong operational performance, and international production was record high," President and CEO Eldar Sætre said.
Norway still accounts for the vast majority of Statoil's revenue stream. Last week, the company placed one of the largest platforms of its kind over the Aasta Hansteen field and its super-giant Johan Sverdrup field development plan is progressing as planned.
Statoil characterized the Aasta Hansteen reserve area as "one of the main projects" in its portfolio. Operations at Johan Sverdrup begin in 2019 and production could top out at 660,000 barrels per day by 2022.
March oil production averaged 1.5 million bpd, based on preliminary figures.
"We upgraded Statoil a few months ago, as despite some headwinds into 2018, we expect to see the company generate significant cash flow growth over 2019-21, which suggests the potential for increased returns to shareholders over the next few years," a review sent to UPI from RBC Capital Markets read.