Austrian energy company OMV said it was upbeat on production but its results for the second quarter were down substantially because of lower oil prices.
OMV said its adjusted second-quarter profit was down 43 percent year-on-year to about $237 million and cost reductions of $110 million will be completed by the end of this year, well ahead of schedule.
CEO Rainer Seele said in a statement the company was able to generate positive cash flow and stimulate production in part by new wells and projects online in Norwegian waters.
“However, decreased oil and gas prices and lower refining margins have impacted the results of OMV Group,” he said in a statement.
The company this week sold about half of its interests in the Rosebank oil and gas project in British waters to Canadian energy company Suncor for about $210 million. OMV said the sale reduced its investment requirements while at the same time maintaining a strategic interest in the offshore operation.
Rosebank was included in a $2.6 billion deal with Norwegian energy company Statoil that OMV made in 2013.
The company posted a $1 billion profit in 2014, when oil prices were holding steady above the $100 mark. OMV outlined a new corporate strategy in March that it said put profitability ahead of quantitative growth.
The energy market has stabilized somewhat in the second quarter, with oil prices holding in the low- to mid-$40 per barrel ranges. OMV early this year said it expects Brent crude oil to average around $40 per barrel for the year.
The CEO said the company was setting a cost reduction target of more than $160 million
“We have also continued with our rigorous capital expenditure discipline and thus reduced our capital expenditure guidance to $2.4 billion in 2016,” Seele said. “This is lower than the initially announced target of $2.6 billion.”