Austrian OMV Gains on Q4 Output, Prices

Austrian integrated energy firm OMV reported February 6 a clean current cost of supplies (CCS) operating result of €1.053bn ($1.2bn), up 53% from €688mn in Q4 2017. That was mainly owing to upstream's rise in sales to €578mn from €344mn in Q4 2017, primarily driven by higher oil, gas and product prices, as well as higher sales volumes. 

Clean CCS return on average capital employed was 13% and it achieved cost savings of more than €100mn relative to 2017.

Production rose by 70,000 barrels of oil equivalent/d (boe/d) to 447,000 boe/d, while production costs fell 29% to $6.3/boe.

In downstream gas, its CCS operating result rose from €45mn in Q4 2017 to €64mn, helped by better electricity sales and a bigger contribution from pipeline owner Gas Connect Austria.  That rose from €21mn to €36mn partly owing to the Baumgarten explosion insurance claim. Natural gas sales rose from 31.1 TWh to 32.7 TWh, primarily following higher sales volumes in Germany, which were partly offset by lower sales in Romania and Turkey. Gas sales rose by 5% to 32.7 TWh.

OMV's gas sales volumes in 2019 are projected to be above the 114 TWh sold last year, but the margins are forecast lower. It will continue to finance Nord Stream 2, it said. 

Cash flow from operating activities grew from €742mn in Q4 2017 to €1.117bn, supported by an improved market environment and positive net working capital effects. Free cash flow after dividends rose to €281mn (€1.532bn in 2017), but the earlier quarter had to cover the €1.644bn cost of a stake in the Yuzhno Russkoye gas field in Russia.

Its reserves as of December 31, 2018 increased to 1.270bn boe, including Petrom's reserves. At 180%, the one-year reserve replacement rate was similar to 2017 and far above the past average in the past. This was due to more reserves discovered in Russia's Yuzhnoe Russkoe field and in the United Arab Emirates.