Statoil ASA sank to a 20-month low in Oslo trading after Goldman Sachs Group Inc. lowered profit estimates for the Norwegian oil explorer, citing a reduction in its share of output from the North Sea’s Ormen Lange gas field.
Statoil declined as much as 2.2 percent to 127.5 kroner, the lowest intraday level since Oct. 6, 2011. The stock was at 128 kroner as of 1:24 p.m. local time, extending its loss this year to 7.9 percent and valuing Statoil at 408.1 billion kroner ($71 billion).
The company’s stake in Ormen Lange, Europe’s third-largest gas field, has been cut by 3.6 percentage points to 25.4 percent in a revision of ownership, it said yesterday. That will reduce Statoil’s share of production by about 30 percent through 2014 and by about 40 percent in 2015, Goldman Sachs said in a note.
The bank lowered its earnings estimates for Stavanger-based Statoil by 1.7 percent for 2014 and by 2.2 percent for 2015.
While Statoil has an “attractive asset base of new opportunities” to counter depletion on the Norwegian Continental Shelf, “the portfolio is capital-intensive and will likely lead to a medium-term dilution of returns and negative free cash flow,” Goldman Sachs said.
Statoil, in which the Norwegian government owns a 67 percent stake, plans to increase production by an average 3 percent a year to 2.5 million barrels of oil equivalent a day by 2020. It’s expanding abroad and into unconventional resources such as shale oil and gas to help meet its target.
The company, which operates about 80 percent of Norway’s oil and gas output, has declined 15 percent in Oslo since European authorities last month opened a probe into the explorer and other producers over possible manipulation of oil prices.