Today’s program will start out with Statoil’s CFO, Torgrim Reitan, going through the earnings and the outlook for the company. As usual, the presentation will be followed by a Q&A session. Please note that questions can be posted by means of telephone only not directly from the web. The dial-in numbers for posing questions can be found on the website.It is now my privilege to introduce Chief Financial Officer, Torgrim Reitan. Torgrim Reitan Thank you, Hilde, and good afternoon to all of you here in Oslo; and good morning and good afternoon to all of you on the webcast following us there. So, it is a pleasure to present our results for the first quarter today. This is our best adjusted earnings ever, 11% production growth but that is as expected. We are continuing our exploration success and we keep on streamlining our portfolio for the longer term, so a strong quarter. But before I get started on production and financials, I want to start with a strategic progress. We made three new high-impact discoveries this quarter, Norway, Tanzania, and Brazil. Two out of these three are operated by Statoil and this means six high-impact wells over the last 12 months, so we will keep on drilling for more and I’ll get back to this later today. This weekend, we signed a strategic operational agreement with Rosneft. This is an important milestone in our Arctic exploration program. Also this, we will come back to later and we have the pleasure to have with us Tim Dodson, our Head of Exploration. So he will be available in the Q&A session and I’m sure he looks very much forward to tell you all about this. We continued to streamline our portfolio towards being a technology focused upstream E&P company. And in April, we accepted a cash offer for our shares in Statoil Fuel & Retail. Couche – Tard is a strong industrial buyer. They are offering an attractive price, a premium of 53%. So SFR will continue their strategic development under long term industrial ownership. And for us, it frees up capital, so we can put our money where our strategy is. The offer period will last until the 21st of May and we expect to close the deal in the second quarter.
And finally we are maturing our project portfolio. We signed the pre-unitization agreement on the Johan Sverdrup and that means that we are operator up to the PDO approval. We started production on Marulk where Eni is the operator and Marulk is connected to the Norne FPSO.We also put together or put a subsea tieback project Smorbukk North-East in production, that’s only 30 months after discovery. That’s a satellite to Åsgard B. All PDOs for Skuld and Åsgard Subsea Compression were approved and finally first oil was produced from Caesar Tonga in the Gulf of Mexico that was one month earlier than planned and a great job there by the operator Anadarko. So we are making progress and we will move ahead as planned. So over to production. In the first quarter, we grew production as expected, 2,193,000 barrels per day. That’s an 11% increase over the first quarter last year. That is important for me to say that this is not more than what we need to deliver in accordance with our guiding. We see growth across the board. We have grown both our oil and gas production and/or production in Norway and internationally. Gas is an important part of the story. We increased our gas production by 16% and this demonstrates the capacity and the flexibility and you know our gas strategy well. We are using our flexibility. And in the first quarter, we have especially used the flexibility at Oseberg. And the Oseberg is the world’s largest short-cycle storage, as I put it. We can produce Oseberg in 80 days. So we have used the full annual production permit on Oseberg in the first quarter, picking the best prices. So that demonstrates the value of flexibility. Liquids production has increased by 8% from 2011, and that’s a stable liquid production on the NCS. Then we see increased oil recovery and we see that that is paying off. On the Statoil fields, we now have a recovery more than 50% across the Norwegian continental shelf. In other regions, people expect around 35%, and 1% increase means actually 300 million more barrels of recoverable oil.
In addition, we have started up and ramped up new fields internationally, this leads to the record international production this quarter. Let me give credit to Total for the startup of Pazflor in Angola, which is performing really well. Pazflor started producing in August last year, ahead of schedule and that field has produced more than 40,000 barrels per day for Statoil in the first quarter.Also Bakken, the Bakken asset in the U.S. contributes well with production of more the 26,000 barrels per day in the quarter. So we are taking on our first onshore operatorship and this is part of our step-wise build up in unconventional. But it is also my job to remind you of the uncertainties in the production going forward. Read the rest of this transcript for free on seekingalpha.com