Norway's Aker BP posted record first-quarter operating profit and revenue on higher prices and production on Wednesday as the independent oil and gas producer looks to approve several developments this year.
Earnings before interests and tax (EBIT) of $591 million contrasted with a loss of $266 million a year earlier and was close to the $596 million expected by analysts in a Refinitiv poll.
"This is a strong quarter with good production and on-track oilfield developments, and the cash flow is record high," CEO Karl Johnny Hersvik told reporters.
"The cost measures we've been working on for a while are really starting to gain traction," he said.
Production rose 7% to 222,200 barrels of oil equivalent per day (boepd), a new high, while the price per barrel of crude increased to $60.10 from $44.20.
Aker shares fell slightly, trading 1.1% lower on the Oslo Bourse at 0847 GMT and lagging a 0.1% fall in European oil and gas stocks.
Aker BP expects to make final investment decisions for its Kobra East Gekko and Frosk developments in the second and third quarters respectively, aiming to add net reserves of 40 million barrels of oil equivalent.
The company is also on track with concept studies for its biggest potential development, the NOAKA area, and a decision on the concept is planned for the third quarter of 2021, Hersvik said.
Production in the second quarter was expected to be lower due to planned maintenance activities, and the company kept its full year guidance unchanged at 210,000-220,000 boepd.
"The company has the potential to almost double production from current levels at a break-even price of less than $30 (per barrel)," said Citigroup, which rates the shares a "buy".
While it primarily plans to focus on organic growth, with around 10 new projects in its pipeline, Hersvik said he also saw some opportunities to combine this with acquisitions.
(Reuters; Editing by Terje Solsvik and Jason Neely)
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