By Eric Sylvers

 

Italian oil and gas company Eni SpA swung to a profit in the fourth quarter, reflecting higher crude prices and the absence of large one-time charges.

The results beat analyst expectations, pushing the share up 3% to EUR14.96 in morning trading.

Net profit was EUR340 million in the three months to end-December compared with a loss of EUR8.45 billion in the same period of 2015 when Eni took a large charge to realign the value of its oil inventories to the drop in crude prices. Adjusted operating profit rose 12% in the quarter to EUR1.29 billion.

Like its peers, Eni profited from the stronger crude prices toward the end of last year, but improved results in the fourth quarter didn't manage to overcome a weak start to 2016 and the company posted a full-year loss of EUR1.46 billion compared with a loss of almost EUR9 billion in 2015.

While the average price of Brent, the global benchmark, was 13% higher in the quarter compared with the same period of 2015, the full-year average price fell 17%.

Eni has been boosting production in recent years on the back of quick startups of new oil and gas discoveries, but production remained little changed in 2016 at 1.76 million barrels of oil equivalent a day. The stagnation, which followed a 10% jump in production in 2015, partly reflects the forced shutdown of an Italian oil field for more than four months as part of a judicial investigation and disruptions in Nigeria following sabotage on a pipeline.

Eni, Italy's largest company by market value, will give a multiyear strategy presentation to financial analysts later Wednesday when it is also expected to announce the dividend it will pay on 2017 results. The company is paying a dividend of 80 euro cents on 2016 results. Eni is also likely to indicate its new break-even oil price. Brent Wednesday traded at about $56 a barrel.

BP PLC this week in its five-year strategic update said it aims to have its break-even oil price down to $35 to $40 a barrel by 2021 compared with a target of $60 this year.

Write to Eric Sylvers at Eric.Sylvers@wsj.com

 

(END) Dow Jones Newswires

March 01, 2017 04:51 ET (09:51 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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