Spanish energy giant Repsol announced the company’s net loss of €1.23 billion in 2015, in its press release on Thursday
Repsol had an adjusted net income of €1.86 billion in 2015; 9 percent higher than the €1.70 billion obtained during the previous year.
As a consequence of the low oil and gas prices which have impacted the value of the company’s oil reserves, Repsol decided to post extraordinary impairments of €2.96 billion resulting in a net loss of €1.23 billion in 2015, according to the press release.
According to company’s announcement, Repsol has generated income from divestments and the purchase of bonds issued by Talisman, along with other non-recurring income. The sum of these factors resulted in a net loss for the year.
Repsol had announced its plans to acquire Canadian oil company Talisman Energy for $8.3 billion plus its debts in December 2014 when the deal was approved by Repsol, Talisman’s boards and its shareholders.
The Spanish energy giant’s net financial debt was €11.93 billion at the end of the year, a fall of €1.19 billion from the end of the third quarter. According to the company’s press release, this reduction is due to strong cash generation, which allowed the company to cover investments and interest payments.
– 88 percent rise in hydrocarbon production in 4Q of 2015
Repsol’s hydrocarbon production reached 697,500 barrels of oil equivalent per day in the fourth quarter; an increase of 88 percent compared to the same period in 2014. Repsol’s proved reserves increased by 54 percent in 2015, totaling 2.37 billion barrels of oil equivalent, the press release said.
Oil prices which are at their lowest levels since early 2000s badly affected the net income of Repsol that posts a loss despite a high performance in exploration and production business.
Oil prices hit the earnings oil and gas companies all around the world, such as U.S. energy giant Exxon. Exxon announced a decrease of 50 percent in earnings to $16.2 billion in 2015, and another U.S company Chevron’s 2015 earnings were $4.6 billion lower compared with $19.2 billion in 2014. BP also reported a net loss of $5 billion for the fourth quarter and a shortfall of about $1.1 billion for the year.
Persistent low prices forced oil companies to slash big chunks of their capital spendings and cut jobs in 2015.
Repsol has introduced additional measures to reinforce its strategic objectives in 2016 such as increasing the synergies from the Talisman integration to $400 million from the initially-identified $220 million, reducing investments planned for the period 2016-2017 by an additional 20 percent which is equal to €1.8 billion and boosting their efficiency program to gain €1.1 billion in 2016, the release explains.
Repsol is an integrated oil and global energy company with upstream and downstream operations around the world. The company carries out its activities in more than 50 countries.