Repsol shares dropped sharply on Thursday after the company released first-quarter production data that fell short of investor forecasts, even as energy prices climbed.
Q1 Production Figures
Daily output remained steady at around 539,000 barrels of oil equivalent compared to the previous year. Consolidated production declined 18% to 303,000 barrels of oil equivalent. Equity-accounted affiliates saw a 38% surge to 235,000 barrels, driven by new operations in Europe, Africa, and other regions that did not exist a year earlier.
A gas pipeline incident in Peru halted operations for two weeks. Officials noted a potential drop of about 9,000 barrels in first-quarter output if the Peruvian government declares an emergency for the state gas corporation. Full quarterly results are scheduled for release on April 30.
Market and Segment Performance
Brent crude averaged $81.1 per barrel in the first quarter, up 7% year-over-year and 27% higher than the fourth-quarter average. Henry Hub natural gas prices jumped nearly 38% to $5.1 per million British thermal units.
In refining, Spain’s margin indicator more than doubled to $10.9 per barrel year-over-year, though utilization rates fell compared to both last year and the prior quarter. Chemical margins decreased 25% from the fourth quarter. Spanish power prices plummeted almost 50% to €43.3 per megawatt-hour.
Analyst Perspectives
“We anticipate a mildly negative stock reaction to Repsol’s first-quarter results,” stated Naiseong Choi, analyst at Barclays. “Refining margins and upstream production came in below our projections, largely reflecting lower base rates. Still, these figures do not threaten the company’s Capital Markets Day targets.”
Barclays trimmed its estimate for Repsol’s first-quarter group EBIT by about 9% to €1.35 billion. Adjusted net income before minority interests fell 5% to €1.1 billion in the revised forecast.
