Spain’s integrated energy group Repsol said its upstream division posted a net loss of €141 million ($163.3 million) in Q2, compared to a net profit of €323 million a year earlier. The decline was attributed to lower oil and gas prices. Its average crude sales price fell 59% year-on-year to $25.50/barrel in the period, while its average gas sales price decreased 39% year-on-year to $1.90/Mcf.
Repsol’s upstream output dropped 8% year-on-year to 640,000 boepd, its lowest since 2015. However, the company sees that production would stabilize this year. It forecasts that production would reach the top end of its estimated production between 630,000-650,000 boepd in 2020. Repsol has restarted some oil and gas wells that it previously shut.
Repsol’s Corporation division reported a loss of €167 million ($193.5 million) in the same period, compared to a €131 million loss in Q2 2019. Meanwhile, throughput from its downstream segment declined by 22% to 8.3 million tons in Q2, with refining margin declining by 14% year-on-year to $3/barrel.
Following the loss in Q2, Repsol said it would likely to reduce capex and opex further. Repsol previously announced an $800-million cut from its initial 2020 capex plan of $2.1 billion. With the latest announcement, the cut will total €1.1 billion ($1.3 billion) by the end of the year. Meanwhile, opex reduction is expected to reach €450 million ($521.4 million) this year, compared to €350 million that the company previously estimated in March.
Repsol uses an assumed Brent crude price of $59.6/barrel and Henry Hub gas price of $3.30/MMBtu until 2050. In March, the company cut its price assumptions for the rest of 2020 from $65/barrel for Brent and $2.80/MMBtu for Henry Hub to $35/barrel and $1.80/MMBtu, respectively.
