- Statoil has suggested to offer a scrip dividend which will enable shareholders to choose if they want to be paid dividend in cash or by 5 % discounted newly issued shares. The move has to be approved by the majority owner (Norwegian government) who has expressed that it supports the suggested dividend policy.
- Statoil shares were surging in today´s trading as investors reacted positively to Statoil´s efficiency and cost cutting programs. Statoil delivered USD 1.9b in cost cutting one year ahead of plan (original cost cutting target was USD 1.7b for 2016).
- The company stated that there will be no more job cuts, although they will keep their focus on efficiency measures and cost cutting. Furthermore they have reduced the average break-even price per barrel from USD 70 to USD 41 for non-sanctioned projects with start-up by 2022.
- Statoil plans to cut capital expenditures by 12 % in 2016 compared to 2015. A reasonable measure considering the current state of the oil price.
I previously criticized Statoil for borrowing money in order to pay dividend instead of spending the borrowed cash on positioning the company for the next bull market: Oeistein Helle: Statoil fires thousands of employees while borrowing billions to pay dividend
The above mentioned scrip dividend, alongside efficiency measures will improve the company´s cash position and enable Statoil to be opportunistic regarding attractive opportunities in a buyers market going forward. Thus the measures mitigates a lot of my concerns in my previous post. Furthermore Statoil stated that they will stop job cuts, which will enable the company to keep valuable in-house competencies. I am now a lot more confident regarding Statoil´s positioning ahead of the next bull market.
Statoil strategy to capture value in upturn:
I wrote this article myself, and it expresses my own opinions. I am not receiving any compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
