Norway's Aker BP Q4 profit lags expectations, capex to jump

OSLO (Reuters) - Aker BP plans to boost its capital spending by more than 50% in 2024 as it develops new fields, Norway's second-largest listed oil group said on Thursday, as it raised its quarterly dividend by 9% to $0.60 per share.

The company also reported a 2.7% fall in October-December earnings before interest and tax to $2.15 billion, down from $2.21 billion a year earlier, lagging a mean forecast of $2.48 billion in a company-compiled poll of analysts.

It said it had suffered some "operational challenges" in the second half of 2023, including an unplanned shutdown at its Alvheim field caused by a malfunction of equipment installed during maintenance. The technical problems have since been solved.

"We think the increase (in quarterly dividends) signals the company's commitment to returning cash to shareholders throughout the cycle of developing new projects," RBC's analyst Victoria McCulloch said in a note.

The dividend increase was in line with Aker BP's previous guidance of rising the payout by a minimum of 5% per year.

"The minimum ambition of 5% (increase) remains strong," Chief Financial Officer David Toenne told a call with analyst.

Aker BP is developing more than 10 new offshore oil and gas fields off Norway, with many due to come on stream in 2027, including the 650 million barrels of oil equivalent Yggdrasil project.

"The cost estimates remain unchanged, and we are one year closer to first oil and generating another wave of value creation for Aker BP and our stakeholders," CEO Karl Johnny Hersvik said in a statement.

Aker BP sees capital spending rising to $5 billion this year from $3.3 billion in 2023.

The new projects are expected to lift its oil and gas production to around 525,000 barrels of oil equivalent per day (boed) in 2028, up from an expected 410,000-440,000 boed in 2024.

The 2024 production guidance implied an 8% decline year-on-year, higher than expected, likely due to lower output from the Edvard Grieg field, Mark Wilson at Jefferies said in a note.

The company's Oslo-listed shares were down 1.6% at 0818 GMT, more than the 0.5% fall in European petroleum stocks.

Year-to-date, Aker BP stocks are 10.5% down.

(Reporting by Nerijus Adomaitis Editing by Terje Solsvik and Mark Potter)