Net operating income was NOK 211.8 billion in 2011, up by 54% compared with NOK 137.3 billion in 2010. In 2011, net operating income was positively impacted by higher prices, and gains on sale of assets and unrealised gains on derivatives. Lower volumes of both liquids and gas sold and increased operating expenses partly offset the increase in net operating income.
Total equity production was 1,850 mboe per day in 2011, compared to 1,888 mboe per day in 2010.
Cash flows from operations, combined with proceeds from our continued portfolio optimisation, have been strong in 2011.
Statoil's safety results with respect to serious incidents have been improved over the recent years. The overall serious incident frequency (SIF) improved from 1.4 in 2010 to 1.1 in 2011. Excluding the reporting segment Fuel & Retail (SFR), the SIF was 0.9 in 2011, compared to 1.3 in 2010.
Strategic portfolio optimisation in 2011 included the sale of interests in Peregrino and Kai Kos Dehseh oil sands, the Gassled divestment and the Brigham acquisition. The portfolio was further streamlined through a farm down agreement of assets with Centrica, which is expected to be closed in the second quarter of 2012.
Statoil delivered strong exploration results in 2011, adding more than 1 billion barrels to the resource base. The reserve replacement ratio (RRR) was 1.17 in 2011, of which the organic RRR was above 1.0. The RRR for oil was 1.45, including the effect of sales and purchases.
Expectations for 2012
For 2012, equity production is estimated to grow by around 3% compound annual growth rate (CAGR) based on the actual 2010 equity production. Deferral of gas production to create value, gas off-take, timing of new capacity coming on stream and operational regularity represent the most significant risks related to the production guidance.
Organic capital expenditures (i.e. excluding acquisitions and capital leases) are estimated to be around USD 17 billion in 2012, including expenditures relating to our new assets from the recent Brigham acquisition.
The company will continue to mature its large portfolio of exploration assets and expects to complete around 40 wells with a total exploration activity level in 2012 similar to the 2011 level at around USD 3 billion, excluding signature bonuses.
You may download the board of directors' report in PDF format at our download centredownload centre.