Statoil posted a net profit Nkr6.4 billion ($1.1 billion) for the three months to 31 March, down from a net income of Nkr15.4 billion during the same period last year.
The fall in profits came as revenue dropped 22% to Nkr47.9 billion in the first quarter, compared to Nkr61.8 billion during the first quarter of 2012.
Oslo-listed Statoil’s share price took a battering as the market showed its disappointment over the weak result, falling more than 3% to Nkr136, having dropped over the past year by almost 7% from an earlier high of Nkr155.
Analyst Henrik Madsen of Swedbank First Securities said the company’s adjusted earnings before interest and tax of Nkr42.2 billion – a drop of 28% on the previous year - were 10% below the firm's own estimate and 11% short of consensus.
Revenue was hit by a 15% decline in production which averaged about 1.3 million barrels of oil equivalent per day during the first quarter of the year.
Statoil said the majority of the fall in production was attributable to its lower ownership share in the Kvitebjorn field compared to a year ago, as well as natural decline at its mature fields.
Statoil noted that the terrorist attack at the In Amenas facility in Algeria earlier this year, which cost nearly 80 lives, resulted in a roughly 13,600 boepd decrease in overall production.
Also hitting output were compressor challenges at Troll and prolonged shutdown at Snohvit, off Norway.
Compounding the effects of the fall in overall production was a drop in prices compared to the first quarter of 2012.
Statoil achieved an average liquids price of $103.5 per barrel during the first quarter of the year, down 7% on the $111.5 per barrel average during the same period last year.
Averaged invoiced gas prices were also down 11% year-on-year, with the company achieving an average price of Nkr2.01 per standard cubic metre.
Statoil noted that the divestment of its fuel and retail segment in the second quarter of last year also contributed to the year-on-year decline in revenue in the first quarter of 2013.
These factors were partly offset by the ramp up of new fields and an overall rise in international production.
"Statoil delivered record international production,with an increase of 6% mainly due to start-up and ramp-up of fields,” Statoil chief executive Helge Lund said.
“We started production from new [Norwegian Continental Shelf] fields, including four fast-track projects, and continued our exploration success by making a new high impact discovery in Tanzania."
The company has previously stated that it expects output this year to be down on 2012 but is aiming to increase production to 2.5 million boepd by 2020 as it brings on a wave of new projects from 2014.
Statoil also warned that it expected planned maintenance to have a negative effect on production during the current quarter of about 40,000 boepd.
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