Portugal's Galp core profit falls 22% on lower oil output, weaker margins
Adds CEO quotes, detail
EBITDA drops, but beat estimates
Galp plans more drilling in Namibia
Very keen to hold its 80% stake in Namibia for now
By Sergio Goncalves
LISBON, Oct 28 (Reuters) -Portugal's Galp Energia GALP.LS reported on Monday a 22% decline in third-quarter adjusted core profit, hit by lower oil output and a sharp drop in refining margins.
The results sent its shares down more than 5% even as earnings still beat estimates for the period.
The energy firm reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 820 million euros ($885 million), beating the 766 million euros average expected by analysts. Adjusted net profit rose 27% to 266 million euros, also above an estimate of 220 million euros.
Galp's share of oil and gas production from its stakes in projects fell 10% year-on-year to 112,000 barrels of oil equivalent per day, reflecting the disposal of a 10% stake in the Area 4 project in Mozambique and a 3% output drop in Brazil.
CEO Filipe Silva said the company had delivered "another robust performance during this quarter, despite the less supportive refining and commodities price environment".
Brent crude prices fell to an average of $80.3 per barrel in the quarter from $86.7 a year earlier, while the refining margin plummeted to $4.7 per barrel from $14.6.
MORE DRILLING IN NAMIBIA
Galp, which is investing in an exploration project in Namibia, has estimated the Mopane field there could contain at least 10 billion barrels of oil, making it one of the largest discoveries in the nascent basin following successful exploration by TotalEnergies TTEF.PA and Shell SHEL.L.
Silva said Galp was already drilling a third Mopane well and planning to spud a fourth next summer, followed by another two.
"No change in plans other than marginally faster... lots of very precious information is going to come our way over the next few months. So, very exciting times for Galp," he said.
Although Galp has been talking to potential partners, it remains "very keen to hold on to our 80% stake in Namibia, at least until we get the results for our next two wells", he said.
Asked about reports that a high gas-to-oil ratio found in other competing wells in the region could hamper the economics of these discoveries, Silva said that, based on Galp's own data from Mopane, "everything we said before stands", expecting no impact on the planned production of the first oil.
($1 = 0.9261 euros)
Reporting by Sergio Goncalves; editing by Andrei Khalip and Susan Fenton
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