Repsol production falls -2.5% in 1Q19

agrees on sale of its 20.07 % stake at €19/share

Renta 4 | Spanish oil company Repsol published its operational data for Q119. In the first quarter of the year, the price of Brent Crude (63.1$/b) fell -5% yoy and -8% compared to Q418 because of the strong reduction in crude prices since their highs at the beginning of October (-42% until the end of December, although with a subsequent recovery of +28% from the beginning of 2019 until the end of March).

The gas price ($3.1/MBtu) rose +3% yoy but fell -14% over the previous quarter. As for production, slight falls to 705,000b/d (-3% you and -2.4% quarterly) affected by the suspension of production in Libya until 4 March 2019 (currently production is around 730,000b/d).

Appreciation of dollar vs euro of 7% yoy to $1.14/€, flat quarterly. Very weak refinery margins in Q119, $5.3/b vs $6.2/b in Q418 and $6.6 in Q118 (-15% inter-quarterly and -20% yoy). The results for Q119 will be published on 30 April and will be negatively affected by the lower oil and gas prices and the fall in refinery margins (which we believe temporary, probably affected by stoppages for maintenance).

Despite a possible initial negative reaction to Q119 operational data, we reiterate Overweight.