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Eni First-Quarter Adjusted Net Profit Slips on Lower Production

Eni, the Italian oil and gas company, said that its adjusted net profit fell in the first quarter to 2.68 billion euros ($3.61 billion) from 2.954 billion euros as it suffered from a decline in production and the weakening of the dollar against the euro.

In the quarter, sales fell to 21.913 billion euros ($29.55 billion) from 23.584 billion and adjusted operating profit dropped to 5.253 billion euros ($7.08 billion) from 5.533 billion.

Analysts polled by Thomson Financial News were expecting adjusted net profits of 2.37-2.432 billion euros and adjusted operating profits of 4.77-4.865 billion euros.

Oil and gas production fell to 1.734 million barrels of oil equivalent in the quarter from 1.827 million a year earlier and 1.796 million in the fourth quarter.

However, full-year production is expected to remain in line with the 2006 average of 1.77 million boe/day thanks to additional output scheduled in the second half, it said.

Thanks to the recent acquisitions of production fields in the Gulf of Mexico, Congo and Alaska, Eni said it expects oil and gas production to rise 4% a year in 2007-2010 compared to a previous expectation of 3%.

Quarterly sales of gas fell to 28.14 billion cubic metres from 31.20 billion a year earlier, while electricity sales fell to 7.61 terawatt/hour from 7.73 and retail sales of refined products slipped to 2.88 million tonnes from 2.93 million.

Eni forecast a 1% increase in full-year gas sales from the 97.48 billion cubic metres sold in 2006. full-year sales of electricity and retail refined products are both seen rising slightly, from 31.03 TWh and 12.48 million tonnes respectively in 2006.

Meanwhile, overall refining is seen declining slightly from 38.04 million tonnes.

In 2007, Eni plans to spend 10.5 billion euros ($14.16 billion) in capital expenditure and 9.2 billion ($12.4 billion) on acquisitions, which along with dividend payments, will lead to an equity/debt ratio of 0.3-0.4 by the end of the year.

End-March, the ratio stood at 0.09.

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