Eni announces the results for the First Quarter of 2010

Eni, the international oil and gas company, today announces its group results for the first quarter of 20101 (unaudited).

Adjusted operating profit
Adjusted operating profit was €4.33 billion, up 15.4% from the first quarter of 2009. This was due to an excellent operating performance reported by the Exploration & Production division driven by increased oil prices and production growth. The Petrochemical division also improved versus a year ago as operating losses were cut in half. Theses positive trends were partially offset by reduced results reported by both the Refining & Marketing and the Gas & Power divisions.

Adjusted Net Profit
Adjusted net profit was €1.82 billion, up 3.6% compared with a year ago, as a better operating performance was partly absorbed by the negative impact associated with an increased adjusted tax rate (from 49% to 53%).

Capital expenditures
Capital expenditures for the quarter amounted to €2.78 billion mainly related to continuing development of oil and gas reserves, the construction of rigs and offshore vessels in the Engineering & Construction segment and the upgrading of gas transport infrastructure.

Cash flow
The main cash inflows for the quarter were net cash generated by operating activities amounting to €4.55 billion and proceeds from divestments of €729 million. These inflows were used to fund the financing requirements associated with capital expenditures (€2.78 billion) and to pay down finance debt. As of March 31, 2010 net borrowings2 amounted to €21.05 billion, representing a decrease of €2 billion from year end 2009, notwithstanding negative exchange rate translation differences (down approximately €370 million).

Exploration & Production
Eni reported liquids and gas production of 1,816 kboe/d for the first quarter of 2010. Production grew by 2.1% as a result of continuing production ramp-up in Nigeria, Congo and the United States, and additions from fields which were started-up in 2009. These positive trends were partly offset by a combined negative impact associated with lower entitlements in Company's PSAs due to higher oil prices, and lower OPEC restrictions. Also, production for the quarter was negatively affected by unplanned facility shutdowns and mature field declines, particularly in the North Sea.

Realized Oil and Gas Prices
Oil realizations in dollar terms increased by 68.5% driven by a recovery in market benchmark Brent prices (up 71.7% from the first quarter of 2009). Natural gas realizations declined due to the impact of the time lag in oil-linked pricing formulae and weak demand.

Gas & Power
Eni's worldwide natural gas sales were 30.51 bcm, down by 5.7% compared with the first quarter of 2009. The performance was negatively affected by sharply lower volumes supplied to the Italian market (down by 2.34 bcm, or 17.7%) due to increased competitive pressures in the power generation business, as well as in sales to wholesalers and industrial customers. Sales outside of Italy increased by 2.6% as a result of organic growth achieved in Northern Europe, France and Belgium.

Refining & Marketing
Eni's realized refining margins in dollar terms were sharply lower mirroring the environment for Brent margins (down $2.94 per barrel in the quarter, or 55.1%). This reduction reflected prolonged weakness in industry fundamentals as rapidly-escalating of oil-based feedstock costs were not fully transferred to final prices of products due to excess capacity, sluggish demand and high inventory levels.

Currency
Results of operations for the quarter were negatively affected by a steep appreciation of euro vs the US dollar, up by 6.3%. This particularly impacted reported results of foreign subsidiaries in the Exploration & Production division which use the US dollar as their functional currency.