Eni announces results for the fourth quarter and the full year 2010

San Donato Milanese, February 16, 2011 - Eni, the international oil and gas company, today announces the Group preliminary results for the fourth quarter and the full year 2010 (unaudited).



Financial Highlights


  • Adjusted operating profit: €4.74 billion in the quarter (up 28%); €17.3 billion for the full year (up 31.9%).
  • Adjusted net profit: €1.72 billion in the quarter (up 23.6%); €6.87 billion for the full year (up 31.9%).
  • Net profit: €0.55 billion in the quarter (up 40.2%); €6.32 billion for the full year (up 44.7%).
  • Cash flow: €3.15 billion in the quarter; €14.69 billion for the full year.
  • Dividend proposal for the full year of €1.00 per share (includes an interim dividend of €0.50 per share paid in September 2010).



Operational Highlights


  • Oil and natural gas production: 1.954 million barrels per day in the quarter, up 2% from 2009 on a comparable basis 1 (up 1.1% for the full year).
  • Preliminary year-end proved reserves estimate: 6.84 bboe with a reference Brent price of $79 per barrel. All sources reserve replacement ratio was 125% on a comparable basis 1.
  • Natural gas sales: up 1.3% to 28.76 billion cubic meters in the quarter (down 6.4% for the full year).
  • Junin 5 in Venezuela: established a joint venture for developing the giant oilfield with first oil expected in 2013.
  • Giant Zubair field in Iraq: first production booked in the fourth quarter.
  • Giant Perla field: appraised to be the largest gas discovery ever in Venezuela with volumes of gas in place of 400 billion cubic meters.
  • Poland: awarded licences in high potential areas for shale gas.
  • Ecuador: renewed the service contract for the Villano oilfield with extension in the Oglan discovery area.
  • Started production at all 12 fields planned for the year.


Paolo Scaroni, Chief Executive Officer, commented:

"In 2010, Eni delivered operating and financial results which rank among the best in its peer group. In E&P, where we reported record production, we paved the way for future growth thanks to our entry into new countries, including Togo, Democratic Republic of Congo and Poland. We also strengthened our position in established areas of operation, such as Venezuela and Iraq, where we expect high productive potential. Thanks to our excellent strategic positioning, Eni will continue to generate industry-leading results, and create value for its shareholders."

(1) Excluding the impact of natural gas conversion factor update. For further information see page 8.



Financial Highlights

Fourth Quarter


Third Quarter


Fourth Quarter


% Ch.

4 Q. 10

vs. 4 Q. 09


(€ million)

Full Year

% Ch.







Operating profit









Adjusted operating profit (a)









Net profit (b)








- per share (€) (c)









- per ADR ($) (c) (d)









Adjusted net profit (a) (b)








- per share (€) (c)








- per ADR ($) (c) (d)




(a) For a detailed explanation of adjusted operating profit and net profit see paragraph “Reconciliation of reported operating and net profit to results on an adjusted basis" page 29.
(b) Profit attributable to Eni’s shareholders.
(c) Fully diluted. Dollar amounts are converted on the basis of the average EUR/USD exchange rate quoted by the ECB for the periods presented.
(d) One ADR (American Depositary Receipt) is equal to two Eni ordinary shares.

Adjusted operating profit

Adjusted operating profit for the fourth quarter of 2010 was €4.74 billion, an increase of 28% compared with the fourth quarter of 2009. For the full year, adjusted operating profit was €17.3 billion, an increase of 31.9% from a year ago. These results reflected excellent operating performance reported by the Exploration & Production division (an increase of 43.7% and 46.4% compared with the fourth quarter and the full year 2009) driven by higher oil prices and the appreciation of the dollar vs. the euro. Also, the Engineering & Construction division reported a robust performance (up 33.1% and 18.4% in both reporting periods). The downstream refining and petrochemical businesses both reported consistent improvement in operating performance, thanks to a more favourable trading environment. In contrast, the Gas & Power division reported sharply lower results as unit margins and gas volumes sold in the first three quarters were hit by strong competitive pressures.

Adjusted net profit

Adjusted net profit for the fourth quarter of 2010 was €1.72 billion, up 23.6% compared with a year ago. For the full year, net profit increased by 31.9% to €6.87 billion, as a result of improved operating performance in both reporting periods. These positives were partly offset by a higher adjusted tax rate (up 2 percentage points and 0.8 percentage points on a quarterly and yearly basis, respectively).

Capital expenditures

Capital expenditures amounted to €3.9 billion for the quarter and €13.9 billion for the full year, mainly relating to the continuing development of oil and gas reserves, the upgrading of rigs and offshore vessels in the Engineering & Construction segment and of the gas transport infrastructure.

Cash flow

The main cash inflows for the quarter were net cash generated by operating activities amounting to €3,146 million (€14,694 million for the full year) benefiting from a cash inflow from transferring certain account receivables without recourse to factoring institutions, amounting to €1,279 million due in 2011. These inflows were balanced by outflows for pre-payments to the Company’s suppliers of gas under long-term contracts upon triggering the take-or-pay clause (€937 million for the quarter and €1,238 million for the full year). Proceeds from divestments amounted €211 million (€1,113 million for the full year). These inflows were used to fund part of the financing requirements associated with capital expenditures of €3,912 million (€13,870 million for the full year), the dividend payments to Eni’s shareholders amounting to €3,622 million, relating to the interim dividend for fiscal year 2010 and the payment of the balance of 2009 dividend. Other dividend payments to
non-controlling interests amounted to €514 million. As a result, net borrowings2 as of December 31, 2010 amounted to €26,119 million, representing an increase of €858 million from September 30, 2010 and €3,064 million from December 31, 2009.

(2) Information on net borrowings composition is furnished on page 38.

Financial Ratios

The ratio of net borrowings to shareholders’ equity including non-controlling interest – leverage 3 – was 0.47 at December 31, 2010 up from 0.46 as of December 31, 2009.

Return on Average Capital Employed (ROACE) 3 calculated on an adjusted basis for the twelve-month period to December 31, 2010 was 10.7% (9.2% at December 31, 2009).

Dividend 2010

The Board of Directors intends to submit a proposal for distributing a cash dividend of €1.00 per share4 (€1.00 in 2009) at the Annual Shareholders’ Meeting. Included in this annual payment is €0.50 per share which was paid as interim dividend in September 2010. The balance of €0.50 per share is payable to shareholders on May 26, 2011, the ex-dividend date being May 23, 2011.

(3) Non-GAAP financial measures disclosed throughout this press release are accompanied by explanatory notes and tables to help investors gain a full understanding of said measures in line with guidance provided for by CESR Recommendation No. 2005-178b. See pages 38 and 39 for leverage and ROACE, respectively.
(4) Dividends are not entitled to tax credit and, depending on the receiver, are subject to a withholding tax on distribution or are partially cumulated to the receiver’s
taxable income.



Operational highlights and trading environment

Fourth Quarter


Third Quarter


Fourth Quarter


% Ch.

4 Q. 10

vs. 4 Q. 09



Full Year

% Ch.







Production of oil and natural gas (a)









Production of oil and natural gas

net of updating the natural gas

conversion factor








- Liquids









- Natural gas









Worldwide gas sales









- of which: E&P sales in Europe

and the Gulf of Mexico









Electricity sales









Retail sales of refined products

in Europe





(a) From April 1, 2010, the natural gas conversion factor from cubic feet to boe has been updated to 1 barrel of oil = 5,550 cubic feet of gas (it was 1 barrel of oil = 5,742 cubic feet of gas). For further information see page 8.

Exploration & Production

In the fourth quarter of 2010, Eni’s reported liquids and gas production reached the record level of 1.954 mmboe/d (1,815 kboe/d for the full year). This was calculated assuming a natural gas conversion factor to barrel equivalent which was updated to 5,550 cubic feet of gas equals 1 barrel of oil (it was 5,742 cubic feet of gas per barrel in previous reporting periods; for further disclosures on this matter see page 8). On a comparable basis, i.e. when excluding the effect of updating the gas conversion factor, production showed an increase of 2% on a quarter-to-quarter basis, and was up 1.1% for the full year. Production growth was driven by additions from new field start-ups, particularly the Zubair field in Iraq started up in the fourth quarter, amounting to 90 and 40 kboe/d in the quarter and full year, respectively. Those trends were partly offset by mature field declines. Lower entitlements in the Company’s Production Sharing Agreements (PSAs) due to higher oil prices, as well as lower gas uplifts in Libya as a result of oversupply conditions in the European market were partly offset by lower OPEC restrictions resulting in a net negative impact of approximately 7 kboe/d on an annual basis and in a net positive impact of approximately 10 kboe/d in the quarter.

Gas & Power

Eni’s gas sales in the fourth quarter of 2010 amounted to 28.76 bcm with an increase of 1.3% compared with the fourth quarter of 2009. Eni’s performance on European markets (up 1.11 bcm or 8.3%) was driven by organic growth in key markets such as Northern Europe (including UK), France, the Iberian Peninsula and higher spot volumes marketed at continental hubs. In Italy, volumes growth (up 0.54 bcm or 5.4%) was driven by higher spot sales due to seasonal effects, the recapture of customers in the wholesale segment, and a good performance in the industrial segment as Eni’s customers utilized more gas. These increases were partly offset by lower off-takes by importers to Italy (down 34.8%) due to oversupply in the Italian market.

For the full year, gas sales (97.06 bmc) declined by 6.4% versus 2009, dragged down by sharply lower sales volumes in the Italian market (down by 5.75 bcm or 14.4%) as all market segments posted volume losses. Specifically, sales to the power generation segment declined as clients opted to directly purchase gas on the marketplace, while sales to industrial customers were dragged down by increased competitive pressures fuelled by oversupplies and sluggish demand growth. Sales to importers declined by 2.04 bcm or 19.5% due to negative market trends. On a positive note, European markets experienced a good performance as sales increased by 1.11 bcm or 2.5%, driven by growth in Northern Europe (including UK), France, Germany and the Iberian Peninsula, while sales decreased in Turkey, Belgium and Hungary.

Refining & Marketing

Refining margins remained unprofitable due to weak underlying fundamentals (sluggish demand, excess capacity and high inventory levels) and high feedstock costs. In the fourth quarter of 2010, the marker Brent margin was $2.74 per barrel ($2.66 per barrel in the full year), higher than the extremely low levels touched in the fourth quarter 2009 (up $1.5 per barrel in the quarter, or 121%, and down by $0.5 per barrel, or 15%, for the full year). Eni’s margins in the same period slightly profited from a re-opening of light-heavy crude differentials in the Mediterranean area (the Brent vs Ural spread was up $0.9 a barrel) and from higher premiums on feedstock for gasoline compared to fuel oil. Both factors favoured the profitability of Eni’s high conversion refineries. Higher utilities expenses were incurred due to rising costs for fuel oil.

In the fourth quarter of 2010, volumes of refined products marketed on the Italian network declined by 4% (down 4.4% in the full year). The performance was affected by declining domestic consumption and increasing competitive pressures that caused Eni’s market share to drop by almost 0.8 percentage points to 30.4% in the quarter. On the positive side, volumes marketed on European markets increased by 1.4% and 3.7% in the fourth quarter and the full year respectively, benefiting from the purchase of a network of service stations in Austria and an improved performance in Eastern Europe, Germany and France.


Results of operations were helped by the depreciation of the euro vs. the US dollar, down 8.1% and 4.7% in the fourth quarter and the full year, respectively.



Portfolio developments

In 2010, Eni continued to progress its growth strategy, particularly in the Exploration & Production segment, as foundations of a new development phase were laid. We strengthened our presence in two countries with tremendous mineral potential: in Venezuela, we signed agreements for developing the giant Junin 5 oilfield and discovered the maxi gas field Perla, offshore; and in Iraq we achieved development milestones at the giant Zubair oilfield. 2010 also marked Eni’s entry in new high potential countries such as Togo, the Democratic Republic of Congo and, in non conventional resources, Poland. In the Gas & Power segment, Eni consolidated its presence in the French market and renewed its strategic partnership with Gazprom. Eni’s portfolio was rationalized by divesting non strategic assets.


In November 2010, Eni and Venezuelan company PDVSA signed the contracts for the development of the giant Junín 5 oilfield, located in the Orinoco Oil Belt with certified volumes of oil in place of 35 billion barrels. The two partners plan to achieve first oil by 2013 at an initial rate of 75,000 barrels per day, targeting a long-term production plateau of 240,000 barrels per day to be reached in 2018. In addition to development, the project provides for the construction of a refinery designed to process the field production.
Appraisal activities performed in 2010 confirmed Perla as a major gas discovery, one of the most significant in recent years and the largest ever in Venezuela, with volumes of gas in place of over 400 bcm. The Perla field, located in the Cardón IV Block, in the shallow water of the Gulf of Venezuela, is currently licensed and operated by a 50/50 Joint Venture with an international oil company. The partners are planning to fast track development of Perla through an early production phase of 10 bcm per day, targeted to start-up by 2013. The Venezuelan state company PDVSA owns a 35% back-in right to be exercised in the development phase.


Eni has achieved an increase in production by more than 10% above the initial production rate of approximately 180 kbbl/d at the giant Zubair oilfield. Lifting production above that level means that Eni has begun the cost recovery of its work on the field by booking its share of production for the fourth quarter, including receiving a remuneration fee for every extra barrel of oil produced above the 10% target. Eni, with a 32.8% share, is leading the consortium in charge of redeveloping the Zubair field over a 20 year period, targeting a production plateau of 1.2 mmbbl/d in the next six years.


In February 2011, production start-up was achieved at the Nikaitchuq operated field (Eni 100%), located in the North Slope basins offshore Alaska, with resources of 220 million barrels. Peak production is expected at 28 kbbl/d.


In January 2011, Eni was awarded rights to explore and the operatorship of offshore Block 35 in Angola, with a 30% interest. The agreement foresees drilling 2 wells and 3D seismic surveys to be carried out in the first 5 years of exploration. This deal is subject to the approval of the relevant authorities.


In January 2011, Eni signed a Memorandum of Understanding with CNPC/Petrochina to promote common opportunities to jointly expand operations in conventional and unconventional hydrocarbons in China and outside China. The parties will also cooperate in the field of advanced technology, with a special focus on the exploitation of unconventional oil and gas resources.


In November 2010, Eni signed with the Government of Ecuador new terms for the service contract for the Villano oilfield, due to expire in 2023. Under the new agreement, the operated area is enlarged to include the Oglan oil discovery, with volumes in place of 300 mmbbl. Development will be achieved in synergy with existing facilities.

Democratic Republic of Congo

In August 2010, Eni signed an agreement with UK-based Surestream Petroleum to acquire a 55% stake and operatorship in the Ndunda block located in the Democratic Republic of Congo. The agreement has already been sanctioned by the relevant authorities.


In October 2010, Eni was awarded operatorship of offshore Block 1 and Block 2 (Eni 100%) in the Dahomey Basin as part of its agreements with the Government of Togo to develop the country’s offshore mineral resources. The area is located in a scarcely explored basin bordered to the west by the analogous Tano Basin where major discoveries have been made previously.


In December 2010, Eni acquired the Minsk Energy Resources operating 3 licences in the Polish Baltic Basin, a highly prospective shale gas play. Drilling operations are expected to start in 2011. Through this agreement, Eni makes its entrance into European unconventional gas, in line with the company’s strategy of expanding its position in unconventional resources.

Signed an extension to the strategic agreement with Gazprom

Eni and Gazprom signed the extension to 2012 of the strategic agreement signed in November 2006. This consolidates a long term partnership to launch joint projects in mid and downstream gas, in the upstream sector and in technological cooperation.


In December 2010, Eni increased its share in Altergaz, a company marketing natural gas in France to retail and middle market clients, to 55.2%, as founding partners of the company exercised a put option on a 15% stake. Eni now controls the entity.

Exploration Activities

In 2010, significant exploratory successes were achieved. In addition to Perla, the main discoveries were made in:

(i) Angola with the exploratory wells Cabaca South East and Mpungi located in the 15/06 offshore block (Eni 35%, operator);
(ii) offshore United Kingdom with the Culzean appraisal well (Eni 16,9%);
(iii) Indonesia with a gas well in the Jangkrik (Eni 55%) field;
(iv) Norway with the Fossekall (Eni 11.5%) and the Flyndretind oil discoveries (Eni 29.4%);
(v) onshore Egypt with the North El Qara gas discovery (Eni 75%) and the Arcadia oil discovery (Eni 56%), both already in production;
(vi) Nigeria with the Tuomo 4 oil discovery (Eni 20%).



Portfolio optimization

Divestment of Società Padana Energia

On October 19, 2010, with a view to rationalizing its upstream portfolio, Eni divested its subsidiary Padana Energia to Gas Plus. The divested subsidiary includes exploration leases and concessions for developing and producing oil and natural gas in Northern Italy.

Divestment of interest in Gas Brasiliano Distribuidora

In May 2010, Eni signed a preliminary agreement with an affiliate of Petrobras for the divestment of its 100% interest in Gas Brasiliano Distribuidora, a company that markets and distributes gas in an area of the S. Paulo state, Brazil. The completion of the transaction is subject to approval of the relevant Brazilian authorities.

Sale of 25% of the share capital of GreenStream BV

In April 2010, Eni sold to NOC (Libyan National Oil Corporation) a 25% stake in the share capital and the control of GreenStream BV, the Company owning and managing the gas pipeline for importing to Italy natural gas produced in Libya.



Divestment of international pipelines

Procedures for the divestment of Eni’s interests in the German TENP, the Swiss Transitgas and the Austrian TAG gas transport pipelines are progressing. The divestment is part of the commitments presented by Eni to the European Commission to settle an antitrust proceeding related to alleged anti-competitive behaviour in the natural gas market ascribed to Eni without the ascertainment of any illicit behaviour and consequently without imposition of any fines or sanctions. The Commission accepted Eni’s commitments as of September 29, 2010.



Eni proposal to the Italian Ministry for the Environment for a global transaction on certain environmental issues

The parent company Eni SpA also on behalf of other Group companies (including in particular Syndial) filed a proposal with the Italian Ministry for the Environment to enter into a global transaction related to nine sites of national interest (Priolo, Napoli Orientale, Brindisi, Pieve Vergonte, Cengio, Crotone, Mantova, Porto Torres and Gela) where the Group companies have started, as guiltless owners of a number of industrial areas, environmental restoration and clean-up activities. The proposal includes a definition of a number of pending proceedings relating to clean-up issues and environmental damage.
The framework of the transaction proposal includes: (i) a global environmental transaction as per article 2 of Law Decree 208/2008 (related to the Pieve Vergonte, Cengio, Crotone, Mantova, Porto Torres and Gela sites);
(ii) the subscription of certain environmental framework agreements that have already been signed by relevant administrative bodies which interested businesses may opt for adhering to (related to the Priolo, Brindisi and Napoli Orientale sites); and (iii) the closing of a civil lawsuit regarding environmental damage at the Pieve Vergonte site.
Briefly, Eni and its subsidiaries through the proposal:

- commit to execute environmental investments amounting to €600 million as provided by the 2011-2014 industrial plan in order to achieve higher levels of efficiency and energy sustainability of their plants;
- reaffirm their commitment to carry out a number of projects to clean up and restore proprietary or concession areas in the above mentioned sites with overall expenditures amounting to €1,250 million;
- pledge to pay the Ministry for the Environment a contribution in cash amounting to €450 million in view of executing clean-up and remediation works in public areas next to Eni and its subsidiaries proprietary areas;
- give certain proprietary areas to interested public administrations for free in order to pursue certain local development projects.

As a result of the filing of the proposal of global transaction following thorough and extended contacts with the public bodies, Eni took a charge amounting to €1,109 million to the environmental provision in its 2010 consolidated accounts, with a net effect on profit for the year of €783 million including the tax impact of the operation. The charge had no effect on the Group’s consolidated net borrowings at period end. In case of finalization of the global transaction, the payment of the accrued provision will be made progressively according to the achievement of executive agreements for each site.
A complex administrative procedure is going to start following the presentation of Eni’s proposal to the Ministry. That entity is responsible for drafting a framework transaction which will undergo technical review on part of all interested administrative bodies including public and local authorities. Finally, the transaction signed by Eni is due to be ratified by the Italian Council of Ministers.




Eni will host a strategy presentation on March 10, 2011 to outline the Company’s targets for the 2011-2014 four-year plan.
The 2011 outlook is still characterized by a certain degree of uncertainty and volatility. However the global economic recovery has been gaining momentum recently. Eni forecasts a solid trend for Brent crude oil prices supported by healthier global oil demand. For capital budgeting and financial planning purposes, Eni assumes an average Brent price of 70 $/barrel for the full year 2011.
Management expects that the European gas market will remain depressed as sluggish demand growth is insufficient to absorb current oversupplies. Refining margins are expected to remain unprofitable due to weak underlying fundamentals and high feedstock costs.
Against this backdrop, key volumes trends for the year are expected to be the following:
- Production of liquids and natural gas is forecast to slightly increase compared to 2010 (1.815 million boe/d was the actual level in 2010). This estimate is based on the Company’s assumption of a Brent price of 70 $/barrel for the full year. Growth will be driven by ramping-up fields started in 2010 mainly in Iraq, and new field start-ups in Australia, Algeria and the United States, partly offset by mature field declines;
- Worldwide gas sales: are expected to be at least in line with 2010 (in 2010 actual sales amounted to 97.06 bcm). Considering mounting competitive pressure in the gas market, the achievement of this target as well as stabilizing the market share will be supported by strengthening the Company’s leadership on the European market, marketing actions intended to strengthen the customer base in the domestic market and renegotiating the Company’s long-term gas supply contracts;
- Regulated businesses in Italy will benefit from the pre-set regulatory return on new capital expenditures and efficiency programs;
- Refining throughputs on Eni’s account are planned to be in line with 2010 (actual throughputs in 2010 were 34.8 mmtonnes), due to higher volumes processed on more competitive refineries, the optimization of refinery cycles, as well as efficiency actions implemented in response to a volatile trading environment;
- Retail sales of refined products in Italy and the rest of Europe are expected to be in line with 2010 (11.73 mmtonnes in 2010) against the backdrop of weaker demand. Management plans to improve sales and profitability leveraging on selective pricing and marketing initiatives, starting new service stations and developing the “non-oil‘ business;
- The Engineering & Construction business confirms solid results due to increasing turnover and a robust order backlog.

In 2011, management plans to make capital expenditures broadly in line with 2010 (€13.87 billion was invested in 2010) and will mainly be directed to developing giant fields and starting production at new important fields in the Exploration & Production division, refinery upgrading related in particular to the realization of the EST project, completing the program of enhancing Saipem’s fleet of vessels and rigs, and upgrading the natural gas transport infrastructure. Assuming a Brent price of $70/barrel and the divestment of certain assets, management forecasts that the ratio of net borrowings to total equity (leverage) at year-end will be lower than the 2010 level.
This press release has been prepared on a voluntary basis in accordance with the best practices on the marketplace.
It provides data and information on the Company’s business and financial performance for the fourth quarter and the full year 2010 (unaudited).
Full year and quarterly accounts set forth herein have been prepared in accordance with the evaluation and recognition criteria set by the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and adopted by the European Commission according to the procedure set forth in Article 6 of the European Regulation (CE) No. 1606/2002 of the European Parliament and European Council of July 19, 2002.

The evaluation and recognition criteria applied in the preparation of this report are unchanged from those adopted for the preparation of the 2009 Annual Report, with the exception of the international accounting standards that have come into force from January 1, 2010 described in the section of the 2009 Annual Report “Accounting standards and interpretations issued by IASB/IFRIC and endorsed by EU‘. Adoption of those accounting standards did not have any significant impacts on the financial results of the fourth quarter and full year 2010 with the sole exception of interpretation IFRIC12 “Service Concession Arrangements‘. IFRIC12 provides guidance on the accounting by operators for public-to-private service concession arrangements. An arrangement within the scope of this interpretation involves for a specified period of time an operator constructing, upgrading, operating and maintaining the infrastructure used to provide the public service. In particular when the grantor controls or regulates what services the operator must provide with the infrastructure, at what price and any significant residual interest in the infrastructure at the end of the term of the arrangement, the operator shall recognize the concession as an intangible asset or as a financial asset on the basis of the agreements. Based on existing arrangements in Eni Group companies, adoption of IFRIC12 has led to the Company classifying infrastructures used to provide the public service within intangible assets in the balance sheet as of June 30, 2010. Balance sheet data as of December 31, 2009 have been restated accordingly for an amount of €3,412 million (i.e. the net book value of infrastructures used to provide the public service which were presented within property, plant and equipment in prior years).Considering the tariff set-up of public services rendered under concessions arrangements and absent any benchmarks, the Company was in no position to reliably quantify margins for construction and upgrading activities and consequently capital expenditures made in the period have been recognized as contract work in progress for an equal amount as costs incurred. Infrastructures used to provide the public service are amortized on the basis of the expected pattern of consumption of expected future economic benefits embodied in those assets and their residual value, as provided by the relevant regulatory framework. From April 1, 2010, Eni has updated the natural gas conversion factor from 5,742 to 5,550 standard cubic feet of gas per barrel of oil equivalent. This update reflected changes in Eni’s gas properties that took place in recent years and was assessed by collecting data on the heating power of gas in all Eni’s 230 gas fields on stream at the end of 2009. The effect of this update on production expressed in boe was 26 kboe/d for the full year 2010. Other per-boe indicators were only marginally affected by the update (e.g. realization prices, costs per boe) and also negligible was the impact on depletion charges. Other oil companies use different conversion rates. Non-GAAP financial measures and other performance indicators disclosed throughout this press release are accompanied by explanatory notes and tables to help investors to gain a full understanding of said measures in line with guidance provided by recommendation CESR/05-178b.

Eni’s Chief Financial Officer, Alessandro Bernini, in his position as manager responsible for the preparation of the Company’s financial reports, certifies pursuant to rule 154-bis paragraph 2 of Legislative Decree No. 58/1998, that data and information disclosed in this press release correspond to the Company’s evidence and accounting books and entries.

Cautionary statement

This press release, in particular the statements under the section “Outlook‘, contains certain forward-looking statements particularly those regarding capital expenditures, development and management of oil and gas resources, dividends, allocation of future cash flow from operations, future operating performance, gearing, targets of production and sales growth, new markets, and the progress and timing of projects. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results may differ from those expressed in such statements, depending on a variety of factors, including the timing of bringing new fields on stream; management’s ability in carrying out industrial plans and in succeeding in commercial transactions; future levels of industry product supply; demand and pricing; operational problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; development and use of new technology; changes in public expectations and other changes in business conditions; the actions of competitors and other factors discussed elsewhere in this document. Due to the seasonality in demand for natural gas and certain refined products and the changes in a number of external factors affecting Eni’s operations, such as prices and margins of hydrocarbons and refined products, Eni’s results from operations and changes in net borrowings for the first nine months of the year cannot be extrapolated on an annual basis.

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