Can STO survive, page-11

Reading the financial statements to December 2014, they made $0.9 billion loss in 2014, BUT that included a $2.4 billion impairment charge. While I have respect for the accounting standards and asset values are important when talking about reserves etc, I always view asset revaluations (either up or down) with caution - they are non-cash items that can skew results during these volatile price movements.

If STO didn't have to take the impairment charge in 2014, they would have made $1.4 billion in profit. I expect there is another impairment charge coming which will affect the bottom line, but the real question is - is the change in oil prices enough to wipe out all their underlying profit after you take out the notional adjustments in the underlying asset values? It is a fairly big margin to take out to make them unviable, even with the drop if oil prices, and I don't know the answer to that question. Will find out on 19 Feb when their results are released!