Equinor (OSE: EQNR, NYSE: EQNR) delivered adjusted
earnings* of USD 8.02 billion and USD 2.73 billion after tax in the
third quarter of 2023. Net operating income was USD 7.45 billion,
and net income was USD 2.50 billion.
Financial and operational performance
- Strong earnings and cash flow from operations
- High oil production. NCS gas production impacted by planned
maintenance and extended turnarounds
- Strong results from sales and trading of oil and oil
products
Strategic progress
- Dogger Bank A first power in the UK
- Negative decision on petition for US Northeast Coast offshore
wind projects
- Breidablikk field onstream; approval of Snøhvit Future PDO
- Consent to develop the Rosebank field in the UK
Competitive capital distribution
- Third quarter ordinary cash dividend of USD 0.30 per share,
continued extraordinary cash dividend of USD 0.60 per share and
fourth tranche of share buy-back USD 1.67 billion
Anders Opedal, president and CEO of Equinor ASA:
“Equinor delivered strong cash flow and earnings in a quarter
with considerably lower gas prices than last year. Through strong
operational performance, we delivered high oil production from
Johan Sverdrup and our international portfolio. The gas production
from the Norwegian continental shelf was impacted by planned
maintenance and extended turnarounds. We continue with significant
capital distribution and will deliver a total distribution of 17
billion dollars in 2023.”
“We continue our transition, with first power from Dogger Bank
in the UK - the world’s largest offshore wind farm, further
expanding in onshore renewables in Brazil and Poland, and investing
in the Bayou Bend CCS project in the US. With the approved plan for
electrification of Hammerfest LNG, and start-up of power from shore
for Gina Krog, we continue to reduce our own emissions.”
“We continue to contribute to energy security by developing
profitable oil and gas projects with low emissions from production,
through the development of the Rosebank field in the UK and the
start-up of the Breidablikk field on the NCS.”
Strong oil production
Equinor delivered total equity production of 2,007 mboe per day
in the third quarter, compared to 2,021 mboe per day in the same
quarter of 2022. Liquids production grew 12% compared to the same
quarter last year. This was mainly driven by strong operational
performance and production from Johan Sverdrup on the NCS, the
partner operated Vito field in the USA, the Peregrino field in
Brazil and the addition of the Buzzard field in the UK to the
portfolio. Gas production was impacted by planned maintenance and
unplanned extended turnarounds on the Troll A-platform and the
third-party operated Nyhamna gas processing facility. Following the
unplanned losses year to date, estimated production in 2023 is now
adjusted to be around 1.5 % above 2022-level.
Power production from renewable energy sources was 373 GWh in
the quarter, up from 294 GWh in the same quarter last year. The
increase was driven by higher production on UK wind farms and new
production from onshore renewables in Poland, as well as the
floating wind farm Hywind Tampen in full production. Including UK
gas-to-power, total power production ended at 883 GWh for the
quarter.
Strategic and industrial progress
Equinor continues to develop its renewables and low carbon
solutions portfolio, while contributing to energy security by
developing profitable oil and gas projects with low emissions from
production.
In the UK, Dogger Bank A, the world’s largest offshore wind
farm, started production in October. It is expected to contribute
to energy security and the decarbonisation of the UK’s energy
system. The Rosebank field received government approval to progress
towards planned oil production in 2026-27. With total recoverable
resources of around 245 million barrels, the field is expected to
strengthen production and value creation on UK continental shelf
and for Equinor.
On the NCS the Breidablikk field started production in October,
ahead of schedule and with low costs and low emissions from
production. In the quarter, the plan for electrification and
onshore compression at Hammerfest LNG received government approval,
enabling LNG exports with reduced emissions towards 2050. The plan
for development of the Eirin field was also delivered, the field is
expected to contribute with gas volumes from 2025. Eirin will be
developed as a subsea tie-back to Gina Krog, which was powered from
shore this quarter.
Offshore wind projects on the US Northeast Coast are negatively
impacted by cost inflation and supply chain constraints. New York
Public Service Commission rejected price increase petitions from
Equinor and other companies and Equinor is assessing the
implications for its projects.
In the quarter, Equinor acquired a stake in Bayou Bend CCS LLC,
a company well positioned to develop one of the largest carbon
capture and storage projects in the USA.
Equinor completed 5 exploration wells offshore with 2 commercial
discoveries in the quarter. At the quarter end, 12 wells were
ongoing.
Strong financial results
Equinor delivered strong adjusted earnings* of USD 8.02 billion
and USD 2.73 billion after tax. This is lower than for the same
quarter last year, mainly due to gas prices coming down from the
extraordinary levels in 2022.
The Marketing, Midstream & Processing (MMP) segment
delivered strong results with adjusted earnings* of USD 876
million, above the guided range for adjusted earnings*. The result
was mostly driven by strong sales and trading of oil and oil
products, optimisation of the shipping portfolio and high refining
margins.
In the third quarter, Equinor recognised net impairments of USD
971 million, mainly consisting of impairments of assets on the NCS
and in the MMP segment of USD 588 million and USD 346 million,
respectively. In the Renewables segment, an impairment of USD 300
million was recognised. This was partially offset by a reversal of
impairment of an asset in the US Gulf of Mexico of USD 290
million.
Cash flow provided by operating activities, before taxes paid
and working capital items, amounted to USD 11.3 billion for the
third quarter.
Equinor paid an NCS tax instalment of USD 3.67 billion based on
expected 2023 earnings. In October an extra instalment of USD 930
million was paid, and two ordinary instalments of USD 3.75
billion(1), will be paid in the fourth quarter.
Organic capital expenditure* was USD 2.64 billion for the
quarter, and total capital expenditures were USD 3.21 billion.
After taxes, capital distribution to shareholders and investments,
net cash flow* ended at USD 1.48 billion for the third quarter.
Equinor maintains a strong financial position with adjusted net
debt to capital employed ratio* at negative 22.9% by the end of the
third quarter, from negative 35.1% at the end of the second quarter
of 2023.
Competitive capital distribution
The board of directors has decided an ordinary cash dividend of
USD 0.30 per share, and to continue the extraordinary cash dividend
of USD 0.60 per share for the third quarter of 2023, in line with
communication at the Capital Markets Update in February. The
Equinor shares will trade ex-dividend on Oslo Børs and New York
Stock Exchange from and including 14 February 2023.
Total capital distribution for 2023 will be around USD 17
billion, including a share buy-back programme of USD 6 billion. The
board of directors has decided to initiate a fourth and final
tranche of the share buy-back programme for 2023 of USD 1.67
billion. The fourth tranche will commence on 30 October and end no
later than 29 January 2024.
The third tranche of the share buy-back programme for 2023 was
completed on 20 October 2023 with a total value of up to USD 1.67
billion.
All share buy-back amounts include shares to be redeemed by the
Norwegian State.
– – –
* For items marked with an asterisk throughout this report, see
Use and reconciliation of non-GAAP financial measures in the
Supplementary disclosures
(1) NOK 37.5 billion, USD estimate based on a USD/NOK exchange
rate assumption of 10.
– – –
Further information from:
Investor relationsBård Glad Pedersen, Senior
vice president Investor relations,+47 918 01 791 (mobile)
PressSissel Rinde, vice president Media
relations,+47 412 60 584 (mobile)
This information is subject to the disclosure requirements
pursuant to Section 5-12 of the Norwegian Securities Trading
Act
- Equinor Third quarter 2023 Financial statements and review
- Press release Equinor third quarter 2023
- CFO presentation - Q3 2023 results
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