Equinor reported adjusted earnings of $4.4 billion in fourth-quarter 2018, citing high production at higher prices as a contributor to the increase from the $4 billion reported in fourth-quarter 2017. Adjusted earnings after tax were $1.5 billion, up from $1.3 billion in the same period last year.
Due to sales pricing mechanisms in the market, the substantial fall in oil prices led to a negative one-off effect with a higher-than-normal differential between realized liquids prices and Brent Blend average. In addition, higher exploration activity and lower refinery and products trading margins impacted adjusted earnings negatively.
For the full year, adjusted earnings were $18 billion, up 42% from $12.6 billion in 2017.
“In 2018 we sanctioned seven new projects, which will deliver more than 1 billion bbl of resources to Equinor at an average break-even price of $14 and very low carbon dioxide emissions. In the quarter, we started production at Aasta Hansteen, Oseberg Vestflanken, and Big Foot, and at the Apodi solar plant in Brazil. We also had the winning bid in an offshore wind lease round offshore Massachusetts in the US,” said Eldar Saetre, president and chief executive officer.
Equinor delivered total equity production of 2.17 million boe/d in the fourth quarter, up from 2.134 million boe/d in the same quarter in 2017, due mainly to portfolio changes and new wells—especially onshore US. New fields coming on stream added to the increase.
Equinor delivered all-time high production in 2018 with an underlying production growth of more than 2%.
As of yearend 2018, Equinor completed 24 exploration wells with nine commercial discoveries. Adjusted exploration expenses in the quarter were $417 million, up from $274 million in the same quarter of 2017, mainly due to higher seismic and drilling activity.
The reserve replacement ratio reached an all-time high of 213% in 2018, mainly driven by sanctioning of new fields, positive revisions, and acquisitions.
Cash flows from operations before tax were $27.6 billion in 2018 compared with $21 billion in 2017.
