Equinor ASA reported adjusted earnings of $3.15 billion in this year’s second quarter, down from $4.31 billion in the same quarter in 2018, citing lower prices, turnarounds, and production mix. Adjusted aftertax earnings were $1.13 billion, down from $1.7 billion in the same period last year.
Production was maintained at a high level, but lower prices, high turnaround activity, and some quarter-specific items impacted the results, the company said. The liquids share of the production mix was low in the quarter, but the company said it will increase going forward. Underlying operating costs and administrative expenses per barrel increased somewhat from the same quarter last year, mainly due to new fields coming on stream. Adjusted depreciation expenses were down. Weak refinery results and a timing effect on gas storages impacted the results from the marketing, midstream, and processing reporting segment in the quarter, the company said.
The company is advancing projects that will deliver production growth towards 2025. Investment costs for Phase 1 of Johan Sverdrup field have been reduced by an additional 3 billion kroner, said Eldar Saetre, president and chief executive officer, bringing reductions to 40 billion kroner since the plan for development and operations was submitted (OGJ Online, Feb. 23, 2015). “With a planned start up later this year, and faster ramp-up to reach plateau production during summer next year, the project will produce and create substantial value for decades to come,” he said.
Earlier this month, Equinor increased its direct ownership in Johan Sverdrup to 42.6% (OGJ Online, July 10, 2019).
With capital discipline and efficient project execution, said Saetre, Equinor is reducing its organic capital expenditure guidance for 2019 to $10-11 billion.
Equinor delivered total equity production of 2.01 million boe/d in the second quarter, on par with the same period last year. Expected natural decline was offset by increased production from new fields and wells.
At the end of the second quarter, Equinor had completed 21 exploration wells with seven commercial discoveries. Adjusted exploration expenses in the quarter were $240 million, on par with the same quarter of 2018, with more wells drilled and completed.
Cash flows from operations before taxes and changes in working capital were $11.96 billion for the first half of this year vs. $13.22 billion in the same period of 2018.