Equinor ASA reported adjusted earnings of $2.59 billion in this year’s third quarter, down from $4.84 billion in the same quarter in 2018. Adjusted aftertax earnings were $1.08 billion, down from $1.99 billion in the same period last year. Lower prices for both liquids and gas impacted the earnings for the quarter.
“Since the beginning of third quarter, we have started production from Trestakk, Mariner, Snefrid Nord, Utgard, and Johan Sverdrup. At Johan Sverdrup, the field has already achieved a daily production above 200,000 barrels. The five new fields are expected to deliver on average more than 200,000 high value barrels per day net to Equinor in 2020,” said Eldar Saetre, president and chief executive officer of Equinor.
Equinor delivered total equity production of 1.9 million boe/d in the third quarter, down 8% from the 2.06 million boe/d in the same period in 2018. The flexibility in the gas fields is used to delay production to periods with higher expected gas prices. High turnaround activity also impacted the production. Successful start-ups and ramp-up of new fields as well as new well capacity partly offset the reduction in production. The Johan Sverdrup field was put in production Oct. 5 and currently five wells are producing (OGJ Online, Oct. 7, 2019). All eight pre-drilled wells are expected to be put in production by the end of November, giving a production capacity well above 300 b/d. The field is expected to reach plateau during summer 2020.
The company is on track to deliver strong production growth in 2020 and a 3% average annual production growth from 2019 to 2025, Saetre said. The company is deferring gas production to periods with higher expected prices, he said, and executing the first tranche of a $5 billion share buy-back program.
At the end of the third quarter, Equinor has completed 32 exploration wells with 14 commercial discoveries. Adjusted exploration expenses in the quarter were $260 million, compared to $240 million in the same quarter of 2018, with more wells drilled and completed.
Net operating income was negative $470 million in the third quarter, down from positive $4.60 billion in the same period of 2018. Net operating income was impacted by net impairment charges of $2.79 billion, of which $2.24 billion relates to unconventional onshore assets in North America, mainly as a result of more cautious price assumptions, the company said.
Cash flows from operations before taxes paid and changes in working capital were $16.60 billion for the first 9 months of 2019 compared to $20.43 billion in the same period of 2018.
Organic capital expenditure guidance for the year is $10-11 billion.
