Equinor (OSE: EQNR, NYSE: EQNR) delivered adjusted operating income* of USD 7.48 billion and USD 2.15 billion after tax in the second quarter of 2024. Equinor reported net operating income of USD 7.66 billion and net income at USD 1.87 billion. Adjusted net income* was USD 2.42 billion, leading to adjusted earnings per share* of USD 0.84.
Financial and operational performance
Continued strong operational performance
Solid financial results
Cash flow impacted by tax payments in Norway and capital distribution
Strategic progress
New fields on stream on the NCS
Continued high grading of oil and gas portfolio
Three new CO2 license awards in Norway and Denmark
Capital distribution
Second quarter ordinary cash dividend of USD 0.35 per share, extraordinary cash dividend of USD 0.35 per share and third tranche of share buy-back of up to USD 1.6 billion
Maintain expected total capital distribution for 2024 of around USD 14 billion
Anders Opedal, President and CEO of Equinor ASA:
“Our operational performance continued to be strong through the quarter and we delivered 3% production growth. This secured solid financial results. We maintain a competitive capital distribution, expecting to deliver a total of 14 billion dollars to our shareholders in 2024.”
“Field developments and high production contributes to energy security for Europe. To unlock further long-term value creation, we continue to optimise our portfolio. We also progressed our renewables projects and accessed three new licences for CO2 storage, to build a profitable business for a future low carbon energy system.”
Strong operational performance
Equinor delivered a total equity production of 2,048 mboe per day in the second quarter, up from 1,994 mboe per day in the same quarter last year.
On the NCS, strong operational performance and lower impact from turnarounds, together with new production from the Breidablikk field contributed to a production growth of 5% compared to the second quarter last year. High production particularly from the Troll and Oseberg fields contributed to a 13% increase in gas production, compared to the same period last year.
Internationally, the Buzzard field in the UK and new wells contributed with new production but was more than offset by lower production from the US due to turnarounds offshore and planned curtailments onshore to capture higher value when demand is higher.
In the quarter, Equinor completed seven exploration wells offshore, including the Argerich well in Argentina, with no commercial discoveries. Seven wells were ongoing at the quarter end.
In the second quarter, Equinor produced 655 GWh from renewables, up 90% from the same quarter last year. Production from onshore power plants contributed with more than half of the production in the quarter, mainly from the Rio Energy assets and Mendubim solar plants in Brazil, as well as new production in Poland. The offshore windfarms contributed to the growth with strong production.
Strategic progress
Equinor’s NCS portfolio progressed in the quarter. Equinor and its partners made an investment decision for further development of gas infrastructure in the Troll West gas province, contributing to energy security to Europe long-term. The Johan Castberg FPSO left the dock for inshore testing and is on track for sail away to the Barents Sea later this summer. The production started from the partner-operated Hanz field in April and from the Kristin South area in July.
Equinor continued to optimise the portfolio through strategic business development. This quarter an agreement with Petoro was announced to harmonise equity interest in the Haltenbanken area to increase long-term value creation, and a divestment of interests in the Gina Krog area. The swap transaction to increase profitability in the US onshore business, exiting the operated position in Ohio and increasing its position in partner-operated assets in Northern Marcellus in Pennsylvania was closed.
Equinor accessed CO2 storage capacity opportunities of 17 million tonnes per year with the awarded three new licences Kinna and Albondigas on the NCS, and the Kalundborg licence onshore Denmark.
In the UK, construction is progressing on Dogger Bank A offshore wind farm with 27 turbines either fully or partly installed. The project targets full commercial operations during the first half of 2025. Based on this the expected growth in power production from renewables assets in 2024 is now adjusted to be around 70% from the 2023-level.
Solid financial results
Equinor delivered adjusted operating income* of USD 7.48 billion, of which USD 6.13 billion from the E&P Norway, USD 699 million from E&P international and USD 264 million from E&P USA.
The Marketing, Midstream & Processing (MMP) segment delivered adjusted operating income* of USD 521 million, mainly from the Gas and Power business, including strong results from LNG trading.
Adjusted operating income* from Renewables was negative USD 90 million, as the costs of project development exceeds the earnings from assets in operations which was USD 41 million in the quarter.
Cash flow from operating activities before taxes paid and working capital items amounted to USD 9.75 billion for the second quarter. Cash flow from operations after taxes paid* was USD 1.90 billion for the quarter, and USD 7.74 billion year to date. Equinor paid two NCS tax instalments, totalling USD 6.98 billion in the quarter. Organic capital expenditure* was USD 2.89 billion for the quarter, and total capital expenditures were USD 4.78 billion. After taxes, capital distribution to shareholders and investments, net cash flow* ended at negative USD 4.22 billion in the second quarter.
Adjusted net debt to capital employed ratio* was negative 3.4% at the end of the second quarter, compared to negative 19.8% at the end of the first quarter of 2024. The calculation of net debt ratio includes the effect of the Norwegian state’s share of the share buy-back, at USD 4.02 billion paid in July.
Capital distribution
The board of directors has decided an ordinary cash dividend of USD 0.35 per share, and to continue the extraordinary cash dividend of USD 0.35 per share for the second quarter of 2024, in line with communication at the Capital Markets Update in February.
Expected total capital distribution for 2024 is around USD 14 billion, including a share buy-back programme of up to USD 6 billion. The board has decided to initiate a third tranche of the share buy-back programme of up to USD 1.6 billion. The third tranche will commence on 25 July and end no later than 22 October 2024.
The second tranche of the share buy-back programme for 2024 was completed on 19 July 2024 with a total value of USD 1.6 billion.
All share buy-back amounts include shares to be redeemed from the Norwegian State.
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*For items marked with an asterisk throughout this report, see Use and reconciliation of non-GAAP financial measures in the Supplementary disclosures.
