Equinor Slides into Red on Charges
Norway’s Equinor swung to a loss in the third quarter after booking hefty impairment charges, with revenues and production also down compared with a year earlier.
The state oil and gas group reported a net operating loss of $469mn for the three-month period on October 24, versus a profit of $4.6bn in the third quarter of 2018. Its net loss came to $1.1bn, in contrast to a profit of $4.84bn.
The company included impairment charges of $2.79bn, of which $2.24bn was related to its onshore shale oil and gas assets in North America owing to “more cautious price assumptions.”
Equinor was also stung by lower prices for oil and gas during the period, with adjusted earnings before interest and tax slumping 46% to $2.59bn and revenues down 18% to $15.7bn.
“We maintain strong cost and capital discipline, but our results are impacted by lower commodity prices in the quarter. In addition, we have decided to use our flexibility to defer gas production to periods with higher expected prices,” CEO Eldar Saetre said in a statement.
Production fell 8% yr/yr, averaging 1.909mn barrels of oil equivalent/day. Besides Equinor’s decision to hold back gas volumes, output was also affected by high turnaround activity, partly offset by increased contributions from new projects. These include the Trestakk, Snefrid Nord, Utgard, and Johan Sverdrup fields off Norway and the Marine field on the UK shelf.
Equinor’s flagship Johan Sverdrup oil project in the North Sea was brought on stream in early October and its output has already reached above 200,000 b/day and should exceed 300,000 b/day by the end of November. It is expected to achieve its first-stage plateau of 440,000 b/day next summer.
“We are developing a portfolio of profitable projects with low CO2 emissions, and we are on track to deliver strong production growth in 2020 and a 3% average annual production growth from 2019 to 2025,” Saetre said.