Prices Cut Equinor's Pre-Tax Q1 Profit

Norwegian energy giant Equinor reported adjusted pre-tax profits for Q1 of $4.19bn in the first quarter, down from $4.41bn in the same period in 2018, as oil and gas prices were both lower. Adjusted earnings after tax however were up, year on year, at $1.54bn, up from $1.47bn in the same period last year. Production was maintained at a high level, but lower prices impacted the result, it said May 3.

CEO Eldar Saetre said cash flow from operating activities was strong at $6.5bn in the quarter, and the company has reduced net debt ratio. "We maintain high production, continue with strong cost focus and strict capital discipline, and we are on track to deliver on our guidance from our capital markets update in February,” he said.

Equinor delivered total equity production of 2.178mn barrels of oil equivalent/day in the first quarter, on par with the same period in 2018. As last year, the liquids/gas split in Q1 2019 was roughly equal, with gas accounting for 1.066mn boe/d. Expected natural decline from mature fields was offset by portfolio changes, new wells and new fields coming on stream, it said. 

Cash flow from operations before tax and changes in working capital amounted to $6.45bn, compared with $7.13bn. Organic capital expenditure was $2.21bn. At quarter end, net debt to capital employed was reduced to 19.4% but, following the implementation of IFRS 16, the net debt ratio was 25.8%. This accounting rule change has hit other producers too, with Anglo-Dutch major Shell adding five percentage points to its debt gearing ratio after IFRS 16.