Equinor ASA, Norway’s biggest energy company, said first-quarter profit beat analyst estimates as higher production and a stronger-than-guided result for trading and processing offset lower oil and gas prices.
(Bloomberg) — Equinor ASA, Norway’s biggest energy company, said first-quarter profit beat analyst estimates as higher production and a stronger-than-guided result for trading and processing offset lower oil and gas prices.
While profit for Europe’s biggest oil and gas companies have eased from last year’s levels, they remain near historic highs. European demand for natural gas from Equinor has risen sharply following Russia’s deep supply cuts after the war in Ukraine, which helped turn Norway into the biggest provider of the fuel to the continent in 2022.
Adjusted net income fell to $3.51 billion in the first quarter, beating analyst estimates of $3.28 billion. The energy company declared an ordinary dividend of 30 cents a share for the quarter, and an extraordinary cash dividend of 60 cents a share. It still expects to distribute total capital of $17 billion in 2023.
“We are not saying anything about ‘24 and ‘25 yet, but using a dividend as a way to come to a more optimal capital structure is the way we would like to go,” Chief Executive Officer Anders Opedal said in an interview Thursday.
The shares rose as much as 3.5% at the start of trading in Oslo, where they were trading as of 9:26 a.m.
Profit contributions from the company’s market, midstream and processing unit were “well above the new and increased guided range, mainly driven by crude, products, and liquids trading,” Equinor said. Adjusted earnings after tax for the division rose to $854 million from $345 million a year earlier.
Production climbed to 2.13 million barrels of oil equivalent per day from 2.11 million barrels, with natural gas shipped to Europe accounting for 55% of Equinor’s production from the Norwegian continental shelf during the quarter.
Stabilizing the energy situation in Europe is Norway’s “most important role,” Petroleum and Energy Minister Terje Aasland said in March. Investment plans for new offshore fields are increasing and the country’s gas output jumped to a record last year. Production is likely to stay at similarly high levels for the next four to five years, the minister said.
Johan Sverdrup Phase 2 and northern natural gas field Snohvit were “the main drivers” of production growth on the Norwegian continental shelf, while the Peregrino field boosted output from Brazil.
Equinor’s realized price for gas sales to Europe was $18.79 per million British thermal units in the first quarter, down 37% compared with a year earlier. The realized liquids price of $73.80 per barrel was 24% lower.
(Updates with comment from CEO fourth paragraph, shares in fifth)
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