Norwegian oil and gas giant Equinor slipped to a net loss in the third quarter of 2019 impacted by lower prices and production drop.
Equinor on Thursday reported adjusted earnings of $2.59 billion, down 46% from $4.84 billion in the same period in 2018.
Adjusted earnings after tax 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.
Equinor recorded a net loss of $1.1 billion in the third quarter of 2019 compared to a profit of $1.7 billion in the same period last year.
The company’s revenues were $15.6 billion, an 18% drop from $19.1 billion revenues in the same period last year.
Eldar Sætre, President and CEO of Equinor, said: “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. Based on our strong balance sheet and outlook for profitable growth, we have in the quarter demonstrated our commitment to capital distribution and are executing the first tranche of a 5-billion-dollar share buy-back program.”
Equinor delivered total equity production of 1,909 mboe per day in the third quarter, down 8% from 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 on October 5 and currently five wells are producing. All eight pre-drilled wells are expected to be put in production by the end of November, giving a production capacity well above 300,000 barrels per day. The field is expected to reach plateau during summer 2020.
Equinor estimates its organic capital expenditures for 2019 will be around $10-11 billion. Equinor estimates a total exploration activity level of around $1.7 billion for 2019, excluding signature bonuses. Production for 2019 is estimated to be around the 2018 level.
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