Equinor fourth quarter 2022 and year end results
Equinor announced adjusted earnings* of US$15.1 billion and US$5.80 billion after tax in the fourth quarter of 2022. Net operating income was USD 16.6 billion and net income was USD 7.90 billion.
The fourth quarter and full year were characterised by:
Solid operational performance, contributing to energy security.
Strong adjusted earnings*.
High value creation from marketing and trading.
Strong cash flow, further strengthening of balance sheet.
Cost focus and capital discipline to address inflation.
Proposed 50% increase in ordinary cash dividend to
USD 0.30 per share.
Expected capital distribution in 2023 of USD 17 billion.
Going forward, Equinor is:
Well positioned to deliver strong returns through the energy transition, expecting above 15% return on average capital employed to 20301.
Expecting around USD 20 billion in average annual cash flow from operations after tax towards 20301.
Investing in a profitable and robust project portfolio, contributing to energy security and decarbonisation.
Progressing on the energy transition plan.
Equinor delivered a total equity production of 2,046 mboe per day for the fourth quarter, down from 2,158 mboe per day in the same quarter of 2021, impacted by turnarounds in the US offshore, the exit from Russian assets and deferral of gas production from the Norwegian continental shelf (NCS) to periods with higher demand.
During the quarter, Equinor brought on stream the Peregrino phase 2 project in Brazil and Askeladd, Johan Sverdrup Phase 2 and Njord Future on the NCS.
The floating offshore windfarm Hywind Tampen on the NCS generated its first power in the fourth quarter and will be completed in 2023. Production from renewable energy sources was 517 GWh in the quarter, down 2% from the same quarter in 2021. Including gas-to-power, total power production for the quarter ended at 1,332 GWh.
Equinor completed five exploration wells offshore with one commercial discovery in the quarter and four wells were ongoing at the quarter end.
Strong financial results
Equinor realised a European gas price of USD 29 per mmbtu and realised liquids prices where USD 80.4 per bbl in the fourth quarter. Although prices are comparatively higher than the corresponding quarter in 2021, European gas price weakened through the fourth quarter of 2022.
Equinor delivered strong sales and trading results, particularly from gas and power, selling to the markets with the highest demand. However, the Marketing, Midstream & Processing segment results were negative due to the timing impact of derivative contracts. In the Exploration & Production USA segment deferred tax asset has been recognised at USD 2.7 billion, with a corresponding decrease in income taxes of USD 2.8 billion resulting in a low reported effective tax rate this quarter compared to last year.
Cash flow provided by operating activities before taxes and changes in working capital amounted to USD 21.0 billion for the fourth quarter, compared to USD 18.0 billion for the same period in 2021. Organic capital expenditure* was USD 2.36 billion for the quarter.
Step-up in capital distribution
The board of directors proposes to the annual general meeting an ordinary cash dividend of USD 0.30 per share for the fourth quarter of 2022, up from USD 0.20 per share for the third quarter of 2022. The board has decided to continue the share buy-back programme of USD 1.2 billion per year, introduced in 2021 as an integrated part of capital distribution.
In addition, the board proposes an extraordinary cash dividend of USD 0.60 per share for the fourth quarter of 2022 based on strong earnings and the robust financial position. The board has also decided to increase the USD 1.2 billion share buy-back programme with up to USD 4.8 billion, resulting in a programme up to USD 6.0 billion in 2023.
The interim cash dividends for the first, second and third quarters of 2023 and further tranches of the share buy-back programme will be decided by the board of directors on a quarterly basis in line with the dividend policy, and subject to existing and renewed authorisations from the AGM, including agreement with the Norwegian state regarding share buy-backs. The share buy-back programme is expected to be executed when Brent oil prices are in or above the range of 50-60 USD/bbl and Equinor’s net debt ratio* stays within the communicated ambition of 15-30 %, and this is supported by commodity prices. Total capital distribution for 2023, including share buy-back, is expected at USD 17 billion.
The fourth tranche of the share buy-back programme for 2022 was completed 17 January 2023 with a total value of USD 1.83 billion. For 2022 total share buy-back amounts to USD 6 billion.
The first tranche of the 2023 share buy-back programme of USD 1 billion will commence on 9 February and end no later than 24 March 2023.
All share buyback amounts include shares to be redeemed by the Norwegian State.
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