Equinor books bigger loss as impairments bite
Norwegian oil and gas company Equinor saw its quarterly loss increase after being hit by impairments due to reduced future price assumptions.
Adjusted earnings were $0.78 billion in the third quarter, down from $2.59 billion in the same period in 2019.
Adjusted earnings after tax were $0.27 billion, down from $1.08 billion in the same period last year.
According to Equinor, low prices for liquids and gas impacted the earnings for the quarter.
IFRS net operating income was negative $2.02 billion in the third quarter, down from negative $0.47 billion in the same period of 2019.
IFRS net income was negative $2.12 billion in the third quarter, down from negative $1.11 billion in the third quarter of 2019.
Net operating income was impacted by net impairments of $2.93 billion mainly due to reduced future price assumptions as well as some reductions in reserves estimates.
Net impairments include $1.38 billion in the E&P USA segment, of which $1.21 billion is related to the U.S. onshore.
Impairments in the E&P International segment were $1.18 billion, while impairments within the E&P Norway segment was $0.37 billion.
In total, $0.58 billion of the net impairment was recognised as exploration expenses.
Equinor delivered total equity production of 1,994 mboe per day in the third quarter, up from 1,909 mboe per day in the same period in 2019, with an increased share of gas.
Adjusting for portfolio transactions and government-imposed curtailments, this represents an underlying production growth of around 9 per cent compared to the third quarter of 2019.
Eldar Sætre, President and CEO of Equinor, said: “Our financial results are impacted by weak prices as regions across the world are still severely affected by the pandemic. We see the results of our forceful response to the market turmoil, with significant cost improvements and strict financial discipline. Net impairments in the quarter are mainly due to reduced price assumptions.
“Significant uncertainty remains around the future commodity price development underlining the importance of increased competitiveness and financial resilience”.
The board of directors has decided a cash dividend of $0.11 per share for the third quarter of 2020.