6-K 1 eqnr1q24_6k.htm EQUINOR FIRST QUARTER 2024 REPORT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of April 2024
Commission File Number 1-15200
Equinor ASA
(Translation of registrant’s name into English)
FORUSBEEN 50, N-4035, STAVANGER,
NORWAY
(Address of principal executive offices)
Indicate by check mark whether the registrant files
or will file annual reports under cover of Form
20-F or Form 40-F:
Form 20-F
X
Form 40-F
This Report on Form 6-K contains a report of
the first quarter 2024 results of Equinor ASA.
Equinor first quarter 2024
2
Key figures Q1 2024
Always safe
High value
Low carbon
0.4
7.63
7.53
6.3
SIF
USD billion
USD billion
kg/boe
Serious incident
frequency (per million
hours worked)
Net operating
income
Adjusted
operating
income*
CO
₂
upstream intensity.
Scope 1 CO
₂
emissions,
Equinor operated, 100%
basis
2.3
5.84
0.96
2.9
TRIF
USD billion
USD
million tonnes CO2e
Total recordable incident
frequency (per million
hours worked)
Cash flow from
operations after
taxes paid*
Adjusted
earnings per
share*
Absolute scope 1+2 GHG
emissions
12
0.70
6
774
Oil and gas leakages
USD per share
USD billion
GWh
with rate above 0.1 kg/
second during the past
12 months
Announced
dividend per share
(ordinary +
extraordinary)
Share buy-
back
programme for
2024
Renewable power
generation Equinor share
Equinor first quarter 2024
3
Equinor first quarter 2024 results
Equinor delivered adjusted operating income* of USD 7.53 billion
and USD 2.57 billion after tax in the
first quarter of 2024. Equinor reported net operating income of
USD 7.63 billion and net income at USD
2.67 billion. Adjusted net income* was USD 2.84 billion, leading
to adjusted earnings per share* of USD
0.96.
Financial and operational performance
-
Strong operational performance and production
-
Solid financial results and cash flow
-
High results from marketing and trading
Strategic progress
-
Power-from-shore to the Sleipner and Gudrun fields on NCS
-
Empire Wind 1 awarded new offtake agreement
-
Announced high-grading of US onshore gas position
Capital distribution
-
First quarter ordinary cash dividend of USD 0.35 per share
-
Continued extraordinary cash dividend of USD 0.35 per share and second tranche of share buy-back
of up to USD 1.6 billion
-
Expected total capital distribution for 2024 of USD 14 billion
Anders Opedal, President and CEO of Equinor ASA:
“Equinor delivered solid financial results driven by strong operational performance across the business.
Production on the Norwegian
continental shelf was high, and the international portfolio contributed with solid production
growth. We continue with significant capital
distribution and expect to deliver a total distribution of 14 billion dollars in 2024.”
“We remain a safe and reliable provider of energy to Europe. On the NCS we got approval for the
Eirin project and the Sleipner and
Gudrun fields are now partially operating with power from shore, all contributing to lower cost
and emissions from production.”
“We maintain a value-driven approach to renewables growth. In the quarter, we achieved significantly better terms for our Empire
Wind 1 project in the US and started the commercial production from the Mendubim solar plants in
Brazil.”
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Net operating income/(loss)
7,631
8,748
12,517
(39%)
Net income/(loss)
2,672
2,608
4,966
(46%)
Basic earnings per share (USD)
0.91
0.88
1.59
(43%)
Adjusted operating income*
1)
7,533
8,558
11,916
(37%)
Adjusted net income*
2,836
1,842
3,864
(27%)
Adjusted earnings per share* (USD)
0.96
0.62
1.24
(22%)
Cash flows provided by operating activities
9,021
2,736
14,871
(39%)
Cash flow from operations after taxes paid*
5,840
2,787
9,716
(40%)
Net cash flow*
8
(3,262)
4,201
(100%)
Operational information
Group average liquids price (USD/bbl) [1]
76.0
75.7
73.8
3%
Total equity liquids and gas production (mboe per day) [4]
2,164
2,197
2,130
2%
Total power generation (GWh) Equinor share
1,277
1,241
1,163
10%
Renewable power generation (GWh) Equinor share
774
694
524
48%
*
For items marked with an asterisk throughout this report, see
Use and reconciliation of non-GAAP financial measures
in the Supplementary disclosures
1) Restated due to amended principles for ‘over-/underlift'.
For further information see Amended principles for Adjusted
operating income in the section 'Use and
reconciliation of non-GAAP financial measures' in the Supplementary
disclosures.
Equinor first quarter 2024
4
Key figures by segment
Adjusted operating
income*
E&P equity liquids
and
gas production
Total power
generation Equinor
share
(USD million)
(mboe/day)
(GWh)
E&P Norway
5,756
1,462
35
E&P International
616
352
E&P USA
377
350
MMP
887
503
REN
(70)
739
Other incl. eliminations
(34)
Equinor Group Q1 2024
7,533
2,164
1,277
Equinor Group Q1 2023
11,916
1)
2,130
1,163
Equinor first quarter 2024
5
Health, safety and the environment
Twelve months average per
Full year
Q1 2024
2023
Serious incident frequency (SIF)
0.4
0.4
First quarter
Full year
2024
2023
Upstream CO
2
intensity (kg CO
2
/boe)
6.3
6.7
First quarter
First quarter
2024
2023
Absolute scope 1+2 GHG emissions (million tonnes
CO
2
e)
2.9
2.9
31 March
31 December
%-point
Net debt to capital employed adjusted*
2024
2023
change
Net debt to capital employed adjusted*
(19.8%)
(21.6%)
1.7
Dividend
(USD per share)
Q1 2024
Q4 2023
Q1 2023
Ordinary cash dividend per share
0.35
0.35
0.30
Extraordinary cash dividend per share
0.35
0.35
0.60
In the first three months of 2024 Equinor settled shares in the market under the 2023 and 2024 share buy-back programmes
of USD
550 million.
Strong production
Equinor delivered a total equity production of 2,164 mboe per day in the first quarter, up from 2,130 mboe per day in the same quarter
last year. The growth is driven by strong operational performance. Increased capacity at Johan Sverdrup and ramp up of Breidablikk,
in addition to new wells on stream, contributed to increased growth on the Norwegian continental
shelf. The Vito field in the US Gulf of
Mexico and the Buzzard field in the UK, in addition to new wells in Angola contributed to
3% production growth internationally.
In the first quarter, Equinor produced 774 GWh from renewables, up 48% from the same quarter last year. The growth came primarily
from onshore power plants in Brazil, in which Rio Energy was the key contributor. Higher production from the offshore windfarms also
supported the increased power production.
Strategic progress
The activity level on the NCS was high throughout the quarter. The plan for development of the Eirin field, a subsea tieback to Gina
Krog, was approved in the quarter and the field is expected to contribute with gas volumes from
next year. In April, Equinor
announced the start-up of electrification of the Sleipner field centre, along with the Gudrun
platform and other associated fields, which
is expected to further reduce emissions from the operations.
Equinor continued to optimise its oil and gas portfolio with the recent swap transaction in the US
onshore business, exiting the
operated position in Ohio and increasing its position in partner-operated assets in Northern
Marcellus in Pennsylvania. Equinor will
pay a cash consideration of USD 500 million to balance the overall transaction.
In the quarter, Equinor completed nine exploration wells offshore with two commercial discoveries. Three wells were ongoing at the
quarter end. The company was awarded 39 new production licenses on the NCS.
During the quarter Equinor secured a significantly improved offtake price for its Empire Wind 1 project on
the US East Coast. Planned
next steps include final investment decision, project financing and farm down to a new
partner. In Brazil, production started at the 531
MW Mendubim solar plants, where Equinor has a 30% ownership share.
Solid financial results and cash flow
Equinor realised a price for piped gas to Europe of USD 9.41 per MMbtu and realised
an average liquids price of USD 76.0 per bbl,
down 50% and up 3% respectively, compared to the first quarter 2023.
Equinor delivered solid adjusted operating income* of USD 7.53 billion and USD 2.57 billion after
tax. This is down from the same
quarter last year due to lower gas prices but partially offset by production growth and increased liquids prices.
In this quarter, the company introduced two new performance measures, namely adjusted net income* and adjusted earnings per
share*, with the purpose to provide additional transparency to Equinor’s underlying financial
performance. In addition, effective as of
this quarter, the adjustment for over- and underlift has been removed from adjusted operating income* (previously named "adjusted
earnings").
The Marketing, Midstream & Processing (MMP) segment delivered adjusted operating income* of USD
887 million, above the guided
range for the segment, mainly driven by strong results from liquids and LNG trading.
Equinor first quarter 2024
6
Cash flow from operating activities before taxes paid and working capital items amounted to USD
9.69 billion for the first quarter and
cash flow from operations after taxes paid* was USD 5.84 billion. Equinor paid one NCS
tax instalment of USD 3.52 billion in the
quarter. Organic capital expenditure* was USD 2.76 billion for the quarter, and total capital expenditures were USD 3.36 billion. After
taxes, capital distribution to shareholders and investments, net cash flow* ended at USD
8 million in the first quarter.
Adjusted net debt to capital employed ratio* was negative 19.8% at the end of the
first quarter, up from negative 21.6% at the end of
the fourth quarter of 2023.
Capital distribution
The board of directors has decided an ordinary cash dividend of USD 0.35 per share, and to
continue the extraordinary cash dividend
of USD 0.35 per share for the first quarter of 2024, in line with communication at the Capital
Markets Update in February.
Expected total capital distribution for 2024 is USD 14 billion, including a share buy-back programme
of up to USD 6 billion. The board
has decided to initiate a second tranche of the share buy-back programme of up to USD 1.6 billion. The second
tranche is subject to
an authorisation from the company’s annual general meeting 14 May 2024 and will commence after this. The tranche will
end no later
than 22 July 2024.
The first tranche of the share buy-back programme for 2024 was completed on 2 April
2024 with a total value of USD 1.2 billion.
All share buy-back amounts include shares to be redeemed by the Norwegian State.
*For items marked with an asterisk throughout this report, see Use and reconciliation of non-GAAP
financial measures in the
Supplementary disclosures.
Equinor first quarter 2024
7
GROUP REVIEW
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Total revenues and other income
25,135
29,054
29,224
(14%)
Total operating expenses
(17,504)
(20,306)
(16,707)
5%
Net operating income/(loss)
7,631
8,748
12,517
(39%)
Net financial items
366
589
1,189
(69%)
Income tax
(5,325)
(6,729)
(8,741)
(39%)
Net income/(loss)
2,672
2,608
4,966
(46%)
Adjusted total revenues and other income*
1)
24,789
28,381
28,423
(13%)
Adjusted purchases* [5]
(11,813)
(13,672)
(11,262)
5%
Adjusted operating and administrative expenses*
1)
(2,832)
(3,256)
(2,809)
1%
Adjusted depreciation, amortisation and net impairments*
(2,345)
(2,518)
(2,198)
7%
Adjusted exploration expenses*
(266)
(377)
(238)
12%
Adjusted operating income*
1)
7,533
8,558
11,916
(37%)
Adjusted net financial items*
373
65
437
(15%)
Income tax less tax effect on adjusting items
(5,071)
(6,782)
(8,489)
(40%)
Adjusted net income*
2,836
1,842
3,864
(27%)
Basic earnings per share (in USD)
0.91
0.88
1.59
(43%)
Adjusted earnings per share* (in USD)
0.96
0.62
1.24
(22%)
Capital expenditures and Investments
2,483
3,031
2,051
21%
Cash flows provided by operating activities
9,021
2,736
14,871
(39%)
Cash flows from operations after taxes paid*
5,840
2,787
9,716
(40%)
Quarters
Change
Operational information
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Total equity liquid and gas production (mboe/day)
2,164
2,197
2,130
2%
Total entitlement liquid and gas production (mboe/day)
2,039
2,065
2,011
1%
Total Power generation (GWh) Equinor share
1,277
1,241
1,163
10%
Renewable power generation (GWh) Equinor share
774
694
524
48%
Average Brent oil price (USD/bbl)
83.2
84.1
81.3
2%
Group average liquids price (USD/bbl)
76.0
75.7
73.8
3%
E&P Norway average internal gas price (USD/mmbtu)
7.76
11.45
17.36
(55%)
E&P USA average internal gas price (USD/mmbtu)
1.74
1.76
2.80
(38%)
1) Restated due to amended principles for
‘over-/underlift '. For further information see Amended principles for Adjusted operating
income in the section 'Use and reconciliation of non-GAAP financial measures' in the
Supplementary disclosures.
Operations and financial results
Production increases and a strong operational performance across the portfolio contributed to strong results
for the first quarter of
2024.
In the first quarter of 2024, E&P Norway achieved a production increase compared to the same
quarter last year. This was driven by a
strong operational performance across the NCS and high production from the ramp up at Johan
Sverdrup and Breidablikk, which
came on stream in the fourth quarter of 2023.
The international upstream business delivered a 3% production increase for the first quarter of 2024
compared to the same quarter in
2023. New volumes from the Buzzard field, contributing following the Suncor UK acquisition in
the second quarter of 2023, and the
Equinor first quarter 2024
8
continued ramp up of Vito in the Gulf of Mexico, operational from the second quarter of 2023, drove the increases for the
period. New
wells in Angola and Argentina also supported the increase.
The addition of onshore power plants in Poland and Brazil during 2023, and the start-up of Mendubim
solar projects in 2024, drove an
increase of 48% in renewable power generation for the first quarter of 2024 compared to 2023.
Power generation from Triton Power
reduced compared to the same quarter of 2023 due to low clean spark spreads for the quarter.
Revenues were affected by gas prices which were lower than in the prior year. The impact of which was partially offset by increased
production and higher sales of third-party gas and liquids volumes. Strong margins were delivered
in the quarter from Crude, Products
and Liquids in our Marketing, Midstream and Processing segment. This was driven by the effective capturing of value
in tightening
markets which increased margins from physical sales and financial trading, as well as efficient shipping portfolio optimisation.
Adjusted operating and administrative expenses* remained relatively stable compared to the first quarter of the
prior year, with some
increases in operational and maintenance costs related to production and volume driven transportation
costs. Effects of an overall
underlift position, internationally and on the NCS, partially offset this. Costs associated with the development and future
capacity
building of the renewables and low carbon solutions portfolios also increased in the first quarter
of 2024 relative to the same period in
2023.
The ramp up of new fields, increased production and the inclusion of Buzzard contributed to an
overall increase in adjusted
depreciation, amortisation and net impairments* in the first quarter of 2024 compared to the same
period in 2023.
During the first three months of the year, exploration costs associated with Bacalhau in Brazil were expensed, driving an increase in
exploration expenses relative to the same quarter in 2023.
Net financial items reduced from the same period in the prior year due to lower currency gains
from the continued strengthening of
USD versus NOK. Adjusted net financial items* are relatively consistent with the same period in
the prior year.
Taxes and net financial result
The impact of lower net financial items in the first quarter of 2024 compared to 2023 has resulted
in a higher relative share of income
from the NCS compared to the same period in the prior year. The effective reported tax rate of 66.6% for the first quarter of 2024
therefore increased compared to 63.8% in 2023.
The effective tax rate on adjusted operating income* of 65.8% for the first quarter of 2024
decreased compared to 70.8% in 2023 due
to lower relative share of adjusted operating income* from NCS and decreased prior period adjustments in 2024
compared with 2023.
An adjusted net income* result of USD 2,836 million and a net income of USD 2,672 million
were recorded in the first quarter of 2024
driven by a strong production delivery.
Cash flow, net debt and capital distribution
The strong operational performance in the first quarter of 2024 translated
into solid financial results and cash flow provided by
operating activities before taxes paid and working capital items of USD 9,689 million.
The downward movement in gas prices drove
the decrease of USD 5,616 million from the same period of the prior year.
Taxes paid of USD 3,849 million in the first quarter have been reduced
from the prior year outflow of USD 5,589 million reflecting the
impact of lower gas prices in 2023 relative to 2022.
The payment consists of the first of three Norwegian corporation tax instalments
relating to the income from the 2023 financial year to be made in 2024.
The final two will occur in the second quarter of 2024.
A working capital decrease of USD 3,181
million positively impacted the cash flow in the first quarter of 2024
primarily through a
reduction in trade receivables. The first quarter of 2023 had a
working capital decrease of USD 5,155 million.
Cash flow from operations after taxes paid* and net cash flow* for the first quarter of 2024 increased
significantly from the prior quarter
to USD 5,840 million, and USD 8 million respectively.
A decrease in liquid assets in the quarter, combined with increased equity caused a slight increase in the net debt
to capital employed
adjusted ratio* at the end of March 2024 from negative 21.6% at the end
of December 2023 to negative 19.8%.
The board of directors has decided an ordinary cash dividend of USD 0.35 per share, and to continue the
extraordinary cash dividend of USD 0.35 per share for the first quarter of 2024, in line with communication at
the Capital Markets Update in February.
Expected total capital distribution for 2024 is around USD 14 billion, including a share buy-back programme of
up to USD 6 billion. The board has decided to initiate a second tranche of the share buy-back programme of up
to USD 1.6 billion. The second tranche is subject to an authorisation from the Company’s annual general meeting
Equinor first quarter 2024
9
14 May 2024 and will commence after this. The tranche will end no later than 22 July 2024.
The first tranche of the share buy-back programme for 2024 was completed on 2 April 2024 with a total value of
USD 1.2 billion.
All share buy-back amounts include shares to be redeemed by the Norwegian State.
Health, safety and the environment
The twelve-month average serious incident frequency (SIF) for the period ending 31 March
2024 was 0.4, consistent with the prior
year. The serious incidents recorded in 2024 included a helicopter accident, which resulted in a fatality.
Absolute scope 1+2 GHG emissions for Equinor’s operated production, on a 100%
basis, were 2.9 million tonnes CO
2
e
for the first
quarter of 2024, consistent with the results from the same quarter 2023. Decreases due to a fire
at Mongstad in mid-February 2024,
partial electrification of Troll C and decommission of Heimdal, were offset by increased emissions at Tjeldbergodden which had a shut
down in the prior year.
Equinor first quarter 2024
10
OUTLOOK
●
Organic capital expenditures*
are estimated at around USD 13 billion for 2024
1
.
●
Oil & gas production
for 2024 is estimated to be stable compared to the 2023 level [6].
●
Renewable power generation
for 2024 is estimated to double compared to the 2023 level.
●
Equinor’s ambition is to keep the
unit of production cost
in the top quartile of its peer group.
●
Scheduled maintenance activity
is estimated to reduce equity production by around 60 mboe per day for the full year
of 2024.
These forward-looking statements reflect current views about future events and are, by their nature, subject
to significant risks and
uncertainties because they relate to events and depend on circumstances that will
occur in the future. Deferral of production to create
future value, gas off-take, timing of new capacity coming on stream and operational regularity and levels of industry
product supply,
demand and pricing represent the most significant risks related to the foregoing production guidance.
Our future financial
performance, including cash flow and liquidity, will be affected by the extent and duration of the current market conditions, the
development in realised prices, including price differentials and other factors discussed elsewhere in the report.
For further
information, see section Forward-looking statements in the report.
1
USD/NOK exchange rate assumption of 10.
Equinor first quarter 2024
11
SUPPLEMENTARY
OPERATIONAL
DISCLOSURES
Operational information
Quarters
Change
Operational information
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Prices
Average Brent oil price (USD/bbl)
83.2
84.1
81.3
2%
E&P Norway average liquids price (USD/bbl)
79.3
79.3
77.5
2%
E&P International average liquids price (USD/bbl)
73.8
73.1
70.7
4%
E&P USA average liquids price (USD/bbl)
66.2
66.0
61.3
8%
Group average liquids price (USD/bbl) [1]
76.0
75.7
73.8
3%
Group average liquids price (NOK/bbl) [1]
799
821
756
6%
E&P Norway average internal gas price (USD/mmbtu)
[8]
7.76
11.45
17.36
(55%)
E&P USA average internal gas price (USD/mmbtu)
[8]
1.74
1.76
2.80
(38%)
Realised piped gas price Europe (USD/mmbtu)
[7]
9.41
13.07
18.79
(50%)
Realised piped gas price US (USD/mmbtu) [7]
2.33
2.07
3.24
(28%)
Refining reference margin (USD/bbl) [2]
7.4
6.1
11.3
(35%)
Entitlement production (mboe per day)
E&P Norway entitlement liquids production
648
658
641
1%
E&P International entitlement liquids production
250
254
231
9%
E&P USA entitlement liquids production
138
156
129
7%
Group entitlement liquids production
1,036
1,068
1,001
4%
E&P Norway entitlement gas production
814
806
806
1%
E&P International entitlement gas production
23
24
33
(31%)
E&P USA entitlement gas production
165
167
171
(3%)
Group entitlement gas production
1,002
997
1,010
(1%)
Total entitlement liquids and gas production [3]
2,039
2,065
2,011
1%
Equity production (mboe per day)
E&P Norway equity liquids production
648
658
641
1%
E&P International equity liquids production
316
323
286
11%
E&P USA equity liquids production
153
174
144
7%
Group equity liquids production
1,118
1,155
1,071
4%
E&P Norway equity gas production
814
806
806
1%
E&P International equity gas production
35
39
50
(29%)
E&P USA equity gas production
197
197
203
(3%)
Group equity gas production
1,046
1,042
1,059
(1%)
Total equity liquids and gas production [4]
2,164
2,197
2,130
2%
Power generation
Power generation (GWh) Equinor share
1,277
1,241
1,163
10%
Renewable power generation (GWh) Equinor share
1)
774
694
524
48%
1) Includes Hywind Tampen renewable power generation.
Equinor first quarter 2024
12
Health, safety and the environment
Twelve months
average per
Full year
Q1 2024
2023
Total recordable injury frequency (TRIF)
2.3
2.4
Serious Incident Frequency (SIF)
0.4
0.4
Oil and gas leakages (number of)
1)
12
10
First quarter
Full year
2024
2023
Upstream CO
2
intensity (kg CO
2
/boe)
2)
6.3
6.7
First quarter
First quarter
2024
2023
Absolute scope 1+2 GHG emissions (million tonnes
CO
2
e)
3)
2.9
2.9
1)
Number of leakages with rate above 0.1 kg/second
during the past 12 months.
2)
Operational control, total scope 1 emissions of CO
2
from exploration and production, divided by total
production (boe).
3)
Operational control, total scope 1 and 2 emissions
of CO
2
and CH
4.
Equinor first quarter 2024
13
EXPLORATION
& PRODUCTION NORWAY
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Total revenues and other income
7,879
10,076
12,044
(35%)
Total operating expenses
(2,123)
(2,339)
(2,229)
(5%)
Net operating income/(loss)
5,756
7,737
9,816
(41%)
Adjusted total revenues and other income*
1)
7,879
9,855
12,141
(35%)
Adjusted operating and administrative expenses*
1)
(866)
(1,057)
(977)
(11%)
Adjusted depreciation, amortisation and net impairments*
(1,173)
(1,144)
(1,115)
5%
Adjusted exploration expenses*
(84)
(138)
(137)
(39%)
Adjusted operating income/(loss)*
1)
5,756
7,515
9,912
(42%)
Additions to PP&E, intangibles and equity accounted
investments
1,372
1,577
1,317
4%
Operational information
Quarters
Change
E&P Norway
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
E&P entitlement liquid and gas production (mboe/day)
1,462
1,464
1,448
1%
Average liquids price (USD/bbl)
79.3
79.3
77.5
2%
Average internal gas price (USD/mmbtu)
7.76
11.45
17.36
(55%)
1) Restated due to amended principles for
‘over-/underlift '. For further information see Amended principles
for Adjusted operating income in
the section 'Use and reconciliation of non-GAAP
financial measures' in the Supplementary disclosures.
Production & revenues
In the first quarter of 2024, E&P Norway demonstrated a strong production performance across
segment, driven by key assets such
as Johan Sverdrup, along with the successful ramp-up of Breidablikk, Njord and Hyme. These factors
more than offset the natural
decline observed in several fields. Gas production increased by 1%, and liquids production remained
stable compared to the first
quarter of 2023.
While there was a slight increase in production, the first quarter of 2024 saw a sharp decline in gas
prices compared to the same
period last year. This significant shift in gas prices led to notably reduced revenues.
Operating expenses and financial results
Overall operating
and administrative
expenses for
the first
quarter of
2024 remained
stable compared
to the
same quarter
last year
based
on
produced
volumes.
The
main
factors
reducing
the
operating
and
administrative
expenses
were
the
underlift
effect
and
Statfjord area divestment.
Field specific
investments during 2023
and ramp
up of
new fields,
partially offset
by lower
asset carrying
values due
to prior
quarter
impairments, led
to an
increase in
adjusted depreciation,
amortisation and
net impairments*
in the
first quarter
of 2024
compared to
the same quarter last year.
A lower
activity level
(6 wells
this quarter
compared to
10 wells
in the
first quarter
last year),
partially offset
by a
lower capitalisation
rate led to a decrease in exploration expenses in the first quarter 2024 compared to first quarter
2023.
Equinor first quarter 2024
14
EXPLORATION
& PRODUCTION INTERNATIONAL
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Total revenues and other income
1,655
1,889
1,548
7%
Total operating expenses
(1,039)
(1,553)
(1,167)
(11%)
Net operating income/(loss)
616
336
382
61%
Adjusted total revenues and other income*
1)
1,655
1,867
1,460
13%
Adjusted purchases*
34
(45)
16
>100%
Adjusted operating and administrative expenses*
1)
(395)
(540)
(400)
(1%)
Adjusted depreciation, amortisation and net impairments*
(529)
(603)
(461)
15%
Adjusted exploration expenses*
(148)
(55)
(55)
>100%
Adjusted operating income/(loss)*
1)
616
623
560
10%
Additions to PP&E, intangibles and equity accounted
investments
756
923
451
68%
Operational information
Quarters
Change
E&P International
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
E&P equity liquid and gas production (mboe/day)
352
362
336
5%
E&P entitlement liquid and gas production (mboe/day)
273
278
264
4%
Production sharing agreements (PSA) effects
78
83
72
8%
Average liquids price (USD/bbl)
73.8
73.1
70.7
4%
1) Restated due to amended principles for ‘over-/underlift '. For further information see Amended principles for Adjusted operating
income in the section 'Use and reconciliation of non-GAAP financial measures' in the
Supplementary disclosures.
Production & Revenues
In the first quarter of 2024, E&P International achieved a 5% growth in equity production compared
to the same quarter last year.
These strong production results can primarily be attributed to positive effects from new wells in Argentina and Angola along with the
added contribution from the Buzzard field in the UK. Furthermore, lower turnaround activities this
quarter contributed to the overall rise
in production levels. This increase was partially offset by natural decline in various fields, the divestment
of the Corrib asset which
closed on 31 March 2023, and by temporary operational issues relating to an asset in Brazil.
The effects of Production Sharing Agreements (PSA) increased in first quarter of 2024 compared to same quarter
last year. This was
driven by higher production from Angola PSA fields, combined with lower entitlement factor due
to lower cost recovery and higher oil
prices.
Lifted production increased by 17 mboe per day to 250 mboe per day compared to the same quarter
last year. The increased lifting,
along with higher realised prices contributed to an increase in revenues.
Operating expenses and financial results
Adjusted operating and maintenance expenses* for this quarter were consistent with the levels
observed in the same quarter last
year. The reduction in expenses from fourth quarter of 2023 is mainly attributed to the absence of several one-time costs that were
incurred in the previous quarter, along with a net underlift position that contributed to lower operating and maintenance expenses in
the current quarter.
The addition of the Buzzard field to our portfolio, increased production from Peregrino in Brazil and
Bandurria Sur in Argentina in
2023, contributed to an overall increase in depreciation in the first quarter of this year
compared to the same period in 2023. The
overall increase in depreciation was partially offset by the cessation of depreciation on ACG in Azerbaijan,
starting end of December
2023 due to the divestment agreement with SOCAR.
Equinor first quarter 2024
15
The increase in exploration expenses this quarter compared to same quarter last year was
mainly caused by expensing of well cost
related to the Bacalhau appraisal well in Brazil.
The increase in additions to PP&E, intangibles and equity accounted investments compared to
same period last year is primarily
driven by the development of Bacalhau and Raia in Brazil, combined with the acquisition of Suncor
Energy UK Limited finalised in the
second quarter of 2023.
Equinor first quarter 2024
16
EXPLORATION
& PRODUCTION USA
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Total revenues and other income
1,055
1,165
1,015
4%
Total operating expenses
(678)
(1,022)
(675)
0%
Net operating income/(loss)
377
143
340
11%
Adjusted total revenues and other income*
1,055
1,165
1,015
4%
Adjusted operating and administrative expenses*
(280)
(308)
(273)
3%
Adjusted depreciation, amortisation and net impairments*
(364)
(506)
(357)
2%
Adjusted exploration expenses*
(34)
(184)
(46)
(26%)
Adjusted operating income/(loss)*
377
168
340
11%
Additions to PP&E, intangibles and equity accounted
investments
359
332
262
37%
Operational information
Quarters
Change
E&P USA
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
E&P equity liquid and gas production (mboe/day)
350
372
347
1%
E&P entitlement liquid and gas production (mboe/day)
303
323
299
1%
Royalties
47
49
47
(0%)
Average liquids price (USD/bbl)
66.2
66.0
61.3
8%
Average internal gas price (USD/mmbtu)
1.74
1.76
2.80
(38%)
Production & Revenues
In the first quarter of 2024, production level for E&P USA was stable compared to the first quarter
of 2023.
With the start-up of the
Vito field in 2023, production from the Gulf of Mexico increased in the first quarter of
2024 compared to the same period last year,
despite natural decline on certain mature fields. The growth in offshore production was offset by lower Appalachia production which
reduced primarily due to well development activity. Towards the end of the quarter Equinor curtailed its drilling & completion activity in
its operated position in response to low gas prices, also impacting production.
Revenues benefited from higher liquids prices and higher production from the Gulf of Mexico. This was
partially offset by lower gas
prices impacting Appalachia production due to oversupply in the basin following mild winter weather.
Operating expenses and financial results
Operating expenditures and depreciation and amortisation increased slightly because of higher
offshore production impacting
transportation expenses and production cost. The increase in offshore operating expenses was offset by lower well maintenance
expenditures in the Appalachian Basin. Exploration expenditures were slightly lower in the first
quarter of 2024 due to reduced drilling
activity in the Gulf of Mexico and reduced field development expenditures on pre-sanctioned fields.
Equinor first quarter 2024
17
MARKETING, MIDSTREAM & PROCESSING
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Total revenues and other income
24,824
28,668
28,889
(14%)
Total operating expenses
(23,522)
(27,934)
(26,771)
(12%)
Net operating income/(loss)
1,303
734
2,118
(39%)
Adjusted total revenues and other income*
24,478
28,257
28,082
(13%)
Adjusted purchases* [5]
(22,026)
(26,241)
(25,344)
(13%)
Adjusted operating and administrative expenses*
(1,337)
(1,365)
(1,229)
9%
Adjusted depreciation, amortisation and net
impairments*
(227)
(227)
(232)
(2%)
Adjusted operating income/(loss)*
887
424
1,278
(31%)
- Gas and Power
529
472
769
(31%)
- Crude, Products and Liquids
458
84
510
(10%)
- Other
(101)
(132)
(1)
>100%
Additions to PP&E, intangibles and equity
accounted investments
210
218
219
(4%)
Operational information
Quarters
Change
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Liquids sales volumes (mmbl)
247.6
245.6
217.3
14%
Natural gas sales Equinor (bcm)
16.3
16.1
15.7
4%
Natural gas entitlement sales Equinor (bcm)
14.3
14.5
14.3
(0%)
Power generation (GWh) Equinor share
503
547
639
(21%)
Realised piped gas price Europe (USD/mmbtu)
9.41
13.07
18.79
(50%)
Realised piped gas price US (USD/mmbtu)
2.33
2.07
3.24
(28%)
Volumes, Pricing & Revenues
Liquids sales volumes remained at similar level compared to the fourth quarter of 2023 and increased against
same quarter of last
year mostly due to higher sales of third-party volumes.
Gas sales slightly increased compared to the fourth quarter of 2023, primarily because of third-party gas sales. Against
same quarter
last year, gas sales increased due to higher equity and third-party gas sales.
Compared to previous quarter and first quarter of last year, power generation decreased due to lower
clean spark spread.
Realised European piped gas price decreased compared to both the first quarter
of last year and prior quarter due to mild
temperatures, lower market prices explained by high storage levels and reduced demand.
The realised piped gas price in the US increased compared to the fourth quarter
of 2023 due to a short period of cold weather and
higher prices on gas sales linked to power indexes. Compared to the first quarter of
last year prices decreased due to the drop in
market prices due to sizeable storage surplus and mild weather.
Financial Results
Crude Products and Liquids contributed significantly to adjusted operating income* during the first quarter of
2024. Equinor achieved
strong results across all products by effectively capturing value through asset backed trading and realising
improved margins from
Equinor first quarter 2024
18
physical sales and financial trading. Additionally, Equinor has good results from optimisation of the shipping portfolio. Adjusted
operating income* from Gas and Power was driven by piped gas and LNG trading based on equity
and third-party volumes. Adjusted
operating income* in the Other subsegment was impacted by costs associated with developing
low-carbon projects.
Adjusted operating income* increased compared to fourth quarter of last year mainly
due to a higher result from Crude Products and
Liquids explained by higher margins from physical sales and gains from optimising the shipping
portfolio. In addition, adjusted
operating income* increased due to better result from LNG, gas trading and higher refining and methanol margins.
Adjusted operating income* in the first quarter of last year was driven by high results from LNG,
gas and power trading as well as very
strong physical crude, products and refining margins.
Net operating income includes net effects from changes in fair value related to storage and commodity derivatives
utilised to manage
price risk exposure.
Equinor first quarter 2024
19
RENEWABLES
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Revenues third party, other revenue and other
income
29
25
5
>100%
Net income/(loss) from equity accounted
investments
30
(6)
(7)
N/A
Total revenues and other income
60
20
(2)
N/A
Total operating expenses
(280)
(185)
(87)
>100%
Net operating income/(loss)
(220)
(166)
(89)
>(100%)
Adjusted total revenues and other income*
60
2
(4)
N/A
Adjusted operating and administrative expenses*
(121)
(176)
(78)
56%
Adjusted depreciation, amortisation and net
impairments*
(8)
(6)
(1)
>100%
Adjusted operating income/(loss)*
(70)
(179)
(83)
16%
Additions to PP&E, intangibles and equity
accounted investments
624
696
851
(27%)
Operational information
Quarters
Change
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Renewables power generation (GWh) Equinor
share
739
661
511
45%
Power generation
In the first quarter of 2024, offshore wind farms generated 468 GWh, with the majority coming from
Dudgeon, Sheringham Shoal and
Arkona. Onshore renewables contributed a further 271 GWh. The substantial increase in generation
compared to the same quarter of
2023 was driven by the addition of onshore power plants in Poland and Brazil, and the
successful production start of the partner
operated Mendubim solar plants, also in Brazil.
Total revenues and other income
The addition of onshore wind farms in operation in Brazil and Poland increased the positive
contribution to revenues third party, other
revenue and other income in the first quarter of 2024 compared to the prior year.
Net income/(loss) from equity accounted investments increased compared to the same quarter in the
prior year.
The positive result from assets in operation remains at the same level as in the first quarter last year, the increase in power generation
was offset by lower price. The increase in net results was driven by lower project development costs in the first
quarter of 2024
compared to last year. Bałtyk,
the offshore wind project in Poland, reached the maturation stage for capitalisation of costs from the
third quarter of 2023 and the Beacon Wind project was divested following the asset swap
transaction between Equinor and bp in the
first quarter of 2024.
Operating expenses and financial results
Higher operating activity levels from ongoing development projects combined with increased business
development expenditures
contributed to an upward trend in operating and administrative expenses compared to the same
quarter of 2023.
Net operating loss included the effect of a USD 147 million net loss following the asset swap transaction
between Equinor and bp,
under which Equinor took full ownership of the Empire Wind lease and projects and bp took
full ownership of the Beacon Wind lease
and projects. This resulted in an overall lower result for the first quarter of 2024 compared
to the same period in 2023.
Additions to PP&E, intangibles, and equity-accounted investments for the first quarter of 2024 was
lower than the corresponding
periods last year. In the first quarter of 2024, USD 28 million for onshore renewables and USD 597 million was allocated for offshore
wind projects, primarily related to the acquisition of full ownership of Empire Wind lease
and projects and investment related to
projects in Europe.
Equinor first quarter 2024
20
CONDENSED INTERIM FINANCIAL STATEMENTS
First quarter 2024
CONSOLIDATED STATEMENT
OF INCOME
Quarters
(unaudited, in USD million)
Note
Q1 2024
Q4 2023
Q1 2023
Revenues
4
25,089
28,843
29,210
Net income/(loss) from equity accounted investments
33
(31)
43
Other income
14
242
(30)
Total revenues and other income
2
25,135
29,054
29,224
Purchases [net of inventory variation]
(11,922)
(13,804)
(11,235)
Operating expenses
3
(2,630)
(2,875)
(2,722)
Selling, general and administrative expenses
(341)
(403)
(304)
Depreciation, amortisation and net impairments
(2,345)
(2,821)
(2,200)
Exploration expenses
(266)
(402)
(246)
Total operating expenses
2
(17,504)
(20,306)
(16,707)
Net operating income/(loss)
2
7,631
8,748
12,517
Interest income and other financial income
560
661
590
Interest expenses and other financial expenses
(416)
(368)
(463)
Other financial items
222
296
1,061
Net financial items
5
366
589
1,189
Income/(loss) before tax
7,998
9,337
13,707
Income tax
6
(5,325)
(6,729)
(8,741)
Net income/(loss)
2,672
2,608
4,966
Attributable to equity holders of the company
2,668
2,603
4,962
Attributable to non-controlling interests
5
5
4
Basic earnings per share (in USD)
0.91
0.88
1.59
Diluted earnings per share (in USD)
0.91
0.88
1.59
Weighted average number of ordinary shares outstanding
(in millions)
2,938
2,954
3,118
Weighted average number of ordinary shares outstanding
diluted (in millions)
2,942
2,961
3,124
Equinor first quarter 2024
21
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
Quarters
(unaudited, in USD million)
Q1 2024
Q4 2023
Q1 2023
Net income/(loss)
2,672
2,608
4,966
Actuarial gains/(losses) on defined benefit pension
plans
513
(894)
54
Income tax effect on income and expenses recognised
in OCI
1)
(117)
211
(16)
Items that will not be reclassified to the Consolidated
statement of income
396
(683)
38
Foreign currency translation effects
(1,094)
1,169
(1,426)
Share of OCI from equity accounted investments
8
(124)
(65)
Items that may be subsequently reclassified to the Consolidated
statement of income
(1,087)
1,045
(1,491)
Other comprehensive income/(loss)
(691)
362
(1,453)
Total comprehensive income/(loss)
1,982
2,969
3,512
Attributable to the equity holders of the company
1,977
2,965
3,508
Attributable to non-controlling interests
5
5
4
1) Other comprehensive income (OCI).
Equinor first quarter 2024
22
CONSOLIDATED BALANCE SHEET
At 31 March
At 31 December
(in USD million)
Note
2024 (unaudited)
2023 (audited)
ASSETS
Property, plant and equipment
2
57,377
58,822
Intangible assets
3
5,646
5,709
Equity accounted investments
2,314
2,508
Deferred tax assets
7,647
7,936
Pension assets
1,455
1,260
Derivative financial instruments
539
559
Financial investments
3,383
3,441
Prepayments and financial receivables
7
1,079
1,291
Total non-current assets
79,441
81,525
Inventories
3,534
3,814
Trade and other receivables
1)
10,944
13,204
Prepayments and financial receivables
1)
3,743
3,729
Derivative financial instruments
1,137
1,378
Financial investments
27,534
29,224
Cash and cash equivalents
2)
9,737
9,641
Total current assets
56,629
60,990
Assets classified as held for sale
3
1,129
1,064
Total assets
137,199
143,580
EQUITY AND LIABILITIES
Shareholders' equity
50,067
48,490
Non-controlling interests
14
10
Total equity
50,081
48,500
Finance debt
5
22,039
22,230
Lease liabilities
2,214
2,290
Deferred tax liabilities
12,913
13,345
Pension liabilities
3,658
3,925
Provisions and other liabilities
7
13,612
15,304
Derivative financial instruments
2,040
1,795
Total non-current liabilities
56,477
58,890
Trade and other payables
3)
8,983
8,841
Provisions and other liabilities
3)
3,159
3,029
Current tax payable
6
12,594
12,306
Finance debt
5, 7
3,371
5,996
Lease liabilities
1,287
1,279
Dividends payable
0
2,649
Derivative financial instruments
808
1,619
Total current liabilities
30,201
35,719
Liabilities directly associated with the assets classified
as held for sale
3
441
471
Total liabilities
87,118
95,080
Total equity and liabilities
137,199
143,580
1) Disaggregated from the line-item Trade and other receivables
in previously issued financial statements.
Equinor first quarter 2024
23
2) Includes collateral deposits of USD 1.5 billion
for 31 March 2024 related to certain requirements
set out by exchanges where Equinor is
participating. The corresponding figure for 31 December
2023 is USD 1.6 billion.
3) Disaggregated from the line-item Trade, other payables and
provisions in previously issued
financial statements.
Equinor first quarter 2024
24
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
(unaudited, in USD million)
Share
capital
Additional
paid-in
capital
Retained
earnings
Foreign
currency
translation
reserve
OCI from
equity
accounted
investments
Share-
holders'
equity
Non-
controlling
interests
Total equity
At 1 January 2023
1,142
3,041
58,236
(8,855)
424
53,988
1
53,989
Net income/(loss)
4,962
4,962
4
4,966
Other comprehensive
income/(loss)
38
(1,426)
(65)
(1,453)
(1,453)
Total comprehensive
income/(loss)
3,512
Dividends
0
0
Share buy-back
(331)
(331)
(331)
Other equity transactions
0
0
At 31 March
2023
1,142
2,710
63,236
(10,281)
359
57,165
5
57,170
At 1 January 2024
1,101
0
56,521
(9,442)
310
48,490
10
48,500
Net income/(loss)
2,668
2,668
5
2,672
Other comprehensive
income/(loss)
396
(1,094)
8
(691)
(691)
Total comprehensive
income/(loss)
1,982
Dividends
0
0
Share buy-back
1)
(396)
(396)
(396)
Other equity transactions
(4)
(4)
(1)
(5)
At 31 March
2024
1,101
0
59,185
(10,536)
318
50,067
14
50,081
1) For more information see note 8 Capital distribution.
Equinor first quarter 2024
25
CONSOLIDATED STATEMENT
OF CASH FLOWS
Quarters
(unaudited, in USD million)
Note
Q1 2024
Q4 2023
Q1 2023
Income/(loss) before tax
7,998
9,337
13,707
Depreciation, amortisation and net impairments,
including exploration write-
offs
2,426
2,849
2,291
(Gains)/losses on foreign currency transactions and
balances
5
(303)
289
(955)
(Gains)/losses on sale of assets and businesses
3
130
(253)
233
(Increase)/decrease in other items related to operating
activities
1), 2)
(882)
(734)
(324)
(Increase)/decrease in net derivative financial instruments
127
(694)
327
Interest received
406
399
277
Interest paid
(212)
(302)
(251)
Cash flows provided by operating activities before
taxes paid and working
capital items
9,689
10,890
15,305
Taxes paid
(3,849)
(8,103)
(5,589)
(Increase)/decrease in working capital
3,181
(51)
5,155
Cash flows provided by operating activities
9,021
2,736
14,871
Cash (used)/received in business combinations
0
(40)
(252)
Capital expenditures and investments
3
(2,483)
(3,031)
(2,051)
(Increase)/decrease in financial investments
507
(3,010)
(5,108)
(Increase)/decrease in derivative financial instruments
(46)
261
(803)
(Increase)/decrease in other interest-bearing items
(210)
92
63
Proceeds from sale of assets and businesses
3)
3
60
154
47
Cash flows provided by/(used in) investing activities
(2,172)
(5,574)
(8,104)
Repayment of finance debt
(1,900)
(342)
(2,176)
Repayment of lease liabilities
(373)
(418)
(332)
Dividends paid
(2,649)
(2,706)
(2,861)
Share buy-back
(550)
(518)
(461)
Net current finance debt and other financing activities
2)
(1,156)
1,813
873
Cash flows provided by/(used in) financing activities
(6,627)
(2,171)
(4,958)
Net increase/(decrease) in cash and cash equivalents
222
(5,009)
1,809
Effect of exchange rate changes on cash and cash equivalents
(181)
230
(8)
Cash and cash equivalents at the beginning
of the period (net of overdraft)
9,641
14,420
15,579
Cash and cash equivalents at the end of the
period (net of overdraft)
4)
9,682
9,641
17,380
1)
The line item includes a fair value gain related to inventory
of USD 476 million in the first quarter 2024.
The corresponding amount in the
fourth quarter 2023 was a fair value gain of USD
204 million and in first quarter 2023 a
fair value loss of USD 20 million.
2)
Cash flows related to variation margin collaterals on
over-the-counter (OTC) commodity derivatives
form part of Equinor's principal
revenue-making activities. From 1 January 2024, these
cash flows are therefore presented within the
line-item (Increase)/decrease in
other items related to operating activities. In previous
periods these cash flows have been presented
within the line-item Net current
finance debt and other financing activities. Comparative
figures have not been restated due to
materiality.
3)
The line item includes cash consideration net of
cash disposed,
related to the disposal of Equinor Energy Ireland
Limited at closing date
31 March 2023. See note 3 Acquisitions and disposals
for more information.
4)
At 31 March 2024 cash and cash equivalents net overdraft
were 55. At 31 December 2023 cash and cash
equivalents net overdraft were
zero.
Equinor first quarter 2024
26
Notes to the Condensed interim financial statements
1 Organisation and basis of preparation
Organisation and principal activities
Equinor Group (Equinor) consists of Equinor ASA and its subsidiaries. Equinor ASA is incorporated
and domiciled in Norway and
listed on the Oslo Børs (Norway) and the New York Stock Exchange (USA). The registered office address is Forusbeen 50, N-4035,
Stavanger, Norway.
The objective of Equinor is to develop, produce and market various forms of energy and derived
products and services, as well as
other businesses. The activities may also be carried out through participation in or cooperation with
other companies. Equinor Energy
AS, a 100% owned operating subsidiary of Equinor ASA and owner of all of Equinor's
oil and gas activities and net assets on the
Norwegian continental shelf, is a co-obligor or guarantor of certain debt obligations of Equinor ASA.
Equinor's condensed interim financial statements for the first quarter of 2024 were authorised for
issue by the board of directors on 24
April 2024.
Basis of preparation
These condensed interim financial statements are prepared in accordance with IAS 34 Interim Financial
Reporting as issued by the
International Accounting Standards Board (IASB) and as adopted by the European Union (EU).
The condensed interim financial
statements do not include all the information and disclosures required by IFRS® Accounting Standards for a
complete set of financial
statements and should be read in conjunction with the Consolidated annual financial statements for
2023. IFRS Accounting Standards
as adopted by the EU differs in certain respects from IFRS Accounting Standards as issued by the IASB,
however the differences do
not impact Equinor's financial statements for the periods presented.
As a result of rounding differences, numbers or percentages may not add up to the total.
The condensed interim financial statements are unaudited.
Accounting policies
The accounting policies applied in the preparation of the condensed interim financial statements are consistent with
those used in the
preparation of Equinor’s consolidated annual financial statements for 2023. A description
of the material accounting policies is
included in Equinor’s consolidated annual financial statements for 2023. When determining
fair value, there have been no changes to
the valuation techniques or models and Equinor applies the same sources of input and the
same criteria for categorisation in the fair
value hierarchy as disclosed in the consolidated annual financial statements for 2023.
For information about IFRS Accounting Standards, amendments to IFRS Accounting Standards
and IFRIC® Interpretations effective
from 1 January 2024, that could affect the consolidated financial statements, please refer to note
2 in Equinor’s consolidated financial
statements for 2023. None of the amendments to IFRS Accounting Standards effective from 1 January 2024 has
had a significant
impact on the condensed interim financial statements. Equinor has not early adopted any IFRS Accounting Standards,
amendments
to IFRS Accounting Standards or IFRIC Interpretations issued, but not yet effective.
Use of judgements and estimates
The preparation of financial statements in conformity with IFRS Accounting Standards requires management
to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income
and expenses. The estimates and associated assumptions are reviewed on an on-going basis and are
based on historical experience
and various other factors that are believed to be reasonable under the circumstances. These estimates and
assumptions form the
basis for making the judgments about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual
results may differ from these estimates. Please refer to note 2 in Equinor’s consolidated financial
statements for 2023 for more
information about accounting judgement and key sources of estimation uncertainty.
Equinor first quarter 2024
27
2 Segments
Equinor’s operations are managed through operating segments identified on the basis
of those components of Equinor that are
regularly reviewed by the chief operating decision maker, Equinor's Corporate Executive Officer (CEO). The reportable segments
Exploration & Production Norway (E&P Norway), Exploration & Production International (E&P
International), Exploration & Production
USA (E&P USA), Marketing, Midstream & Processing (MMP) and Renewables (REN)
correspond to the operating segments. The
operating segments Projects, Drilling & Procurement (PDP), Technology, Digital & Innovation (TDI) and Corporate staff and functions
are aggregated into the reportable segment Other based on materiality. The majority of the costs in PDP and TDI is allocated to the
three Exploration & Production segments, MMP and REN.
The accounting policies of the reporting segments equal those applied in these condensed interim financial
statements, except for the
line-item Additions to PP&E, intangibles and equity accounted investments in which movements
related to changes in asset retirement
obligations are excluded as well as provisions for onerous contracts which reflect only obligations
towards group external parties. The
measurement basis of segment profit is net operating income/(loss). Deferred tax assets, pension
assets, non-current financial assets,
total current assets and total liabilities are not allocated to the segments. Transactions between the segments, mainly from the
sale of
crude oil, gas, and related products, are performed at defined internal prices which have been derived from market
prices. The
transactions are eliminated upon consolidation.
First quarter 2024
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total Group
(in USD million)
Revenues third party
55
183
67
24,733
26
25
0
25,089
Revenues and other income inter-segment
7,852
1,470
968
92
3
8
(10,393)
0
Net income/(loss) from equity accounted
investments
0
3
0
(1)
30
0
0
33
Other income
(28)
(1)
20
0
0
23
0
14
Total revenues and other income
7,879
1,655
1,055
24,824
60
55
(10,393)
25,135
Purchases [net of inventory variation]
0
34
0
(21,968)
0
0
10,012
(11,922)
Operating, selling, general and
administrative expenses
(866)
(395)
(280)
(1,326)
(272)
(46)
213
(2,971)
Depreciation and amortisation
(1,173)
(529)
(364)
(227)
(8)
(36)
0
(2,337)
Net impairment (losses)/reversals
0
0
0
0
0
(7)
0
(7)
Exploration expenses
(84)
(148)
(34)
0
0
0
0
(266)
Total operating expenses
(2,123)
(1,039)
(678)
(23,522)
(280)
(89)
10,226
(17,504)
Net operating income/(loss)
5,756
616
377
1,303
(220)
(34)
(167)
7,631
Additions to PP&E, intangibles and equity
accounted investments
1,372
756
359
210
624
40
0
3,361
Balance sheet information
Equity accounted investments
4
0
0
777
1,475
55
2
2,314
Non-current segment assets
27,072
17,919
10,995
3,829
2,215
993
0
63,023
Non-current assets not allocated to
segments
14,104
Total non-current assets
79,441
Assets held for sale
0
1,129
0
0
0
0
0
1,129
Equinor first quarter 2024
28
Fourth quarter 2023
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total Group
(in USD million)
Revenues third party
72
297
76
28,372
5
21
0
28,843
Revenues and other income inter-segment
9,780
1,597
1,089
309
4
8
(12,787)
0
Net income/(loss) from equity accounted
investments
0
(5)
0
(13)
(6)
(8)
0
(31)
Other income
224
0
0
0
17
0
0
242
Total revenues and other income
10,076
1,889
1,165
28,668
20
22
(12,787)
29,054
Purchases [net of inventory variation]
0
(45)
0
(26,330)
0
0
12,570
(13,804)
Operating, selling, general and
administrative expenses
(1,057)
(540)
(308)
(1,384)
(180)
17
173
(3,279)
Depreciation and amortisation
(1,144)
(603)
(506)
(227)
(6)
(31)
0
(2,518)
Net impairment (losses)/reversals
0
(310)
0
7
0
0
0
(303)
Exploration expenses
(138)
(55)
(208)
0
0
0
0
(402)
Total operating expenses
(2,339)
(1,553)
(1,022)
(27,934)
(185)
(15)
12,743
(20,306)
Net operating income/(loss)
7,737
336
143
734
(166)
7
(43)
8,748
Additions to PP&E, intangibles and equity
accounted investments
1,577
923
332
218
696
25
0
3,770
Balance sheet information
Equity accounted investments
3
0
0
783
1,665
57
0
2,508
Non-current segment assets
28,915
17,977
11,049
3,997
1,575
1,018
0
64,530
Non-current assets not allocated to
segments
14,487
Total non-current assets
81,525
Assets held for sale
0
1,064
0
0
0
0
0
1,064
In the fourth quarter of 2023, Equinor recognised
impairments in the E&P International segment to an
amount of USD 310 million, following the
held for sale classification of its interest in Azerbaijan
assets. Refer to note 3 for additional details.
Equinor first quarter 2024
29
First quarter 2023
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total Group
(in USD million)
Revenues third party
49
329
61
28,744
3
25
0
29,210
Revenues and other income inter-segment
12,092
1,209
954
82
0
9
(14,346)
0
Net income/(loss) from equity accounted
investments
0
11
0
40
(7)
0
0
43
Other income
(97)
0
0
23
3
41
0
(30)
Total revenues and other income
12,044
1,548
1,015
28,889
(2)
75
(14,346)
29,224
Purchases [net of inventory variation]
0
16
0
(25,358)
0
0
14,107
(11,235)
Operating, selling, general and
administrative expenses
(977)
(659)
(273)
(1,178)
(86)
(133)
281
(3,025)
Depreciation and amortisation
(1,115)
(461)
(357)
(232)
(1)
(33)
0
(2,198)
Net impairment (losses)/reversals
0
0
0
(2)
0
0
0
(2)
Exploration expenses
(137)
(64)
(46)
0
0
0
0
(246)
Total operating expenses
(2,229)
(1,167)
(675)
(26,771)
(87)
(166)
14,388
(16,707)
Net operating income/(loss)
9,816
382
340
2,118
(89)
(91)
42
12,517
Additions to PP&E, intangibles and equity
accounted investments
1,317
451
262
219
851
78
0
3,179
Non-current assets by country
At 31 March
At 31 December
(in USD million)
2024
2023
Norway
30,928
32,977
USA
12,872
12,587
Brazil
10,936
10,871
UK
5,513
5,535
Canada
1,112
1,157
Angola
1,084
1,103
Denmark
971
973
Argentina
656
648
Poland
572
447
Algeria
443
474
Other
251
265
Total non-current assets
1)
65,337
67,038
1) Excluding deferred tax assets, pension assets
and non-current financial assets. Non-current assets
are attributed to country of operations.
3 Acquisitions and disposals
Acquisition and disposals
Swap of US Offshore Wind assets
On 24 January 2024, Equinor entered into a swap agreement with bp to acquire bp’s 50% share and take full
ownership of Empire
Offshore Wind Holdings LLC, including the Empire Wind lease and projects (Empire Wind), in
exchange for its 50% share in Beacon
Wind Holdings LLC, including the Beacon Wind lease and projects (Beacon Wind). Equinor
has also agreed to acquire bp's 50%
interest in the South Brooklyn Marine Terminal (SBMT) lease. Based on the agreement, Equinor controls and has consolidated
Empire Wind and SBMT from the first quarter of 2024 and has divested its 50% share of Beacon
Wind. The swap of Empire Wind and
Beacon Wind was formally closed on 4 April. The acquisitions have been accounted for as asset
acquisitions, and previous holdings
Equinor first quarter 2024
30
have not been revalued. The swap resulted in a combined loss of USD 147 million recognised
in the REN segment and presented in
the line item Operating expenses in the Consolidated statement of income.
Held for sale
Divestment of interest in Azerbaijan
On 22 December 2023, Equinor entered into an agreement with
the State Oil Company of the Republic of Azerbaijan
(SOCAR)
to sell
its interest in its Azerbaijan assets. The assets comprise a 7.27% non-operated interest in the Azeri Chirag
Gunashli (ACG) oil fields in
the
Azerbaijan
sector
of
the
Caspian
Sea,
8.71%
interest
in
the
Baku-Tbilisi-Ceyhan (BTC)
pipeline
and
50%
in
the
Karabagh
oil
field. Closing is
expected during
2024 subject
to regulatory
and contractual
approvals. The
assets have
been classified
as held
for
sale in the fourth quarter 2023.
4 Revenues
Revenues from contracts with customers by geographical areas
When attributing the line item Revenues from contracts with customers for the first quarter of 2024 to the
country of the legal entity
executing the sale, Norway constitutes 79% and the USA constitutes 18% of such revenues (77%
and 19%, respectively, for the
fourth quarter of 2023). For the first quarter of 2023, Norway and the USA constituted 84%
and 12% of such revenues, respectively.
Revenues from contracts with customers are mainly reflecting such revenues from the reporting segment
MMP.
Revenues from contracts with customers and other revenues
Quarters
(in USD million)
Q1 2024
Q4 2023
Q1 2023
Crude oil
14,266
15,695
12,112
Natural gas
5,060
6,597
10,457
- European gas
4,177
5,796
9,228
- North American gas
305
298
397
- Other incl. Liquefied natural gas
578
503
832
Refined products
2,224
2,710
2,477
Natural gas liquids
2,097
2,087
2,383
Power
2)
563
504
852
Transportation
369
305
453
Other sales
2)
85
447
107
Revenues from contracts with customers
24,663
28,345
28,841
Total other revenues
1)
426
498
370
Revenues
25,089
28,843
29,210
1) This item mainly relates to commodity derivatives and
change in fair value, less cost to sell, of commodity
inventories
held for trading purposes.
2) The line item Power has been disaggregated
from the line item Other sales in previously
issued financial reports.
Equinor first quarter 2024
31
5 Financial items
Quarters
(in USD million)
Q1 2024
Q4 2023
Q1 2023
Net foreign currency exchange gains/(losses)
303
(289)
955
Interest income and other financial income
560
661
590
Gains/(losses) on financial investments
(7)
139
32
Gains/(losses) other derivative financial instruments
(74)
445
74
Interest and other finance expenses
(416)
(368)
(463)
Net financial items
366
589
1,189
The decrease in Interest income and other financial income in first quarter compared to previous quarter mainly
relates to lower
interest rates and reduced portfolio.
Equinor has a US Commercial paper programme available with a limit of USD 5 billion. As
of 31 March 2024, USD 0.4 billion were
utilised compared to USD 1.9 billion utilised as of 31 December 2023.
6 Income taxes
Quarters
(in USD million)
Q1 2024
Q4 2023
Q1 2023
Income/(loss) before tax
7,998
9,337
13,707
Income tax
(5,325)
(6,729)
(8,741)
Effective tax rate
66.6%
72.1%
63.8%
The effective tax rate for the first quarter of 2024 was significantly influenced by low share of income from the
Norwegian continental
shelf and high effect from uplift relative to income before tax.
The effective tax rate for the first quarter of 2023 was significantly influenced by low share of income
from the Norwegian continental
shelf and currency effects in entities that are taxable in other currencies than the functional currency.
Equinor first quarter 2024
32
7 Provisions, commitments and contingent items
Asset retirement obligation
Equinor's estimated asset retirement obligations (ARO) have decreased by approximately USD 1 billion to USD 11.4 billion at 31
March 2024 compared to year-end 2023, mainly due to increased discount rates and strengthening of
USD versus NOK. Changes in
ARO are reflected within Property, plant and equipment and Provisions and other liabilities in the Consolidated balance sheet.
Litigation and claims
During the normal course of its business, Equinor is involved in legal and other proceedings,
and several unresolved claims are
currently outstanding. The ultimate liability or asset in respect of such litigation and claims
cannot be determined at this time. Equinor
has provided in its Condensed interim financial statements for probable liabilities related to
litigation and claims based on the
company’s best judgement. Equinor does not expect that its financial position, results of operations or cash
flows will be materially
affected by the resolution of these legal proceedings.
8 Capital distribution
Dividend for the first quarter 2024
On 24 April 2024, the Board of Directors resolved to declare an ordinary cash dividend for the first quarter
of 2024 of USD 0.35 per
share and an extraordinary cash dividend of USD 0.35 per share. The Equinor shares will
be traded ex-dividend 16 August 2024 on
the Oslo Børs and 19 August 2024 for ADR holders on the New York Stock Exchange. Record date will be 19 August 2024 and
payment date will be 28 August 2024.
Share buy- back programme 2024
The Board of Directors has announced a two-year share buy-back programme for
2024-2025 of USD 10-12 billion in total, with up to
USD 6 billion for 2024, including shares to be redeemed from the Norwegian State.
In February 2024, Equinor launched the first
tranche of up to USD 1.2 billion, including shares to be redeemed from the Norwegian State,
and entered into an irrevocable
agreement with a third-party to purchase shares for up to USD 396 million in the market. Of
this first tranche, shares for USD 389
million have been purchased in the market and settled at 31 March 2024, whereas USD 396 million
has been recognised as reduction
in equity. The market execution of the first tranche was completed in April 2024. The purpose of the share buy-back programme is to
reduce the issued share capital of the company, and all shares repurchased in this first tranche in 2024 will be cancelled. According to
an agreement between Equinor and the Norwegian State, a proportionate number of the
Norwegian State's shares will be redeemed
and cancelled at the annual general meeting in May 2024, ensuring that the State's ownership
interest in Equinor remains unchanged
at 67%.
On 24 April 2024, the Board of Directors resolved the commencement of the second tranche of the
share buy-back programme for
2024 of a total of up to USD 1.6 billion, including shares to be redeemed from the Norwegian State.
The second tranche is subject to
approval at the general meeting and will end no later than 22 July 2024.
Equity impact of share buy-back programmes (in USD million)
Q1 2024
Q1 2023
First tranche
396
330
Total
396
330
9 Subsequent events
Swap of US onshore assets
On 15 April, Equinor announced a swap transaction with EQT ARO LLC (EQT). Under the agreement, Equinor will sell its 100% interest in
the
Marcellus
and
Utica
shale
formations
in
the
Appalachian
Basin,
located
in
southeastern
Ohio,
and
transfer
the
operatorship
to
EQT.
In
exchange,
Equinor
will
acquire
40%
of
EQT’s
non-operated
working
interest
in
the
Northern
Marcellus
shale
formation
in
Pennsylvania.
Equinor will
pay a
cash consideration
of USD
500 million
to EQT
to
balance the
overall transaction.
Following the
transaction, Equinor
will
increase its average working interest from 15.7% to 25.7% in certain Chesapeake-operated Northern Marcellus gas units. Closing is subject to
approval by relevant authorities and is expected
in the second quarter of 2024. The swap will be
recognised in the E&P USA segment.
Equinor first quarter 2024
33
SUPPLEMENTARY
DISCLOSURES
Exchange rates
Quarters
Change
Exchange rates
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
USD/NOK average daily exchange rate
10.5094
10.8474
10.2439
3%
USD/NOK period-end exchange rate
10.8011
10.1724
10.4772
3%
EUR/USD average daily exchange rate
1.0858
1.0747
1.0728
1%
EUR/USD period-end exchange rate
1.0816
1.1050
1.0875
(1%)
USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Non-GAAP financial measures are defined as numerical measures that either exclude
or include amounts that are not excluded or
included in the comparable measures calculated and presented in accordance with GAAP (i.e.,
IFRS Accounting Standards in the
case of Equinor). The following financial measures included in this report may be considered
non-GAAP financial measures:
Adjusted operating income (previously named Adjusted earnings)
is based on net operating income/(loss) and adjusts for certain
items affecting the income for the period to separate out effects that management considers may not be well correlated to
Equinor’s
underlying operational performance in the individual reporting period. Management believes adjusted
operating income provides an
indication of Equinor’s underlying operational performance and facilitates comparison
of operational trends between periods. The
name of this measure was changed in 2024 to eliminate confusion regarding the basis of the
calculation; additionally, one adjusting
item was removed from the calculation of the measure, as detailed below in the Amended
principles section.
Adjusted operating income after tax
(previously named Adjusted earnings after tax)
– equals the sum of net operating
income/(loss) less income tax in reporting segments and includes adjustments to net operating income/(loss) to take
the applicable
marginal tax into consideration. The name of this measure was changed in 2024 in line with
the change of the name of the pre-tax
measure above
.
Adjusted operating income after tax excludes net financial items and the associated
tax effects on net financial items.
It is based on adjusted operating income less the tax effects on all elements included in adjusted operating income
(or calculated tax
on net operating income and on each of the adjusting items using an estimated marginal
tax rate). In addition, tax effects related to tax
exposure items not related to the individual reporting period are excluded from adjusted operating
income after tax. Management
believes adjusted operating income after tax provides an indication of Equinor’s underlying
operational performance after tax and
facilitates comparisons of operational trends after tax between periods as it reflects the tax charge
associated with operational
performance excluding the impact of financing. Certain net USD denominated financial positions are held by group
companies that
have a USD functional currency that is different from the currency in which the taxable income is measured.
As currency exchange
rates change between periods, the basis for measuring net financial items for IFRS
Accounting Standards will change
disproportionally with taxable income which includes exchange gains and losses from translating
the net USD denominated financial
positions into the currency of the applicable tax return. Therefore, the effective tax rate may be
significantly higher or lower than the
statutory tax rate for any given period. Adjusted taxes included in adjusted operating income
after tax should not be considered
indicative of the amount of current or total tax expense (or taxes payable) for the period.
Adjusted net income
is based on net income/(loss) and provides additional transparency to Equinor’s
underlying financial
performance by also including net financial items and the associated tax effects. This measure includes
adjustments made to arrive at
adjusted operating income after tax, in addition to specific adjustments related to net financial items. Management
believes this
measure provides an indication of Equinor’s underlying financial performance including
the impact from financing and facilitates
comparison of trends between periods.
Adjusted Earnings Per Share (Adjusted EPS)
is computed by dividing Adjusted net income by the weighted average number of
shares outstanding during the period. Earnings per share is a metric that is frequently
used by investors, analysts and other parties to
assess a company's profitability per share. Management believes this measure provides an indication
of Equinor’s underlying financial
performance including the impact from financing and facilitates comparison of trends between
periods.
Management believes the above measures provides an indication of Equinor’s underlying
operational and financial performance and
facilitates the comparison of trends between periods.
Equinor first quarter 2024
34
The above measures are supplementary measures and should not be viewed in isolation
or as substitutes for net operating
income/(loss), net income/(loss) and earnings per share, which are the most directly comparable IFRS Accounting
Standards
measures. The reconciliation tables later in this report reconcile the above non-GAAP measures to the most
directly comparable IFRS
Accounting Standards measure or measures. There are material limitations associated with the
above measures compared with the
IFRS Accounting Standards measures, as these non-GAAP measures do not include
all the items of revenues/gains or
expenses/losses of Equinor that are required to evaluate its profitability on an overall basis. The
non-GAAP measures are only
intended to be indicative of the underlying developments in trends of our on-going operations.
Amended principles for Adjusted operating income with effect from the first quarter of
2024:
Equinor has made the following changes to the items adjusted for within Adjusted operating
income:
With effect from the first quarter of 2024, Equinor no longer adjusts for over-/underlift to arrive at adjusted operating income. Over-
/underlift is presented using the sales method. The sales revenues and associated
costs are reflected in adjusted operating income
when the physical volumes are lifted and sold rather than when they are produced, in line with
IFRS Accounting Standards. Removing
this adjustment is the result of a comprehensive materiality assessment and an effort to streamline our reporting.
This change is part
of our ongoing commitment to improve the alternative performance measures we present, ensuring that
the adjustments are
meaningful to users of the financial statements and supplementary information.
These changes have been applied retrospectively to the comparative figures. This change only affects the E&P
Norway and E&P
International reporting segments and does not impact the comparative figures of other segments.
Impact of change
Q1 2023
Q4 2023
E&P Norway
As reported
Impact
Restated
As reported
Impact
Restated
Adjusted total revenues and other income
12,144
(3)
12,141
9,871
(16)
9,855
Over-/underlift
3
(3)
-
16
(16)
-
Adjusted operating and administrative expenses
(976)
(1)
(977)
(1,018)
(40)
(1,057)
Over-/underlift
1
(1)
-
40
(40)
-
Adjusted operating income/(loss)
9,916
(4)
9,912
7,571
(56)
7,515
Adjusted operating income/(loss) after tax
2,214
(1)
2,213
1,570
(12)
1,558
Impact of change
Q1 2023
Q4 2023
E&P International
As reported
Impact
Restated
As reported
Impact
Restated
Adjusted total revenues and other income
1,555
(95)
1,460
1,952
(86)
1,867
Over-/underlift
95
(95)
-
86
(86)
-
Adjusted operating and administrative expenses
(442)
42
(400)
(559)
19
(540)
Over-/underlift
(42)
42
-
(19)
19
-
Adjusted operating income/(loss)
614
(53)
560
690
(67)
623
Adjusted operating income/(loss) after tax
330
(34)
295
255
(33)
222
Impact of change
Q1 2023
Q4 2023
Equinor group
As reported
Impact
Restated
As reported
Impact
Restated
Adjusted total revenues and other income
28,520
(98)
28,423
28,483
(102)
28,381
Over-/underlift
98
(98)
-
102
(102)
-
Adjusted operating and administrative expenses
(2,849)
41
(2,809)
(3,235)
(21)
(3,256)
Over-/underlift
(41)
41
-
21
(21)
-
Adjusted operating income/(loss)
11,973
(57)
11,916
8,681
(123)
8,558
Adjusted operating income/(loss) after tax
3,514
(35)
3,479
1,879
(46)
1,833
Effective tax rates on adjusted operating income
71%
0%
71%
78%
0%
79%
No other line items or segments were affected by the
change.
Adjusted operating income adjust for the following items:
Equinor first quarter 2024
35
●
Changes in fair
value of derivatives:
In the ordinary
course of business,
Equinor enters into commodity
derivative contracts to
manage the price risk exposure relating to future sale and purchase contracts. These commodity derivatives are
measured at fair
value at each
reporting date, with
the movements in
fair value recognised
in the income
statement. By contrast,
the related sale
and purchase contracts are
not recognised until the
transaction occurs resulting in
timing differences. Therefore, with
effect from
the first
quarter of
2023, the
unrealised movements
in the
fair value
of these
commodity derivative
contracts are
excluded from
adjusted operating
income and deferred
until the
time of
the physical
delivery to
minimise the effect
of these
timing differences.
Further,
embedded
derivatives
within
certain
gas
contracts
and
contingent
consideration
related
to
historical
divestments
are
carried at fair value. Any
accounting impacts resulting from such changes
in fair value are also
excluded from adjusted operating
income, as these fluctuations are not indicative of the underlying performance of the business.
●
Periodisation of inventory hedging effect:
Equinor enters into derivative contracts to manage price risk exposure relating to its
commercial storage.
These derivative
contracts are
carried at
fair value
while the
inventories are
accounted for
at the
lower of
cost or market price.
An adjustment is made to
align the valuation principles
of inventories with related
derivative contracts. The
adjusted
valuation
of
inventories
is
based
on
the
forward
price
at
the
expected
realisation
date.
This
is
so
that
the
valuation
principles between commercial storages and derivative contracts are better aligned.
●
The
operational storage
is not
hedged and
is not
part of
the trading
portfolio. Cost
of goods
sold is
measured based
on the
FIFO (first-in, first-out)
method, and includes realised
gains or losses
that arise due to
changes in market prices.
These gains or
losses will fluctuate from one period to another and are not considered part of the underlying
operations for the period.
●
Impairment and
reversal of
impairment
are excluded
from adjusted
operating income
since they
affect
the economics
of an
asset
for
the
lifetime
of
that
asset,
not
only
the
period
in
which
it
is
impaired, or
the
impairment
is
reversed.
Impairment
and
reversal
of
impairment
can
impact
both
the
exploration
expenses
and
the
depreciation,
amortisation
and
net
impairment
line
items.
●
Gain or
loss from
sales of
assets
is eliminated
from the
measure since
the gain
or loss
does not
give an
indication of
future
performance or
periodic performance;
such a
gain or
loss is
related to
the cumulative
value creation
from the
time the
asset is
acquired until it is sold.
●
Eliminations (Internal unrealised profit
on inventories):
Volumes derived
from equity oil inventory
vary depending on several
factors and
inventory strategies,
i.e., level
of crude
oil in
inventory,
equity oil
used in
the refining
process and
level of
in-transit
cargoes. Internal profit related to volumes sold between entities within the group, and
still in inventory at period end, is eliminated
according
to
IFRS
Accounting
Standards
(write
down
to
production
cost).
The
proportion
of
realised
versus
unrealised
gain
fluctuates
from one
period
to another
due
to
inventory strategies
and
consequently impact
net
operating income/(loss).
Write-
down to production
cost is not
assessed to be
a part of
the underlying operational performance,
and elimination of
internal profit
related to equity volumes is excluded in adjusted operating income.
●
Other
items
of income
and
expense
are
adjusted
when
the
impacts
on
income
in
the
period
are
not
reflective of
Equinor’s
underlying operational performance in
the reporting period.
Such items may be
unusual or infrequent
transactions, but they
may
also include transactions
that are significant
which would not
necessarily qualify as
either unusual or
infrequent. However,
other
items
adjusted do
not
constitute normal,
recurring income
and operating
expenses
for the
company.
Other items
are
carefully
assessed and can include transactions such as provisions related to reorganisation, early retirement,
etc.
●
Change in accounting policy
is adjusted when the impacts on income in the period are unusual or infrequent, and not reflective
of Equinor’s underlying operational performance in the reporting period.
Adjusted net income incorporates the adjustments above, as well as the following items
impacting net financial items:
●
Changes
in
fair
value
of
financial
derivatives
used
to
hedge
interest
bearing
instruments.
Equinor
enters
into
financial
derivative contracts to
manage interest rate
risk on
long term interest-bearing
liabilities including bonds
and financial loans.
The
financial
derivative
contracts
(hedging
instruments)
are
measured
at
fair
value
at
each
reporting
date,
with
movements in
fair
value
recognised
in
the
income
statement.
The
long
term
interest-bearing
labilities
are
measured
at
amortised
cost
and
not
remeasured at
fair value at
each reporting date.
This creates
measurement differences
and therefore the
movements in the
fair
value of
these financial derivative
contracts and associated
tax effects are
excluded from the
calculation of adjusted
net income
and
deferred
until
the
time
the
underlying
instrument
is
matured,
exercised,
or
settled.
Management
believes
that
this
appropriately
reflects
the
economic
effect
of
these
risk
management
activities
in
each
period
and
provides
an
indication
of
Equinor’s underlying financial performance.
●
Foreign currency gains/losses
on certain intercompany
bank and cash
balances
are eliminated from
adjusted net income.
These currency effects are mainly
due to a large part
of Equinor’s operations having NOK as functional
currency, and
the effects
are offset
within equity
as other
comprehensive income
arising on
translation from
functional currency
to presentation
currency
USD.
These
currency
effects
increase
volatility
in
financial
performance,
which
does
not
reflect
Equinor’s underlying
financial
performance. Management believes that this adjustment removes periodic fluctuations in Equinor’s
adjusted net income.
Net
debt
to
capital
employed
ratio
–
In
Equinor’s view,
net
debt
ratios
provide
a
more
informative picture
of
Equinor’s financial
strength than gross interest-bearing financial
debt. Three different net
debt to capital ratios
are presented in this
report: 1) net debt
to
capital employed,
2) net
debt to
capital employed
adjusted, including
lease liabilities,
and 3)
net debt
to capital
employed adjusted.
These calculations are all based on Equinor’s gross interest-bearing
financial liabilities as recorded in the Consolidated balance
sheet
and exclude cash, cash equivalents and current financial investments.
The following
adjustments are
made in
calculating the
net debt
to capital
employed adjusted,
including lease
liabilities ratio
and the
net debt
to capital employed
adjusted ratio: collateral
deposits (classified as
Cash and cash
equivalents in the
Consolidated balance
Equinor first quarter 2024
36
sheet),
and
financial
investments
held
in
Equinor
Insurance
AS
(classified
as
Current
financial
investments
in
the
Consolidated
balance
sheet)
are
treated
as
non-cash
and
excluded
from
the
calculation
of
these
non-GAAP
measures.
Collateral
deposits
are
excluded since they relate
to certain requirements of exchanges
where Equinor is trading
and presented as restricted
cash. Financial
investments
in
Equinor
Insurance
are
excluded
as
these
investments
are
not
readily
available
for
the
group
to
meet
short
term
commitments. These adjustments result in a
higher net debt figure and
in Equinor’s view provides a more
prudent measure of the net
debt to
capital employed
ratio than
would be
the case
without such
exclusions.
Additionally,
lease liabilities
are further
excluded in
calculating the net debt to capital employed adjusted ratio. The table
Calculation of capital employed and net debt to capital employed
ratio later in
this report details the
calculations for these non-GAAP
measures and reconciles
them with the
most directly comparable
IFRS Accounting Standards financial measure or measures.
Organic capital
expenditures
(organic
investments/capex) –
Capital expenditures,
defined
as
Additions to
PP&E, intangibles
and
equity
accounted
investments
as
presented
in
note
2
Segments
to
the
Condensed
interim
financial
statements.
Organic
capital
expenditures
are
capital
expenditures
excluding
expenditures
related
to
acquisitions,
leased
assets
and
other
investments
with
significantly
different
cash
flow
patterns.
Equinor
believes
this
measure
gives
stakeholders
relevant
information
to
understand
the
company’s investments in
maintaining and developing
its assets. Forward-looking
organic capital expenditures
included in this
report
are not
reconcilable to
its most
directly comparable
IFRS Accounting
Standards measure
without unreasonable efforts,
because the
amounts excluded from such IFRS Accounting Standards measure to determine organic capital expenditures cannot be predicted with
reasonable certainty.
Gross
capital
expenditures
(gross
capex)
–
Gross
capital
expenditures
represent
capital
expenditures,
defined
as
Additions
to
PP&E,
intangibles
and
equity
accounted
investments
as
presented
in
the
financial
statements,
excluding
additions
to
right
of
use
assets related to leases and capital expenditures financed through government grants. Equinor adds the proportionate share of capital
expenditures
in
equity
accounted
investments
not
included
in
Additions
to
PP&E,
intangibles
and
equity
accounted
investments.
Equinor
believes
that
by
excluding
additions
to
right
of
use
assets
related
to
leases,
this
measure
better
reflects
the
company's
investments in the business
to drive growth. Forward-looking
gross capital expenditures included
in this report are
not reconcilable to
its most directly comparable
IFRS measure without unreasonable efforts,
because the amounts included
or excluded from such
IFRS
measure to determine gross capital expenditures cannot be predicted with reasonable certainty.
Cash flows
from operations
after taxes
paid (CFFO after
taxes paid)
represents, and
is used
by management,
to evaluate cash
generated
from
operating
activities
after
taxes
paid,
which
is
available
for
investing
activities,
debt
servicing
and
distribution
to
shareholders. Cash
flows from
operations after
taxes paid
is not
a
measure of
our
liquidity under
IFRS Accounting
Standards and
should not be
considered in isolation
or as a
substitute for an
analysis of our
results as reported
in this report.
Our definition of
Cash
flows from
operations after
taxes paid
is limited
and does
not represent
residual cash
flows available
for discretionary
expenditures.
The
table
Calculation
of
CFFO
after
taxes
paid
and
net
cash
flow
later
in
this
report
provides
a
reconciliation
of
Cash
flows
from
operations after
taxes paid
to its
most directly
comparable IFRS
Accounting Standards
measure, Cash
flows provided
by operating
activities
before
taxes
paid
and
working
capital
items,
as
of
the
specified
dates.
Forward-looking
cash
flows
from
operations
after
taxes
paid
included
in
this
report
are
not
reconcilable
to
its
most
directly
comparable
IFRS
measure
without unreasonable
efforts,
because the amounts included or
excluded from such IFRS measure
to determine cash flows from operations
after taxes paid cannot
be predicted with reasonable certainty.
Net cash
flow
- Net
cash flow
represents, and
is used
by management
to evaluate,
cash generated
from operational
and investing
activities
available
for
debt
servicing
and
distribution
to
shareholders.
Net
cash
flow
is
not
a
measure
of
our
liquidity
under
IFRS
Accounting Standards
and should
not be
considered in
isolation or
as a
substitute for
an analysis
of our
results as
reported in
this
report. Our
definition of
Net cash
flow is
limited and
does not
represent residual
cash flows
available for
discretionary expenditures.
The table
Calculation of
CFFO after
taxes paid
and net
cash flow
later in
this report
provides a
reconciliation of
Net cash
flow to
its
most
directly
comparable
IFRS
Accounting
Standards
measure,
Cash
flows
provided
by
operating activities
before
taxes
paid
and
working capital items, as of the specified dates.
For more information on our definitions and use of non-GAAP financial measures, see section 5.6
Use and reconciliation of non-
GAAP financial measures in Equinor's 2023 Integrated Annual Report.
Equinor first quarter 2024
37
Reconciliation of adjusted operating income
The table specifies the adjustments made to each of the profit and loss line item included
in the net operating income/(loss) subtotal.
Items impacting net operating income/(loss) in the
first quarter of 2024
Equinor
group
E&P Norway
E&P
Internationa
l
E&P USA
MMP
REN
Other
(in USD million)
Net operating income/(loss)
7,631
5,756
616
377
1,303
(220)
(200)
Total revenues and other income
25,135
7,879
1,655
1,055
24,824
60
(10,337)
Adjusting items
(346)
-
-
-
(346)
-
-
Changes in fair value of derivatives
(444)
-
-
-
(444)
-
-
Periodisation of inventory hedging effect
98
-
-
-
98
-
-
Adjusted total revenues and other income
24,789
7,879
1,655
1,055
24,478
60
(10,337)
Purchases [net of inventory variation]
(11,922)
0
34
-
(21,968)
-
10,012
Adjusting items
109
-
-
-
(58)
-
167
Operational storage effects
(58)
-
-
-
(58)
-
-
Eliminations
167
-
-
-
-
-
167
Adjusted purchases [net of inventory variation]
(11,813)
0
34
-
(22,026)
-
10,179
Operating and administrative expenses
(2,971)
(866)
(395)
(280)
(1,326)
(272)
168
Adjusting items
139
-
-
-
(12)
151
-
Other adjustments
3
-
-
-
-
3
-
Gain/loss on sale of assets
147
-
-
-
-
147
-
Provisions
(12)
-
-
-
(12)
-
-
Adjusted operating and administrative expenses
(2,832)
(866)
(395)
(280)
(1,337)
(121)
168
Depreciation, amortisation and net impairments
(2,345)
(1,173)
(529)
(364)
(227)
(8)
(43)
Adjusting items
-
-
-
-
-
-
-
Adjusted depreciation, amortisation and net
impairments
(2,345)
(1,173)
(529)
(364)
(227)
(8)
(43)
Exploration expenses
(266)
(84)
(148)
(34)
-
-
-
Adjusting items
-
-
-
-
-
-
-
Adjusted exploration expenses
(266)
(84)
(148)
(34)
-
-
-
Sum of adjusting items
(98)
-
-
-
(416)
151
167
Adjusted operating income/(loss)
7,533
5,756
616
377
887
(70)
(34)
Tax on adjusted operating income
(4,959)
(4,435)
(92)
(94)
(387)
14
35
Adjusted operating income/(loss) after tax
2,574
1,322
524
283
499
(55)
1
Equinor first quarter 2024
38
Items impacting net operating income/(loss) in the
first quarter of 2023
Equinor
group
E&P Norway
E&P
Internationa
l
E&P USA
MMP
REN
Other
(in USD million)
Net operating income/(loss)
12,517
9,816
382
340
2,118
(89)
(49)
Total revenues and other income
29,224
12,044
1,548
1,015
28,889
(2)
(14,271)
Adjusting items
(802)
97
(89)
-
(807)
(2)
(0)
Changes in fair value of derivatives
(803)
96
(89)
-
(809)
-
-
Periodisation of inventory hedging effect
25
-
-
-
25
-
-
Gain/loss on sale of assets
(25)
1
-
-
(23)
(3)
(0)
Adjusted total revenues and other income
1)
28,423
12,141
1,460
1,015
28,082
(4)
(14,271)
Purchases [net of inventory variation]
(11,235)
(0)
16
-
(25,358)
-
14,107
Adjusting items
(27)
-
-
-
15
-
(42)
Operational storage effects
15
-
-
-
15
-
-
Eliminations
(42)
-
-
-
-
-
(42)
Adjusted purchases [net of inventory variation]
(11,262)
(0)
16
-
(25,344)
-
14,065
Operating and administrative expenses
(3,025)
(977)
(659)
(273)
(1,178)
(86)
148
Adjusting items
217
-
259
-
(51)
8
-
Other adjustments
2
-
-
-
-
2
-
Gain/loss on sale of assets
265
-
259
-
-
6
-
Provisions
(51)
-
-
-
(51)
-
-
Adjusted operating and administrative expenses
1)
(2,809)
(977)
(400)
(273)
(1,229)
(78)
148
Depreciation, amortisation and net impairments
(2,200)
(1,115)
(461)
(357)
(234)
(1)
(33)
Adjusting items
2
-
-
-
2
-
-
Impairment
2
-
-
-
2
-
-
Adjusted depreciation, amortisation and net
impairments
(2,198)
(1,115)
(461)
(357)
(232)
(1)
(33)
Exploration expenses
(246)
(137)
(64)
(46)
-
-
(0)
Adjusting items
8
-
8
-
-
-
-
Impairment
8
-
8
-
-
-
-
Adjusted exploration expenses
(238)
(137)
(55)
(46)
-
-
(0)
Sum of adjusting items
1)
(602)
97
178
-
(841)
6
(42)
Adjusted operating income/(loss)
1)
11,916
9,912
560
340
1,278
(83)
(91)
Tax on adjusted operating income
1)
(8,437)
(7,699)
(265)
(80)
(424)
11
20
Adjusted operating income/(loss) after tax
1)
3,479
2,213
295
260
854
(72)
(72)
1) Restated for Equinor group, E&P Norway and
E&P International due to amended principles
for ‘over-/underlift'. For further information see Amended
principles for Adjusted operating income in the section
'Use and reconciliation of non-GAAP financial
measures' in the Supplementary disclosures.
Equinor first quarter 2024
39
Items impacting net operating income/(loss) in the
fourth quarter of 2023
Equinor
group
E&P Norway
E&P
Internationa
l
E&P USA
MMP
REN
Other
(in USD million)
Net operating income/(loss)
8,748
7,737
336
143
734
(166)
(36)
Total revenues and other income
29,054
10,076
1,889
1,165
28,668
20
(12,764)
Adjusting Items
(673)
(222)
(22)
-
(412)
(17)
(0)
Changes in fair value of derivatives
(65)
-
3
-
(67)
-
-
Periodisation of inventory hedging effect
(344)
-
-
-
(344)
-
-
Gain/loss on sale of assets
(264)
(222)
(25)
-
-
(17)
(0)
Adjusted total revenues and other income
1)
28,381
9,855
1,867
1,165
28,257
2
(12,765)
Purchases [net of inventory variation]
(13,804)
0
(45)
-
(26,330)
0
12,570
Adjusting Items
132
-
-
-
89
-
43
Operational storage effects
89
-
-
-
89
-
-
Eliminations
43
-
-
-
-
-
43
Adjusted purchases [net of inventory variation]
(13,672)
0
(45)
-
(26,241)
0
12,613
Operating and administrative expenses
(3,279)
(1,057)
(540)
(308)
(1,384)
(180)
190
Adjusting Items
23
-
0
(0)
19
4
-
Other adjustments
4
-
-
(0)
-
4
-
Provisions
19
-
-
-
19
-
-
Adjusted operating and administrative
expenses
1)
(3,256)
(1,057)
(540)
(308)
(1,365)
(176)
190
Depreciation, amortisation and net impairments
(2,821)
(1,144)
(913)
(506)
(220)
(6)
(31)
Adjusting Items
303
-
310
-
(7)
-
-
Impairment
303
-
310
-
(7)
-
-
Adjusted depreciation, amortisation and net
impairments
(2,518)
(1,144)
(603)
(506)
(227)
(6)
(31)
Exploration expenses
(402)
(138)
(55)
(208)
-
-
-
Adjusting Items
25
-
-
25
-
-
-
Impairment
25
-
-
25
-
-
-
Adjusted exploration expenses
(377)
(138)
(55)
(184)
-
-
-
Sum of adjusting items
1)
(190)
(222)
288
25
(310)
(13)
43
Adjusted operating income/(loss)
1)
8,558
7,515
623
168
424
(179)
7
Tax on adjusted operating income
1)
(6,725)
(5,957)
(401)
(90)
(281)
33
(29)
Adjusted operating income/(loss) after tax
1)
1,834
1,558
222
78
143
(146)
(22)
1) Restated for Equinor group, E&P Norway and
E&P International due to amended principles
for ‘over-/underlift'. For further information see
Amended principles for Adjusted operating income
in the section 'Use and reconciliation of non-GAAP
financial measures' in the Supplementary
disclosures.
Equinor first quarter 2024
40
Adjusted operating income after tax by reporting segment
Quarters
Q1 2024
Q4 2023
Q1 2023
(in USD million)
Adjusted
operating
income
Tax on
adjusted
operating
income
Adjusted
operating
income
after tax
Adjusted
operating
income
Tax on
adjusted
operating
income
Adjusted
operating
income
after tax
Adjusted
operating
income
Tax on
adjusted
operating
income
Adjusted
operating
income
after tax
E&P Norway
1)
5,756
(4,435)
1,322
7,515
(5,957)
1,558
9,912
(7,699)
2,213
E&P International
1)
616
(92)
524
623
(401)
222
560
(265)
295
E&P USA
377
(94)
283
168
(90)
78
340
(80)
260
MMP
887
(387)
499
424
(281)
143
1,278
(424)
854
REN
(70)
14
(55)
(179)
33
(146)
(83)
11
(72)
Other
(34)
35
1
7
(29)
(22)
(91)
20
(72)
Equinor group
1)
7,533
(4,959)
2,574
8,558
(6,725)
1,834
11,916
(8,437)
3,479
Effective tax rates on adjusted
operating income
65.8%
78.6%
70.8%
1) Restated for Q1 2023 and Q4 2023 due
to amended principles for ‘over-/underlift'. For more
information, see Amended principles for
Adjusted operating income in the section 'Use and reconciliation
of non-GAAP financial measures' in the
Supplementary disclosures
Equinor first quarter 2024
41
Reconciliation of adjusted operating income after tax to net income
Reconciliation of adjusted operating income after tax to net income
Quarters
(in USD million)
Q1 2024
Q4 2023
Q1 2023
Net operating income/(loss)
A
7,631
8,748
12,517
Income tax
B1
5,325
6,729
8,741
Tax on net financial items
B2
96
155
68
Income tax less tax on net financial items
B = B1 - B2
5,230
6,574
8,673
Net operating income after tax
C = A-B
2,402
2,174
3,844
Items impacting net operating income/(loss)
1) 2)
D
(98)
(190)
2)
(602)
2)
Tax on items impacting net operating income/(loss)
2)
E
271
(150)
2)
236
2)
Adjusted operating income after tax*
2)
F = C+D+E
2,574
1,834
2)
3,479
2)
Net financial items
G
366
589
1,189
Tax on net financial items
H
(96)
(155)
(68)
Net income/(loss)
I = C+G+H
2,672
2,608
4,966
1) For items impacting net operating income/(loss),
see Reconciliation of adjusted operating income
in the
Supplementary disclosures.
2) Restated due to amended principles for 'over-/underlift'.
For more information, see Amended principles
for Adjusted
operating income in the section ‘Use and reconciliation
of non-GAAP financial measures’ in the Supplementary
disclosures.
Equinor first quarter 2024
42
Reconciliation of adjusted net income to net income
Reconciliation of adjusted net income to net income
Quarters
(in USD million)
Q1 2024
Q4 2023
Q1 2023
Net operating income/(loss)
7,631
8,748
12,517
Items impacting net operating income/(loss)
1)
A
(98)
(190)
2)
(602)
2)
Adjusted operating income
B
7,533
8,558
2)
11,916
2)
Net financial items
366
589
1,189
Adjusting items
C
7
(523)
(752)
Changes in fair value of financial derivatives used
to hedge
interest bearing instruments
74
(445)
(74)
Foreign currency (gains)/losses on certain intercompany
bank and
cash balances
(67)
(78)
(678)
Adjusted net financial items
D
373
65
437
Income tax
E
(5,325)
(6,729)
(8,741)
Tax effect on adjusting items
F
255
(53)
253
Adjusted net income
G = B+D+E+F
2,836
1,842
3,864
Less:
Adjusting items
H = A+C
(91)
(713)
(1,354)
Tax effect on adjusting items
255
(53)
253
Net income/(loss)
2,672
2,608
4,966
Attributable to equity holders of the company
2,668
2,603
4,962
Attributable to non-controlling interests
5
5
4
Attributable to Equity holders in %
I
99.8 %
99.8 %
99.9 %
Adjusted net income attributable to equity holders
of the company
J = G x I
2,831
1,839
3,861
Weighted average number of ordinary shares outstanding
(in
millions)
K
2,938
2,954
3,118
Basic earnings per share (in USD)
0.91
0.88
1.59
Adjusted earnings per share (in USD)
L = J/K
0.96
0.62
1.24
1) For items impacting net operating income/(loss),
see Reconciliation of adjusted operating income
in the Supplementary
disclosures.
2) Restated due to amended principles for 'over-/underlift'.
For more information, see Amended principles
for Adjusted
operating income in the section ‘Use and reconciliation
of non-GAAP financial measures’ in the Supplementary
disclosures.
Equinor first quarter 2024
43
Adjusted exploration expenses
Quarters
Change
(in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
E&P Norway exploration expenditures
91
213
148
(38%)
E&P International exploration expenditures
100
125
61
64%
E&P USA exploration expenditures
44
86
70
(37%)
Group exploration expenditures
236
423
278
(15%)
Expensed, previously capitalised exploration expenditures
81
3
82
(1%)
Capitalised share of current period's exploration
activity
(51)
(49)
(122)
(58%)
Impairment (reversal of impairment)
0
25
8
(99%)
Exploration expenses according to IFRS Accounting
Standards
266
402
246
8%
Items impacting net operating income/(loss)
1)
-
(25)
(8)
(100%)
Adjusted exploration expenses*
266
377
238
12%
1) For items impacting net operating income/(loss),
see Reconciliation of adjusted operating income
in the
Supplementary disclosures.
Equinor first quarter 2024
44
Calculation of CFFO after taxes paid and net cash flow
CFFO information
Quarters
Change
(in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Cash flows provided by operating activities before
taxes paid and
working capital items
9,689
10,890
15,305
(37%)
Taxes Paid
(3,849)
(8,103)
(5,589)
(31%)
Cash flow from operations after taxes paid (CFFO
after taxes
paid)
5,840
2,787
9,716
(40%)
Net Cash Flow Information
Quarters
Change
(in USD million)
Q1 2024
Q4 2023
Q1 2023
Q1 on Q1
Cash flow from operations after taxes paid (CFFO
after taxes paid)
5,840
2,787
9,716
(40%)
(Cash used)/received in business combinations
0
(40)
(252)
N/A
Capital expenditures and investments
(2,483)
(3,031)
(2,051)
21%
(Increase)/decrease in other interest-bearing items
(210)
92
63
N/A
Proceeds from sale of assets and businesses
60
154
47
27%
Dividend paid
(2,649)
(2,706)
(2,861)
(7%)
Share buy-back
(550)
(518)
(461)
19%
Net Cash Flow
8
(3,262)
4,201
(100%)
Organic capital expenditures
Quarters
(in USD billion)
Q1 2024
Q4 2023
Q1 2023
Additions to PP&E, intangibles and equity accounted
investments
3.4
3.8
3.2
Acquisition-related additions
0.3
0.5
0.5
Right of use asset additions
0.3
0.3
0.4
Other additions (with unique cash flow patterns)
0.0
0.0
0.0
Organic capital expenditures
2.8
3.0
2.3
Equinor first quarter 2024
45
Calculation of capital employed and net debt to capital employed ratio
Calculation of capital employed and net debt to capital
employed ratio
At 31 March
At 31 December
(in USD million)
2024
2023
Shareholders' equity
50,067
48,490
Non-controlling interests
14
10
Total equity
A
50,081
48,500
Current finance debt and lease liabilities
4,657
7,275
Non-current finance debt and lease liabilities
24,253
24,521
Gross interest-bearing debt
B
28,910
31,796
Cash and cash equivalents
9,737
9,641
Current financial investments
27,534
29,224
Cash and cash equivalents and financial investment
C
37,271
38,865
Net interest-bearing debt [9]
B1 = B-C
(8,361)
(7,069)
Other interest-bearing elements
1)
1,858
2,030
Normalisation for cash-build up before tax payment
(50% of Tax Payment)
1,713
-
Net interest-bearing debt adjusted normalised for
tax payment, including lease liabilities*
B2
(4,789)
(5,040)
Lease liabilities
3,501
3,570
Net interest-bearing debt adjusted*
B3
(8,290)
(8,610)
Calculation of capital employed*
Capital employed
A+B1
41,720
41,431
Capital employed adjusted, including lease liabilities
A+B2
45,291
43,460
Capital employed adjusted
A+B3
41,790
39,890
Calculated net debt to capital employed*
Net debt to capital employed
(B1)/(A+B1)
(20.0%)
(17.1%)
Net debt to capital employed adjusted, including
lease liabilities
(B2)/(A+B2)
(10.6%)
(11.6%)
Net debt to capital employed adjusted
(B3)/(A+B3)
(19.8%)
(21.6%)
1)
Other interest-bearing elements are cash and
cash equivalents adjustments regarding collateral
deposits classified as cash and cash
equivalents in the Consolidated balance sheet but
considered as non-cash in the non-GAAP calculations
as well as financial investments
in Equinor Insurance AS classified as current financial
investments.
Equinor first quarter 2024
46
FORWARD
-LOOKING STATEMENTS
This report
contains certain
forward-looking statements
that involve
risks and
uncertainties. In
some cases,
we use
words such
as
"ambition", "continue",
"could", "estimate",
"intend", "expect",
"believe", "likely",
"may", "outlook",
"plan", "strategy",
"will", "guidance",
"targets", and similar expressions to identify forward-looking statements. Forward-looking statements include all statements other than
statements
of
historical
fact,
including,
among
others,
statements
regarding
Equinor's
plans,
intentions,
aims,
ambitions
and
expectations;
the
commitment
to
develop
as
a
broad
energy
company
and
diversify
its
energy
mix;
the
ambition
to
be
a
leading
company in
the energy
transition and
reduce net
group-wide greenhouse
gas emissions;
our ambitions
and expectations
regarding
decarbonisation; future
financial performance,
including earnings,
cash
flow and
liquidity;
accounting policies;
the
ambition to
grow
cash flow and
returns *; expectations
regarding progress on
the energy transition
plan; expectations regarding
cash flow and
returns
from Equinor’s oil and gas
portfolio, CCS projects and
renewables and low carbon solutions
portfolio; our expectations and ambitions
regarding operated emissions, annual Co2 storage and
carbon intensity; plans to develop fields
and projects; expectations, plans and
ambitions for
renewables production
capacity,
power generation
and Co2
transport and
storage and
investments in
renewables and
low
carbon
solutions,
and
the
balance
between
oil
and
gas
and
renewables
production;
expectations
and
plans
regarding
development of renewables projects, CCUS and hydrogen businesses and production of low carbon
energy and CCS; our intention to
optimise
our
portfolio;
break-even
considerations,
targets
and
other
metrics
for
investment
decisions;
future
worldwide
economic
trends,
market
outlook
and
future
economic
projections
and
assumptions,
including
commodity
price,
currency
and
refinery
assumptions;
estimates
of
proved
reserves;
organic
capital
expenditures
through
2024;
expectations
and
estimates
regarding
production
and
development
and
execution
of
projects;
expectations
regarding
oil
and
gas
and
renewable
power
production;
estimates regarding tax payments;
considerations regarding exploration expenses;
the ambition to keep
unit of production
cost in the
top quartile of our peer
group; scheduled maintenance activity and the effects
thereof on equity production;
completion and results of
acquisitions, disposals,
divestments and
other contractual
arrangements and
delivery commitments;
expected amount
and timing
of
dividend
payments
and
the
implementation
of
our
share
buy-back
programme;
provisions
and
contingent
liabilities,
obligations
or
expenses;
and
expected
impact of
currency
and
interest
rate
fluctuations.
You
should
not
place
undue
reliance
on
these
forward-
looking
statements.
Our
actual
results
could
differ
materially
from
those
anticipated
in
the
forward-looking
statements
for
many
reasons.
These
forward-looking statements
reflect
current views
about future
events,
are based
on management’s
current expectations
and
assumptions
and
are,
by
their
nature,
subject
to
significant
risks
and
uncertainties
because
they
relate
to
events
and
depend
on
circumstances that
will occur
in the
future. There
are a
number of
factors that could
cause actual
results and
developments to
differ
materially from
those expressed or
implied by
these forward-looking
statements, including levels
of industry
product supply,
demand
and pricing,
in particular
in light
of significant
oil price
volatility; unfavourable
macroeconomic conditions
and inflationary
pressures;
exchange
rate
and
interest
rate
fluctuations;
levels
and
calculations
of
reserves
and
material differences
from
reserves
estimates;
regulatory stability and
access to resources,
including attractive low
carbon opportunities; the
effects of
climate change and
changes
in
stakeholder
sentiment
and
regulatory
requirements
regarding
climate
change;
changes
in
market
demand
and
supply
for
renewables;
inability
to
meet
strategic
objectives;
the
development
and
use
of
new
technology;
social
and/or
political
instability,
including as a result of
Russia’s invasion of Ukraine and
the conflict in the
Middle East; failure to prevent or
manage digital and cyber
disruptions to our
information and operational
technology systems and
those of
third parties on
which we rely;
operational problems,
including
cost
inflation
in
capital
and
operational
expenditures;
unsuccessful
drilling;
availability
of
adequate
infrastructure
at
commercially viable
prices; the
actions of
field partners
and other
third-parties; reputational
damage; the
actions of
competitors; the
actions of
the Norwegian state
as majority shareholder
and exercise of
ownership by the
Norwegian state; changes
or uncertainty
in
or non-compliance
with laws
and
governmental regulations;
adverse changes
in tax
regimes; the
political and
economic policies
of
Norway
and
other
oil-producing
countries;
regulations
on
hydraulic
fracturing
and
low-carbon
value
chains;
liquidity,
interest
rate,
equity and
credit risks;
risk of
losses relating
to trading
and commercial
supply activities;
an inability
to attract
and retain
personnel;
ineffectiveness
of
crisis
management
systems;
inadequate
insurance
coverage;
health,
safety
and
environmental
risks;
physical
security risks
to personnel,
assets, infrastructure and
operations from
hostile or
malicious acts; failure
to meet
our ethical
and social
standards; non-compliance
with international
trade sanctions;
and other
factors discussed
elsewhere in
this report
and in
Equinor's
Integrated
Annual
Report
for
the
year
ended
December
31,
2023
(including
section
5.2
-
Risk
factors
thereof).
Equinor's
2023
Integrated Annual Report is available at Equinor's website www.equinor.com.
Although we believe
that the expectations
reflected in the
forward-looking statements are reasonable,
we cannot assure
you that our
future results, level of activity,
performance or achievements will meet these
expectations. Moreover, neither we
nor any other person
assumes responsibility
for the accuracy
and completeness of
the forward-looking statements.
Any forward-looking statement
speaks
only as of the date on which such statement is made, and, except as required by applicable law,
we undertake no obligation to update
any of these statements after the date of this report, either to make them conform to actual results
or changes in our expectations.
We
use
certain terms
in
this document,
such as
"resource" and
"resources", that
the
SEC's rules
prohibit
us
from including
in
our
filings
with the
SEC.
U.S.
investors are
urged
to closely
consider
the
disclosures in
our
Annual Report
on
Form 20-F
for
the
year
ended December 31,
2023, SEC File
No. 1-15200. This
form is available on
our website or
by calling 1-800-SEC-0330 or
logging on
to www.sec.gov
Equinor first quarter 2024
47
END NOTES
1.
The group's
average liquids price
is a volume-weighted average of the segment prices of crude oil, condensate and natural gas
liquids (NGL).
2.
The
refining reference margin
is a typical gross margin and will differ from the actual margin, due to variations in type of crude
and other feedstock, throughput, product yields, freight cost, inventory, etc
3.
Liquids volumes
include oil, condensate and NGL, exclusive of royalty oil.
4.
Equity volumes
represent produced volumes under a
production sharing agreement (PSA)
that correspond to Equinor’s
ownership share in a field.
Entitlement volumes
, on the other hand, represent Equinor’s share of the volumes distributed to the
partners in the field, which are subject to deductions for, among other things, royalty and the host government's share of profit oil.
Under the terms of a PSA, the amount of profit oil deducted from equity volumes will
normally increase with the cumulative return
on investment to the partners and/or production from the licence. Consequently, the gap between entitlement and equity volumes
will likely increase in times of high liquids prices. The distinction between equity and entitlement
is relevant to most PSA regimes,
whereas it is not applicable in most concessionary regimes such as those in Norway, the UK, the US, Canada and Brazil.
5.
Transactions with the
Norwegian State.
The Norwegian State, represented by the Ministry of Trade, Industry and Fisheries, is
the majority shareholder of Equinor and it also holds major investments in other entities. This ownership
structure means that
Equinor participates in transactions with many parties that are under a common ownership structure
and therefore meet the
definition of a related party. Equinor purchases liquids and natural gas from the Norwegian State, represented by SDFI (the
State's Direct Financial Interest). In addition, Equinor sells the State's natural gas
production in its own name, but for the
Norwegian State's account and risk, and related expenditures are refunded by the State.
6.
The production guidance reflects our estimates of
proved reserves
calculated in accordance with US Securities and Exchange
Commission (SEC) guidelines and additional production from other reserves not included in
proved reserves estimates.
7.
The group's
average realised piped gas prices
include all realised piped gas sales, including both physical sales and related
paper positions.
8.
The internal
transfer price
paid from the MMP segment to the E&P Norway and E&P USA segments.
9.
Since different legal entities in the group lend to projects and others borrow from banks, project financing through
external bank
or similar institutions is not netted in the balance sheet and results in over-reporting of the debt
stated in the balance sheet
compared to the underlying exposure in the group. Similarly, certain net interest-bearing debt incurred from activities pursuant to
the Marketing Instruction of the Norwegian government are offset against receivables on the SDFI. Some
interest-bearing
elements are classified together with non-interest bearing elements and are therefore included when
calculating the net interest-
bearing debt.
Equinor first quarter 2024
48
Signatures
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf
by
the undersigned, thereunto duly authorised.
EQUINOR ASA
(Registrant)
Dated: 25 April, 2024
By: ___/s/ Torgrim Reitan
Name: Torgrim Reitan
Title:
Chief Financial Officer