Equinor ASA (EQNR) Earnings

Management highlights

- Record high production this quarter, 9% up from same quarter last year, with high regularity and new fields on NCS and record high in US. - Adjusted operating income $9.8 billion, net income $3.1 billion. Year-to-date cash flow from operations after tax $6 billion. - Made seven commercial discoveries on NTS and awarded 35 new licenses in January. Started drilling at Rayar gas field in Brazil expected on stream in 2028. - Board approved cash dividend of 39 cents per share and share buyback of up to $375 million. - Safety is top priority but saw increase in incidents, need to improve safety. - Production on track to deliver 3% growth for the year. NCS up 10%, US record high, international production increased, power production stable.

Guidance

- Reiterated $1.5 billion share buyback guidance with no change. Originally planned to lean on balance sheet in 2026 but with current price outlook, not expected to lean on balance sheet for rest of the year. - Guidance presented in February remains stable. If Brent averages $85 per barrel this year and European gas prices $13 per MB2, cash flow from operations expected to be around $8 billion higher for 2036. Future tax liabilities will increase by around $4 billion due to tax lag in Norway. Net debt ratio expected to remain fairly stable through second quarter and reduce to somewhat below 15% during second half of the year. - Expect 3% production growth for the year, organic CapEx $3 billion in line with guidance, strong cash position of $20 billion, net debt ratio 15%.

Segment performance

EMP Norway's adjusted operating income totaled $7.7 billion pre-tax and $1.7 billion post-tax. M&P delivered close to double quarterly guidance, $787 million before tax. Power segment result came in close to zero with strong contribution from power trading. Production was an all-time high, up 9% from same quarter last year. NCS production up 10% driven by high regularity and new field ramp-ups. US production record high. Outside US, international production increased driven by Adura and Bacalao but offset by reduced ownership in Peregrino. Power production stable at 1.4 TWh. Adjusted operating cost and SG&A up 9% but underlying OPEX and SG&A down 6% adjusted for currency.

Risks & headwinds

- War and conflict in Middle East creating high volatility and imbalances in energy markets, uncertainty about resolution and impact on markets. - Increase in number of safety incidents, need to continue work to improve safety. - Significant uncertainty in predicting cash flow for the year due to large movements in forward prices, making it hard to forecast.

Analyst Q&A

• Q: In terms of the sale buybacks for the year, the guidance of $1.5, is it already fixed or depending on commodity environment? And view on European natural gas market.

  A: No change to $1.5 billion share buyback guiding, too early to discuss beyond base, important to be competitive in capital distribution. European natural gas market situation: softer gas market expected earlier, but Qatar Energy says 70% export capacity from Gulf damaged, will take 3-5 years to repair, European gas storages at 30% below season normal, vulnerable to weather events and operational issues with 32 BCM of Russian gas leaving market.

• Q: About Allstate holding, still long-term strategic holding? Related to JV with them.

  A: See Allstate as long-term industrial owner, collaboration has potential to create shareholder value, not nominating board member this year but approach remains same as long-term industrial owner.

• Q: Activity levels in US onshore, non-operated position. Thoughts on increasing? And Germany's gas-fired power tenders.

  A: US onshore position in Marcellus, produce well, area strategic. Priority in renewable space is to finalize existing projects in US, UK, Poland, high bar for further capital commitments into offshore wind, no particular mention on Germany's gas-fired power tenders.

• Q: Price credentials, realized prices in Q2; potential postponing maintenance.

  A: Strong price realizations in quarter, no hedge on production, achieved premiums on NCS, demand for certain qualities high, differential in March high, wait and see for April. No, maintenance programs are major industrial projects, take planning, won't be postponed.

• Q: Production guidance, cost reduction.

  A: 3% production growth guidance, first quarter production better than planned but too early to change guidance, turnarounds in second and third quarter. Reported cost up 9% due to record production and more fields, underlying cost reduction 6%, unit production cost expected to reduce from $6.6 to $6 during year.

• Q: Higher capex for acceleration in production, upside to 3% growth.

  A: No changes to free cash flow guidance, investment program high-rated, disciplined. Strong first quarter production but too early to adjust 3% growth guidance due to turnaround uncertainty.

• Q: International exploration ambitions, Drilling Transfer 26, Dogger Bank.

  A: Streamlined international business, focus on fewer countries, exploration focused on Brazil, Angola, US. Dogger Bank B on track, Dogger Bank C transition pieces completed, OpenIC expected in around two years.

• Q: Safety data deterioration in Q1, new power segment.

  A: Safety data flattening but underlying quality in operations high, technical integrity of platforms high. New power segment result close to zero, positive development on underlying costs and business development, strong contribution from power trading.

• Q: Bayden Ord project timeline.

  A: Project getting closer to concept select this year, large development, 60% ownership, investment levels $9-$10 billion on 100% basis, production plateau below 200,000 bpd, low tax rate, technology ready.

• Q: Cash flow collaterals play out, Orsted collaboration, $8 billion CFO upside.

  A: Collaterals increase with market volatility, reduce when volatility comes down, normal business. Satisfied with 10% ownership in Ørsted, high bar for committing more capital into offshore wind. $8 billion CFO upside with Brent $85 and gas $13, adjusted for tax leg impact.