Equinor ASA Q1 FY2025 earnings call

Safety: Safety remains a top priority with a record low incident frequency of 0.28 and total recordable injury frequency of 2.2 per million hours worked in the last 12 months. ### Production: Norway produced 2.123 million barrels per day with increased gas production and somewhat lower oil production; Hammerfest LNG shutdown impacted NCS production, while Halten East started production. E&P US saw positive effects from increased non-opposition in Marcellus. E&P International production was lower due to divestments. ### Empire Wind: Received a stop work order from BOEM on 16th April, considers the order unlawful, book value is $2.5 billion, and aggregated gross exposure on Equinor group level is $1.5 billion to $2 billion. ### Financials: Adjusted operating income was $8.6 billion before tax, IFRS net income was $2.6 billion, cash flow from operations after tax was $7.4 billion, adjusted EPS was $0.66, and earnings per share based on net income was $0.97. Had a strong balance sheet with $25 billion cash, net debt ratio below 7%, and planned capital distribution of $9 billion for the year.

E&P Norway had adjusted earnings before tax totaling $7.4 billion, driven by higher gas prices. International segments combined delivered over $1 billion in adjusted operating income and ~$500 million after tax, supported by higher gas production in the US. MMP came in below the guided range due to lower liquids and LNG trading results and CCS wells. Renewables saw lower business development and early phase costs across the portfolio. Liquids prices were lower while gas prices were higher in Europe and the US; storages in Europe ended the gas winter at 34% of total capacity, 24 percentage points lower than the previous year.

Maintained the guidance communicated at the Capital Markets Day in February.

Uncertainty from tariffs, trade wars, and market volatility affecting the global economy and supply chains. Empire Wind stop work order, considered unlawful, posing risks to the project's progress and financials.

Q: Comments on changing approach due to Empire Wind and geographical concentration?

A: Anders Opedal stated the Empire Wind situation is unlawful, US is important, portfolio concentration is for scale and synergies, and Bucha Lau startup is planned for 2025.

Q: Sustainability of dividend and capital distribution?

A: Torgrim Reitan said $9 billion capital distribution is firm, Norwegian tax system helps in low price, cash flow from operations $20 billion based on $70 oil and $13 gas, lower prices still allow capital distribution.

Q: Impact of Empire Wind pause on capex?

A: Torgrim Reitan said focus is on clarifying the situation, too early to determine capex impact.

Q: Write down of Empire Wind book value?

A: Anders Opedal said too early to say, impairment testing will be done in Q2.

Q: MMP trading conditions?

A: Anders Opedal said moderated trading due to macro uncertainty, geopolitical turmoil, but opportunities exist.

Q: Empire Wind project delay and weather window?

A: Anders Opedal said project is urgent, need clarity quickly, weather window is critical.

Q: Engagement with US authorities on Empire Wind?

A: Anders Opedal said engaging, sees stop order as unlawful, US gas realizations strong due to marketing and trading.

Q: Appetite for US gas acreage?

A: Anders Opedal said made acquisitions with EQT, believes in natural gas long term.

Q: Urgency and weather window for Empire Wind?

A: Anders Opedal said urgent, need clarity quickly, preparing for all outcomes.

Q: New power business area?

A: Anders Opedal said combining power assets, including Triton and UK assets, no inorganic plans currently.