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    Equinor Profit Slips, Production Up


Equinor has reported lower year on year net income in 2Q 2018, but a 2% increase in its equity production.

by: Mark Smedley

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Equinor Profit Slips, Production Up

Norwegian producer Equinor has reported net income of $1.2bn in second quarter 2018, down from $1.4bn in 2Q2017, but a 2% increase in its equity production.

Higher prices for both liquids and gas, coupled with high production, contributed to an increase in its adjusted earnings to $4.3bn, up from $3bn in 2Q2017; the higher earnings included a net impairment reversal of $273mn and a negative effect from changes in the unrealised fair value of derivatives of $553mn in 2Q2018.

Equinor delivered equity production of 2.028mn barrels of oil equivalent per day (boe/d), up 2% from its 1.996 mn boe/d in 2Q 2017, mainly due to higher production in the US.  

It plans to continue to mature its large portfolio of exploration assets and estimates a total exploration activity level of around $1.5bn for 2018, excluding signature bonuses.

Adjusted earnings after tax were $817mn from E&P Norway, $752mn from E&P International, and $165mn from downstream and trading; the latter benefited from strong LNG earnings but European gas trading results were lower.

Natural gas sales volumes amounted to 13.4bn m3 in 2Q2018, 0.1bn m3 higher than in 2Q2017.  The 2Q2018 split out as 12.4bn m3 entitlement gas and 1.1bn m3 third-party volumes. Equnior's average invoiced European natural gas sales price was 28% higher year on year.

“In the quarter we have closed the Roncador and Carcara transactions in Brazil and the North Platte transaction in the US, and we have secured new and attractive exploration acreage in Brazil, the UK and Norway," said CEO Eldar Saetre, adding that in July the company (formerly known as Statoil) submitted its development plan for the very profitable Troll Phase 3 project for approval.