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Equinor's logo is seen displayed in this illustration. Picture: DADO RUVIC/REUTERS
London — Equinor said on Wednesday it would cut its overall cash returns to shareholders this year by $3bn, sending its shares down 4% even as it posted a slightly smaller-than-expected drop in operating profit for the final quarter of 2023.
The Norwegian oil and gas producer’s adjusted earnings before tax for October-December fell to $8.68bn from $17bn a year earlier amid lower energy prices, but beat the $8.46bn seen in a poll of 26 analysts compiled by Equinor.
“We expect to grow our cash flow and sustain competitive returns,” CEO Anders Opedal said in a statement.
Rivals including BP, Exxon Mobil, Chevron and Shell also beat fourth-quarter profit forecasts, supported by a mix of strong trading results and higher oil and gas production, but some of them announced plans to increase dividends and share buybacks.
Equinor said its combined dividend payments and share buybacks in the 2024 calendar year were expected to amount to $14bn, down from $17bn in 2023, reflecting a normalisation of gas prices during the year.
The company maintained a projection for capital expenditure in 2024 of $13bn but said it would spend some $14bn to $15bn per year in 2025-2027, up from a previous guidance of $13bn for 2024-2026.
Equinor’s shares were down 4.2% at 0859 GMT, lagging a 0.2% rise in the European oil and gas sector.
The group’s combined oil and gas output increased by 2.1% in 2023 thanks to a strong finish to the year, and exceeded the company’s October guidance of 1.5% growth.
The rise was mainly driven by strong production at the Johan Sverdrup field, the largest in the North Sea, and new wells in production, Equinor said.
“The production increase was also driven by contributions from the international portfolio with (Brazil’s) Peregrino field reaching plateau production and strong performance from US offshore assets,” it added.
Equinor said its production would be unchanged in 2024 before rising by 5% by 2026. It would then decline somewhat towards 2030 to about 2-million barrels of oil equivalent per day, down from about 2.2-million in the fourth quarter of 2023.
In addition, the group’s domestic Norwegian unit set a target of pumping 1.2-million barrels of oil equivalent per day in 2035, down from 1.37-million in 2023.
The company raised its ordinary quarterly dividend payment to $0.35 per share from $0.30 but said its extraordinary cash dividend would be cut to $0.35 per quarter from $0.60.
Equinor said it planned to spend $6bn on share buybacks in 2024, equal to 2023. In 2025 it plans buybacks of between $4bn and $6bn.
The company plans to increase the regular part of its quarterly dividend payments by $0.02 each year going forward, while extraordinary dividends would come to an end after 2024.
In January Equinor warned that earnings in its marketing, midstream & processing (MMP) unit, which includes refining, were expected to be at the low end of its guided range of $400m to $800m, hit by weak margins.
The MMP division on Wednesday reported a profit of $424m, while analysts on average had expected $461m.
Equinor in 2022 overtook Russia’s Gazprom as Europe’s biggest supplier of natural gas as Moscow’s invasion of Ukraine upended decades-long energy ties.
The Norwegian group’s full-year adjusted earnings totalled $36.2bn, down from a record $76.9bn in 2022 as the price of gas declined sharply.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Norway’s Equinor cuts shareholder payouts by $3bn
London — Equinor said on Wednesday it would cut its overall cash returns to shareholders this year by $3bn, sending its shares down 4% even as it posted a slightly smaller-than-expected drop in operating profit for the final quarter of 2023.
The Norwegian oil and gas producer’s adjusted earnings before tax for October-December fell to $8.68bn from $17bn a year earlier amid lower energy prices, but beat the $8.46bn seen in a poll of 26 analysts compiled by Equinor.
“We expect to grow our cash flow and sustain competitive returns,” CEO Anders Opedal said in a statement.
Rivals including BP, Exxon Mobil, Chevron and Shell also beat fourth-quarter profit forecasts, supported by a mix of strong trading results and higher oil and gas production, but some of them announced plans to increase dividends and share buybacks.
Equinor said its combined dividend payments and share buybacks in the 2024 calendar year were expected to amount to $14bn, down from $17bn in 2023, reflecting a normalisation of gas prices during the year.
The company maintained a projection for capital expenditure in 2024 of $13bn but said it would spend some $14bn to $15bn per year in 2025-2027, up from a previous guidance of $13bn for 2024-2026.
Equinor’s shares were down 4.2% at 0859 GMT, lagging a 0.2% rise in the European oil and gas sector.
The group’s combined oil and gas output increased by 2.1% in 2023 thanks to a strong finish to the year, and exceeded the company’s October guidance of 1.5% growth.
The rise was mainly driven by strong production at the Johan Sverdrup field, the largest in the North Sea, and new wells in production, Equinor said.
“The production increase was also driven by contributions from the international portfolio with (Brazil’s) Peregrino field reaching plateau production and strong performance from US offshore assets,” it added.
Equinor said its production would be unchanged in 2024 before rising by 5% by 2026. It would then decline somewhat towards 2030 to about 2-million barrels of oil equivalent per day, down from about 2.2-million in the fourth quarter of 2023.
In addition, the group’s domestic Norwegian unit set a target of pumping 1.2-million barrels of oil equivalent per day in 2035, down from 1.37-million in 2023.
The company raised its ordinary quarterly dividend payment to $0.35 per share from $0.30 but said its extraordinary cash dividend would be cut to $0.35 per quarter from $0.60.
Equinor said it planned to spend $6bn on share buybacks in 2024, equal to 2023. In 2025 it plans buybacks of between $4bn and $6bn.
The company plans to increase the regular part of its quarterly dividend payments by $0.02 each year going forward, while extraordinary dividends would come to an end after 2024.
In January Equinor warned that earnings in its marketing, midstream & processing (MMP) unit, which includes refining, were expected to be at the low end of its guided range of $400m to $800m, hit by weak margins.
The MMP division on Wednesday reported a profit of $424m, while analysts on average had expected $461m.
Equinor in 2022 overtook Russia’s Gazprom as Europe’s biggest supplier of natural gas as Moscow’s invasion of Ukraine upended decades-long energy ties.
The Norwegian group’s full-year adjusted earnings totalled $36.2bn, down from a record $76.9bn in 2022 as the price of gas declined sharply.
Reuters
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