Equinor Swings to Net Loss on Impairments, Lower Energy Prices
October 24 2019 - 2:10AM
Dow Jones News
By Dominic Chopping
Equinor ASA (EQNR.OS) Thursday swung to a third-quarter net loss
as it posted extensive impairments and provisions while also being
hit by lower prices and production.
In response, the Norwegian oil-and-gas major said it will now
defer gas production to periods with higher expected prices.
Equinor posted a net loss of $1.11 billion, down from a profit
of $1.67 billion a year earlier. Revenue fell 23% to $14.7
billion.
Analysts polled by FactSet had expected net profit of $1.06
billion on revenue of $16.04 billion.
Adjusted earnings fell 46% to $2.59 billion against expectations
of $2.68 billion.
The company, which is 67%-owned by the Norwegian state, proposed
a maintained dividend of 26 cents for the third quarter.
Equinor said its earnings were weighed by lower average prices
and lower volumes for both liquids and gas, in addition to
impairment losses, mainly related to unconventional onshore assets
in North America.
It posted net impairments of $2.79 billion, provisions of $560
million and changes in fair value of derivatives and inventory
hedge contracts of $444 million, with a positive gain from sale of
assets of $849 million.
Provisions and impairments were related to damage at its South
Riding Point oil terminal in the Bahamas, in addition to onerous
contract provisions in North America, it said.
Equinor delivered total equity production of 1.909 million
barrels of oil equivalent a day in the third quarter, down from
2.066 million barrels a day in 2018.
The company still expects exploration spending of around $1.7
billion and production around the 2018 level.
For the 2019 to 2025 period, production growth is still expected
from new projects, resulting in a compound annual growth rate of
around 3%.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 24, 2019 01:55 ET (05:55 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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