Norway‘s energy firm Equinor reported a fall in earnings due to low oil prices that saw adjusted earning come in at $2.05 billion, down from $4.19 billion in the same period last year.
Equinor reported a $0.71 billion net loss after taking net impairments of $2.45 billion. It announced that due to market uncertainties, government-imposed production curtailments and Equinor’s value over volume approach, Equinor has suspended further production guidance for 2020.
“The COVID-19 pandemic is impacting people, societies and industries across the world. We have taken forceful actions to strengthen our financial resilience, and we are prepared to take further measures as necessary to protect people, operations and value creation,” says Eldar Sætre, president and CEO of Equinor ASA.
Sætre added: ““Our financial results in the quarter were impacted by the lower commodity prices. However, we delivered strong operational performance with record high production and solid cash flow under these market conditions. Uncertainty remains high with very low commodity prices and increased differentials towards the end of first quarter and in the start of the second quarter. We will continue to prioritise value over volume and have already reduced activity, particularly in the US onshore. We will consider further activity reductions and use the flexibility we have in our portfolio as necessary.”
In first quarter, Equinor announced a plan for reducing costs for 2020 by around US$700 million compared to original estimates. Operating costs in first quarter 2020, were improved from last quarter and we see lower unit production costs.
Equinor said it delivered record high total equity production of 2,233 mboe per day in the first quarter, up 3 per cent from the same period in 2019.
“The flexibility in the gas fields was used to defer production into periods with higher expected gas prices. Successful rampup of new fields as well as new well capacity, contributed to growth in production. The ramp- up of Johan Sverdrup contributes significantly to the increased production in the quarter, and the field reached a higher plateau production level at 470,000 boe per day in late April,” he energy firm said in a statement.
“In times like this, with the current unprecedented market conditions and uncertainties, it is more important than ever to have a clear direction for the long-term development of the company. Our values and strategy remain firm, and we are committed to develop Equinor as a broad energy company. It is a sound business strategy to ensure competitiveness and drive change towards a low carbon future, based on a strong commitment to value creation for our shareholders,” said Sætre.