Equinor ASA 6-K, filed May 4, 2023
Equinor ASA (EQNR)
6-K
2023-05-04
For: 2023-03-31
View Original
Added on
April 10, 2026
About this 6-K
Equinor ASA filed this 6-K on May 4, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2023
Commission File Number 1-15200
Equinor ASA
(Translation of registrant’s name into English)
FORUSBEEN 50, N-4035, STAVANGER, NORWAY
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F
X
This report on Form 6-K is being filed for the purposes of incorporation by reference in the Registration Statements on Form F-3 (File No. 333-
239808) and Form S-8 (File No. 333-2626201). This report shall be deemed filed and incorporated by reference in such Registration
Statements and shall be deemed to be a part thereof from the date on which this report is furnished, to the extent not superseded by
documents or reports subsequently filed or furnished.
This document includes portions from the previously published results announcement of Equinor ASA as of, and for the three months ended
31 March 2023, as revised to comply with the requirements of Item 10(e) of Regulation S-K regarding non-GAAP financial information
promulgated by the U.S. Securities and Exchange Commission. This document does not update or otherwise supplement the information
contained in the previously published results announcement.
Equinor first quarter 2023
Equinor delivered IFRS net operating income of USD 12.5 billion and IFRS net income of USD 5.0
billion in the first quarter of 2023.
The first quarter was characterised by:
●
Strong earnings and cash flow across the business
●
Solid operational performance and production growth
o
Continued high gas production from NCS to Europe
●
High value creation from marketing and trading
●
Maintaining cost and capital discipline
●
Ordinary cash dividend of USD 0.30 per share, extraordinary cash dividend of USD 0.60 per share and commencement of
second tranche of share buy-back of USD 1.67 billion. Expected total capital distribution in 2023 is USD 17 billion.
Anders Opedal, president and CEO of Equinor ASA:
“Equinor delivered strong earnings and cash flow across the business and remains a safe and reliable provider of energy to
Europe. We continue to deliver competitive capital distribution to shareholders and invest in a profitable portfolio in oil and gas,
renewables, and low-carbon solutions.”
“We progressed on our strategy, optimising our oil and gas portfolio by acquiring Suncor Energy in the UK and continuing with
focused exploration. We developed our portfolio within renewables and low-carbon solutions by acquiring the solar project
developer BeGreen and collaborating with industry partners, aiming to build large-scale value chains for decarbonisation.”
Financial information
Quarter
Change
(unaudited, in USD million)
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Net operating income/(loss)
12,517
16,584
18,392
(32%)
Net income/(loss)
4,966
7,897
4,714
5%
Cash flows provided by operating activities
14,871
4,267
15,771
(6%)
Net cash flow*
4,201
1,669
12,689
(67%)
Quarter
Change
Operational data
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Group average liquids price (USD/bbl) [1]
73.8
80.4
97.1
(24%)
Total equity liquids and gas production (mboe per day) [4]
2,130
2,046
2,106
1%
Total power generation (Gwh) Equinor share
1,163
1,332
511
>100%
Renewable power generation (GWh) Equinor share
524
517
511
3%
Twelve months average per
Full year
Health, safety and the environment
Q1 2023
2022
Serious incident frequency (SIF)
0.4
0.4
First quarter
First quarter
Health, safety and the environment
2023
2022
Upstream CO
2
2
/boe)
6.6
6.7
Absolute scope 1+2 GHG emissions (million tonnes CO
2
e)
2.9
2.8
31 March
31 December
%-point
Net debt to capital employed adjusted*
2023
2022
change
Net debt to capital employed adjusted*
(52.3%)
(23.9%)
(28.4)
Dividend
(USD per share)
Q1 2023
Q4 2022
Q1 2022
Ordinary cash dividend per share
0.30
0.30
0.20
Extraordinary cash dividend per share
0.60
0.60
0.20
In the first three months of 2023 Equinor settled shares in the market under the 2022 and 2023 share buy-back programmes of USD
461 million.
*
These are non-GAAP figures. For a discussion of how we use the and their calculation, for the periods shown, see “Use and Reconciliation of Non-GAAP
Financial Measures” in this report.
Strong production and continued high deliveries of energy to Europe
Equinor delivered a total equity production of 2,130 mboe per day for the first quarter, up from 2,106 mboe per day in the same
quarter of 2022. The growth was driven by the ramp-up of new fields and wells, and fields back in production, such as Johan Sverdrup
phase 2 and Snøhvit in Norway and Peregrino in Brazil. Short-term operational issues at Johan Sverdrup early in the quarter impacted
the increase.
Gas production on the Norwegian continental shelf (NCS) remained high and stable, contributing to European energy security.
Production from renewable energy sources was 524 GWh in the quarter, slightly up from the same quarter last year, driven by good
availability for the offshore wind farms and production from the floating wind farm Hywind Tampen on the NCS. Including gas-to-power
production in the UK, total power production for the quarter ended at 1,163 GWh.
Continued strategic and industrial progress
Since the start of the year, Equinor has brought the satellite field Bauge on stream in the Norwegian Sea. The partner-operated Vito
field was put on stream in the US Gulf of Mexico.
Equinor continued to optimise the oil and gas portfolio, deepening in core areas by entering into an agreement to acquire Suncor
Energy UK. An interest in the Statfjord area on the NCS was divested in the quarter.
Equinor completed nine exploration wells offshore with three commercial discoveries in the quarter, and three wells were ongoing at
the quarter end. Two of the discoveries were in the Troll area in the North Sea, where Equinor also agreed to acquire a further equity
interest in five discoveries. Equinor was awarded 26 new production licences on the NCS.
In the UK, the Dogger Bank offshore wind farm is progressing towards first power this summer. Together with SSE, Equinor is
exploring the option of developing a fourth phase, Dogger Bank D.
In the quarter, Equinor closed the acquisition of BeGreen, a leading solar project developer in Northwest Europe, with a project
pipeline of over 6 GW in the early to medium stages of maturity.
Equinor continued to develop low-carbon value chains in collaboration with industrial partners and entered into a partnership with the
German energy company RWE aiming to develop large-scale value chains for low-carbon hydrogen.
Strong financial results and cash flow
Equinor realised a price for piped gas to Europe of USD 18.8 per mmbtu and realised liquids prices were USD 73.8 per bbl, down by
37% and 24%, respectively, compared to the first quarter 2022.
Equinor delivers strong IFRS net operating income at USD 12.5 billion and IFRS net income USD 5.0 billion after tax. This is down
from the same quarter last year due to lower prices for liquids and gas but partly offset by production growth. The Marketing,
Midstream & Processing (MMP) segment contributed with strong IFRS net operating income, main driven by crude, products and
liquids trading.
Cash flow provided by operating activity before taxes paid and working capital items amounted to USD 15.3 billion for the first quarter.
Equinor paid the first of three equal NCS tax instalments of USD 5.42 billion in the quarter and will pay the next two in the second
quarter. Organic capital expenditure* was USD 2.31 billion for the quarter, and total capital expenditures were USD 3.18 billion. After
taxes, capital distribution to shareholders and investments, net cash flow* ended at USD 4.20 billion for the first quarter.
Strong cash flow, a reduction in working capital and a reduction in collateral deposits resulted in a further strengthening of the financial
position. Adjusted net debt to capital employed ratio* was negative 52.3% at the end of the first quarter, from negative 23.9% at the
end of the fourth quarter of 2022.
Competitive capital distribution
The board of directors has decided an ordinary cash dividend of USD 0.30 per share and an extraordinary cash dividend of USD 0.60
per share for the first quarter of 2023, in line with communication at the Capital Markets Update in February.
Expected total capital distribution for 2023 is USD 17 billion, including a share buy-back programme of USD 6 billion. The board has
decided to initiate a second tranche of the share buy-back programme of USD 1.67 billion. The second tranche will commence on 11
May, end no later than 25 July 2023 and is subject to authorisation from the annual general meeting on 10 May 2023.
The first tranche of the share buy-back programme for 2023 was completed on 20 March 2023 with a total value of USD 1 billion.
All share buy-back amounts include shares to be redeemed by the Norwegian State.
GROUP REVIEW
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Total revenues and other income
29,224
34,321
36,393
(20%)
Total operating expenses
(16,707)
(17,737)
(18,001)
(7%)
Purchases [net of inventory variation]
(11,235)
(12,853)
(13,510)
(17%)
Operating and administrative expenses
(3,025)
(3,304)
(2,271)
33%
Depreciation, amortisation and net impairments
(2,200)
(1,184)
(2,017)
9%
Exploration expenses
(246)
(396)
(203)
21%
Net operating income/(loss)
12,517
16,584
18,392
(32%)
Capital expenditures and Investments
2,303
2,376
2,616
(12%)
Cash flows provided by operating activities
14,871
4,267
15,771
(6%)
Quarters
Change
Operational information
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Total equity liquid and gas production (mboe/day)
2,130
2,046
2,106
1%
Total entitlement liquid and gas production (mboe/day)
2,011
1,919
1,958
3%
Total Power generation (GWh) Equinor share
1,163
1,332
511
>100%
Renewable power generation (GWh) Equinor share
524
517
511
3%
Average Brent oil price (USD/bbl)
81.3
88.7
101.4
(20%)
Group average liquids price (USD/bbl)
73.8
80.4
97.1
(24%)
E&P Norway average internal gas price (USD/mmbtu)
17.36
27.22
29.77
(42%)
E&P USA average internal gas price (USD/mmbtu)
2.80
4.73
4.18
(33%)
Operations
Solid operational performance and production growth in the first quarter of 2023 provides strong results despite a lower price
environment compared to 2022.
Snøhvit, which restarted in June 2022, and Johan Sverdrup phase two, which came on stream in December 2022, were the main
drivers for increased production on the NCS relative to the same quarter last year. Peregrino in Brazil contributed significantly towards
increased production from the international portfolio. Improved levels from Caesar Tonga in the USA following technical
improvements, and a reduction in downtime compared to the prior year also added to the improvement in production.
Secure gas production to Europe remains a continued focus in 2023, representing 55% of NCS production for the quarter.
The overall production growth was impacted by short term operational challenges in the quarter for Johan Sverdrup and turnaround
activity in Angola and Brazil. 2022 events relating to the exit from Russia, Ekofisk area divestment and Martin Linge ownership share
reduction also partly offset the increase in production relative to the first quarter of 2022.
Price realisation in the quarter was lower than the extraordinary highs witnessed in the prior year. This is evident through reduced
margins even with a stable production level. Additionally, there was a strong contribution to the overall business results from the
Midstream, Marketing and Processing segment for the first quarter of 2023. Strong physical crude and products margins and solid
results from LNG and piped gas trading positively contributed to the first quarter results.
Increased operational capacity and activity in the quarter have contributed to an increased cost base. In addition rising environmental
costs together with inflationary pressures were evidenced by an increase in upstream operating expenditure compared to the prior
year. Depreciation, amortisation, and net impairments increased compared to the prior year, mainly driven by impairment reversals in
the first quarter of 2022 which were partially offset by a decrease in depreciation driven by an increase in proved reserves. The
strengthening of the USD against the NOK impacts the visibility of these increases in the reported costs.
In the first quarter of 2022, total operating expenses were negatively impacted by impairments of USD 1,080 million related to
Equinor’s exit from Russia.
Taxes
The decrease in reported effective tax rate from 72.6% in the first quarter of 2022 to 63.8% in 2023 was mainly caused by a lower
relative share of income from the NCS. Net foreign currency exchange gains with a low tax rate also contributed to this decrease in
effective tax rate for the quarter.
Cash flow, net debt and capital distribution
A strong cashflow provided by operating activities before taxes paid and working capital items of USD 15,305 million was achieved
despite lower income before tax which resulted from lower commodity prices in the first quarter of 2023.
Tax outflow of USD 5,589 million reduced by USD 8,599 million from the fourth quarter of 2022. The first of three equal instalments of
Norwegian corporate income tax were paid in the first quarter of 2023, whereas two instalments were made in the prior quarter.
Due to reduced prices working capital decreased by USD 5,155 million in the first quarter (USD 23 million in the first quarter of 2022)
positively contributing to a strong cashflow.
Net Cash and cash equivalents increased by USD 1,809 million compared to a decrease of USD 8,612 million in the prior quarter
despite the lower price environment and continued increased dividend cash outflows (USD 2,861 million compared to USD 2,231
million).
Continued strong results have led to an increase in short term liquid assets in addition to a reduction in net collateral deposits, further
strengthening the adjusted net debt to capital employed ratio* from negative 23.9% at the end of December 2022 to negative 52.3% at
the end of March 2023.
Subject to approval at the AGM in May, the cash outflow to the Norwegian state in relation to the second, third, fourth tranche of the
2022, and first tranche of the 2023 share buy-back programme is expected to occur in the second quarter of 2023, in addition to two
instalments of Norwegian corporate income tax.
The board of directors has decided an ordinary cash dividend of USD 0.30 per share, and an extraordinary cash dividend of USD 0.60
per share for the first quarter of 2023, in line with communication at the Capital Markets Update in February.
Expected total capital distribution for 2023 is around USD 17 billion, including a share buy-back programme of USD 6 billion. The
board has decided to initiate a second tranche of the share buy-back programme of USD 1.67 billion. The second tranche will
commence on 11 May, end no later than 25 July 2023 and is subject to authorisation from the annual general meeting on 10 May
2023.
The first tranche of the share buy-back programme for 2023 was completed on 20 March 2023 with a total value of USD 1 billion.
All share buy-back amounts include shares to be redeemed by the Norwegian State.
OUTLOOK
●
Organic capital expenditures*
for 2024-2026
1
.
●
Production
●
unit of production cost
●
Scheduled maintenance activity
These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and
uncertainties because they relate to events and depend on circumstances that will occur in the future. Deferral of production to create
future value, gas off-take, timing of new capacity coming on stream and operational regularity and levels of industry product supply,
demand and pricing represent the most significant risks related to the foregoing production guidance. Our future financial
performance, including cash flow and liquidity, will be affected by the extent and duration of the current market conditions, the
development in realised prices, including price differentials and other factors discussed elsewhere in the report. For further
information, see section Forward-looking statements.
1
SUPPLEMENTARY OPERATIONAL DISCLOSURES
Operational data
Quarters
Change
Operational data
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Prices
Average Brent oil price (USD/bbl)
81.3
88.7
101.4
(20%)
E&P Norway average liquids price (USD/bbl)
77.5
83.8
100.3
(23%)
E&P International average liquids price (USD/bbl)
70.7
77.2
96.3
(27%)
E&P USA average liquids price (USD/bbl)
61.3
68.6
82.5
(26%)
Group average liquids price (USD/bbl) [1]
73.8
80.4
97.1
(24%)
Group average liquids price (NOK/bbl) [1]
756
819
859
(12%)
E&P Norway average internal gas price (USD/mmbtu) [8]
17.36
27.22
29.77
(42%)
E&P USA average internal gas price (USD/mmbtu) [8]
2.80
4.73
4.18
(33%)
Realised piped gas price Europe (USD/mmbtu) [7]
1)
18.79
29.80
29.60
(37%)
Realised piped gas price US (USD/mmbtu) [7]
3.24
5.40
4.62
(30%)
Refining reference margin (USD/bbl) [2]
11.3
15.5
5.8
97%
Entitlement production (mboe per day)
E&P Norway entitlement liquids production
641
610
638
1%
E&P International entitlement liquids production
231
228
201
15%
E&P USA entitlement liquids production
129
100
114
13%
Group entitlement liquids production
1,001
938
953
5%
E&P Norway entitlement gas production
806
791
798
1%
E&P International entitlement gas production
33
31
37
(10%)
E&P USA entitlement gas production
171
160
170
0%
Group entitlement gas production
1,010
981
1,005
0%
Total entitlement liquids and gas production [3]
2,011
1,919
1,958
3%
Equity production (mboe per day)
E&P Norway equity liquids production
641
610
638
1%
E&P International equity liquids production
286
293
287
(0%)
E&P USA equity liquids production
144
112
127
14%
Group equity liquids production
1,071
1,015
1,051
2%
E&P Norway equity gas production
806
791
798
1%
E&P International equity gas production
50
50
54
(6%)
E&P USA equity gas production
203
190
203
0%
Group equity gas production
1,059
1,031
1,055
0%
Total equity liquids and gas production [4]
2,130
2,046
2,106
1%
Power generation
Power generation (GWh) Equinor share
1,163
1,332
511
>100%
Renewable power generation (GWh) Equinor share
524
517
511
3%
1) Restated. Restatement due to change in the definition of the price marker. For more information see 'End notes'.
Health, safety and the environment
Twelve months
average per
Full year
Q1 2023
2022
Total recordable injury frequency (TRIF)
2.7
2.5
Serious Incident Frequency (SIF)
0.4
0.4
Oil and gas leakages (number of)
1)
8
8
First quarter
First quarter
2023
2022
Upstream CO
2
2
/boe)
2)
6.6
6.7
Absolute scope 1+2 GHG emissions (million tonnes CO
2
e)
3)
2.9
2.8
1) Number of leakages with rate above 0.1 kg/second during the past 12 months.
2) Operational control, total scope 1 emissions of CO
2
3) Operational control, total scope 1 and 2 emissions of CO
2
4.
EXPLORATION & PRODUCTION NORWAY
Financial information
Quarter
Change
(unaudited, in USD million)
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Total revenues and other income
12,044
16,729
18,454
(35%)
Total operating expenses
(2,229)
(2,343)
(1,521)
47%
Operating and administrative expenses
(977)
(1,020)
(816)
20%
Depreciation, amortisation and net impairments
(1,115)
(1,222)
(600)
86%
Exploration expenses
(137)
(101)
(106)
30%
Net operating income/(loss)
9,816
14,386
16,933
(42%)
Additions to PP&E, intangibles and equity accounted investments
1,317
1,422
1,072
23%
Operational information
Quarters
Change
E&P Norway
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
E&P entitlement liquid and gas production (mboe/day)
1,448
1,401
1,436
1%
Average liquids price (USD/bbl)
77.5
83.8
100.3
(23%)
Average internal gas price (USD/mmbtu)
17.36
27.22
29.77
(42%)
Production & Revenues
Increased production supported by the ramp-up of new fields and continued high gas deliveries to Europe were somewhat offset by
temporary operational issues at Johan Sverdrup. This delivered solid results for the years’ first quarter, even in a lower-price
environment.
Continued high focus on gas production maintained reliable energy deliveries to Europe. Gas volumes represented over 55% of the
total production and contributed to a slight increase in volume from the first quarter of 2022. Johan Sverdrup Phase 2 and Snøhvit
contributed to a 1% increase in gas volume and a 0.6% increase in liquids compared to the first quarter of 2022.
There was high exploration activity in the quarter with 3 commercial discoveries and activity in 10 wells.
Operating expenses and financial results
Lower gas prices primarily drove the decrease in net operating income in the first quarter of 2023 compared to the same period last
year. Realised gas prices were 33% lower in the first quarter of 2023 compared to the same quarter in 2022.
In the first quarter of 2023, high environmental costs and higher operations and maintenance costs were the main drivers for the
increase in operating and administrative expenses compared to the same period last year. An increase in proved reserves during the
year 2022 contributed towards a downward trend in depreciation, partially offsetting the increase in operating expenditure. The
development of the USD/NOK exchange rate had a significant positive effect on the total operating expenses.
The divestment of a 19% ownership share in Martin Linge in the fourth quarter of last year and the USD/NOK exchange rate
developments led to a decrease in depreciation, amortisation, and net impairments in the first quarter compared to the first quarter of
2022.
EXPLORATION & PRODUCTION INTERNATIONAL
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Total revenues and other income
1,548
2,373
1,453
7%
Total operating expenses
(1,167)
(551)
(1,822)
(36%)
Purchases [net of inventory variation]
16
(85)
27
(39%)
Operating and administrative expenses
(659)
(511)
(390)
69%
Depreciation, amortisation and net impairments
(461)
310
(1,378)
(67%)
Exploration expenses
(64)
(266)
(81)
(21%)
Net operating income/(loss)
382
1,822
(369)
>(100%)
Additions to PP&E, intangibles and equity accounted investments
451
584
626
(28%)
Operational information
Quarters
Change
E&P International
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
E&P equity liquid and gas production (mboe/day)
336
343
341
(1%)
E&P entitlement liquid and gas production (mboe/day)
264
258
239
11%
Production sharing agreements (PSA) effects
72
85
102
(29%)
Average liquids price (USD/bbl)
70.7
77.2
96.3
(27%)
Production & Revenues
The restart of production at the Peregrino field in Brazil in July 2022 and the start-up of phase 2 in October 2022 positively impacted
the production in the first quarter of 2023. This was offset mainly by Equinor’s exit from Russia, natural decline in several mature fields
and the effect of turnarounds, resulting in slightly lower equity production than in the first quarter of 2022. The lower effects from
production sharing agreements (PSA) were driven by a decrease in production from several fields with PSAs in combination with
lower prices.
Lower liquids and gas prices negatively impacted revenues in the first quarter of 2023 compared to the same period last year. This
was partially offset by increased entitlement production. The fair value of derivatives positively impacted reported total revenues by
USD 89 million in the first quarter of 2023 (2022: negative USD 314 million) resulting in a 7% increase overall in total revenues.
Operating expenses and financial results
Restart of production at the Peregrino field drove higher operations and maintenance expenses and increased royalties in the first
quarter of 2023 compared to the same quarter last year. This was also a major contributor to the increase in depreciation, together
with new investments in several fields and the effect of an impairment reversal in the first quarter of 2022.
In the first quarter of 2023, total reported operating expenses were negatively impacted by a loss of USD 258 million from the sale of
the Corrib field in Ireland, compared to a negative impact of USD 1,080 million related to Equinor’s exit from Russia in the same period
last year.
EXPLORATION & PRODUCTION USA
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Total revenues and other income
1,015
1,083
1,269
(20%)
Total operating expenses
(675)
(262)
(24)
>100%
Operating and administrative expenses
(273)
(220)
(220)
24%
Depreciation, amortisation and net impairments
(357)
(13)
212
N/A
Exploration expenses
(46)
(29)
(16)
>100%
Net operating income/(loss)
340
821
1,245
(73%)
Additions to PP&E, intangibles and equity accounted investments
262
281
126
>100%
Operational information
Quarters
Change
E&P USA
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
E&P equity liquid and gas production (mboe/day)
347
302
329
5%
E&P entitlement liquid and gas production (mboe/day)
299
260
284
6%
Royalties
47
42
45
4%
Average liquids price (USD/bbl)
61.3
68.6
82.5
(26%)
Average internal gas price (USD/mmbtu)
2.80
4.73
4.18
(33%)
Production & Revenues
The Caesar Tonga field in the US Gulf of Mexico back in production with new flow lines, combined with additional wells online in the
Appalachian basin, were the main drivers for increased production in the first quarter of 2023 compared to the prior year. The increase
was partially offset by a natural decline in the Appalachian basin and several mature fields in the Gulf of Mexico.
Increased entitlement production helped to mitigate some of the downward impacts on revenue caused by the lower price
environment.
Operating expenses and financial results
Reduced downtime in certain Gulf of Mexico assets, the start-up of the Vito platform combined with increased maintenance activity in
the Appalachian basin, contributed to higher operations and maintenance expenses. Depreciation and amortisation increased in the
first quarter of 2023 compared to the same period in 2022 due to increased production and added offshore and onshore capital
expenditures. The improved proved reserves partially offset the increase.
In the first quarter of 2022, net operating income was positively impacted by impairment reversals of USD 532 million related to assets
in the Gulf of Mexico.
MARKETING, MIDSTREAM & PROCESSING
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Total revenues and other income
28,889
33,591
35,917
(20%)
Total operating expenses
(26,771)
(33,842)
(35,425)
(24%)
Purchases [net of inventory variation]
(25,358)
(31,996)
(34,289)
(26%)
Operating and administrative expenses
(1,178)
(1,614)
(924)
28%
Depreciation, amortisation and net impairments
(234)
(233)
(212)
10%
Net operating income/(loss)
2,118
(251)
492
>100%
Additions to PP&E, intangibles and equity accounted investments
219
349
265
(17%)
Operational information
Quarters
Change
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Liquids sales volumes (mmbl)
1)
217.3
212.1
211.6
3%
Natural gas sales Equinor (bcm)
15.7
15.8
16.5
(5%)
Natural gas entitlement sales Equinor (bcm)
14.3
14.2
14.1
1%
Power generation (GWh) Equinor share
639
815
0
N/A
Realised piped gas price Europe (USD/mmbtu)
1)
18.79
29.80
29.60
(37%)
Realised piped gas price US (USD/mmbtu)
3.24
5.40
4.62
(30%)
1) Restated. Restatement due to a change in the definition of the price marker for realised gas price and improved methodology for calculating
liquids sales volumes. For more information, see 'End notes'.
Volumes, Pricing & Revenues
Liquids sales volumes increased compared to the first quarter of 2022. This was mainly due to an increase in sales of international
equity volumes and purchases from third parties, partially offset by a decrease in sales volume from NCS.
Compared to the first quarter of 2022, the restarted deliveries from Hammerfest LNG partially offset a reduction in gas sales volumes
and third-party volumes.
The realised piped gas price Europe decreased compared to the first quarter last year due to a drop in market prices caused by
reduced demand amid mild winter temperatures, high LNG imports and healthy storage levels.
The realised US piped gas price decreased compared to the first quarter last year as market prices fell steadily throughout the quarter,
driven by a mild winter season, driving down residential and commercial heating demand.
Financial Results
Net operating income
The increase was mainly due to solid results driven by LNG and piped gas trading as well as strong physical crude and gasoline
margins.
In the first quarter of 2023, net operating income was positively impacted by changes in fair value of mark to market derivatives on gas
and LNG amounting to USD 809 million
In the first quarter of 2022, net operating income was positively impacted by change in fair value of mark to market derivatives on gas
and LNG amounting to net of USD 256 million and operational storage of USD 181 million due to increase in market prices.
Purchases decreased mainly due to lower prices for both gas and liquids and currency effect, partially offset by higher liquids
volumes.
RENEWABLES
Financial information
Quarters
Change
(unaudited, in USD million)
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Revenues third party, other revenue and other income
5
31
90
(94%)
Net income/(loss) from equity accounted investments
(7)
8
29
N/A
Total revenues and other income
(2)
38
119
N/A
Total operating expenses
(87)
(102)
(41)
>100%
Operating and administrative expenses
(86)
(101)
(40)
>100%
Depreciation, amortisation and net impairments
(1)
(1)
(1)
36%
Net operating income/(loss)
(89)
(63)
77
N/A
Additions to PP&E, intangibles and equity accounted investments
851
103
43
>100%
Operational information
Quarters
Change
(unaudited, in USD million)
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
Renewables power generation (GWh) Equinor share
511
509
511
0%
Renewables power generation
Power generation comes mainly from offshore wind assets, and remained stable in the first quarter of 2023 compared to the same
quarter last year.
Results from equity accounted investments
Net income from equity-accounted investments decreased compared to same quarter in the prior year. Producing assets contributed
positively to net income, however, the contribution was somewhat lower than in the first quarter of last year due to lower prices. Net
income from producing assets was more than offset by net losses from projects under development. Project expenses have increased
compared to the first quarter of 2022 due to higher activity levels as projects progress.
Operating expenses and financial results
In the first quarter of 2023, the decrease in net operating income compared to the same period last year was driven by increased
business development costs due to higher activity levels in the US, the UK and Asia. In the first quarter of 2022, net operating income
included divestment gains of USD 87 million from the Dogger Bank C wind farm project.
The acquisition of BeGreen which closed in the first quarter of 2023 and investment related to projects in the US significantly
contributed to the additions to PP&E, intangibles and equity accounted investments for the first quarter of 2023 compared to last year.
CONDENSED INTERIM FINANCIAL STATEMENTS
First quarter 2023
CONSOLIDATED STATEMENT OF INCOME
Quarters
(unaudited, in USD million)
Note
Q1 2023
Q4 2022
Q1 2022
Revenues
4
29,210
33,841
36,050
Net income/(loss) from equity accounted investments
43
395
99
Other income
(30)
84
244
Total revenues and other income
2
29,224
34,321
36,393
Purchases [net of inventory variation]
(11,235)
(12,853)
(13,510)
Operating expenses
3
(2,722)
(3,026)
(1,989)
Selling, general and administrative expenses
(304)
(278)
(282)
Depreciation, amortisation and net impairments
(2,200)
(1,184)
(2,017)
Exploration expenses
(246)
(396)
(203)
Total operating expenses
2
(16,707)
(17,737)
(18,001)
Net operating income/(loss)
2
12,517
16,584
18,392
Interest expenses and other financial expenses
(463)
(450)
(266)
Other financial items
1,652
(1,664)
(903)
Net financial items
5
1,189
(2,115)
(1,169)
Income/(loss) before tax
13,707
14,469
17,223
Income tax
6
(8,741)
(6,572)
(12,509)
Net income/(loss)
4,966
7,897
4,714
Attributable to equity holders of the company
4,962
7,895
4,710
Attributable to non-controlling interests
4
2
4
Basic earnings per share (in USD)
1.59
2.52
1.46
Diluted earnings per share (in USD)
1.59
2.51
1.46
Weighted average number of ordinary shares outstanding (in millions)
3,118
3,131
3,228
Weighted average number of ordinary shares outstanding diluted (in millions)
3,124
3,141
3,237
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarters
(unaudited, in USD million)
Q1 2023
Q4 2022
Q1 2022
Net income/(loss)
4,966
7,897
4,714
Actuarial gains/(losses) on defined benefit pension plans
54
895
(419)
Income tax effect on income and expenses recognised in OCI
1)
(16)
(208)
93
Items that will not be reclassified to the Consolidated statement of income
38
687
(326)
Foreign currency translation effects
(1,426)
4,116
173
Share of OCI from equity accounted investments
(65)
424
0
Items that may be subsequently reclassified to the Consolidated statement of income
(1,491)
4,540
173
Other comprehensive income/(loss)
(1,453)
5,228
(153)
Total comprehensive income/(loss)
3,512
13,125
4,561
Attributable to the equity holders of the company
3,508
13,123
4,557
Attributable to non-controlling interests
4
2
4
1) Other comprehensive income (OCI).
CONSOLIDATED BALANCE SHEET
At 31 March
At 31 December
(unaudited, in USD million)
Note
2023
2022
1)
ASSETS
Property, plant and equipment
2
55,161
56,498
Intangible assets
5,535
5,158
Equity accounted investments
3,084
2,758
Deferred tax assets
8,417
8,732
Pension assets
1,182
1,219
Derivative financial instruments
526
691
Financial investments
2,857
2,733
Prepayments and financial receivables
7
868
2,063
Total non-current assets
77,632
79,851
Inventories
3,192
5,205
Trade and other receivables
2
16,229
22,452
Derivative financial instruments
2,836
4,039
Financial investments
34,576
29,876
Cash and cash equivalents
3
17,915
15,579
Total current assets
74,749
77,152
Assets classified as held for sale
3
109
1,018
Total assets
152,491
158,021
EQUITY AND LIABILITIES
Shareholders' equity
57,165
53,988
Non-controlling interests
5
1
Total equity
57,170
53,989
Finance debt
5
22,403
24,141
Lease liabilities
2,459
2,410
Deferred tax liabilities
11,925
11,996
Pension liabilities
3,617
3,671
Provisions and other liabilities
7
14,236
15,633
Derivative financial instruments
2,194
2,376
Total non-current liabilities
56,834
60,226
Trade, other payables and provisions
10,410
13,352
Current tax payable
6
18,926
17,655
Finance debt
5
4,995
4,359
Lease liabilities
1,275
1,258
Dividends payable
0
2,808
Derivative financial instruments
2,597
4,106
Total current liabilities
38,204
43,539
Liabilities directly associated with the assets classified as held for sale
3
283
268
Total liabilities
95,321
104,032
Total equity and liabilities
152,491
158,021
1) Audited
2) Of which Trade receivables of USD 12.0 billion 31 March 2023 and USD 17.3 billion 31 December 2022
3) Includes collateral deposits of USD 2.450 billion for 31 March 2023 related to certain requirements set out by exchanges where Equinor is
participating. The corresponding figure for 31 December 2022 is USD 6.128 billion.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited, in USD million)
Share
capital
Additional
paid-in
capital
Retained
earnings
Foreign
currency
translation
reserve
OCI from
equity
accounted
investments
Share-
holders'
equity
Non-
controlling
interests
Total equity
At 1 January 2022
1,164
6,408
36,683
(5,245)
0
39,010
14
39,024
Net income/(loss)
4,710
4,710
4
4,714
Other comprehensive
income/(loss)
(326)
173
(153)
(153)
Total comprehensive
income/(loss)
4,561
Dividends
0
0
Share buy-back
(330)
(330)
(330)
Other equity transactions
(4)
(3)
(3)
At 31 March 2022
1,164
6,074
41,068
(5,073)
0
43,233
19
43,251
At 1 January 2023
1,142
3,041
58,236
(8,855)
424
53,988
1
53,989
Net income/(loss)
4,962
4,962
4
4,966
Other comprehensive
income/(loss)
38
(1,426)
(65)
(1,453)
(1,453)
Total comprehensive
income/(loss)
3,512
Dividends
0
0
Share buy-back
1)
(331)
(331)
(331)
Other equity transactions
0
0
At 31 March 2023
1,142
2,710
63,236
(10,281)
359
57,165
5
57,170
1) For more information see note 8 Capital distribution.
CONSOLIDATED STATEMENT OF CASH FLOWS
Quarters
(unaudited, in USD million)
Note
Q1 2023
Q4 2022
Q1 2022
Income/(loss) before tax
13,707
14,469
17,223
Depreciation, amortisation and net impairment
2,200
1,184
2,017
Exploration expenditures written off
91
183
73
(Gains)/losses on foreign currency transactions and balances
5
(955)
2,140
284
(Gains)/losses on sale of assets and businesses
3
233
(87)
(89)
(Increase)/decrease in other items related to operating activities
1)
(324)
2,923
(300)
(Increase)/decrease in net derivative financial instruments
327
217
953
Interest received
277
216
11
Interest paid
(251)
(258)
(118)
Cash flows provided by operating activities before taxes paid and working capital items
15,305
20,988
20,055
Taxes paid
(5,589)
(14,188)
(4,307)
(Increase)/decrease in working capital
5,155
(2,532)
23
Cash flows provided by operating activities
14,871
4,267
15,771
Capital expenditures and investments
2)
3
(2,303)
(2,376)
(2,616)
(Increase)/decrease in financial investments
(5,108)
(6,990)
(2,850)
(Increase)/decrease in derivative financial instruments
(803)
(374)
424
(Increase)/decrease in other interest-bearing items
63
7
4
Proceeds from sale of assets and businesses
3)
3
47
47
574
Cash flows provided by/(used in) investing activities
(8,104)
(9,687)
(4,465)
Repayment of finance debt
(2,176)
(250)
0
Repayment of lease liabilities
(332)
(365)
(317)
Dividends paid
(2,861)
(2,231)
(582)
Share buy-back
(461)
(577)
(439)
Net current finance debt and other financing activities
873
230
(2,804)
Cash flows provided by/(used in) financing activities
(4,958)
(3,193)
(4,142)
Net increase/(decrease) in cash and cash equivalents
1,809
(8,612)
7,165
Effect of exchange rate changes on cash and cash equivalents
(8)
844
(270)
Cash and cash equivalents at the beginning of the period (net of overdraft)
15,579
23,348
13,987
Cash and cash equivalents at the end of the period (net of overdraft)
4)
17,380
15,579
20,882
1) The line item includes a fair value loss related to inventory of USD 2,408 million in the fourth quarter 2022. The corresponding amount in
the first quarter 2023 is immaterial.
2) Cash inflow of USD 433 million received in the first quarter 2022 related to the disposal of parts of the interests in the Bacalhau field in
2018 (contingent consideration) has been reclassified from Capital expenditures and investments to Proceeds from sale of assets and
businesses.
3) The line item includes cash consideration net of cash disposed of related to the disposal of
Equinor Energy Ireland Limited at closing date
31 March 2023. See note 3 Acquisitions and disposals for more information.
4) At 31 March 2023 cash and cash equivalents net overdraft was USD 535 million. At 31 December 2022 and March 2022, cash and cash
equivalents net overdrafts were zero.
Notes to the Condensed interim financial statements
1 Organisation and basis of preparation
Organisation and principal activities
Equinor Group (Equinor) consists of Equinor ASA and its subsidiaries. Equinor ASA is incorporated and domiciled in Norway and
listed on the Oslo Børs (Norway) and the New York Stock Exchange (USA). The address of its registered office is Forusbeen 50, N-
4035 Stavanger, Norway.
The objective of Equinor is to develop, produce and market various forms of energy and derived products and services, as well as
other business. The activities may also be carried out through participation in or cooperation with other companies. Equinor Energy
AS, a 100% owned operating subsidiary of Equinor ASA and owner of all of Equinor's oil and gas activities and net assets on the
Norwegian continental shelf, is co-obligor or guarantor of certain debt obligations of Equinor ASA.
Equinor's condensed interim financial statements for the first quarter of 2023 were authorised for issue by the board of directors on 3
May 2023.
Basis of preparation
These condensed interim financial statements are prepared in accordance with International Accounting Standard 34 Interim Financial
Reporting as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (EU). The
condensed interim financial statements do not include all the information and disclosures required by International Financial Reporting
Standards (IFRS) for a complete set of financial statements, and these condensed interim financial statements should be read in
conjunction with the consolidated annual financial statements for 2022. IFRS as adopted by the EU differs in certain respects from
IFRS as issued by the IASB, however the differences do not impact Equinor's financial statements for the periods presented. A
description of the material accounting policies applied in preparing these condensed interim financial statements is included in
Equinor`s consolidated annual financial statements for 2022.
There have been no changes to the material accounting policies during 2023 compared to the consolidated annual financial
statements for 2022.
Certain amounts in the comparable periods in the note disclosures have been reclassified to conform to current period presentation.
The subtotals and totals in some of the tables may not equal the sum of the amounts shown due to rounding. When determining fair
value, there have been no changes to the valuation techniques or models and Equinor applies the same sources of input and the
same criteria for categorisation in the fair value hierarchy as disclosed in the Consolidated annual financial statements for 2022.
The Condensed interim financial statements are unaudited.
Use of estimates
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated
assumptions are reviewed on an on-going basis and are based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis for making the judgments about carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
2 Segments
Equinor’s operations are managed through operating segments identified on the basis of those components of Equinor that are
regularly reviewed by the chief operating decision maker, Equinor's Corporate Executive Committee (CEC). The reportable segments
Exploration & Production Norway (E&P Norway), Exploration & Production International (E&P International), Exploration & Production
USA E&P USA), Marketing, Midstream & Processing (MMP) and Renewables (REN) correspond to the operating segments. The
operating segments Projects, Drilling & Procurement (PDP), Technology, Digital & Innovation (TDI) and Corporate staff and functions
are aggregated into the reportable segment Other based on materiality. The majority of the costs in PDP and TDI is allocated to the
three Exploration & Production segments, MMP and REN.
The accounting policies of the reporting segments equal those described in these Consolidated financial statements, except for the
line-item Additions to PP&E, intangibles and equity accounted investments in which movements related to changes in asset retirement
obligations are excluded as well as provisions for onerous contracts which reflect only obligations towards group external parties. The
measurement basis of segment profit is net operating income/(loss). Deferred tax assets, pension assets, non-current financial assets,
total current assets and total liabilities are not allocated to the segments. Transactions between the segments, mainly from the sale of
crude oil, gas, and related products, are performed at defined internal prices which have been derived from market prices. The
transactions are eliminated upon consolidation.
First quarter 2023
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total
(in USD million)
Revenues third party, other revenue and
other income
(48)
329
61
28,767
5
66
0
29,181
Revenues inter-segment
12,092
1,209
954
82
0
9
(14,346)
0
Net income/(loss) from equity accounted
investments
0
11
0
40
(7)
0
0
43
Total revenues and other income
12,044
1,548
1,015
28,889
(2)
75
(14,346)
29,224
Purchases [net of inventory variation]
(0)
16
0
(25,358)
0
(0)
14,107
(11,235)
Operating, selling, general and
administrative expenses
(977)
(659)
(273)
(1,178)
(86)
(133)
281
(3,025)
Depreciation and amortisation
(1,115)
(461)
(357)
(232)
(1)
(33)
0
(2,198)
Net impairment losses/(reversals)
0
0
0
(2)
0
0
0
(2)
Exploration expenses
(137)
(64)
(46)
0
0
0
0
(246)
Total operating expenses
(2,229)
(1,167)
(675)
(26,771)
(87)
(166)
14,388
(16,707)
Net operating income/(loss)
9,816
382
340
2,118
(89)
(91)
42
12,517
Additions to PP&E, intangibles and equity
accounted investments
1,317
451
262
219
851
78
0
3,179
Balance sheet information
Equity accounted investments
3
560
0
675
1,771
75
0
3,084
Non-current segment assets
27,167
15,992
11,241
4,469
763
1,064
0
60,696
Non-current assets not allocated to
segments
13,852
Total non-current assets
77,632
Assets held for sale
109
0
0
0
0
0
0
109
Fourth quarter 2022
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total
(in USD million)
Revenues third party, other revenue and
other income
77
720
69
32,965
31
65
0
33,926
Revenues inter-segment
16,652
1,623
1,014
254
0
27
(19,570)
0
Net income/(loss) from equity accounted
investments
(0)
31
0
372
8
(16)
0
395
Total revenues and other income
16,729
2,373
1,083
33,591
38
76
(19,570)
34,321
Purchases [net of inventory variation]
(0)
(85)
(0)
(31,996)
0
(0)
19,228
(12,853)
Operating, selling, general and
administrative expenses
(1,020)
(511)
(220)
(1,614)
(100)
(153)
314
(3,304)
Depreciation and amortisation
(1,219)
(436)
(363)
(236)
(1)
(26)
0
(2,281)
Net impairment losses/(reversals)
(3)
747
350
3
0
(0)
0
1,097
Exploration expenses
(101)
(266)
(29)
0
0
0
0
(396)
Total operating expenses
(2,343)
(551)
(262)
(33,843)
(101)
(179)
19,542
(17,737)
Net operating income/(loss)
14,386
1,822
821
(252)
(63)
(103)
(29)
16,584
Additions to PP&E, intangibles and equity
accounted investments
1,422
584
281
349
103
88
0
2,828
Balance sheet information
Equity accounted investments
3
550
0
688
1,452
65
0
2,758
Non-current segment assets
28,510
15,868
11,311
4,619
316
1,031
0
61,656
Non-current assets not allocated to
segments
15,437
Total non-current assets
79,851
Assets held for sale
0
1,018
0
0
0
0
0
1,018
First quarter 2022
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total
(in USD million)
Revenues third party, other revenue and
other income
209
62
78
35,825
90
31
0
36,294
Revenues inter-segment
18,245
1,324
1,191
89
0
10
(20,859)
0
Net income/(loss) from equity accounted
investments
0
67
0
3
29
0
0
99
Total revenues and other income
18,454
1,453
1,269
35,917
119
41
(20,859)
36,393
Purchases [net of inventory variation]
0
27
0
(34,289)
0
0
20,752
(13,510)
Operating, selling, general and
administrative expenses
(816)
(390)
(220)
(923)
(41)
(78)
197
(2,271)
Depreciation and amortisation
(1,421)
(336)
(320)
(212)
(1)
(39)
0
(2,330)
Net impairment losses/(reversals)
821
(1,042)
533
0
0
0
0
312
Exploration expenses
(106)
(81)
(16)
0
0
0
0
(203)
Total operating expenses
(1,521)
(1,822)
(24)
(35,425)
(41)
(116)
20,949
(18,001)
Net operating income/(loss)
16,933
(369)
1,245
492
77
(76)
90
18,392
Additions to PP&E, intangibles and equity
accounted investments
1,072
626
126
265
43
56
0
2,188
Non-current assets by country
At 31 March
At 31 December
(in USD million)
2023
2022
Norway
31,779
33,242
USA
12,624
12,343
Brazil
9,493
9,400
UK
3,739
3,688
Azerbaijan
1,396
1,401
Canada
1,160
1,171
Denmark
935
497
Angola
893
895
Argentina
625
615
Algeria
584
622
Other
553
541
Total non-current assets
1)
63,780
64,414
1) Excluding deferred tax assets, pension assets and non-current financial assets.
3 Acquisitions and disposals
Acquisitions
Acquisition of BeGreen
On 26 January 2023, Equinor closed a transaction with the Bregentved Group and members of the executive board of BeGreen Solar
Aps to acquire 100% of the shares in the Danish solar developer BeGreen Solar Aps. The cash consideration amounted to USD 252
million (EUR 235 million), in addition to a consideration contingent on the successful delivery of future solar projects above an agreed
megawatt threshold. The transaction has been accounted for within the REN segment as a business combination, resulting in an
increase of Equinor’s intangible assets of USD 423 million. The purchase price and the purchase price allocation are preliminary.
Acquisition of Suncor Energy UK Limited
On 3 March 2023, Equinor entered into an agreement to acquire 100% of Suncor Energy UK Limited for a total consideration of USD
850 million before adjustments for working capital and net cash. USD 250 million is contingent on a final investment decision on the
Rosebank field. The transaction includes a non-operated interest in the producing Buzzard oil field (29.89%) and an additional interest
in the operated Rosebank development (40%). Closing of the transaction is expected to take place in the second quarter of 2023
subject to relevant regulatory approvals and will be recognised in the E&P International segment.
Disposals
Equinor Energy Ireland Limited
On 31 March 2023, Equinor closed the transaction with Vermilion Energy Inc (Vermillion) to sell Equinor’s non-operated equity
position in the Corrib gas project in Ireland, covering 100% of the shares in Equinor Energy Ireland Limited (EEIL). Prior to closing,
Equinor received an extraordinary dividend of USD 371 million from EEIL. Total consideration amounted to USD 362 million, including
cash settlement of contingent consideration. A loss of USD 258 million has been recognised and presented in the line item Operating
expenses in the Consolidated statement of income within the E&P International segment.
4 Revenues
Revenues from contracts with customers by geographical areas
When attributing the line item Revenues from contracts with customers for the first quarter of 2023 to the country of the legal entity
executing the sale, Norway constitutes 84% and USA constitutes 12% of such revenues. For the first quarter of 2022, Norway and
USA constituted 86% and 10% of such revenues, respectively.
Revenues from contracts with customers and other revenues
Quarters
(in USD million)
Q1 2023
Q4 2022
Q1 2022
Crude oil
12,112
12,994
15,034
Natural gas
10,457
15,479
15,538
9,228
13,326
14,350
397
651
621
832
1,502
567
Refined products
2,477
2,892
2,904
Natural gas liquids
2,383
1,896
2,576
Transportation
453
480
282
Other sales
959
1,469
1,117
Revenues from contracts with customers
28,841
35,209
37,451
Total other revenues
1)
370
(1,368)
(1,401)
Revenues
29,210
33,841
36,050
1) Principally relates to commodity derivatives and change in fair value less cost to sell for commodity inventories held for trading purposes.
5 Financial items
Quarters
(in USD million)
Q1 2023
Q4 2022
Q1 2022
Net foreign currency exchange gains/(losses)
955
(2,140)
(284)
Interest income and other financial items
590
482
114
Gains/(losses) on financial investments
32
8
(134)
Gains/(losses) other derivative financial instruments
74
(15)
(599)
Interest and other finance expenses
(463)
(450)
(266)
Net financial items
1,189
(2,115)
(1,169)
Equinor reports significant unrealised foreign currency gains in the first quarter, mainly related to strengthening of USD versus NOK.
These effects are mainly due to a large part of Equinor’s operations having NOK as functional currency, and the effects are offset
within equity as OCI effects arising on translation from functional currency to presentation currency USD.
The increase in Interest income and other financial items in first quarter compared to the previous quarter and same quarter prior year
mainly relates to higher interest rates and increased Cash and cash equivalents and Current financial investments.
Equinor has a US Commercial paper programme available with a limit of USD 5 billion. As of 31 March 2023, USD 1.4 billion were
utilised compared to USD 0.2 billion utilised as of 31 December 2022.
6 Income taxes
Quarters
(in USD million)
Q1 2023
Q4 2022
Q1 2022
Income/(loss) before tax
13,707
14,469
17,223
Income tax
(8,741)
(6,572)
(12,509)
Effective tax rate
The effective tax rate for the first quarter of 2023 was significantly influenced by lower share of income from the Norwegian continental
shelf and currency effects in entities that are taxable in other currencies than the functional currency.
The effective tax rate for the first quarter of 2022 was primarily influenced by high share of operating income from the Norwegian
continental shelf and losses including impairments recognised in countries with lower effective tax rates, partially offset by positive
income in countries with unrecognised deferred tax assets. The tax rate is also influenced by currency effects in entities that are
taxable in other currencies than the functional currency.
7 Provisions, commitments, contingent items and related parties
Litigation and claims
During the normal course of its business, Equinor is involved in legal and other proceedings, and several unresolved claims are
currently outstanding. The ultimate liability or asset in respect of such litigation and claims cannot be determined at this time. Equinor
has provided in its Condensed interim financial statements for probable liabilities related to litigation and claims based on the
company’s best judgement. Equinor does not expect that its financial position, results of operations or cash flows will be materially
affected by the resolution of these legal proceedings.
Related parties
The line-item Prepayments and Financial Receivables includes USD 213 million which represent a gross receivable from the
Norwegian state under the Marketing Instruction in relation to the state’s (SDFI) expected participation in the gas sales activities of a
foreign subsidiary of Equinor. At year-end 2022, the corresponding amount was USD 1,461 million. The decrease is mainly related to
reduced gas storage volumes due to gas sales. A corresponding non-current liability of USD 213 million has been recognised,
representing SDFI's estimated interest in the gas sales activities in the foreign subsidiary. Total non-current liabilities to SDFI amounts
to USD 770 million at 31 March 2023 (USD 2,072 million at year end 2022).
8 Capital distribution
Dividend for the first quarter
On 3 May 2023, the Board of Directors resolved to declare an ordinary cash dividend for the first quarter of 2023 of USD 0.30 per
share and an extraordinary cash dividend of USD 0.60 per share. The Equinor shares will be traded ex-dividend 14 August 2023 on
the Oslo Børs and for ADR holders on the New York Stock Exchange. Record date will be 15 August 2023 and payment date will be
25 August 2022.
Share buy- back programme 2023
The purpose of the share buy-back programme is to reduce the issued share capital, and all shares repurchased will be cancelled.
According to agreement between Equinor and the Norwegian State, a proportionate share of the Norwegian State's shares will be
redeemed and annulled at the annual general meeting, ensuring that the State's ownership interest in Equinor remains unchanged at
67%. The Board of Directors has proposed an annual buy-back programme for 2023 with up to USD 6 billion, including shares to be
redeemed from the Norwegian State, subject to authorisation from the annual general meeting.
On 7 February 2023, Equinor launched the first tranche of USD 1 billion. USD 330 million order has been acquired in the open market
and the full amount has been settled, while USD 670 million of shares from the Norwegian State will be redeemed at the annual
general meeting in May 2023. On 3 May 2023, the Board of Directors resolved the commencement of the second tranche of the share
buy-back programme for 2023 of a total of around USD 1.67 billion, including shares to be redeemed from the Norwegian State. The
second tranche is subject to approval at the general meeting and will end no later than 25 July 2023.
Equity impact of share buy back programmes (in USD million)
Q1 2023
Q1 2022
First tranche
330
330
Total
330
330
SUPPLEMENTARY DISCLOSURES
Exchange rates
Quarters
Change
Exchange rates
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
NOK/USD average daily exchange rate
0.0976
0.0981
0.1130
(14%)
NOK/USD period-end exchange rate
0.0954
0.1014
0.1143
(17%)
USD/NOK average daily exchange rate
10.2439
10.1925
8.8483
16%
USD/NOK period-end exchange rate
10.4772
9.8573
8.7479
20%
EUR/USD average daily exchange rate
1.0728
1.0195
1.1216
(4%)
EUR/USD period-end exchange rate
1.0875
1.0666
1.1101
(2%)
Exploration expenses
Exploration expenses
Quarters
Change
(in USD million)
Q1 2023
Q4 2022
Q1 2022
Q1 on Q1
E&P Norway exploration expenditures
148
144
127
16%
E&P International exploration expenditures
61
114
43
40%
E&P USA exploration expenditures
70
50
51
38%
Group exploration expenditures
278
307
221
26%
2)
Expensed, previously capitalised exploration expenditures
82
183
26
>100%
Capitalised share of current period's exploration activity
(122)
(95)
(91)
34%
Impairment (reversal of impairment)
8
0
46
(82%)
Exploration expenses according to IFRS
246
396
203
21%
USE AND RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
Non-GAAP financial measures are defined as numerical measures that either exclude or include amounts or certain accounting items
that are not excluded or included in the comparable measures calculated and presented in accordance with GAAP (i.e. IFRS).
Management considers adjusted earnings and adjusted earnings after tax together with other non-GAAP financial measures as
defined below, to provide a better indication of the underlying operational and financial performance in the period (excluding
financing), and therefore better facilitate comparisons between periods.
The following financial measures may be considered non-GAAP financial measures:
●
Capital employed adjusted
– this measure is defined as Equinor's total equity (including non-controlling interests) and net
interest-bearing debt adjusted.
●
Net interest-bearing debt adjusted
– this measure is defined as Equinor's interest bearing financial liabilities less cash and
cash equivalents and current financial investments, adjusted for collateral deposits and balances held by Equinor's captive
insurance company and balances related to the SDFI.
●
Net debt to capital employed, Net debt to capital employed adjusted, including lease liabilities and Net debt to capital
employed ratio adjusted
– Following implementation of IFRS 16 Equinor presents a “net debt to capital employed adjusted”
excluding lease liabilities from the gross interest-bearing debt. Comparable numbers are presented in the table Calculation of
capital employed and net debt to capital employed ratio in the report include Finance lease according to IAS17, adjusted for
marketing instruction agreement. In Equinor’s view, net debt ratio provides useful information about Equinor’s capital structure
and financial strength.
●
Organic capital expenditures (organic investments/capex)
– Capital expenditures, defined as Additions to PP&E, intangibles
and equity accounted investments in note 2 Segments to the Condensed interim financial statements, amounted to USD 3.2
billion in Q1 2023 (Q1 2022: USD 2.2 billion). Organic capital expenditures are capital expenditures excluding acquisitions,
recognised lease assets (RoU assets) and other investments with significant different cash flow pattern. In Q1 2023, a total of
USD 0.9 billion (Q1 2022: USD 0.4 billion) is excluded in the organic capital expenditures. Forward-looking organic capital
expenditures included in this report are not reconcilable to its most directly comparable IFRS measure without unreasonable
efforts, because the amounts excluded from such IFRS measure to determine organic capital expenditures cannot be predicted
with reasonable certainty. Organic capital expenditure is a measure which Equinor believes gives relevant information about
Equinor’s investments in maintenance and development of the company’s assets.
●
Gross investments/capex
– Capital expenditures, defined as Additions to PP&E, intangibles and equity accounted investments
in the financial statements, including Equinor’s proportionate share of capital expenditures in equity accounted investments not
included in additions to equity accounted investments. Forward-looking gross capital expenditures included in this report are not
reconcilable to its most directly comparable IFRS measure without unreasonable efforts, because the amounts excluded from
such IFRS measure to determine gross capital expenditures cannot be predicted with reasonable certainty.
●
Net cash flow (previously named free cash flow) for the first quarter of 2023 and the first and fourth quarter of 2022
includes the following line items in the Consolidated statement of cash flows: Cash flows provided by operating activities before
taxes paid and working capital items (2023: USD 15.3 billion | Q1 2022: USD 20.1 billion | Q4 2022: USD 21.0 billion), taxes paid
(2023: negative USD 5.6 billion | Q1 2022: negative USD 4.3 billion | Q4 2022: negative USD 14.2 billion), cash used/received in
business combinations (2023: USD 0.0 billion | Q1 2022: USD 0.0 billion | Q4 2022: USD 0.0 billion), capital expenditures and
investments (2023: negative USD 2.3 billion | Q1 2022: negative USD 2.6 billion | Q4 2022: negative USD 2.4 billion),
increase/decrease in other items interest-bearing (2023: USD 0.1 billion | Q1 2022: USD 0.0 billion | Q4 2022: USD 0.0 billion),
proceeds from sale of assets and businesses (2023: USD 0.0 billion | Q1 2022: USD 0.6 billion | Q4 2022: USD 0.0 billion),
dividend paid (2023: negative USD 2.9 billion | Q1 2022: negative USD 0.6 billion | Q4 2022: negative USD 2.2 billion) and share
buy-back (2023: negative USD 0.5 billion | Q1 2022: negative USD 0.4 billion | Q4 2022: negative USD 0.6 billion), resulting in a
net cash flow of 4.2 billion in the first quarter of 2023 (Q1 2022: 12.7 billion | Q4 2022: 1.7 billion). Net cash flow represents, and
is used by management to evaluate, cash generated from operational and investing activities available for debt servicing and
distribution to shareholders. The name of the measure was updated in the first quarter of 2023, but no changes have been made
to the definition.
See “Use and Reconciliation of Non-GAAP Financial Measures” in our Annual Report on Form 20-F for the year ended 31 December
2022 for additional information on our definition and use of these non-GAAP financial measures.
Calculation of capital employed and net debt to capital employed ratio
The table below reconciles the net interest-bearing debt adjusted, the capital employed, the net debt to capital employed ratio
adjusted including lease liabilities and the net debt to capital employed adjusted ratio with the most directly comparable financial
measure or measures calculated in accordance with IFRS.
Calculation of capital employed and net debt to capital employed ratio
At 31 March
At 31 December
(in USD million)
2023
2022
Shareholders' equity
57,165
53,988
Non-controlling interests
5
1
Total equity
A
57,170
53,989
Current finance debt and lease liabilities
6,271
5,617
Non-current finance debt and lease liabilities
24,862
26,551
Gross interest-bearing debt
B
31,132
32,168
Cash and cash equivalents
17,915
15,579
Current financial investments
34,576
29,876
Cash and cash equivalents and financial investment
C
52,491
45,455
Net interest-bearing debt [9]
B1 = B-C
(21,359)
(13,288)
Other interest-bearing elements
2,845
6,538
Normalisation for cash-build up before tax payment (50% of Tax Payment)
2,625
-
Net interest-bearing debt adjusted normalised for tax payment, including lease liabilities*
B2
(15,889)
(6,750)
Lease liabilities
3,734
3,668
Net interest-bearing debt adjusted*
B3
(19,623)
(10,417)
Calculation of capital employed*
Capital employed
A+B1
35,811
40,701
Capital employed adjusted, including lease liabilities
A+B2
41,281
47,239
Capital employed adjusted
A+B3
37,547
43,571
Calculated net debt to capital employed*
Net debt to capital employed
(B1)/(A+B1)
(59.6%)
(32.6%)
Net debt to capital employed adjusted, including lease liabilities
(B2)/(A+B2)
(38.5%)
(14.3%)
Net debt to capital employed adjusted
(B3)/(A+B3)
(52.3%)
(23.9%)
1) Cash and cash equivalents adjustments regarding collateral deposits classified as cash and cash equivalents in the Consolidated
balance sheet but considered as non-cash in the non-GAAP calculations as well as financial investments in Equinor Insurance AS
classified as current financial investments.
FORWARD -LOOKING STATEMENTS
This report contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as
"ambition", "continue", "could", "estimate", "intend", "expect", "believe", "likely", "may", "outlook", "plan", "strategy", "will", "guidance",
"targets", and similar expressions to identify forward-looking statements. Forward-looking statements include all statements other than
statements of historical fact, including, among others, statements regarding Equinor's plans, intentions, aims, ambitions and
expectations; the commitment to develop as a broad energy company; the ambition to be a leading company in the energy transition
and reduce net group-wide greenhouse gas emissions; our ambitions to decarbonise; future financial performance, including cash
flow and liquidity; accounting policies; the ambition to grow cash flow and returns; expectations regarding progress on the energy
transition plan; expectations regarding cash flow and returns from Equinor’s oil and gas portfolio; plans to develop fields and increase
gas exports; intention to optimise our portfolio; expectations and plans for renewables production capacity and investments in
renewables and low carbon solutions; expectations and plans regarding development of renewables projects, CCUS and hydrogen
businesses; future worldwide economic trends, market outlook and future economic projections and assumptions, including
commodity price and refinery assumptions; organic capital expenditures through 2026; expectations and estimates regarding
production and execution of projects; expectations regarding growth in oil and gas and renewable power production; estimates
regarding tax payments; the ambition to keep unit of production cost in the top quartile of our peer group; scheduled maintenance
activity and the effects thereof on equity production; completion and results of acquisitions and disposals; expected amount and timing
of dividend payments and the implementation of our share buy-back programme; and provisions and contingent liabilities. You should
not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the
forward-looking statements for many reasons.
These forward-looking statements reflect current views about future events, are based on management’s current expectations and
assumptions and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on
circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking statements, including levels of industry product supply, demand
and pricing, in particular in light of significant oil price volatility and the uncertainty created by Russia’s invasion of Ukraine;
unfavorable macroeconomic conditions and inflationary pressures; exchange rate and interest rate fluctuations; levels and
calculations of reserves and material differences from reserves estimates; regulatory stability and access to resources, including
attractive low carbon opportunities; the effects of climate change and changes in stakeholder sentiment and regulatory requirements
regarding climate change; changes in market demand and supply for renewables; inability to meet strategic objectives; the
development and use of new technology; social and/or political instability, including as a result of Russia’s invasion of Ukraine; failure
to manage digital and cyber threats; operational problems; unsuccessful drilling; availability of adequate infrastructure; the actions of
field partners and other third-parties; reputational damage; the actions of competitors; the actions of the Norwegian state as majority
shareholder and exercise of ownership by the Norwegian state; changes or uncertainty in or non-compliance with laws and
governmental regulations; adverse changes in tax regimes; the political and economic policies of Norway and other oil-producing
countries; regulations on hydraulic fracturing and low-carbon value chains; liquidity, interest rate, equity and credit risks; risks relating
to trading and commercial supply activities; an inability to attract and retain personnel; ineffectiveness of crisis management systems;
inadequate insurance coverage; health, safety and environmental risks; physical security risks; failure to meet our ethical and social
standards; non-compliance with international trade sanctions; and other factors discussed elsewhere in this report and in Equinor's
Annual Report on Form 20-F for the year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission
(including the risks described in the risk factors incorporated in Item 3.D thereof). Equinor's 2022 Annual Report on Form 20-F is
available at Equinor's website www.equinor.com.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our
future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of the forward-looking statements. Any forward-looking statement speaks
only as of the date on which such statement is made, and, except as required by applicable law, we undertake no obligation to update
any of these statements after the date of this report, either to make them conform to actual results or changes in our expectations.
END NOTES
1.
The group's
average liquids price
liquids (NGL).
2.
The
refining reference margin
and other feedstock, throughput, product yields, freight cost, inventory, etc
3.
Liquids volumes
change in the calculation methodology. See table below for further information.
4.
Equity volumes
production sharing agreement (PSA)
ownership share in a field.
Entitlement volumes
, on the other hand, represent Equinor’s share of the volumes distributed to the
partners in the field, which are subject to deductions for, among other things, royalty and the host government's share of profit oil.
Under the terms of a PSA, the amount of profit oil deducted from equity volumes will normally increase with the cumulative return
on investment to the partners and/or production from the licence. Consequently, the gap between entitlement and equity volumes
will likely increase in times of high liquids prices. The distinction between equity and entitlement is relevant to most PSA regimes,
whereas it is not applicable in most concessionary regimes such as those in Norway, the UK, the US, Canada and Brazil.
5.
Transactions with the
Norwegian State.
the majority shareholder of Equinor and it also holds major investments in other entities. This ownership structure means that
Equinor participates in transactions with many parties that are under a common ownership structure and therefore meet the
definition of a related party. Equinor purchases liquids and natural gas from the Norwegian State, represented by SDFI (the
State's Direct Financial Interest). In addition, Equinor sells the State's natural gas production in its own name, but for the
Norwegian State's account and risk, and related expenditures are refunded by the State.
6.
The production guidance reflects our estimates of
proved reserves
Commission (SEC) guidelines and additional production from other reserves not included in proved reserves estimates.
7.
The group's
average realised piped gas prices
paper positions. The realised piped gas price Europe for 2022 has been restated due to a change in the definition and exclusion
of LNG. This is done to report a realised European gas price that is comparable to relevant European piped gas
references/market prices. See table below for further information.
8.
The internal
transfer price
9.
Since different legal entities in the group lend to projects and others borrow from banks, project financing through external bank
or similar institutions is not netted in the balance sheet and results in over-reporting of the debt stated in the balance sheet
compared to the underlying exposure in the group. Similarly, certain net interest-bearing debt incurred from activities pursuant to
the Marketing Instruction of the Norwegian government are offset against receivables on the SDFI. Some interest-bearing
elements are classified together with non-interest bearing elements and are therefore included when calculating the net interest-
bearing debt.
Liquid sales volume restatement (mmbl)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Full year
2022
Liquid sales volume (old)
185.5
180.5
182.9
191.2
740.1
Liquid sales volume (new)
211.6
195.4
196.8
212.1
815.9
Achieved invoiced gas price restatement (mmbtu)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Full year
2022
Average invoice gas price - Europe (old)
29.60
27.18
43.65
29.80
32.46
Realised piped gas price Europe (new)
30.25
27.43
44.37
29.84
32.84
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorised.
EQUINOR ASA
(Registrant)
Dated: 4 May, 2023
By: ___/s/ Torgrim Reitan
Name: Torgrim Reitan
Title: Chief Financial Officer