Equinor swings to 1Q profit, raises dividend

Norway's state-controlled Equinor has increased its first-quarter dividend as it swung to a profit partly on higher oil and gas prices. But its production declined on the year.

Including inventory effects, Equinor made a profit of $1.85bn in January-March, compared with a loss of $705mn a year earlier and a loss of $2.42bn in the fourth quarter. Its pre-pandemic, first quarter 2019 profit was $1.71bn.

In addition to higher oil and gas prices the firm took lower impairments, and reported capital gains of around $1.4bn from farm-downs in the renewable sector. This was from the sale of its stakes in wind farms offshore the UK and the US, as previously expected.

"With sustained improvements and capital discipline, we are able to capture value from recovering oil and gas prices and achieve our best quarterly results since 2014," Equinor chief executive Anders Opedal said.

The firm increased its cash dividend to $0.15/share for the first quarter of 2021, up from $0.12/share in the fourth quarter and $0.09/share a year earlier, when Equinor cut its dividend to help weather the Covid-19-induced crash in oil prices.

Equinor's production — including the effect of production sharing agreements (PSA) — fell by 3pc year on year to 2.01mn b/d in the first quarter, but was up from 1.192mn b/d in the last three months of 2020. The year-on-year decrease was mainly because of "expected" natural decline, a production halt for repairs at the heavy Peregrino oil field offshore Brazil, and the shutdown at its Hammerfest LNG plant in Norway following a fire in September last year. A restart date at the export facility has been pushed back to 2022.

The production decline was partially offset by increased output from the US onshore and from the Johan Sverdrup field and Snorre Expansion offshore Norway, as well as by higher flex gas volumes.

Equinor maintains its forecast for 2021 production — excluding PSA effects — to rise by 2pc from 2020, although it said that scheduled maintenance will reduce output by around 50,000 b/d of oil equivalent (boe/d).

The firm's gearing — including lease liabilities — fell to 30.6pc at the end of March, from 37.3pc at the end of December.

Equinor plans to update its strategy in June.

By Rowena Edwards