Equinor(US:EQNR)2025-07-23 10:18Second Quarter 2025 Highlights Financial and Operational Overview Equinor delivered solid Q2 2025 results with $6.53 billion in adjusted operating income and a 2% rise in production Q2 2025 Key Financial and Operational Metrics | Metric | Value | Unit | | :--- | :--- | :--- | | Adjusted Operating Income* | 6.53 | USD Billion | | Net Operating Income | 5.72 | USD Billion | | Net Income | 1.32 | USD Billion | | Adjusted Earnings Per Share* | 0.64 | USD | | Equity Oil & Gas Production | 2,096 | mboe/d | | Renewable Power Generation | 0.83 | TWh | - CEO Anders Opedal highlighted strong operational performance, production growth from Johan Castberg, and significant value creation from the US onshore gas portfolio, which saw a 50% production increase and nearly 80% higher prices year-over-year5 - Total equity liquids and gas production increased by 2% year-over-year, from 2,048 mboe/day in Q2 2024 to 2,096 mboe/day in Q2 2025911 Strategic Progress and Capital Distribution The company advanced key projects, recognized impairments on Empire Wind, and maintained its $9 billion capital distribution target for 2025 - Key strategic milestones achieved include Johan Castberg field reaching plateau, financial close of Bałtyk 2 & 3 offshore wind projects, and the announced divestment of the Peregrino field for USD 3.5 billion, though impairments were recognized on Empire Wind7 - The board has decided on an ordinary cash dividend of $0.37 per share for Q2 2025723 - A third tranche of the 2025 share buy-back program was initiated, valued at up to $1.265 billion, with an expected total capital distribution for 2025 of $9 billion724 Second Quarter 2025 Review Group Review Group net operating income fell 25% to $5.72 billion, impacted by lower liquids prices and a $955 million impairment on US offshore wind assets Group Financial Performance (Q2 2025 vs Q2 2024) | Metric (USD million) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net operating income/(loss) | 5,721 | 7,656 | (25)% | | Net income/(loss) | 1,317 | 1,872 | (30)% | | Adjusted operating income* | 6,535 | 7,482 | (13)% | | Adjusted net income* | 1,670 | 2,417 | (31)% | | Cash flow from operations after taxes paid* | 1,938 | 2,097 | (8)% | - Net operating income was negatively impacted by a $955 million impairment related to the Empire Wind projects in the US, driven by regulatory changes and increased tariff exposure1535 - The net debt to capital employed adjusted ratio increased to 15.2% at the end of Q2 2025, up from 6.9% at the end of Q1 2025, mainly due to a liability to the Norwegian state for share buy-backs1842 Outlook Equinor reaffirms its 2025 guidance, projecting 4% production growth and approximately $13 billion in organic capital expenditures - Oil & gas production for 2025 is estimated to grow by 4% compared to 202449 - Organic capital expenditures are estimated at $13 billion for 202549 - Scheduled maintenance is expected to reduce equity production by around 30 mboe per day for the full year of 202549 Exploration & Production Norway The E&P Norway segment's net operating income fell 7% to $5.71 billion, as higher gas prices were offset by lower liquids prices E&P Norway Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net operating income (USD million) | 5,706 | 6,129 | (7)% | | Entitlement production (mboe/day) | 1,359 | 1,375 | (1)% | | Average liquids price (USD/bbl) | 65.4 | 80.6 | (19)% | | Average internal gas price (USD/mmbtu) | 10.60 | 8.47 | 25% | - Production remained robust and stable compared to the same quarter last year, as contributions from new fields (Johan Castberg, Halten East) and high efficiency from Johan Sverdrup offset natural decline and maintenance at Hammerfest LNG55 Exploration & Production International E&P International's net operating income fell 41% to $415 million, driven by a 9% production drop from asset divestments E&P International Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net operating income (USD million) | 415 | 699 | (41)% | | Equity production (mboe/day) | 306 | 336 | (9)% | | Average liquids price (USD/bbl) | 60.1 | 75.4 | (20)% | - The decrease in production was mainly due to the divestment of assets in Azerbaijan and Nigeria, partially offset by new wells and improved production efficiency in Brazil62 Exploration & Production USA The E&P USA segment saw a 28% production surge to 431 mboe/day, though net operating income declined 31% due to higher costs E&P USA Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net operating income (USD million) | 183 | 264 | (31)% | | Equity production (mboe/day) | 431 | 337 | 28% | | Average liquids price (USD/bbl) | 56.3 | 68.0 | (17)% | | Average internal gas price (USD/mmbtu) | 2.41 | 1.32 | 83% | - Production growth was primarily driven by increased gas output from the Appalachia onshore assets following the acquisition of additional interests in late 202460 Marketing, Midstream & Processing (MMP) The MMP segment's net operating income decreased 34% to $329 million, impacted by lower LNG and crude trading results MMP Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net operating income (USD million) | 329 | 497 | (34)% | | Adjusted operating income* (USD million) | 333 | 521 | (36)% | | Realised piped gas price Europe (USD/mmbtu) | 12.00 | 9.94 | 21% | - The segment's results were impacted by lower contributions from LNG trading, primarily due to turnaround activities at Hammerfest LNG, and reduced crude and product trading results30 Renewables (REN) The Renewables segment reported a $1.0 billion net operating loss, driven almost entirely by a $955 million impairment on US offshore wind assets Renewables Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net operating income/(loss) (USD million) | (1,002) | (90) | >(100)% | | Adjusted operating income/(loss)* (USD million) | (75) | (90) | 17% | | Renewable power generation (TWh) | 0.78 | 0.63 | 24% | - Net operating income includes a significant impairment of USD 955 million related to US offshore wind assets, primarily Empire Wind 1 and 235109 - The growth in power generation is primarily attributed to the ramp-up of production from Dogger Bank A and a new onshore acquisition in Sweden74 Condensed Interim Financial Statements and Notes Consolidated Financial Statements The statements show Q2 net income of $1.32 billion, total assets of $139.1 billion, and operating cash flow of $2.48 billion Consolidated Statement of Income (Q2 2025) | (in USD million) | Q2 2025 | | :--- | :--- | | Total revenues and other income | 25,145 | | Net operating income/(loss) | 5,721 | | Net income/(loss) | 1,317 | Consolidated Balance Sheet (as of June 30, 2025) | (in USD million) | At 30 June 2025 | | :--- | :--- | | Total assets | 139,091 | | Total equity | 41,972 | | Total liabilities | 97,119 | Consolidated Statement of Cash Flows (Q2 2025) | (in USD million) | Q2 2025 | | :--- | :--- | | Cash flows provided by operating activities | 2,477 | | Cash flows provided by/(used in) investing activities | 880 | | Cash flows provided by/(used in) financing activities | (2,579) | Notes to the Condensed Interim Financial Statements Key notes detail a $955 million impairment, a $491 million gain on an asset swap, dividend declarations, and geopolitical risks - Note 1: The company changed its accounting policy for classifying cash collaterals, resulting in the restatement of comparative figures for 2024102104 - Note 2: A net impairment of $955 million was recognized in the Renewables segment related to US offshore wind projects (Empire Wind 1/SBMT and Empire Wind 2) due to regulatory changes and increased tariff exposure109 - Note 8: The board declared a Q2 2025 cash dividend of $0.37 per share and initiated a third share buy-back tranche of up to $1.265 billion as part of its 2025 program132134 - Note 9: Geopolitical and market uncertainty, particularly regarding US international trade policy, is cited as a key risk and a factor contributing to the $955 million impairment on US offshore wind projects137 Supplementary Disclosures Use and Reconciliation of Non-GAAP Financial Measures This section reconciles reported results to adjusted non-GAAP measures, showing a Q2 adjusted operating income of $6.54 billion - Non-GAAP measures like 'Adjusted operating income' are used to separate out effects that may not be correlated to underlying operational performance, such as impairments, gains/losses on asset sales, and fair value changes of certain derivatives144149157 Reconciliation of Net Operating Income to Adjusted Operating Income (Q2 2025) | (in USD million) | Amount | | :--- | :--- | | Net operating income/(loss) | 5,721 | | Impairment | 955 | | Other adjusting items | (142) | | Sum of adjusting items | 813 | | Adjusted operating income/(loss) | 6,535 | Reconciliation of Net Income to Adjusted Net Income (Q2 2025) | (in USD million) | Amount | | :--- | :--- | | Net income/(loss) | 1,317 | | Adjusting items (impacting operating & financial items) | 670 | | Tax effect on adjusting items | (317) | | Adjusted net income | 1,670 | Forward-Looking Statements This section cautions that projections are subject to significant risks, including price volatility, regulatory changes, and geopolitical instability - The report identifies numerous risks that could cause actual results to differ from forward-looking statements, including levels of industry supply and demand, price volatility, exchange rate fluctuations, and regulatory changes190 End Notes The end notes clarify key terminology, including the distinction between equity and entitlement volumes and transactions with the SDFI - The distinction between equity and entitlement volumes is explained: equity volumes represent Equinor's ownership share, while entitlement volumes are the share distributed after deductions for royalty and the host government's profit oil, which can increase in times of high prices192 - Equinor sells natural gas from the Norwegian state's Direct Financial Interest (SDFI) in its own name, but for the state's account and risk191