Page 6 - EurOil Week 07 2021

EurOil COMMENTARY EurOil

Equinor suffers record 2020 losses,

announces Bakken exit

Equinor is drawing a line under its misadventures in the US Bakken shale play

NORWAY NORWEGIAN state oil giant Equinor has $1.19bn in Q4 2019 and $271mn in Q3 2020.
reported a record loss for 2020, while also Company revenues were down 23% y/y in
WHAT: announcing the sale of struggling US Bakken Q4 at $11.75bn. Equinor’s production fell 7%
Equinor has reported shale oil operations. to 2.043mn barrels of oil equivalent per day
record losses for 2020 The state oil company suffered a net loss of (boepd), as growth at greenfield projects like
and has announced the $5.5bn for the year, as the pandemic weighed Johan Sverdrup in Norway was not enough to
sale of its US Bakken down on oil and gas prices and led to hefty write- combat decline elsewhere. Liquids prices for the
operations. downs. This compared with $1.9bn in earnings company plunged 28% y/y to $40.6 per barrel,
during the previous year. The company’s net loss while its gas prices in Europe were down 5% at
WHY: in the fourth quarter widened to $2.42bn, versus $5.04 per mmBtu and in North America by 11%
The company has $230mn a year earlier. at $1.99 per mmBtu.
suffered billions of Adjusted earnings in the fourth quarter Costs across most of Equinor’s activities were
dollars of impairments slumped 79% year on year at $756mn, as weaker down, although exploration expenses surged to
from its US business prices, a drop in output and increased explo- $1.57bn in Q4 2020, versus $480mn a year ear-
over the years, leading to ration expenses took their tool. Earnings were lier, plunging Equinor into a $989mn net oper-
scrutiny at home. notably weaker than in the third quarter, when ating loss.
they reached $780mn, in contrast to many of The company was also stung by a $982mn
WHAT NEXT: Equinor’s European peers, which saw improved write-down charge at its long-delayed Tanzania
Equinor has slashed quarter-on-quarter numbers, aided by a recov- LNG project, as well as $1.3bn in net impair-
capital expenditure plans ery in oil prices. ment charges and $315mn in inventory hedg-
for this year and next. Post-tax, Equinor’s adjusted earnings swung ing losses. Equinor has been trying to unload
to negative $554mn, compared with profits of Tanzania LNG from the group for years, but has

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