Why Oil & Gas Major Equinor Shares Are Diving Premarket Wednesday

Equinor ASA EQNR shares are tumbling after the company reported fourth-quarter FY23 results.

Adjusted revenue and other income declined 20% Y/Y to $28.48 billion, missing the consensus of $28.61 billion.

Equity liquids production rose 14% Y/Y, and equity gas production grew 1% Y/Y, aided by strong output at the Johan Sverdrup field and new wells in production, along with contributions from the international portfolio (mainly Peregrino field) and strong performance from the U.S. offshore assets. 

Group average liquids price declined 6% Y/Y to $75.7/bbl, and realised piped gas price tumbled 62% Y/Y to $2.07/mmbtu.

Adjusted earnings declined 49% Y/Y $8.68 billion, with the Marketing, Midstream & Processing (MMP) segment delivering adjusted earnings of $424 million (-70% Y/Y), as Gas and Power experienced the impact of diminishing gas market volatility and narrower geographical spreads. 

Operating cash flow stood at $2.736 billion in the quarter.

Dividend: The board of directors declared a fourth-quarter ordinary cash dividend per share of $0.35 and an extraordinary cash dividend of $0.35, payable on May 28, 2024, to shareholders of record as of May 16, 2024.

Repurchase: The company completed the fourth tranche of the share buyback program for 2023 on January 19, 2024, with a total value of up to $1.67 billion.

The board of directors disclosed a two-year share buy-back program for 2024-2025 of $10 billion-$12 billion in total, with up to $6 billion for 2024. 

In the quarter, Equinor completed 12 exploration wells offshore with nine commercial discoveries and had four wells ongoing at the end of the quarter.

Anders Opedal, president and CEO of Equinor, said, “Equinor is well positioned to deliver profitable growth. We expect to grow our cash flow and sustain competitive returns. We are extending the outlook for stable contribution from oil and gas to 2035. By 2030 we expect material and rapidly growing cash flow from our renewables and low carbon business.” 

“We aim to grow renewables and decarbonised energy to more than 80 terawatt hours by 2035 and have increased our ambition for carbon storage.” 

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FY24 Outlook: Equinor expects production to be stable Y/Y and organic capital expenditures to be around $13 billion.

Equinor expects combined dividend payments and share buybacks in FY24 of $14 billion in FY24 (vs. $17 billion last year, reflecting a normalization of gas prices during 2023, as per Reuters).

Also Read: Equinor And National Grid Compete For Offshore Wind Dominance In NY’s Clean Energy Drive: Report

Price Action: EQNR shares are down 5.76% at $27.51 premarket on the last check Wednesday.