Equinor posts $2.12B loss in Q3

Norway’s Equinor posted on Thursday a net loss of $2.12 billion in the third quarter of 2020, hit by weak hydrocarbon prices but, mostly, impairment charges due to reduced future price assumptions.

The company’s net income was 92% lower than the same period last year at $1.11 billion, as it recorded impairment charges of $2.93 billion for the quarter, Kallanish Energy reports.

The U.S. onshore exploration and production segment alone accounted for a net impairment loss of $1.21 billion, of the total $1.38 billion loss for the total U.S. E&P. Net impairments in E&P International stood at $1.18 billion and in Norway at $0.37 billion.

“Our financial results are impacted by weak prices as regions across the world are still severely affected by the pandemic,” said CEO Eldar Sætre. “Net impairments in the quarter are mainly due to reduced price assumptions. Significant uncertainty remains around the future commodity price development underlining the importance of increased competitiveness and financial resilience.”

The energy major reported a 4% increase in its oil and gas production in Q3 to average 1.99 million barrels of oil equivalent per day (Mmboe/d), from 1.90 Mmboe/d in 3Q19. Increased flexible gas production added to the increase, as well as new fields on the Norwegian and UK Continental Shelves.

Production growth was partially offset by expected natural decline mainly on the NCS, production halt in Brazil and divestment of the Eagle Ford asset in the E&P U.S. segment in 4Q19.

Norway said there’s been considerable uncertainty created by the Covid-19 pandemic and “we are still unable to predict the ultimate impact of this event, including impact on general economic conditions worldwide.”

“Deferral of production to create future value, production cuts, gas off-take, timing of new capacity coming on stream, operational regularity, impact of Covid-19 and activity level in the U.S. onshore represent the most significant risks related to the foregoing production guidance,” Equinor said.

In light of such uncertainty, the company has suspended its 2020 production guidance and ditched plans to raise output by 7%. The long-term forecast growth is an annual growth of 3% by 2026.

This post appeared first on Kallanish Energy News.