Equinor Surpasses Q1 Profit Expectations on Strong European Gas Prices

Equinor announced a greater-than-anticipated increase in its profits for the first quarter on Wednesday, driven by a surge in European gas prices. The adjusted earnings before tax for January-March of the Norwegian oil and gas producer rose to $8.65 billion from $7.53 billion the previous year, surpassing the $8.51 billion forecasted in a survey conducted among 20 analysts by Equinor. "I am happy to observe the strong operational performance and robust production taking advantage of increased gas prices," Chief Executive Anders Opedal stated, per a Reuters report. Gas prices in Europe dropped to approximately 32 euros per megawatt hour in April, following a two-year peak of almost 60 euros/hour in early February.

Experts continue to predict that prices will average approximately 40 euros/MWh for the remainder of the year. In 2024, their average was 34.6 euros/MWh. Equinor upheld its estimate that its oil and gas production will rise by 4 per cent this year compared to 2024 and retained its capital expenditure forecast of $13 billion for 2025. In February, Equinor joined competitors like Shell and BP in pledging increased oil and gas production while reducing investment in renewables, referencing difficult market circumstances for the transition to green energy.

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In the first quarter, Equinor extracted 2.12 million barrels of oil equivalent daily, matching analyst expectations and slightly below the 2.16 million boed recorded a year prior. "Given the present market uncertainties, Equinor's primary aim is to maintain safe, stable, and cost-effective operations while ensuring resilience via a robust balance sheet," Opedal stated. In 2022, the firm surpassed Russia's Gazprom to become Europe's largest natural gas supplier after Moscow's extensive invasion of Ukraine disrupted energy relationships built over decades.

Equinor's stock price has fallen by 10 per cent this year, trailing behind a 1.2 per cent decrease in the overall European energy stock index. The predominantly state-owned firm upheld its quarterly dividend at $0.37 per share and reaffirmed intentions to distribute a total of $9 billion to shareholders this year, which includes $5 billion allocated for share repurchases. It announced $7.39 billion in post-tax cash flow from operations for the first quarter, slightly surpassing analysts' average estimate of $7.3 billion. Equinor stated that it is premature to evaluate the effects of the recent U.S. trade policy changes on the company's operations and finances.

($1 = 0.8794 EUR)