UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of February 2024
Commission File Number 1-15200
Equinor ASA
(Translation of registrant’s name into English)
FORUSBEEN 50, N-4035, STAVANGER, NORWAY
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F
X
This Report on Form 6-K contains a report of the fourth quarter 2023 results of Equinor ASA.
Equinor fourth quarter 2023 2
Equinor fourth quarter and full year 2023 results
Equinor delivered adjusted earnings* of USD 8.68 billion and USD 1.88 billion after tax in the fourth
quarter of 2023. Net operating income was USD 8.75 billion and net income was USD 2.61 billion.
The fourth quarter and full year were characterised by:
●
●
●
●
●
Competitive capital distribution
●
year
●
●
●
Equinor is well positioned for profitable growth towards 2035
Key ambitions:
●
adding material contribution from renewables and low carbon solutions on top of stable cash flow from oil, gas and trading.
●
and CO
2
●
Lower emissions. Reducing operated emissions and increasing production of low carbon energy
intensity.
Anders Opedal, president and CEO of Equinor ASA:
“In 2023 we continued to contribute to energy security in Europe and delivered 2.1% production growth. Solid operational performance
and cost focus yielded strong financial results and cash flow. We delivered competitive capital distribution, while investing in a
profitable portfolio that will contribute to future growth.”
«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 will provide a broader energy offering with lower emissions. We aim to grow renewables and decarbonised energy to more than
80 terawatt hours by 2035 and have increased our ambition for carbon storage.”
Financial information
Quarters
Change
Full year
(unaudited, in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Net operating income/(loss)
8,748
7,453
16,584
(47%)
35,770
78,811
(55%)
Adjusted earnings*
1)
8,681
8,024
17,014
1)
(49%)
36,220
1)
(53%)
Net income/(loss)
2,608
2,501
7,897
(67%)
11,904
28,744
(59%)
Adjusted earnings after tax*
1)
1,879
2,731
4,719
1)
(60%)
10,371
1)
(54%)
Cash flows provided by operating activities
2,736
5,236
4,267
(36%)
24,701
35,136
(30%)
Cash flow from operations after taxes paid*
2,787
7,594
6,800
(59%)
19,741
39,752
(50%)
Net cash flow*
(3,262)
1,479
1,669
N/A
(8,340)
23,388
N/A
Operational information
Group average liquids price (USD/bbl) [1]
75.7
80.3
80.4
(6%)
75.0
94.1
(20%)
Total equity liquids and gas production (mboe per day) [4]
2,197
2,007
2,046
7%
2,082
2,039
2%
Total power generation (GWh) Equinor share
1,241
883
1,332
(7%)
4,235
2,661
59%
Equinor fourth quarter 2023 3
Renewable power generation (GWh) Equinor share
694
373
517
34%
1,937
1,649
17%
*
For items marked with an asterisk throughout this report, see Use and reconciliation of non-GAAP financial measures in the Supplementary disclosures
1) Restated. For more information, see Amended principles for Adjusted earnings in the section ‘Use and reconciliation of non-GAAP financial measures’ in the
Supplementary disclosures.
Equinor fourth quarter 2023 4
Health, safety and the environment
Full year
Full year
2023
2022
Serious incident frequency (SIF)
0.4
0.4
Full year
Full year
2023
2022
Upstream CO
2
2
/boe)
6.7
6.9
Full year
Full year
2023
2022
Absolute scope 1+2 GHG emissions (million tonnes CO
2
e)
11.6
11.4
31 December
31 December
%-point
Net debt to capital employed adjusted*
2023
2022
change
Net debt to capital employed adjusted*
(21.6%)
(23.9%)
2.3
Dividend
(USD per share)
Q4 2023
Q3 2023
Q4 2022
Ordinary cash dividend per share
0.35
0.30
0.30
Extraordinary cash dividend per share
0.35
0.60
0.60
In 2023 Equinor settled shares in the market under the share buy-back programmes of USD 1.95 billion and USD 3.64 billion for the
Norwegian government’s share of the 2022 programme and the first tranche of the 2023 programme.
Strong operational performance
Equinor delivered strong production for the fourth quarter of 2,197 mboe per day, up from 2,046 in the same quarter of 2022, driving
production growth for 2023 to 2.1%, above the updated guidance of 1.5%.
Equity liquids and gas production was up 14% and 1% respectively, from the same quarter in 2022. The production increase was
mainly driven by strong production at the Johan Sverdrup field and new wells in production. The production increase was also driven
by contributions from the international portfolio with the Peregrino field reaching plateau production and strong performance from US
offshore assets.
Power production from renewable energy sources reached 694 GWh in the quarter, up 34% from the same quarter last year. This
increase was mainly driven by onshore production from Rio Energy in Brazil and Wento in Poland, along with production from Hywind
Tampen. In the UK, the world's largest offshore windfarm, Dogger Bank, delivered first power in the fourth quarter and is currently
ramping up production. Including the UK gas-to-power, total power production ended at 1,241 GWh for the quarter.
Strong financial results
Equinor delivered strong adjusted earnings* of USD 8.68 billion and USD 1.88 billion after tax in the fourth quarter. Gas prices are
significantly down compared to the extraordinary price levels seen in 2022, and more than offset the contribution from increased
production.
In the fourth quarter, Equinor recognised net impairments of USD 328 million, mainly related to the announced sale of assets and exit
from Azerbaijan.
Cash flow provided by operating activities, before taxes paid and working capital items, amounted to USD 10.89 billion for the fourth
quarter. Cash flow from operations after tax* ended at USD 2.79 billion for the fourth quarter, bringing the cash flow from operations
after tax* to USD 19.7 billion for the year.
Equinor paid two ordinary NCS tax instalments in the fourth quarter and an extra instalment in October, totalling at USD 7.9 billion.
One ordinary instalment of USD 3.7 billion
1)
, will be paid in the first quarter of 2024.
Organic capital expenditure* was USD 2.99 billion for the quarter, and USD 10.2 billion for the full year. Total capital expenditure was
USD 3.77 billion for the fourth quarter and USD 14.5 billion for 2023.
After taxes, capital distribution to shareholders and investments, net cash flow* ended at negative USD 3.26 billion for the fourth
quarter and at negative USD 8.34 billion for the full year. Equinor retains a strong financial position with adjusted net debt to capital
employed ratio* at negative 21.6% by the end of the fourth quarter, compared to negative 22.9% at the end of the third quarter of
2023.
Equinor fourth quarter 2023 5
Progressing on strategy and enabling future growth
As the largest energy provider to Europe, Equinor continues to develop its broad portfolio to contribute to energy security.
On the NCS Equinor increased its ownership share to 50% in the Linnorm discovery in the Norwegian Sea, which is the largest
undeveloped gas discovery on the NCS. The Breidablikk field ramped up successfully towards its plateau production of around 60
mboe per day at 100%. In a response to Europe’s need for long-term, reliable energy supply, Germany’s state owned energy
company SEFE entered into a long-term gas sales agreement with Equinor. Under the contract Equinor will deliver 10 bcm of gas
annually at least to 2034 and pursue large scale hydrogen supplies. Equinor made final investment decision on the partner-operated
Sparta field in the US Gulf of Mexico, the third large investment decision in the international upstream business of the year. The
Sparta field has estimated resources above 250 million boe and is designed for a production capacity of 100 mboe per day. Equinor
continued to focus its international oil and gas, with the announced sale of assets in Nigeria and Azerbaijan. These assets have
delivered profitable production to Equinor over the last decades.
In the UK, operations recently started at Blandford Road battery asset, the company’s first commercial power storage asset. Danske
Commodities will provide market access and optimisation, providing further value creation in a power market with a high share of
intermittent renewable power.
Equinor has announced its intention to take full ownership of the Empire Wind projects in the US through a swap transaction with bp,
where bp takes full ownership to the Beacon Wind projects.
Equinor completed 12 exploration wells offshore with 9 commercial discoveries in the quarter. At the quarter end, 4 wells were
ongoing.
In 2023 Equinor added proved reserves mainly through sanctioning of new field developments, resulting in an organic reserve
replacement ratio (RRR) of 104%, and an organic three-year average of 107%, excluding purchase and sales.
Equinor progressed several projects to reduce emissions from production, and the average CO2-emission from the operated
upstream production, on a 100% basis, was 6.7 kg per boe for 2023. Absolute greenhouse gas emissions scope 1 and 2 was 11.6
tonnes CO2 equivalents for the full year.
The twelve-month average serious incident frequency (SIF) for 2023 was 0.4, stable from the previous year.
Competitive capital distribution
The board of directors proposes to the annual general meeting on 14 May 2024 an ordinary cash dividend of USD 0.35 per share for
the fourth quarter 2023, an increase of USD 0.05 per share from the third quarter of 2023, and sets an ambition to grow the quarterly
cash dividend by 2 cents per year. Based on the strong earnings in 2023 and the robust financial position of the company, the board
of directors further proposes an extraordinary cash dividend of USD 0.35 per share for the fourth quarter of 2023. Equinor share will
trade ex-dividend on Oslo Børs and New York Stock Exchange from and including 15 May 2024.
The interim cash dividends for the first, second and third quarter of 2024, to be decided by the board of directors on a quarterly basis
in line with the company’s dividend policy, subject to existing and renewed authorisation from the annual general meeting, are
expected to be at the same level as for the fourth quarter of 2023.
The fourth tranche of the share buy-back programme for 2023 was completed on 19 January 2024 with a total value of USD 1.67
billion. Following this, the total share buy-backs under the share buy-back programme for 2023 amounts to USD 6 billion.
The board of directors has decided to announce a two-year share buy-back programme for 2024-2025 of USD 10-12 billion in total,
with up to USD 6 billion for 2024. The share buy-back programme will be subject to market outlook and balance sheet strength. The
first tranche of up to USD 1.2 billion of the 2024 share buy-back programme will commence on 8 February and end no later than 5
April 2024. Commencement of new share buy-back tranches after the first tranche in 2024 will be decided by the board of directors on
a quarterly basis in line with the company’s dividend policy and will be subject to existing and new board authorisations for share buy-
back from the company’s annual general meeting and agreement with the Norwegian State regarding share buy-back.
(1)
Equinor fourth quarter 2023 6
Capital markets update: Profitable growth towards 2035
With a firm strategy and strong portfolio of projects, Equinor is well positioned for profitable growth with a stronger cash flow, a
broader energy offering and lower emissions towards 2035
1
.
Key ambitions:
●
Grow cash flow from operations after tax* to around USD 23 billion by 2030 and to more than USD 26 billion by 2035. Deliver
high returns while transitioning with a ROACE* above 15% towards 2030 and target to sustain a level of around 15% through
2035.
●
Produce more than 80 TWh from renewables and decarbonised energy and deliver transport and storage of 30-50 million tonnes
CO
2
million barrels per day from the Norwegian Continental Shelf in 2035.
●
50% net reduction of operated emissions by 2030, and 40% reduction in net carbon intensity by 2035, in line with our Energy
transition plan
2
.
Equinor is contributing to energy security, while driving decarbonisation and energy transition.
Stronger cash flow
Equinor expects to sustain an annual average cash flow from operations after tax* from oil, gas and trading of around USD 20 billion
through 2035. Renewables and low carbon solutions are expected to deliver a material contribution with around USD 3 billion in 2030
and above USD 6 billion in 2035.
Equinor will continue to optimise the oil and gas portfolio and invest in a profitable project portfolio coming on stream the next ten
years, with an average breakeven price of around USD 35 per boe, 30% internal rate of return, 2.5 years payback time and an
upstream operated scope 1 CO
2
from 2023 – 2026 and maintain production of around 2 million barrels per day in 2030.
Broader energy offering
Equinor is set to broaden the energy offering and aims to deliver above 80 TWh from renewables and decarbonised energy by 2035.
Based on extensive experience from CCS and project pipeline progress, Equinor also increases the ambition for annual CO
2
to 30-50 million tonnes in 2035.
For the renewables portfolio, Equinor expects real base project returns of 4-8%. CCS projects are also expected to deliver real base
project returns of 4-8%, with potential for higher returns as markets mature.
Lower emissions
Equinor continue to progress according to the Energy transition plan. Gross investments in renewables and low carbon solutions
increased to 20% in 2023 and Equinor is on the path to reach the ambition of above 50% by 2030. Equinor’s operated emissions are
30% lower in 2023 compared to 2015. The company is on track to deliver on the 2030 ambition of net 50 percent reduction in
operated scope 1 & 2 CO
2
ambition to reduce net carbon intensity by 20% by 2030 and 40% by 2035.
Updated outlook for 2024:
●
3
.
●
●
This press release contains Forward Looking Statements. Please see the Forward Looking Statement disclaimer published on
Equinor.com/investors/cmu-2024-forward-looking-statements
1
Brent blend 75 USD/bbl, Henry Hub 3.5 USD/mmbtu and European gas price 2024/25: 13
USD/mmbtu, and 2026 onwards: 9 USD/mmbtu
2
3
Equinor fourth quarter 2023 7
GROUP REVIEW
Financial information
Quarters
Change
Full year
(unaudited, in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Total revenues and other income
29,054
26,024
34,321
(15%)
107,174
150,806
(29%)
Adjusted total revenues and other income*
1)
28,483
25,735
1)
(20%)
105,871
1)
(30%)
Total operating expenses
(20,306)
(18,571)
(17,737)
14%
(71,404)
(71,995)
(1%)
Adjusted purchases* [5]
(13,672)
(12,392)
(12,781)
7%
(48,003)
(54,415)
(12%)
Adjusted operating and administrative expenses*
(3,235)
(2,703)
(3,032)
7%
(11,540)
(10,530)
10%
Adjusted depreciation, amortisation and net impairments*
(2,518)
(2,426)
(2,279)
11%
(9,374)
(8,879)
6%
Adjusted exploration expenses*
(377)
(190)
(396)
(5%)
(734)
(1,146)
(36%)
Net operating income/(loss)
8,748
7,453
16,584
(47%)
35,770
78,811
(55%)
Adjusted earnings*
1)
8,681
8,024
1)
(49%)
36,220
1)
(53%)
Capital expenditures and Investments
3,031
2,652
2,376
28%
10,575
8,758
21%
Cash flows provided by operating activities
2,736
5,236
4,267
(36%)
24,701
35,136
(30%)
Cash flows from operations after taxes paid*
2,787
7,594
6,800
(59%)
19,741
39,752
(50%)
Quarters
Change
Full year
Operational information
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Total equity liquid and gas production (mboe/day)
2,197
2,007
2,046
7%
2,082
2,039
2%
Total entitlement liquid and gas production (mboe/day)
2,065
1,879
1,919
8%
1,954
1,901
3%
Total Power generation (GWh) Equinor share
1,241
883
1,332
(7%)
4,235
2,661
59%
Renewable power generation (GWh) Equinor share
694
373
517
34%
1,937
1,649
17%
Average Brent oil price (USD/bbl)
84.1
86.8
88.7
(5%)
82.6
101.2
(18%)
Group average liquids price (USD/bbl)
75.7
80.3
80.4
(6%)
75.0
94.1
(20%)
E&P Norway average internal gas price (USD/mmbtu)
11.45
8.83
27.22
(58%)
12.20
31.22
(61%)
E&P USA average internal gas price (USD/mmbtu)
1.76
1.08
4.73
(63%)
1.77
5.55
(68%)
1) Restated. For more information, see Amended principles for Adjusted earnings in the section ‘Use and reconciliation of non-GAAP
financial measures’ in the Supplementary disclosures.
Operations and financial results
Equinor delivers strong production increases in the fourth quarter, securing a robust financial performance despite the impact of lower
commodity prices relative to 2022.
Sustained high production levels and efficiency from Johan Sverdrup on the NCS, including phase 2 which came onstream in
December 2022, contributed substantially to the increased production within E&P Norway for the fourth quarter and full year of 2023.
The growth in production was also supported by the international portfolio with Peregrino in Brazil reaching plateau during the quarter
and Caesar Tonga in the US making notable contributions following added capacity from the first quarter of 2023.
New volumes from Buzzard in the UK following the Suncor UK acquisition, early start-up of Breidablikk on the NCS in the fourth
quarter and the ramp-up of partner operated Vito in the US in the first half of the year all positively contributed to production growth.
These increases were partially offset by the effects of the divestments from Corrib in early 2023 and in Martin Linge and Ekofisk in the
third quarter of 2022.
Operational challenges, turnarounds and extended maintenance activities, particularly affecting NCS gas assets earlier in 2023,
impacted an otherwise solid full year operational performance for Equinor. The decline in full year production from the NCS, was more
than offset by strong production from the international assets securing a full year increase compared to the high levels reported for
2022.
Power generation from Rio Energy and the continued maturation of both onshore and offshore projects within the Renewable portfolio
contributed well to Equinor’s power generation in the fourth quarter of 2023. The increase from the Brazilian acquisition was offset by
decreased gas-to-power in the fourth quarter, attributed to decreased clean spark spread. Full year 2023 power generation increase is
primarily driven by the acquisition of Triton Power in the second half of 2022 and Rio Energy in 2023.
Equinor fourth quarter 2023 8
Solid production growth combined with high realised prices drove strong revenue and results for the fourth quarter and full year 2023.
Realised commodity prices, particularly gas, were markedly reduced from the elevated levels in 2022, and as such more than offset
the production increase, resulting in a decline in revenue relative to the prior year. The Marketing, Midstream and Processing segment
supported the total group results through a sound delivery within Gas and Power trading and optimisation. However, reduced refinery
margins and absence of favourable arbitrage opportunities captured in prior quarters resulted in a lower contribution to group results.
Throughout the year Equinor has increased production capacity leading to an increase in operating and maintenance costs in the
quarter and for the full year of 2023. The reduction in energy prices from the highs experienced in 2022 has reduced transportation
tariffs partially offsetting the increase.
The prevailing inflationary pressures and a number of one-off costs have also impacted the upward movement in operating expenses
in the fourth quarter of 2023. The USD remains strong against the NOK thereby limiting the visibility of these increases in the reported
costs.
Adjusted depreciation, amortisation and net impairments* increased in the quarter and for the full year compared to 2022 primarily due
to investments in producing fields, and strong production from Peregrino in Brazil, partially offset by a reduced rate of depreciation in
E&P Norway resulting from prior quarter impairments.
Successful near-field exploration activity on the NCS has balanced limited commercial discoveries internationally during 2023. During
the fourth quarter of 2023 exploration expenses included costs related to unsuccessful exploration wells in the Gulf of Mexico. The
prior year fourth quarter included the expense of previously capitalised well costs for the E&P International segment.
In the fourth quarter of 2023 net operating income was negatively impacted by impairments of USD 328 million, primarily relating to
the planned exit from Azerbaijan. In comparison, net impairment reversals totalling USD 1,094 million impacted the results in the
fourth quarter of 2022. In the full year of 2023 net impairments of USD 1,320 million were recognised in contrast to net impairment
reversals of USD 2,429 million in the full year 2022, contributing to the relative decrease in net operating income for 2023.
Taxes
The reported effective tax rate was 72.1% for the fourth quarter of 2023 (45.4% for the fourth quarter of 2022) and 68.6% for the full
year 2023 (63.4% for the full year 2022). The change in reported tax rates for the fourth quarter and full year has been influenced by
recognition of previously unrecognised deferred tax assets in the US in the fourth quarter of 2022.
The effective tax rate on adjusted earnings of 78.4% for the fourth quarter of 2023 and 71.4% for the full year increased compared to
72.3% and 70.5% in 2022 due to higher prior period adjustments in 2023 compared with 2022 and by the recognition of the US
deferred tax assets in the fourth quarter of 2022.
Cash flow, net debt and capital distribution
Strong financial results from the business during the fourth quarter of 2023, driven by a strong operational performance, generated
cash flow provided by operating activities before taxes paid and working capital items of USD 10,890 million. The downward
movement in commodity prices drove this decrease of USD 10,098 million from the prior year.
Taxes paid of USD 8,103 million in the fourth quarter have reduced from the prior year outflow of USD 14,188 million. The payment
primarily consists of two Norwegian corporation tax instalments in addition to an extra payment of USD 930 million (NOK 10,000
million) resulting from updated results when compared to previous estimates. The reduction in payment compared to the same period
in the prior year reflects the relatively lower pricing environment of 2023. NCS tax instalments totalling NOK 111 billion are expected
to be paid in the first half of 2024.
A working capital increase of USD 51 million negatively impacted the cash flow in the fourth quarter 2023, compared to an increase of
USD 2,532 million in the fourth quarter of 2022.
Net cash flow* decreased by USD 4,741 million from the prior quarter to an outflow of USD 3,262 million primarily reflecting the
increased NCS tax instalments. Full year cash flow from operations after taxes paid* concluded at USD 19,741 million inflow, with net
cash outflow* of USD 8,340 million demonstrating a significant increase in shareholder distribution.
A decrease in liquid assets in the quarter with stable equity caused a slight increase in the net debt to capital employed adjusted ratio*
at the end of 2023 from negative 22.9% at the end of September 2023 to negative 21.6%.
the fourth quarter 2023, an increase of USD 0.05 per share from the third quarter of 2023, and sets an ambition to grow the quarterly
cash dividend by 2 cents per year. Based on the strong earnings in 2023 and the robust financial position of the company, the board
of directors further proposes an extraordinary cash dividend of USD 0.35 per share for the fourth quarter of 2023. Equinor share will
trade ex-dividend on Oslo Børs and New York Stock Exchange from and including 15 May 2024.
Equinor fourth quarter 2023 9
The interim cash dividends for the first, second and third quarter of 2024, to be decided by the board of directors on a quarterly basis
in line with the company’s dividend policy, subject to existing and renewed authorisation from the annual general meeting, are
expected to be at the same level as for the fourth quarter of 2023.
The fourth tranche of the share buy-back programme for 2023 was completed on 19 January 2024 with a total value of USD 1.67
billion. Following this, the total share buy-backs under the share buy-back programme for 2023 amounts to USD 6 billion.
The board of directors has decided to announce a two-year share buy-back programme for 2024-2025 of USD 10-12 billion in total,
with USD 6 billion for 2024. The share buy-back programme will be subject to market outlook and balance sheet strength. The first
tranche of up to USD 1.2 billion of the 2024 share buy-back programme will commence on 8 February and end no later than 5 April
2024. Commencement of new share buy-back tranches after the first tranche in 2024 will be decided by the board of directors on a
quarterly basis in line with the company’s dividend policy and will be subject to existing and new board authorisations for share buy-
back from the company’s annual general meeting and agreement with the Norwegian State regarding share buy-back.
Based on adjusted earnings after tax and average capital employed, calculated
return on average capital employed (ROACE)
* was
24.9 % for the 12-month period ended 31 December 2023 and 55.1 % for the 12-month period ended 31 December 2022.
Organic capital expenditures
* amounted to USD 10.2 billion for the full year 2023. Total capital expenditures were USD 14.5 billion
for the full year 2023.
Estimated
Proved reserves
at the end of 2023 were 5,214 million barrels of oil equivalent (boe), a net increase of 23 million boe
compared to 5,191 million boe at the end of 2022.
The net increase was mainly due to more volumes being added through extensions and discoveries, with a net increase of 507 million
boe in 2023 compared to 278 million boe in 2022. The net increase was mainly due to sanctioning of the Raia field in Brazil, the
Rosebank field in UK and the Sparta field in the USA. Revisions and improved recovery projects added to the increase, with a net
increase of 232 million boe in 2023 compared to a net increase of 344 million boe in 2022. The net effect of the purchase and sale of
reserves slightly reduced the proved reserves by 4 million boe in 2023.
The entitlement production in 2023 was 711 million boe compared to 695 million boe in 2022.
This results in a reserve replacement ratio (RRR) of
compared to 76% and 89% in 2022. The corresponding three-year average replacement ratio was 98%, and the organic three-year
average was 107% at the end of 2023 compared to 62% and 70% at the end of 2022.
The RRR measures the estimated proved reserves added to the reserve base, including the effects of sales and purchases, relative to
the amount of oil and gas produced.
All reserves numbers are preliminary and include equity accounted entities.
Health, safety and the environment
The twelve-month average serious incident frequency (SIF) for the period ending 31 December 2023 remained stable with the prior
year at 0.4.
Absolute scope 1+2 GHG emissions for Equinor’s operated production, on a 100% basis, were 11.6 million tonnes CO
2
e
for the full
year 2023. This is an increase from the prior year of 0.2 million tonnes CO
2
e. Resumption of activity at the Hammerfest LNG facility in
Norway and the return to normal operations of production at the Peregrino field in Brazil contributed to the increase.
Equinor fourth quarter 2023 10
OUTLOOK
●
Organic capital expenditures*
4
.
●
Oil & gas production
●
Renewable power generation
for 2024 is estimated to double compared to the 2023 level.
●
unit of production cost
●
Scheduled maintenance activity
These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and
uncertainties because they relate to events and depend on circumstances that will occur in the future. Deferral of production to create
future value, gas off-take, timing of new capacity coming on stream and operational regularity and levels of industry product supply,
demand and pricing represent the most significant risks related to the foregoing production guidance. Our future financial
performance, including cash flow and liquidity, will be affected by the extent and duration of the current market conditions, the
development in realised prices, including price differentials and other factors discussed elsewhere in the report. For further
information, see section Forward-looking statements in the report.
4
Equinor fourth quarter 2023 11
SUPPLEMENTARY OPERATIONAL DISCLOSURES
Operational information
Quarters
Change
Full year
Operational information
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Prices
Average Brent oil price (USD/bbl)
84.1
86.8
88.7
(5%)
82.6
101.2
(18%)
E&P Norway average liquids price (USD/bbl)
79.3
84.3
83.8
(5%)
78.6
97.5
(19%)
E&P International average liquids price (USD/bbl)
73.1
79.1
77.2
(5%)
72.6
92.0
(21%)
E&P USA average liquids price (USD/bbl)
66.0
68.1
68.6
(4%)
64.4
81.0
(20%)
Group average liquids price (USD/bbl) [1]
75.7
80.3
80.4
(6%)
75.0
94.1
(20%)
Group average liquids price (NOK/bbl) [1]
821
842
819
0%
792
905
(12%)
E&P Norway average internal gas price (USD/mmbtu) [8]
11.45
8.83
27.22
(58%)
12.20
31.22
(61%)
E&P USA average internal gas price (USD/mmbtu) [8]
1.76
1.08
4.73
(63%)
1.77
5.55
(68%)
Realised piped gas price Europe (USD/mmbtu) [7]
1)
13.07
10.93
29.84
1)
(56%)
13.86
1)
(58%)
Realised piped gas price US (USD/mmbtu) [7]
2.07
1.57
5.40
(62%)
2.09
5.89
(64%)
Refining reference margin (USD/bbl) [2]
6.1
15.2
15.5
(61%)
10.2
14.5
(30%)
Entitlement production (mboe per day)
E&P Norway entitlement liquids production
658
636
610
8%
645
605
7%
E&P International entitlement liquids production
254
252
228
12%
240
203
18%
E&P USA entitlement liquids production
156
155
100
56%
145
114
27%
Group entitlement liquids production
1,068
1,044
938
14%
1,030
922
12%
E&P Norway entitlement gas production
806
647
791
2%
729
782
(7%)
E&P International entitlement gas production
24
25
31
(21%)
26
32
(18%)
E&P USA entitlement gas production
167
164
160
4%
168
165
2%
Group entitlement gas production
997
836
981
2%
924
980
(6%)
Total entitlement liquids and gas production [3]
2,065
1,879
1,919
8%
1,954
1,901
3%
Equity production (mboe per day)
E&P Norway equity liquids production
658
636
610
8%
645
605
7%
E&P International equity liquids production
323
318
293
10%
304
281
8%
E&P USA equity liquids production
174
174
112
55%
162
127
28%
Group equity liquids production
1,155
1,128
1,015
14%
1,112
1,013
10%
E&P Norway equity gas production
806
647
791
2%
729
782
(7%)
E&P International equity gas production
39
37
50
(23%)
41
47
(13%)
E&P USA equity gas production
197
195
190
4%
200
197
2%
Group equity gas production
1,042
879
1,031
1%
970
1,026
(5%)
Total equity liquids and gas production [4]
2,197
2,007
2,046
7%
2,082
2,039
2%
Power generation
Power generation (GWh) Equinor share
1,241
883
1,332
(7%)
4,235
2,661
59%
Renewable power generation (GWh) Equinor share
2)
694
373
517
34%
1,937
1,649
17%
1) Restated. Restatement due to change in the definition of the price marker. For more information see 'End notes'.
2) Includes Hywind Tampen renewable power generation.
Equinor fourth quarter 2023 12
Health, safety and the environment
Full year
Full year
2023
2022
Total recordable injury frequency (TRIF)
2.4
2.5
Serious Incident Frequency (SIF)
0.4
0.4
Oil and gas leakages (number of)
1)
10
8
Full year
Full year
2023
2022
Upstream CO
2
2
/boe)
2)
6.7
6.9
Full year
Full year
2023
2022
Absolute scope 1+2 GHG emissions (million tonnes CO
2
e)
3)
11.6
11.4
1)
2)
2
3)
2
4.
Equinor fourth quarter 2023 13
EXPLORATION & PRODUCTION NORWAY
Financial information
Quarters
Change
Full year
(unaudited, in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Total revenues and other income
10,076
7,938
16,729
(40%)
38,340
75,930
(50%)
Adjusted total revenues and other income*
9,871
8,164
16,968
(42%)
38,213
75,443
(49%)
Total operating expenses
(2,339)
(2,604)
(2,343)
(0%)
(9,253)
(8,315)
11%
Adjusted operating and administrative expenses*
(1,018)
(849)
(1,053)
(3%)
(3,730)
(3,836)
(3%)
Adjusted depreciation, amortisation and net impairments*
(1,144)
(1,107)
(1,219)
(6%)
(4,429)
(4,986)
(11%)
Adjusted exploration expenses*
(138)
(120)
(101)
37%
(476)
(361)
32%
Net operating income/(loss)
7,737
5,335
14,386
(46%)
29,087
67,614
(57%)
Adjusted earnings/(loss)*
7,571
6,087
14,594
(48%)
29,577
66,260
(55%)
Additions to PP&E, intangibles and equity accounted
investments
1,577
1,421
1,422
11%
5,939
4,922
21%
Operational information
Quarters
Change
Full year
E&P Norway
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
E&P entitlement liquid and gas production (mboe/day)
1,464
1,283
1,401
4%
1,374
1,387
(1%)
Average liquids price (USD/bbl)
79.3
84.3
83.8
(5%)
78.6
97.5
(19%)
Average internal gas price (USD/mmbtu)
11.45
8.83
27.22
(58%)
12.20
31.22
(61%)
Production & revenues
In the fourth quarter of 2023, E&P Norway delivered strong production performance driven by sustained high production level and
operational efficiency from Johan Sverdrup and the early start-up of Breidablikk field, more than offsetting natural decline on several
fields and unplanned turnaround extension on Troll C. Liquids production rose by 8% and gas production was up by 2% in fourth
quarter this year compared to fourth quarter of 2022.
Despite a robust production performance for the fourth quarter 2023, full year production ended slightly below the 2022 level.
In the second and third quarters of 2023, unplanned turnaround extensions on Troll and Nyhamna (impacting Aasta Hansteen and
Ormen Lange) contributed to the year-on-year reduction.
The strong production in the fourth quarter of 2023 helped to offset some of the impact of lower gas prices on revenue. While gas
prices have increased from the prior quarter, realised prices have experienced a sharp decline from 2022 peaks. The movement in the
pricing environment outweighed production increases, resulting in a notable decrease in revenues for both the fourth quarter and the
full year of 2023 compared to 2022.
Operating expenses and financial results
For the fourth quarter of 2023, updated estimates drove an escalation in Gassled removal costs, impacting adjusted operating and
administrative expenses*. The development in the NOK/USD exchange rate offset this increaseand its visibility in the reported
numbers.
Adding to this, for the year 2023, there has been higher operation and maintenance cost, as well as environmental
expenses, compared to the same period last year. In contrast, energy prices have fallen, leading to lower transportation and electricity
cost.
Lower asset carrying values due to prior quarter impairments, combined with the effect of the development in NOK/USD exchange
rate, led to a decrease in adjusted depreciation, amortisation and net impairments* in the fourth quarter of 2023 compared to the
same quarter last year. The decrease was partially offset by higher investment levels for some fields. For the year 2023 the main
factor contributing to the decrease compared to 2022 was the NOK/USD exchange rate development.
Successful exploration activity resulted in five commercial discoveries for E&P Norway in the fourth quarter 2023. A higher activity
level (eight wells this quarter compared to six wells in fourth quarter last year) with a lower capitalisation rate led to an increase in
exploration expenses in the fourth quarter this year compared to same quarter last year.
Net operating income was positively affected by a gain from sale of ownership shares in the Statfjord area of USD 222 million in the
fourth quarter of 2023. For the full year 2023, there was a negative impact from impairment of USD 588 million related to an asset in
the North Sea. In 2022 the net operating income was positively impacted by a gain from sale of ownership shares in Martin Linge and
Ekofisk of USD 730 million and net impairment reversals of USD 814 million.
Equinor fourth quarter 2023 14
EXPLORATION & PRODUCTION INTERNATIONAL
Financial information
Quarters
Change
Full year
(unaudited, in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Total revenues and other income
1,889
1,990
2,373
(20%)
7,032
7,431
(5%)
Adjusted total revenues and other income*
1,952
1,849
1,897
3%
6,956
7,616
(9%)
Total operating expenses
(1,553)
(1,152)
(551)
>100%
(4,700)
(4,183)
12%
Adjusted purchases*
(45)
58
(85)
(47%)
(70)
(116)
(40%)
Adjusted operating and administrative expenses*
(559)
(458)
(438)
28%
(1,915)
(1,675)
14%
Adjusted depreciation, amortisation and net impairments*
(603)
(594)
(433)
39%
(2,123)
(1,445)
47%
Adjusted exploration expenses*
(55)
(47)
(266)
(79%)
16
(573)
N/A
Net operating income/(loss)
336
838
1,822
(82%)
2,332
3,248
(28%)
Adjusted earnings/(loss)*
690
809
676
2%
2,863
3,806
(25%)
Additions to PP&E, intangibles and equity accounted
investments
923
888
584
58%
4,376
2,623
67%
Operational information
Quarters
Change
Full year
E&P International
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
E&P equity liquid and gas production (mboe/day)
362
355
343
5%
345
328
5%
E&P entitlement liquid and gas production (mboe/day)
278
277
258
8%
266
235
13%
Production sharing agreements (PSA) effects
83
78
85
(1%)
79
94
(15%)
Average liquids price (USD/bbl)
73.1
79.1
77.2
(5%)
72.6
92.0
(21%)
Production & Revenues
In both the fourth quarter and full year of 2023, E&P International achieved a 5% growth in production compared to the corresponding
periods in 2022. These strong production results can primarily be attributed to the Peregrino field achieving plateau in the fourth
quarter, coupled with the full-year production in 2023. Additionally, positive contributions from the Buzzard field in the UK, following
the Suncor acquisition in July 2023, and a notable decrease in turnaround effects in the fourth quarter further increased the overall
production level. The natural decline experienced in various fields, the divestment of the Corrib asset which closed on March 31,
2023, and higher turnaround activities throughout 2023 partially offset this increase.
The decrease in the effects of production sharing agreements (PSA) in the fourth quarter and full year of 2023, was mainly caused by
lower oil and gas prices, in combination with a decrease in production from several fields with PSAs.
Despite the less favourable market prices compared to 2022, E&P International achieved strong financial results in 2023. The
increase in adjusted total revenues and other income* in the fourth quarter compared to last year is primarily attributed to higher
production levels. The fair value of derivatives positively impacted total revenue and other income for the full year by USD 96 million.
Operating expenses and financial results
Higher operation and maintenance expenses associated with turnarounds across various fields, drove an increase in adjusted
operating and administrative expenses* in both the fourth the full year of 2023. Increased royalties and production fees
��
quarter andlinked to higher production at the Peregrino field contributed to the overall rise in costs. P&L impacts from the reassessment of
retirement obligations, along with a one-off R&D expenditure associated with internal reallocation to the business also impacted the
operating expenses in the quarter.
The inclusion of Buzzard, strong production from Peregrino and Bandurria Sur in Argentina, in addition to several new investments in
producing fields resulted in an increase in adjusted depreciation, amortisation and net impairments* compared to the prior year. Well
costs from the prior year relating to Azerbaijan, Karabagh, and drilling costs in Canada were expensed causing the reduction in
exploration expenses year on year. The capitalisation of previously expensed exploration wells in Brazil also positively impacted the
2023 numbers.
In the fourth quarter of 2023 net operating income was negatively impacted by net impairments of USD 310 million, primarily relating
to the planned exit from Azerbaijan. In comparison, net impairment reversals totalling USD 744 million impacted the results in the
fourth quarter of 2022. In the full year of 2023 impairments of USD 346 million were recognised in contrast to net impairments of USD
351 million in the full year 2022, contributing to the relative decrease in net operating income for 2023.
Additions to PP&E, intangibles and equity accounted investments increased year-on-year primarily driven by the development of
Bacalhau and Raia in Brazil, combined with the acquisition of Suncor Energy UK Limited finalised in the second quarter of 2023.
Equinor fourth quarter 2023 15
EXPLORATION & PRODUCTION USA
Financial information
Quarters
Change
Full year
(unaudited, in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Total revenues and other income
1,165
1,162
1,083
8%
4,319
5,523
(22%)
Adjusted total revenues and other income*
1,165
1,130
1,083
8%
4,286
5,523
(22%)
Total operating expenses
(1,022)
(496)
(262)
>100%
(2,966)
(1,501)
98%
Adjusted operating and administrative expenses*
(308)
(293)
(217)
41%
(1,156)
(933)
24%
Adjusted depreciation, amortisation and net impairments*
(506)
(472)
(363)
40%
(1,779)
(1,422)
25%
Adjusted exploration expenses*
(184)
(23)
(29)
>100%
(274)
(212)
30%
Net operating income/(loss)
143
666
821
(83%)
1,353
4,022
(66%)
Adjusted earnings/(loss)*
168
343
474
(65%)
1,076
2,957
(64%)
Additions to PP&E, intangibles and equity accounted
investments
332
338
281
18%
1,206
764
58%
Operational information
Quarters
Change
Full year
E&P USA
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
E&P equity liquid and gas production (mboe/day)
372
369
302
23%
363
324
12%
E&P entitlement liquid and gas production (mboe/day)
323
319
260
24%
314
279
12%
Royalties
49
50
42
16%
49
44
10%
Average liquids price (USD/bbl)
66.0
68.1
68.6
(4%)
64.4
81.0
(20%)
Average internal gas price (USD/mmbtu)
1.76
1.08
4.73
(63%)
1.77
5.55
(68%)
Production & Revenues
In the fourth quarter of 2023, E&P USA delivered a strong operational performance due to the ramp-up of the Vito field which started
production earlier in the year. The Caesar Tonga field increased its production following the installation of new flowlines placed in
service late 2022. The addition of new wells in the Appalachia also resulted in a further production increase from this basin. While
natural decline impacted several assets in the portfolio, consistent and high production regularity more than offset these effects.
Increased entitlement production helped to mitigate some of the downward impacts on revenue caused by the significantly lower price
environment, in particular for gas, this quarter and the full year of 2023 compared to the same periods last year.
Operating expenses and financial results
Operating expenditures and depreciation and amortisation increased due to the higher production and the addition of new assets. The
Vito ramp-up, Caesar Tonga and Appalachia increases resulted in higher transportation expenses and production cost. Furthermore,
the fourth quarter of 2023 saw increased maintenance in the Appalachian Basin and on several mature fields in the Gulf of Mexico. In
the fourth quarter, E&P USA concluded on drilling activity for three exploration prospects in the Gulf of Mexico. All the three prospects
were dry or non-commercial and were expensed accordingly, resulting in a significant increase in exploration cost for the quarter.
Net operating income for the full year of 2023 included net impairment reversals amounting to USD 266 million, compared to USD
1,071 million in net impairment reversals for the same period of 2022, which were primarily related to the assets in the Gulf of Mexico.
In the fourth quarter of 2022, the net operating income included impairment reversals amounting to USD 350 million.
Equinor fourth quarter 2023 16
MARKETING, MIDSTREAM & PROCESSING
Financial information
Quarters
Change
Full year
(unaudited, in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Total revenues and other income
28,668
25,712
33,591
(15%)
105,908
148,105
(28%)
Adjusted total revenues and other income*
1)
28,257
25,371
1)
(19%)
104,860
1)
(30%)
Total operating expenses
(27,934)
(24,730)
(33,842)
(17%)
(101,925)
(144,493)
(29%)
Adjusted purchases* [5]
(26,241)
(23,083)
(31,969)
(18%)
(95,733)
(139,949)
(32%)
Adjusted operating and administrative expenses*
(1,365)
(1,195)
(1,389)
(2%)
(4,988)
(4,516)
10%
Adjusted depreciation, amortisation and net
impairments*
(227)
(217)
(236)
(4%)
(897)
(881)
2%
Net operating income/(loss)
734
982
(251)
N/A
3,984
3,612
10%
Adjusted earnings*
1)
424
876
1)
(70%)
3,242
1)
(23%)
- Gas and Power
2)
472
371
1,212
(61%)
2)
2,038
3,942
(48%)
- Crude, Products and Liquids
2)
84
466
210
(60%)
2)
1,359
683
99%
- Other
2)
(132)
38
(6)
>100%
2)
(155)
(391)
(60%)
Additions to PP&E, intangibles and equity
accounted investments
218
342
349
(38%)
844
1,212
(30%)
Operational information
Quarters
Change
Full year
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Liquids sales volumes (mmbl)
3)
245.6
260.0
212.1
3)
16%
956.3
815.9
3)
17%
Natural gas sales Equinor (bcm)
16.1
13.0
15.8
2%
58.9
63.3
(7%)
Natural gas entitlement sales Equinor (bcm)
14.5
12.0
14.2
2%
53.2
56.1
(5%)
Power generation (GWh) Equinor share
547
510
815
(33%)
2,298
1,012
>100%
Realised piped gas price Europe (USD/mmbtu)
3)
13.07
10.93
29.84
3)
(56%)
13.86
32.84
3)
(58%)
Realised piped gas price US (USD/mmbtu)
2.07
1.57
5.40
(62%)
2.09
5.89
(64%)
1) Restated. For more information, see Amended principles for Adjusted earnings in the section ‘Use and reconciliation of non-
GAAP financial measures’ in the Supplementary disclosures.
2) From Q1 2023, the presentation of MMP’s adjusted earnings has been changed to align with organisational structure and
management’s review of performance, with retrospective effect.
3) Restated. Restatement due to a change in definition of the price marker for realised gas price and improved methodology for
calculating liquids sales volumes. For more information, see 'End notes'.
Volumes, Pricing & Revenues
Liquids sales volumes increased in the fourth quarter and year to date in 2023 compared to the same periods in 2022, due to higher
sales of equity and third-party volumes.
Gas sales slightly increased compared to the fourth quarter of 2022, primarily because of higher NCS piped gas sales.
Power generation has decreased compared to the fourth quarter of last year, primarily due to a decrease in the clean spark spread.
Year to date, power generation was higher compared to last year, primarily driven by the acquisition of conventional combined cycle
gas turbine (CCGT) activity in the second half of 2022.
The realised European piped gas price decreased compared to the fourth quarter of last year, attributed to lower demand, increased
LNG imports and high storage levels.
The realised piped gas price in the US decreased compared to the fourth quarter of last year due to the drop in market prices driven
by a storage surplus and mild weather.
Financial Results
During the fourth quarter of 2023 Gas and Power substantially contributed to adjusted earnings* capturing value from geographical
optimisation of piped gas in Europe, gas price volatility and LNG sales. Crude, Products, and Liquids reported modest adjusted
earnings* due to weaker margins and optimisation gains compared to previous quarters in 2023
.
. Additionally, adjusted earnings* in
Equinor fourth quarter 2023 17
the Other subsegment were adversely affected by a low refining margin and costs associated with the development of low-carbon
projects.
Adjusted earnings* for all subsegments in the fourth quarter of this year show a decrease compared to the same period last year. Gas
and Power experienced the effects of diminished gas market volatility and narrower geographical spreads, limiting the opportunity to
capitalise on favourable events from the previous year. Similarly, Crude, Products, and Liquids reported lower results, primarily
influenced by reduced crude trading margins. In the Other subsegment, adjusted earnings* were affected by a decrease in refining
margins.
Adjusted earnings* for the full year of 2023 were lower than previous year. The result from Crude, Product and Liquids has doubled by
effectively capturing financial and physical market opportunities and optimising the shipping portfolio. Contrasting to the extraordinary
market conditions in the prior year, opportunities to capture value in 2023 reduced. A reduction in gas market volatility and declined
geographical spreads limited favourable opportunities in Gas and Power trading, giving rise to a lower result year on year.
Net operating income includes net effects from changes in fair value related to storage and commodity derivatives utilised to manage
price risk exposure. During 2023, the net operating income included impairments amounting to USD 343 million, in contrast to USD
895 million in net impairment reversals in the prior year.
Equinor fourth quarter 2023 18
RENEWABLES
Financial information
Quarters
Change
Full year
(unaudited, in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Revenues third party, other revenue and other
income
25
10
31
(17%)
50
127
(61%)
Net income/(loss) from equity accounted
investments
(6)
(16)
8
N/A
(33)
58
N/A
Total revenues and other income
20
(5)
38
(49%)
17
185
(91%)
Adjusted total revenues and other income*
2
(5)
15
(84%)
(0)
75
N/A
Total operating expenses
(185)
(406)
(102)
82%
(774)
(269)
>100%
Adjusted operating and administrative expenses*
(176)
(100)
(101)
74%
(442)
(255)
73%
Adjusted depreciation, amortisation and net
impairments*
(6)
(3)
(1)
>100%
(12)
(4)
>100%
Net operating income/(loss)
(166)
(412)
(63)
>(100%)
(757)
(84)
>(100%)
Adjusted earnings*
(179)
(108)
(87)
>(100%)
(454)
(184)
>(100%)
Additions to PP&E, intangibles and equity
accounted investments
696
193
103
>100%
2,007
298
>100%
Operational information
Quarters
Change
Full year
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Renewables power generation (GWh) Equinor share
661
352
509
30%
1,859
1,641
13%
Power generation
and Arkona. Onshore renewables contributed another 208 GWh. This substantial increase in production was driven by the ramp-up of
new onshore power plants in Poland and Brazil compared to both the fourth quarter and the full year of 2022.
Total revenues and other income
European offshore wind assets in operation within our equity accounted investment portfolio increased their positive revenue
contribution by 24% within net income/(loss) from equity accounted investments in the fourth quarter. This increase was more than
offset by higher expenditures associated with early phase projects. Following the decision to reset the Empire Wind 2 project in the
US, criteria for capitalisation is no longer met. Accordingly, ongoing costs related to this project have been expensed from the fourth
quarter of 2023, also contributing to the overall decline in the net result from equity accounted investments from the fourth quarter
2022. A lower pricing environment in 2023 compared to the prior year contributed to the full year decline.
Added revenue from the newly acquired onshore wind farm in Brazil contributed positively to total revenues and other income in the
fourth quarter. Combined with the lower results from equity accounted investments in the fourth quarter and full year 2023, total
revenues and other income decreased relative to the same periods in 2022. Favourable effects of divestments early in 2022 also
significantly impacted the full year decline.
Operating expenses and financial results
The notable decrease in net operating income for the full year of 2023 was primarily due to the recognition of a USD 300 million
impairment in the third quarter for offshore wind projects in the US Northeast following the rejection of petitions related to offtake
agreements. In addition, increased business development expenditures and higher operating activity levels contributed to an upward
trend in operating and administrative expenses in the fourth quarter and the full year of 2023. The increased costs associated with
maturing projects predominantly originated from offshore wind activities in the UK and Asia. Project costs were also negatively
impacted by one-off events in the fourth quarter of 2023.
Additions to PP&E, intangibles, and equity-accounted investments for both the fourth quarter and the full year of 2023 were higher
than the corresponding periods last year. In the fourth quarter of 2023, USD 192 million was allocated for offshore wind projects, and
USD 504 million for onshore renewables, primarily related to the acquisition of Rio Energy, an onshore wind farm in Brazil. Over the
course of 2023, the acquisition of BeGreen, a commercial-scale offshore wind lease in California, Rio Energy and investments related
to projects in the US and the UK significantly contributed to the overall increase in PP&E, intangibles and equity-accounted
investments compared to the prior year.
Equinor fourth quarter 2023 19
CONDENSED INTERIM FINANCIAL STATEMENTS
Fourth quarter 2023
CONSOLIDATED STATEMENT OF INCOME
Quarters
Full year
(unaudited, in USD million)
Note
Q4 2023
Q3 2023
Q4 2022
2023
2022
Revenues
4
28,843
25,924
33,841
106,848
149,004
Net income/(loss) from equity accounted investments
(31)
(25)
395
(1)
620
Other income
242
124
84
327
1,182
Total revenues and other income
2
29,054
26,024
34,321
107,174
150,806
Purchases [net of inventory variation]
(13,804)
(12,269)
(12,853)
(48,175)
(53,806)
Operating expenses
3
(2,875)
(2,420)
(3,026)
(10,582)
(9,608)
Selling, general and administrative expenses
(403)
(295)
(278)
(1,218)
(986)
Depreciation, amortisation and net impairments
(2,821)
(3,369)
(1,184)
(10,634)
(6,391)
Exploration expenses
(402)
(218)
(396)
(795)
(1,205)
Total operating expenses
2
(20,306)
(18,571)
(17,737)
(71,404)
(71,995)
Net operating income/(loss)
2
8,748
7,453
16,584
35,770
78,811
Interest income and other financial income
661
580
482
2,449
1,222
Interest expenses and other financial expenses
(368)
(412)
(450)
(1,660)
(1,379)
Other financial items
296
(155)
(2,147)
1,325
(50)
Net financial items
5
589
13
(2,115)
2,114
(207)
Income/(loss) before tax
9,337
7,466
14,469
37,884
78,604
Income tax
6
(6,729)
(4,965)
(6,572)
(25,980)
(49,861)
Net income/(loss)
2,608
2,501
7,897
11,904
28,744
Attributable to equity holders of the company
2,603
2,497
7,895
11,885
28,746
Attributable to non-controlling interests
5
4
2
19
(3)
Basic earnings per share (in USD)
0.88
0.84
2.52
3.93
9.06
Diluted earnings per share (in USD)
0.88
0.84
2.51
3.93
9.03
Weighted average number of ordinary shares outstanding (in millions)
2,954
2,971
3,131
3,021
3,174
Weighted average number of ordinary shares outstanding diluted (in millions)
2,961
2,978
3,141
3,027
3,183
Equinor fourth quarter 2023 20
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarters
Full year
(unaudited, in USD million)
Q4 2023
Q3 2023
Q4 2022
2023
2022
Net income/(loss)
2,608
2,501
7,897
11,904
28,744
Actuarial gains/(losses) on defined benefit pension plans
(894)
20
895
(276)
461
Income tax effect on income and expenses recognised in OCI
1)
211
(8)
(208)
66
(105)
Items that will not be reclassified to the Consolidated statement of income
(683)
12
687
(211)
356
Foreign currency translation effects
1,169
(284)
4,116
(587)
(3,609)
Share of OCI from equity accounted investments
(124)
(17)
424
(113)
424
Items that may be subsequently reclassified to the Consolidated statement of income
1,045
(301)
4,540
(701)
(3,186)
Other comprehensive income/(loss)
362
(289)
5,228
(911)
(2,829)
Total comprehensive income/(loss)
2,969
2,212
13,125
10,992
25,914
Attributable to the equity holders of the company
2,965
2,207
13,123
10,974
25,917
Attributable to non-controlling interests
5
4
2
19
(3)
1) Other comprehensive income (OCI).
Equinor fourth quarter 2023 21
CONSOLIDATED BALANCE SHEET
At 31 December
At 31 December
(unaudited, in USD million)
Note
2023
2022
1)
ASSETS
Property, plant and equipment
2
58,822
56,498
Intangible assets
3
5,709
5,158
Equity accounted investments
2,508
2,758
Deferred tax assets
7,936
8,732
Pension assets
1,260
1,219
Derivative financial instruments
559
691
Financial investments
3,441
2,733
Prepayments and financial receivables
7
1,291
2,063
Total non-current assets
81,525
79,851
Inventories
3,814
5,205
Trade and other receivables
2
16,933
22,452
Derivative financial instruments
1,378
4,039
Financial investments
29,224
29,876
Cash and cash equivalents
3
9,641
15,579
Total current assets
60,990
77,152
Assets classified as held for sale
3
1,064
1,018
Total assets
143,580
158,021
EQUITY AND LIABILITIES
Shareholders' equity
48,490
53,988
Non-controlling interests
10
1
Total equity
48,500
53,989
Finance debt
5
22,230
24,141
Lease liabilities
2,290
2,410
Deferred tax liabilities
13,345
11,996
Pension liabilities
3,925
3,671
Provisions and other liabilities
7
15,304
15,633
Derivative financial instruments
1,795
2,376
Total non-current liabilities
58,890
60,226
Trade, other payables and provisions
11,870
13,352
Current tax payable
6
12,306
17,655
Finance debt
5, 7
5,996
4,359
Lease liabilities
1,279
1,258
Dividends payable
2,649
2,808
Derivative financial instruments
1,619
4,106
Total current liabilities
35,719
43,539
Liabilities directly associated with the assets classified as held for sale
3
471
268
Total liabilities
95,080
104,032
Total equity and liabilities
143,580
158,021
1) Audited
2) Of which Trade receivables of USD 13.0 billion at 31 December 2023 and USD 17.3 billion at 31 December 2022.
3) Includes collateral deposits of USD 1.6 billion for 31 December 2023 related to certain requirements set out by exchanges where Equinor
is participating. The corresponding figure for 31 December 2022 is USD 6.1 billion.
Equinor fourth quarter 2023 22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited, in USD million)
Share
capital
Additional
paid-in
capital
Retained
earnings
Foreign
currency
translation
reserve
OCI from
equity
accounted
investments
Share-
holders'
equity
Non-
controlling
interests
Total equity
At 1 January 2022
1,164
6,408
36,683
(5,245)
0
39,010
14
39,024
Net income/(loss)
28,746
28,746
(3)
28,744
Other comprehensive
income/(loss)
356
(3,609)
424
(2,829)
(2,829)
Total comprehensive
income/(loss)
25,914
Dividends
(7,549)
(7,549)
(7,549)
Share buy-back
(22)
(3,358)
(3,380)
(3,380)
Other equity transactions
(10)
(10)
(10)
(20)
At 31 December 2022
1,142
3,041
58,236
(8,855)
424
53,988
1
53,989
At 1 January 2023
1,142
3,041
58,236
(8,855)
424
53,988
1
53,989
Net income/(loss)
11,885
11,885
19
11,904
Other comprehensive
income/(loss)
(211)
(587)
(113)
(911)
(911)
Total comprehensive
income/(loss)
10,992
Dividends
(10,783)
(10,783)
(10,783)
Share buy-back
1)
(42)
(3,037)
(2,606)
(5,685)
(5,685)
Other equity transactions
(3)
(3)
(10)
(13)
At 31 December 2023
1,101
0
56,521
(9,442)
310
48,490
10
48,500
1) For more information see note 8 Capital distribution.
Equinor fourth quarter 2023 23
CONSOLIDATED STATEMENT OF CASH FLOWS
Quarters
Full year
Full year
(unaudited, in USD million)
Note
Q4 2023
Q3 2023
Q4 2022
2023
2022
Income/(loss) before tax
9,337
7,466
14,469
37,884
78,604
Depreciation, amortisation and net impairments
2,821
3,369
1,184
10,634
6,391
Exploration expenditures written off (net)
28
52
183
(53)
342
(Gains)/losses on foreign currency transactions and balances
5
289
12
2,140
(852)
(2,088)
(Gains)/losses on sale of assets and businesses
3
(253)
0
(87)
8
(823)
(Increase)/decrease in other items related to operating activities
1)
(734)
21
2,923
(1,313)
468
(Increase)/decrease in net derivative financial instruments
(694)
195
217
1,041
1,062
Interest received
399
407
216
1,710
399
Interest paid
(302)
(186)
(258)
(1,042)
(747)
Cash flows provided by operating activities before taxes paid and working
capital items
10,890
11,336
20,988
48,016
83,608
Taxes paid
(8,103)
(3,743)
(14,188)
(28,276)
(43,856)
(Increase)/decrease in working capital
(51)
(2,357)
(2,532)
4,960
(4,616)
Cash flows provided by operating activities
2,736
5,236
4,267
24,701
35,136
Cash (used)/received in business combinations
(40)
(100)
(0)
(1,195)
147
Capital expenditures and investments
2)
3
(3,031)
(2,652)
(2,376)
(10,575)
(8,758)
(Increase)/decrease in financial investments
(3,010)
(2,679)
(6,990)
443
(10,089)
(Increase)/decrease in derivative financial instruments
261
14
(374)
(1,266)
1,894
(Increase)/decrease in other interest-bearing items
92
(219)
7
(87)
(23)
Proceeds from sale of assets and businesses
3)
3
154
(0)
47
272
966
Cash flows provided by/(used in) investing activities
(5,574)
(5,636)
(9,687)
(12,409)
(15,863)
Repayment of finance debt
(342)
0
(250)
(2,818)
(250)
Repayment of lease liabilities
(418)
(336)
(365)
(1,422)
(1,366)
Dividends paid
(2,706)
(2,613)
(2,231)
(10,906)
(5,380)
Share buy-back
(518)
(531)
(577)
(5,589)
(3,315)
Net current finance debt and other financing activities
1,813
(1,195)
230
2,593
(5,102)
Cash flows provided by/(used in) financing activities
(2,171)
(4,675)
(3,193)
(18,142)
(15,414)
Net increase/(decrease) in cash and cash equivalents
(5,009)
(5,074)
(8,612)
(5,850)
3,860
Effect of exchange rate changes on cash and cash equivalents
230
(156)
844
(87)
(2,268)
Cash and cash equivalents at the beginning of the period (net of overdraft)
14,420
19,650
23,348
15,579
13,987
Cash and cash equivalents at the end of the period (net of overdraft)
4)
9,641
14,420
15,580
9,641
15,579
1)
the fourth quarter 2023 was a fair value gain of USD 204 million.
2)
2018 (contingent consideration) has been reclassified from Capital expenditures and investments to Proceeds from sale of assets and
businesses.
3)
31 March 2023. See note 3 Acquisitions and disposals for more information.
4)
Equinor fourth quarter 2023 24
Notes to the Condensed interim financial statements
1 Organisation and basis of preparation
Organisation and principal activities
Equinor Group (Equinor) consists of Equinor ASA and its subsidiaries. Equinor ASA is incorporated and domiciled in Norway and
listed on the Oslo Børs (Norway) and the New York Stock Exchange (USA). The registered office address is Forusbeen 50, N-4035,
Stavanger, Norway.
The objective of Equinor is to develop, produce and market various forms of energy and derived products and services, as well as
other businesses. The activities may also be carried out through participation in or cooperation with other companies. Equinor Energy
AS, a 100% owned operating subsidiary of Equinor ASA and owner of all of Equinor's oil and gas activities and net assets on the
Norwegian continental shelf, is a co-obligor or guarantor of certain debt obligations of Equinor ASA.
Equinor's condensed interim financial statements for the fourth quarter of 2023 were authorised for issue by the board of directors on
6 February 2024.
Basis of preparation
These condensed interim financial statements are prepared in accordance with IAS 34 Interim Financial Reporting as issued by the
International Accounting Standards Board (IASB) and as adopted by the European Union (EU). The condensed interim financial
statements do not include all the information and disclosures required by IFRS® Accounting Standards for a complete set of financial
statements and should be read in conjunction with the Consolidated annual financial statements for 2022. IFRS Accounting Standards
as adopted by the EU differs in certain respects from IFRS Accounting Standards as issued by the IASB, however the differences do
not impact Equinor's financial statements for the periods presented.
As a result of rounding differences, numbers or percentages may not add up to the total.
The condensed interim financial statements are unaudited.
Accounting policies
The accounting policies applied in the preparation of the condensed interim financial statements are consistent with those used in the
preparation of Equinor’s consolidated annual financial statements for 2022. A description of the material accounting policies is
included in Equinor’s consolidated annual financial statements for 2022. When determining fair value, there have been no changes to
the valuation techniques or models and Equinor applies the same sources of input and the same criteria for categorization in the fair
value hierarchy as disclosed in the consolidated annual financial statements for 2022.
For information about standards, amendments to standards and interpretations effective from 1 January 2023, that could affect the
consolidated financial statements, please refer to note 2 in Equinor’s consolidated financial statements for 2022. None of the
amendments effective from 1 January 2023 has had a significant impact on the condensed interim financial statements. Equinor has
not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
Equinor has adopted amendments to IAS 12 – International Tax Reform – Pillar Two Model Rules (top-up tax) with effect from 1
January 2023. Equinor has applied the mandatory exception and does not recognise or disclose information about deferred tax assets
and liabilities related to Pillar Two income taxes. The mandatory exception applies retrospectively. However, since no new legislation
to implement the top-up tax was enacted or substantively enacted on 31 December 2022 in any jurisdiction in which Equinor operates,
and no related deferred tax was recognised at that date, the retrospective application has no impact on the Consolidated financial
statements.
Use of judgements and estimates
The preparation of financial statements in conformity with IFRS Accounting Standards requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income
and expenses. The estimates and associated assumptions are reviewed on an on-going basis and are based on historical experience
and various other factors that are believed to be reasonable under the circumstances. These estimates and assumptions form the
basis for making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates. Please refer to note 2 in Equinor’s consolidated financial statements for 2022 for more
information about accounting judgement and key sources of estimation uncertainty. Refer to note 2 Segments in this report for further
information about management’s future commodity price assumptions.
Equinor fourth quarter 2023 25
2 Segments
Equinor’s operations are managed through operating segments identified on the basis of those components of Equinor that are
regularly reviewed by the chief operating decision maker, Equinor's Corporate Executive Officer (CEO). The reportable segments
Exploration & Production Norway (E&P Norway), Exploration & Production International (E&P International), Exploration & Production
USA (E&P USA), Marketing, Midstream & Processing (MMP) and Renewables (REN) correspond to the operating segments. The
operating segments Projects, Drilling & Procurement (PDP), Technology, Digital & Innovation (TDI) and Corporate staff and functions
are aggregated into the reportable segment Other based on materiality. The majority of the costs in PDP and TDI is allocated to the
three Exploration & Production segments, MMP and REN.
The accounting policies of the reporting segments equal those applied in these condensed interim financial statements, except for the
line-item Additions to PP&E, intangibles and equity accounted investments in which movements related to changes in asset retirement
obligations are excluded as well as provisions for onerous contracts which reflect only obligations towards group external parties. The
measurement basis of segment profit is net operating income/(loss). Deferred tax assets, pension assets, non-current financial assets,
total current assets and total liabilities are not allocated to the segments. Transactions between the segments, mainly from the sale of
crude oil, gas, and related products, are performed at defined internal prices which have been derived from market prices. The
transactions are eliminated upon consolidation.
Fourth quarter 2023
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total Group
(in USD million)
Revenues third party
72
297
76
28,372
5
21
0
28,843
Revenues inter-segment
9,780
1,597
1,089
309
4
8
(12,787)
0
Net income/(loss) from equity accounted
investments
0
(5)
0
(13)
(6)
(8)
0
(31)
Other income
224
(0)
0
(0)
17
0
0
242
Total revenues and other income
10,076
1,889
1,165
28,668
20
22
(12,787)
29,054
Purchases [net of inventory variation]
0
(45)
0
(26,330)
0
(0)
12,570
(13,804)
Operating, selling, general and
administrative expenses
(1,057)
(540)
(308)
(1,384)
(180)
17
173
(3,279)
Depreciation and amortisation
(1,144)
(603)
(506)
(227)
(6)
(31)
0
(2,518)
Net impairment (losses)/reversals
0
(310)
(0)
7
(0)
0
0
(303)
Exploration expenses
(138)
(55)
(208)
0
0
0
0
(402)
Total operating expenses
(2,339)
(1,553)
(1,022)
(27,934)
(185)
(15)
12,743
(20,306)
Net operating income/(loss)
7,737
336
143
734
(166)
7
(43)
8,748
Additions to PP&E, intangibles and equity
accounted investments
1,577
923
332
218
696
25
(0)
3,770
Equinor fourth quarter 2023 26
Third quarter 2023
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total Group
(in USD million)
Revenues third party
42
183
65
25,611
2
20
0
25,924
Revenues inter-segment
7,904
1,809
1,064
107
8
8
(10,902)
0
Net income/(loss) from equity accounted
investments
0
(2)
0
(6)
(16)
0
0
(25)
Other income
(9)
0
32
(0)
0
101
0
124
Total revenues and other income
7,938
1,990
1,162
25,712
(5)
129
(10,902)
26,024
Purchases [net of inventory variation]
(1)
58
0
(22,987)
0
(0)
10,661
(12,269)
Operating, selling, general and
administrative expenses
(788)
(541)
(293)
(1,181)
(103)
(76)
267
(2,715)
Depreciation and amortisation
(1,107)
(594)
(472)
(217)
(3)
(34)
0
(2,426)
Net impairment (losses)/reversals
(588)
0
290
(346)
(300)
0
0
(943)
Exploration expenses
(120)
(75)
(23)
0
0
0
0
(218)
Total operating expenses
(2,604)
(1,152)
(496)
(24,730)
(406)
(110)
10,928
(18,571)
Net operating income/(loss)
5,335
838
666
982
(412)
18
27
7,453
Additions to PP&E, intangibles and equity
accounted investments
1,421
888
338
342
193
24
0
3,206
Equinor fourth quarter 2023 27
Fourth quarter 2022
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total Group
(in USD million)
Revenues third party
59
695
69
32,965
7
46
0
33,841
Revenues inter-segment
16,652
1,623
1,014
254
0
27
(19,570)
0
Net income/(loss) from equity accounted
investments
(0)
31
0
372
8
(16)
0
395
Other income
18
24
0
0
23
19
0
84
Total revenues and other income
16,729
2,373
1,083
33,591
38
76
(19,570)
34,321
Purchases [net of inventory variation]
(0)
(85)
(0)
(31,996)
0
(0)
19,228
(12,853)
Operating, selling, general and
administrative expenses
(1,020)
(511)
(220)
(1,614)
(101)
(153)
314
(3,304)
Depreciation and amortisation
(1,219)
(436)
(363)
(236)
(1)
(26)
0
(2,281)
Net impairment (losses)/reversals
(3)
747
350
3
0
(0)
0
1,097
Exploration expenses
(101)
(266)
(29)
0
0
0
0
(396)
Total operating expenses
(2,343)
(551)
(262)
(33,842)
(102)
(179)
19,542
(17,737)
Net operating income/(loss)
14,386
1,822
821
(251)
(63)
(103)
(29)
16,584
Additions to PP&E, intangibles and equity
accounted investments
1,422
584
281
349
103
88
0
2,828
Equinor fourth quarter 2023 28
Full year 2023
E&P
Norway
E&P
Internationa
l
E&P
USA
MMP
REN
Other
Eliminations
Total Group
(in USD million)
Revenues third party
230
993
277
105,242
20
85
0
106,848
Revenues inter-segment
37,999
6,009
4,009
633
12
33
(48,695)
0
Net income/(loss) from equity accounted
investments
0
28
0
12
(33)
(8)
0
(1)
Other income
111
1
32
23
18
142
0
327
Total revenues and other income
38,340
7,032
4,319
105,908
17
253
(48,695)
107,174
Purchases [net of inventory variation]
(0)
(70)
0
(95,769)
0
(1)
47,665
(48,175)
Operating, selling, general and
administrative expenses
(3,759)
(2,176)
(1,178)
(4,916)
(462)
(201)
893
(11,800)
Depreciation and amortisation
(4,429)
(2,123)
(1,779)
(897)
(12)
(133)
0
(9,373)
Net impairment (losses)/reversals
(588)
(310)
290
(343)
(300)
(10)
0
(1,260)
Exploration expenses
(476)
(20)
(299)
0
0
0
0
(795)
Total operating expenses
(9,253)
(4,700)
(2,966)
(101,925)
(774)
(345)
48,558
(71,404)
Net operating income/(loss)
29,087
2,332
1,353
3,984
(757)
(92)
(137)
35,770
Additions to PP&E, intangibles and equity
accounted investments
5,939
4,376
1,206
844
2,007
128
0
14,500
Balance sheet information
Equity accounted investments
3
0
0
783
1,665
57
0
2,508
Non-current segment assets
28,915
17,977
11,049
3,997
1,575
1,018
0
64,530
Non-current assets not allocated to
segments
14,487
Total non-current assets
81,525
Assets held for sale
0
1,064
0
0
0
0
0
1,064
Equinor fourth quarter 2023 29
Full year 2022
E&P
Norway
E&P
International
E&P
USA
MMP
REN
Other
Eliminations
Total Group
(in USD million)
Revenues third party
304
1,099
305
147,164
16
115
0
149,004
Revenues inter-segment
74,631
6,124
5,217
527
0
55
(86,554)
0
Net income/(loss) from equity accounted
investments
(0)
172
0
406
58
(16)
0
620
Other income
994
35
0
9
111
33
0
1,182
Total revenues and other income
75,930
7,431
5,523
148,105
185
187
(86,554)
150,806
Purchases [net of inventory variation]
0
(116)
(0)
(139,916)
0
(0)
86,227
(53,806)
Operating, selling, general and
administrative expenses
(3,782)
(1,698)
(938)
(4,591)
(265)
(223)
904
(10,593)
Depreciation and amortisation
(4,986)
(1,445)
(1,422)
(881)
(4)
(142)
0
(8,878)
Net impairment (losses)/reversals
819
(286)
1,060
895
0
(0)
0
2,487
Exploration expenses
(366)
(638)
(201)
0
0
0
0
(1,205)
Total operating expenses
(8,315)
(4,183)
(1,501)
(144,493)
(269)
(365)
87,131
(71,995)
Net operating income/(loss)
67,614
3,248
4,022
3,612
(84)
(178)
577
78,811
Additions to PP&E, intangibles and equity
accounted investments
4,922
2,623
764
1,212
298
176
0
9,994
Balance sheet information
Equity accounted investments
3
550
0
688
1,452
65
0
2,758
Non-current segment assets
28,510
15,868
11,311
4,619
316
1,031
0
61,656
Non-current assets not allocated to
segments
15,437
Total non-current assets
79,851
Assets held for sale
0
1,018
0
0
0
0
0
1,018
Equinor fourth quarter 2023 30
Net impairments/reversal of impairments and changes to accounting assumptions
Management’s future commodity price assumptions are used for value in use impairment testing. While there are inherent
uncertainties in the assumptions, the commodity price assumptions reflect management’s best estimate of the price development over
the life of the Group’s assets based on its view of relevant current circumstances and the likely future development of such
circumstances, including energy demand development, energy and climate change policies as well as the speed of the energy
transition, population and economic growth, geopolitical risks, technology and cost development and other factors. Management’s
best estimate also takes into consideration a range of external forecasts.
Equinor has performed a thorough and broad analysis of the expected development in drivers for the different commodity markets.
Significant uncertainty exists regarding future commodity price development due to the transition to a lower carbon economy, future
supply actions by OPEC+ and other factors. Such analysis resulted in changes in the long-term price assumptions with effect from the
second quarter of 2023. The main price assumptions applied in impairment and impairment reversal assessments are disclosed in the
table below as price-points on price curves. Previous price-points applied from the third quarter of 2022 up to and including the first
quarter of 2023 are provided in brackets.
Year
Prices in real terms
1)
2025
2030
2040
2050
Brent Blend (USD/bbl)
79
(78)
78
(78)
73
(73)
68
(68)
European gas (USD/mmBtu) - TTF
15.5
(20.9)
9.1
(9.9)
9.5
(9.4)
9.5
(9.4)
Henry Hub (USD/mmBtu)
3.6
(4.2)
4.3
(3.9)
4.3
(3.9)
4.3
(3.9)
Electricity Germany (EUR/MWh)
106
(122)
78
(74)
71
(60)
71
(60)
EU ETS (EUR/tonne)
90
(84)
105
(84)
128
(111)
150
(137)
1) Basis year 2023.
Equinor fourth quarter 2023 31
For the full year of 2023, Equinor recognised net impairments of USD 1,260 million, excluding impairments related to capitalized
exploration and evaluation expenditures.
In the fourth quarter of 2023, Equinor recognised impairments in the E&P International segment to an amount of USD 310 million,
following the held for sale classification of its interest in Azerbaijan assets. Refer to note 3 for additional details.
In the third quarter of 2023, Equinor recognised impairments in the REN segment to an amount of USD 300 million, due to inflation
and supply chain constraints on the US North East Coast offshore wind projects. Impairments in the E&P Norway segment amounted
to USD 588 million and mainly relate to reduced expected reserves on a producing asset. Impairments in the MMP segment
amounted to USD 346 million and mainly relate to expectations of stabilizing refinery margins at a lower level than the margins
consumed in the recent quarterly periods. Impairment reversals in the E&P USA segment amounted to USD 290 million and mainly
relate to increased expected reserves on a producing asset.
Non-current assets by country
At 31 December
At 31 December
(in USD million)
2023
2022
Norway
32,977
33,242
USA
12,587
12,343
Brazil
10,871
9,400
UK
5,535
3,688
Canada
1,157
1,171
Angola
1,103
895
Denmark
973
497
Argentina
648
615
Algeria
474
622
Poland
447
270
Other
265
1,672
Total non-current assets
1)
67,038
64,414
1) Excluding deferred tax assets, pension assets and non-current financial assets. Non-current assets are attributed to country of operations.
3 Acquisitions and disposals
Acquisitions
Swap of US Offshore Wind assets
In January 2024, Equinor entered into a swap agreement with bp. Equinor will acquire bp’s 50% share and take full ownership of
Empire Offshore Wind Holdings LLC, including the Empire Wind lease and projects, while bp will acquire Equinor’s 50% share and
take full ownership of Beacon Wind Holdings LLC, including the Beacon Wind lease and projects. It is anticipated that Equinor will
consolidate Empire Wind and derecognise its 50% share of Beacon Wind in the first quarter of 2024. Subject to certain conditions,
Equinor will also acquire bp's 50% interest in the South Brooklyn Marine Terminal (SBMT) lease. The transaction, pending regulatory
approvals, is anticipated to be cash neutral, with the exception of standard cash and working capital settlements and will be
recognised in the REN segment.
Acquisition of Rio Energy
On 3 November 2023, Equinor closed a transaction with Denham Capital to acquire 100% of the shares in Horus Investimentos S.A.,
the parent company of Rio Energy, a leading onshore renewables company in Brazil. The cash consideration amounted to USD 82
million in addition to USD 268 million in capital contribution to settle Rio Energy’s external financing. The acquired portfolio includes a
producing onshore wind farm in the north-eastern state of Bahia, a pre-construction solar photovoltaic (PV) portfolio and a pipeline of
1.2 GW of onshore wind and solar projects. This transaction resulted in an increase in Equinor’s property, plant and equipment of
USD 350 million. The transaction has been accounted for as a business combination within the REN segment. The purchase price
and the purchase price allocation are preliminary.
Acquisition of Suncor Energy UK Limited
On 30 June 2023, Equinor closed a transaction with Suncor Energy UK Holdings Ltd to acquire 100% of the shares in Suncor Energy
UK Limited for a total consideration of USD 847 million after customary adjustments for working capital. The transaction includes a
non-operated interest in the producing Buzzard oil field (29.89%) and an additional interest in the operated Rosebank development
(40%). The transaction has been accounted for within the E&P International segment as a business combination, resulting in an
Equinor fourth quarter 2023 32
increase in Equinor’s property, plant and equipment of USD 1,490 million and deferred tax liabilities of USD 672 million. The purchase
price allocation remains preliminary.
Acquisition of BeGreen
On 26 January 2023, Equinor closed a transaction with the Bregentved Group and members of the executive board of BeGreen Solar
Aps to acquire 100% of the shares in the Danish solar developer BeGreen Solar Aps. The cash consideration amounted to USD 252
million (EUR 235 million), in addition to a consideration contingent on the successful delivery of future solar projects above an agreed
megawatt threshold. The transaction has been accounted for within the REN segment as a business combination, resulting in an
increase of Equinor’s intangible assets of USD 423 million.
Disposals
Equinor Energy Ireland Limited
On 31 March 2023, Equinor closed the transaction with Vermilion Energy Inc (Vermillion) to sell Equinor’s non-operated equity
position in the Corrib gas project in Ireland, covering 100% of the shares in Equinor Energy Ireland Limited (EEIL). Prior to closing,
Equinor received an extraordinary dividend of USD 371 million from EEIL. Total consideration amounted to USD 362 million, including
cash settlement of contingent consideration. A loss of USD 258 million has been recognised within the E&P International segment and
presented in the line item Operating expenses in the Consolidated statement of income.
Held for sale
Divestment of interest in Azerbaijan
On 22 December 2023, Equinor entered into an agreement with the State Oil Company of the Republic of Azerbaijan (SOCAR) to sell
its interest in its Azerbaijan assets. The assets comprise a 7.27% non-operated interest in the Azeri Chirag Gunashli (ACG) oil fields in
the Azerbaijan sector of the Caspian Sea, 8.71% interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline and 50% in the Karabagh oil
field. Closing is expected during 2024 subject to regulatory and contractual approvals. The assets have been classified as held for
sale resulting in a USD 310 million impairment within the E&P International segment, presented in the line item Depreciation,
amortisation and net impairments in the Consolidated statement of income.
4 Revenues
Revenues from contracts with customers by geographical areas
When attributing the line item Revenues from contracts with customers for the fourth quarter of 2023 to the country of the legal entity
executing the sale, Norway constitutes 77%, and the USA constitutes 19% of such revenues (78% and 20%, respectively, for the third
quarter of 2023; 79% and 18%, respectively, for the full year of 2023). For the fourth quarter of 2022, Norway and the USA constituted
81% and 14% of such revenues, respectively (84% and 13%, respectively, for the full year of 2022). Revenues from contracts with
customers are mainly reflecting such revenues from the reporting segment MMP.
Revenues from contracts with customers and other revenues
Quarters
Full year
(in USD million)
Q4 2023
Q3 2023
Q4 2022
2023
2022
Crude oil
15,695
15,999
12,994
56,861
58,524
Natural gas
6,597
4,292
15,479
26,386
65,232
5,796
3,728
13,326
23,174
58,239
298
217
651
1,111
2,884
503
347
1,502
2,102
4,109
Refined products
2,710
2,528
2,892
10,083
11,093
Natural gas liquids
2,087
2,095
1,896
8,345
9,240
Transportation
305
272
480
1,425
1,470
Other sales
951
465
1,469
3,032
4,702
Revenues from contracts with customers
28,345
25,650
35,209
106,132
150,262
Total other revenues
1)
498
274
(1,368)
716
(1,258)
Revenues
28,843
25,924
33,841
106,848
149,004
1) Principally relates to commodity derivatives and change in fair value less cost to sell for commodity inventories held for trading purposes.
Equinor fourth quarter 2023 33
5 Financial items
Quarters
Full year
(in USD million)
Q4 2023
Q3 2023
Q4 2022
2023
2022
Net foreign currency exchange gains/(losses)
(289)
(12)
(2,140)
852
2,088
Interest income and other financial income
661
580
482
2,449
1,222
Gains/(losses) on financial investments
139
(54)
8
123
(394)
Gains/(losses) other derivative financial instruments
445
(89)
(15)
351
(1,745)
Interest and other finance expenses
(368)
(412)
(450)
(1,660)
(1,379)
Net financial items
589
13
(2,115)
2,114
(207)
Equinor reports foreign currency losses in the fourth quarter and the fourth quarter last year, mainly related to weakening of USD
versus NOK. For the full year 2023, and 2022, there have been significant foreign currency gains, mainly related to the strengthening
of USD versus NOK. These currency effects are mainly due to a large part of Equinor’s operations having NOK as functional currency,
and the effects are offset within equity as OCI effects arising on translation from functional currency to presentation currency USD.
The gains are lower in 2023 compared to 2022 due to reduced balances and a lesser change in currency rates.
The increase in Interest income and other financial income in 2023 compared to previous year mainly relates to higher interest rates.
Equinor has a US Commercial paper programme available with a limit of USD 5 billion. As of 31 December 2023, USD 1.9 billion were
utilised compared to USD 0.2 billion utilised as of 31 December 2022.
6 Income taxes
Quarters
Full year
(in USD million)
Q4 2023
Q3 2023
Q4 2022
2023
2022
Income/(loss) before tax
9,337
7,466
14,469
37,884
78,604
Income tax
(6,729)
(4,965)
(6,572)
(25,980)
(49,861)
Effective tax rate
68.6 %
63.4 %
The effective tax rate for the full year 2023 was significantly influenced by lower share of income from the Norwegian continental shelf
and currency effect in entities that are taxable in other currencies than the functional currency.
The effective tax rate for the fourth quarter of 2022 and for the full year 2022 was significantly influenced by recognition of previously
unrecognised deferred tax assets in the US. The effective tax rate for the fourth quarter of 2022 was also influenced by low share of
income from the Norwegian continental shelf due to derivative losses.
Equinor fourth quarter 2023 34
7 Provisions, commitments, contingent items and related parties
Asset retirement obligation
Equinor's estimated asset retirement obligations (ARO) have increased by USD 0.6 billion to USD 12.4 billion at 31 December 2023
compared to year-end 2022, mainly due to net increase in underlying cost estimate. Changes in ARO are reflected within Property,
plant and equipment and Provisions and other liabilities in the Consolidated balance sheet.
Litigation and claims
During the normal course of its business, Equinor is involved in legal and other proceedings, and several unresolved claims are
currently outstanding. The ultimate liability or asset in respect of such litigation and claims cannot be determined at this time. Equinor
has provided in its Condensed interim financial statements for probable liabilities related to litigation and claims based on the
company’s best judgement. Equinor does not expect that its financial position, results of operations or cash flows will be materially
affected by the resolution of these legal proceedings.
Related parties
The line-item Trade and other receivables include a receivable from the Norwegian state under the Marketing Instruction in relation to
the state’s (SDFI) participation in the gas sales activities of a foreign subsidiary of Equinor, estimated at USD 0.1 billion. At year-end
2022, the corresponding estimated amount of USD 1.5 billion was classified as a non-current item and included in the line-item
Prepayments and financial receivables. The decrease is mainly related to reduced cost price for gas storage volume. A corresponding
non-current liability of USD 0.1 billion has been recognised, representing SDFI's estimated interest in the gas sales activities in the
foreign subsidiary. The estimated total non-current liabilities to SDFI amounts to USD 0.8 billion at 31 December 2023 (USD 2.1 billion
at year-end 2022). In addition, the line-item Finance debt, which form part of the sub-total Total current liabilities, includes a liability of
USD 0.9 billion to SDFI due to cash received for collateral deposits requirement (0 at year-end 2022).
8 Capital distribution
Dividend for the fourth quarter 2023 and share buy-back programme 2024 - 2025
On 6 February 2024, the Board of Directors proposed to the annual general meeting on 14 May 2024 an ordinary cash dividend for
the fourth quarter of 2023 of USD 0.35 per share and an extraordinary cash dividend of USD 0.35
per share. The Equinor shares will
be traded ex-dividend 15 May 2024 on the Oslo Børs and for ADR holders on the New York Stock Exchange. Record date will be 16
May 2024, and payment date will be 28 May 2024.
On 6 February 2024, the Board of Directors further decided to announce a two-year share buy-back programme for 2024-2025 of
USD 10-12 billion in total, with USD 6 billion for 2024. The share buy-back programme will be subject to market outlook and balance
sheet strength. The first tranche of up to USD 1.2 billion of the 2024 share buy-back programme will commence on 8 February and
end no later than 5 April 2024. The first tranche of the 2024 share buy-back programme is based on the authorisation from the annual
general meeting in May 2023, valid until the next annual general meeting, but no later than 30 June 2024. Commencement of new
share buy-back tranches after the first tranche in 2024 will be decided by the board of directors on a quarterly basis in line with the
company’s dividend policy and will be subject to existing and new board authorisations for share buy-back from the company’s annual
general meeting and agreement with the Norwegian State regarding share buy-back.
Share buy- back programme 2023
Based on the authorisation from the annual general meeting on 10 May 2023, the Board of directors has, on a quarterly basis,
decided on share buy-back tranches. The 2023 programme was up to USD 6,000 million, including shares to be redeemed from the
Norwegian State.
During the first nine months of 2023, Equinor launched three tranches totaling USD 4,333 million, of which USD 1,430 million was
acquired in the open market. In October 2023, Equinor launched the fourth and final tranche of USD 1,667 billion, of which USD 550
million has been recognised as a reduction in equity due to an irrevocable agreement with a third party. Of the fourth tranche, USD
388 million has been acquired in the open market and settled at 31 December 2023.
In order to maintain the Norwegian State’s ownership share in Equinor, a proportionate share of the second, third and fourth tranche
of the 2022 programme as well as the first tranche of the 2023 programme was redeemed and annulled after approval by the annual
general meeting on 10 May 2023. The liability to the Norwegian State of USD 3,705 million (NOK 39,071 million) was settled in June
2023.
Full year
Equinor fourth quarter 2023 35
Equity impact of share buy-back programmes (in USD million)
2023
2022
First tranche
330
330
Second tranche
550
440
Third tranche
550
605
Fourth tranche
550
605
Norwegian state share 1)
3,705
1,399
Total
5,685
3,380
1) Relates to second to fourth tranche of previous year programme and first tranche of current year
programme
Equinor fourth quarter 2023 36
SUPPLEMENTARY DISCLOSURES
Exchange rates
Quarters
Change
Full year
Exchange rates
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
USD/NOK average daily exchange rate
10.8474
10.4818
10.1925
6%
10.5647
9.6245
10%
USD/NOK period-end exchange rate
10.1724
10.6225
9.8573
3%
10.1724
9.8573
3%
EUR/USD average daily exchange rate
1.0747
1.0880
1.0195
5%
1.0810
1.0498
3%
EUR/USD period-end exchange rate
1.1050
1.0594
1.0666
4%
1.1050
1.0666
4%
USE AND RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Non-GAAP financial measures are defined as numerical measures that either exclude or include amounts that are not excluded or
included in the comparable measures calculated and presented in accordance with GAAP (i.e., IFRS Accounting Standards in the
case of Equinor). The following financial measures included in this report may be considered non-GAAP financial measures:
Adjusted earnings
are based on net operating income/(loss) and adjusts for certain items affecting the income for the period to
separate out effects that management considers may not be well correlated to Equinor’s underlying operational performance in the
individual reporting period. Management believes adjusted earnings provides an indication of Equinor’s underlying operational
performance in the period and facilitates comparison of operational trends between periods The calculation of Adjusted earnings was
changed in 2023, as detailed below.
Adjusted earnings after tax
adjustments to operating income to take the applicable marginal tax into consideration. Adjusted earnings after tax excludes net
financial items and the associated tax effects on net financial items. It is based on adjusted earnings less the tax effects on all
elements included in adjusted earnings (or calculated tax on operating income and on each of the adjusting items using an estimated
marginal tax rate). In addition, tax effect related to tax exposure items not related to the individual reporting period is excluded from
adjusted earnings after tax. Management believes adjusted earnings after tax provides an indication of Equinor’s underlying
operational performance and facilitates comparisons of operational trends between periods as it reflects the tax charge associated
with operational performance excluding the impact of financing. Certain net USD denominated financial positions are held by group
companies that have a USD functional currency that is different from the currency in which the taxable income is measured. As
currency exchange rates change between periods, the basis for measuring net financial items for IFRS Accounting Standards will
change disproportionally with taxable income which includes exchange gains and losses from translating the net USD denominated
financial positions into the currency of the applicable tax return. Therefore, the effective tax rate may be significantly higher or lower
than the statutory tax rate for any given period. Adjusted taxes included in adjusted earnings after tax should not be considered
indicative of the amount of current or total tax expense (or taxes payable) for the period.
Adjusted earnings and adjusted earnings after tax are supplementary measures and should not be viewed in isolation or as
substitutes for net operating income/(loss) and net income/(loss), which are the most directly comparable IFRS Accounting Standards
measures. The tables presented under Reconciliation of adjusted earnings and Reconciliation of adjusted earnings after tax to net
income later in this report reconcile adjusted earnings and adjusted earnings after tax with the most directly comparable IFRS
Accounting Standards financial measure or measures. There are material limitations associated with the use of adjusted earnings and
adjusted earnings after tax compared with the IFRS Accounting Standards measures as these non-GAAP measures do not include all
the items of revenues/gains or expenses/losses of Equinor that are needed to evaluate its profitability on an overall basis. Adjusted
earnings and adjusted earnings after tax are only intended to be indicative of the underlying developments in trends of our on-going
operations for the production, manufacturing and marketing of our products and exclude pre-and post-tax impacts of net financial
items. Equinor reflects such underlying developments in our operations by eliminating the effects of certain items that may not be
directly associated with the period's operations or financing. However, for that reason, adjusted earnings and adjusted earnings after
tax are not complete measures of profitability and should therefore not be used in isolation.
Equinor fourth quarter 2023 37
Amended principles for Adjusted earnings with effect from the first quarter of 2023:
Equinor has made the following changes to the items adjusted for within Adjusted earnings:
●
exposure of future sale and purchase contracts are excluded from adjusted earnings and deferred until the time of the physical
delivery. This change minimises the effects of timing differences and presents a measure more indicative of underlying economic
performance.
●
forward price at the expected realisation date. Prior to this amendment, the valuation adjustment was based on short-term
forward prices which, for some storages, did not correspond to the forward price at the expected realisation date. This change
brings the valuation principle in line with how the corresponding derivative contract used to manage price exposure is valued.
These changes have been applied retrospectively to the comparative figures. The majority of the impact is due to the revised
treatment of commodity derivatives. These changes only affect the MMP reporting segment and currently do not have an impact on
other segments. Equinor deems that these changes lead to a better representation of performance in each period by appropriately
reflecting the economic impact of its risk management activities.
Impact of change
Q4 2022
Full year 2022
MMP segment
As reported
Impact
Restated
As reported
Impact
Restated
Changes in fair value of derivatives
(142)
2,207
2,065
(149)
1,801
1,651
Periodisation of inventory hedging effect
(395)
(251)
(646)
(349)
181
(168)
Adjusted total revenues and other income
33,055
1,955
35,010
147,599
1,981
149,580
Adjusted earnings/(loss)
(540)
1,955
1,416
2,253
1,981
4,234
Adjusted earnings/(loss) after tax
1,907
(1,077)
831
2,727
(10)
2,717
Impact of change
Q4 2022
Full year 2022
Equinor group
As reported
Changes in fair value of derivatives
(462)
2,207
1,744
(207)
1,801
1,593
Periodisation of inventory hedging effect
(395)
(251)
(646)
(349)
181
(168)
Adjusted total revenues and other income
33,546
1,955
35,501
149,910
1,981
151,891
Adjusted earnings/(loss)
15,059
1,955
17,014
74,940
1,981
76,921
Adjusted earnings/(loss) after tax
5,796
(1,077)
4,719
22,691
(10)
22,680
Effective tax rates on adjusted earnings
61.5%
10.8%
72.3%
69.7%
0.8%
70.5%
No other line items or segments were affected by the change.
Adjusted earnings adjust for the following items:
●
Changes in fair value of derivatives:
manage the price risk exposure relating to future sale and purchase contracts. These commodity derivatives are measured at fair
value at each reporting date, with the movements in fair value recognised in the income statement. By contrast, the sale and
purchase contracts are not recognised until the transaction occurs resulting in timing differences. Therefore, with effect from the
first quarter of 2023, the unrealised movements in the fair value of these commodity derivative contracts are excluded from
adjusted earnings and deferred until the time of the physical delivery to minimise the effect of these timing differences. Further,
embedded derivatives within certain gas contracts and contingent consideration related to historical divestments are carried at
fair value. Any accounting impacts resulting from such changes in fair value are also excluded from adjusted earnings, as these
fluctuations are not indicative of the underlying performance of the business.
●
Periodisation of inventory hedging effect:
commercial storage. These derivative contracts are carried at fair value while the inventories are accounted for at the lower of
cost or market price. An adjustment is made to align the valuation principles of inventories with related derivative contracts. With
effect from the first quarter of 2023, the adjusted valuation of inventories is based on the forward price at the expected realisation
date. This is so that the valuation principles between commercial storages and derivative contracts are better aligned.
●
Over/underlift:
Over/underlift is accounted for using the sales method and therefore revenues are reflected in the period the
product is sold rather than in the period it is produced. The over/underlift position depends on several factors related to our lifting
programme and the way it corresponds to our entitlement share of production. The effect on income for the period is therefore
adjusted, to show estimated revenues and associated costs based upon the production for the period to reflect operational
performance.
Equinor fourth quarter 2023 38
●
The
operational storage
FIFO (first-in, first-out) method, and includes realised gains or losses that arise due to changes in market prices. These gains or
losses will fluctuate from one period to another and are not considered part of the underlying operations for the period.
●
Impairment and reversal of impairment
the lifetime of that asset, not only the period in which it is impaired, or the impairment is reversed. Impairment and reversal of
impairment can impact both the exploration expenses and the depreciation, amortisation and net impairment line items.
●
Gain or loss from sales of assets
performance or periodic performance; such a gain or loss is related to the cumulative value creation from the time the asset is
acquired until it is sold.
●
Eliminations (Internal unrealised profit on inventories):
factors and inventory strategies, i.e., level of crude oil in inventory, equity oil used in the refining process and level of in-transit
cargoes. Internal profit related to volumes sold between entities within the group, and still in inventory at period end, is eliminated
according to IFRS Accounting Standards (write down to production cost). The proportion of realised versus unrealised gain
fluctuates from one period to another due to inventory strategies and consequently impact net operating income/(loss). Write-
down to production cost is not assessed to be a part of the underlying operational performance, and elimination of internal profit
related to equity volumes is excluded in adjusted earnings.
●
Other items of income and expense
underlying operational performance in the reporting period. Such items may be unusual or infrequent transactions, but they may
also include transactions that are significant which would not necessarily qualify as either unusual or infrequent. However, other
items adjusted do not constitute normal, recurring income and operating expenses for the company. Other items are carefully
assessed and can include transactions such as provisions related to reorganisation, early retirement, etc.
●
Change in accounting policy
reflective of Equinor’s underlying operational performance in the reporting period.
Net debt to capital employed ratio
– In Equinor’s view, net debt ratios provide a more informative picture of Equinor’s financial
strength than gross interest-bearing financial debt. Three different net debt to capital ratios are presented in this report: 1) net debt to
capital employed, 2) net debt to capital employed adjusted, including lease liabilities, and 3) net debt to capital employed adjusted.
These calculations are all based on Equinor’s gross interest-bearing financial liabilities as recorded in the Consolidated balance sheet
and exclude cash, cash equivalents and current financial investments.
The following adjustments are made in calculating the net debt to capital employed adjusted, including lease liabilities ratio and the
net debt to capital employed adjusted ratio: collateral deposits (classified as Cash and cash equivalents in the Consolidated balance
sheet), and financial investments held in Equinor Insurance AS (classified as Current financial investments in the Consolidated
balance sheet) are treated as non-cash and excluded from the calculation of these non-GAAP measures. Collateral deposits are
excluded since they relate to certain requirements of exchanges where Equinor is trading and presented as restricted cash. Financial
investments in Equinor Insurance are excluded as these investments are not readily available for the group to meet short term
commitments. These adjustments result in a higher net debt figure and in Equinor’s view provides a more prudent measure of the net
debt to capital employed ratio than would be the case without such exclusions. Additionally, lease liabilities are further excluded in
calculating the net debt to capital employed adjusted ratio. The table Calculation of capital employed and net debt to capital employed
ratio later in this report details the calculations for these non-GAAP measures and reconciles them with the most directly comparable
IFRS Accounting Standards financial measure or measures.
Organic capital expenditures
equity accounted investments as presented in note 2 Segments to the Condensed interim financial statements, amounted to USD 3.8
billion in Q4 2023 (Q4 2022: USD 2.8 billion) and USD 14.5 billion for YTD 2023 (2022: USD 10.0 billion). Organic capital
expenditures are capital expenditures excluding expenditures related to acquisitions, leased assets and other investments with
significantly different cash flow patterns. In Q4 2023, a total of USD 0.8 billion (Q4 2022: USD 0.5 billion) is excluded in the organic
capital expenditures (YTD 2023: USD 4.3 billion; YTD 2022: USD 1.9 billion). Equinor believes this measure gives stakeholders
relevant information to understand the company’s investments in maintaining and developing its assets. Forward-looking organic
capital expenditures included in this report are not reconcilable to its most directly comparable IFRS Accounting Standards measure
without unreasonable efforts, because the amounts excluded from such IFRS Accounting Standards measure to determine organic
capital expenditures cannot be predicted with reasonable certainty.
Gross capital expenditures (gross capex)
– Gross capital expenditures represent capital expenditures, defined as Additions to
PP&E, intangibles and equity accounted investments as presented in the financial statements, excluding additions to right of use
assets related to leases and capital expenditures financed through government grants. Equinor adds the proportionate share of capital
expenditures in equity accounted investments not included in Additions to PP&E, intangibles and equity accounted investments.
Equinor believes that by excluding additions to right of use assets related to leases, this measure better reflects the company's
investments in the business to drive growth. Forward-looking gross capital expenditures included in this report are not reconcilable to
its most directly comparable IFRS measure without unreasonable efforts, because the amounts included or excluded from such IFRS
measure to determine gross capital expenditures cannot be predicted with reasonable certainty.
Equinor fourth quarter 2023 39
Return on average capital employed (ROACE)
adjusted. For a reconciliation for adjusted earnings after tax, see Reconciliation of net operating income/(loss) to adjusted earnings as
presented later in this report. Average capital employed adjusted refers to the average of the capital employed adjusted values as of
31 December for both the current and the preceding year, as presented in the table Calculation of capital employed and net debt to
capital employed ratio later in this report. Equinor uses ROACE to evaluate performance by measuring how effectively the company
employs its capital, whether financed through equity or debt. An IFRS Accounting Standards measure most directly comparable to
ROACE would be calculated as the ratio of net income/(loss) to average capital employed that is based on Equinor’s gross interest-
bearing financial liabilities as recorded in the Consolidated balance sheet, excluding cash, cash equivalents and current financial
investments. ROACE is used as a supplementary measure and should not be viewed in isolation or as an alternative to measures
calculated in accordance with IFRS Accounting Standards, including income before financial items, income taxes and minority
interest, or net income, or ratios based on these figures. Forward-looking ROACE included in this report is not reconcilable to its most
directly comparable IFRS Accounting Standards measure without unreasonable efforts, because the amounts included or excluded
from IFRS Accounting Standards measures used to determine ROACE cannot be predicted with reasonable certainty.
Cash flows from operations after taxes paid (CFFO after taxes paid)
represents, and is used by management, to evaluate cash
generated from operating activities after taxes paid, which is available for investing activities, debt servicing and distribution to
shareholders. Cash flows from operations after taxes paid is not a measure of our liquidity under IFRS Accounting Standards and
should not be considered in isolation or as a substitute for an analysis of our results as reported in this report. Our definition of Cash
flows from operations after taxes paid is limited and does not represent residual cash flows available for discretionary expenditures.
The table Calculation of CFFO after taxes paid and net cash flow later in this report provides a reconciliation of Cash flows from
operations after taxes paid to its most directly comparable IFRS Accounting Standards measure, Cash flows provided by operating
activities before taxes paid and working capital items, as of the specified dates. Forward-looking cash flows from operations after
taxes paid included in this report are not reconcilable to its most directly comparable IFRS measure without unreasonable efforts,
because the amounts included or excluded from such IFRS measure to determine cash flows from operations after taxes paid cannot
be predicted with reasonable certainty.
Net cash flow (previously named free cash flow)
- Net cash flow represents, and is used by management to evaluate, cash
generated from operational and investing activities available for debt servicing and distribution to shareholders. The name of the
measure was updated in the first quarter of 2023, but no changes have been made to the definition. Net cash flow is not a measure of
our liquidity under IFRS Accounting Standards and should not be considered in isolation or as a substitute for an analysis of our
results as reported in this report. Our definition of Net cash flow is limited and does not represent residual cash flows available for
discretionary expenditures. The table Calculation of CFFO after taxes paid and net cash flow later in this report provides a
reconciliation of Net cash flow to its most directly comparable IFRS Accounting Standards measure, Cash flows provided by operating
activities before taxes paid and working capital items, as of the specified dates.
For more information on our definitions and use of non-GAAP financial measures, see section 5.8 Use and reconciliation of non-
GAAP financial measures in Equinor's 2022 Integrated Annual Report.
Equinor fourth quarter 2023 40
Reconciliation of adjusted earnings
The table specifies the adjustments made to each of the profit and loss line item included in the net operating income/(loss) subtotal.
Items impacting net operating income/(loss) in the
fourth quarter of 2023
Equinor
group
Exploration
&
Production
Norway
Exploration
&
Production
Internationa
l
Exploration
&
Production
USA
Marketing,
Midstream
&
Processing
Rene-
wables
Other
(in USD million)
Total revenues and other income
29,054
10,076
1,889
1,165
28,668
20
(12,764)
Adjusting items
(571)
(205)
63
-
(412)
(17)
(0)
Changes in fair value of derivatives
(65)
-
3
-
(67)
-
-
Periodisation of inventory hedging effect
(344)
-
-
-
(344)
-
-
Over-/underlift
102
16
86
-
-
-
-
Gain/loss on sale of assets
(264)
(222)
(25)
-
-
(17)
(0)
Adjusted total revenues and other income
28,483
9,871
1,952
1,165
28,257
2
(12,765)
Purchases [net of inventory variation]
(13,804)
0
(45)
-
(26,330)
0
12,570
Adjusting items
132
-
-
-
89
-
43
Operational storage effects
89
-
-
-
89
-
-
Eliminations
43
-
-
-
-
-
43
Adjusted purchases [net of inventory variation]
(13,672)
0
(45)
-
(26,241)
0
12,613
Operating and administrative expenses
(3,279)
(1,057)
(540)
(308)
(1,384)
(180)
190
Adjusting items
44
40
(19)
(0)
19
4
-
Over-/underlift
21
40
(19)
-
-
-
-
Other adjustments
4
-
-
(0)
-
4
-
Provisions
19
-
-
-
19
-
-
Adjusted operating and administrative expenses
(3,235)
(1,018)
(559)
(308)
(1,365)
(176)
190
Depreciation, amortisation and net impairments
(2,821)
(1,144)
(913)
(506)
(220)
(6)
(31)
Adjusting items
303
-
310
-
(7)
-
-
Impairment
303
-
310
-
(7)
-
-
Adjusted depreciation, amortisation and net
impairments
(2,518)
(1,144)
(603)
(506)
(227)
(6)
(31)
Exploration expenses
(402)
(138)
(55)
(208)
-
-
-
Adjusting items
25
-
-
25
-
-
-
Impairment
25
-
-
25
-
-
-
Adjusted exploration expenses
(377)
(138)
(55)
(184)
-
-
-
Net operating income/(loss)
8,748
7,737
336
143
734
(166)
(36)
Sum of adjusting items
(67)
(166)
354
25
(310)
(13)
43
Adjusted earnings/(loss)
8,681
7,571
690
168
424
(179)
7
Tax on adjusted earnings
(6,802)
(6,001)
(435)
(90)
(281)
33
(29)
Adjusted earnings/(loss) after tax
1,879
1,570
255
78
143
(146)
(22)
Equinor fourth quarter 2023 41
Items impacting net operating income/(loss) in the
fourth quarter of 2022
Equinor
group
Exploration
&
Production
Norway
Exploration
&
Production
Internationa
l
Exploration
&
Production
USA
Marketing,
Midstream
&
Processing
Rene-
wables
Other
(in USD million)
Total revenues and other income
34,321
16,729
2,373
1,083
33,591
38
(19,495)
Adjusting items
1,181
239
(476)
-
1,419
(23)
23
Changes in fair value of derivatives
1)
58
(378)
-
1)
-
-
Periodisation of inventory hedging effect
1)
-
-
-
1)
-
-
Over-/underlift
181
257
(75)
-
-
-
-
Other adjustments
(0)
-
(22)
-
-
-
22
Gain/loss on sale of assets
(98)
(75)
-
-
-
(23)
0
Adjusted total revenues and other income
1)
16,968
1,897
1,083
1)
15
(19,472)
Purchases [net of inventory variation]
(12,853)
(0)
(85)
(0)
(31,996)
-
19,228
Adjusting items
72
-
-
-
27
-
46
Operational storage effects
27
-
-
-
27
-
-
Eliminations
46
-
-
-
-
-
46
Adjusted purchases [net of inventory variation]
(12,781)
(0)
(85)
(0)
(31,969)
-
19,273
Operating and administrative expenses
(3,304)
(1,020)
(511)
(220)
(1,614)
(101)
161
Adjusting items
272
(34)
73
2
225
-
5
Over-/underlift
36
(34)
70
-
-
-
-
Other adjustments
1
-
(4)
-
-
-
5
Gain/loss on sale of assets
9
-
7
2
-
-
-
Provisions
225
-
-
-
225
-
-
Adjusted operating and administrative expenses
(3,032)
(1,053)
(438)
(217)
(1,389)
(101)
166
Depreciation, amortisation and net impairments
(1,184)
(1,222)
310
(13)
(233)
(1)
(26)
Adjusting items
(1,094)
3
(744)
(350)
(3)
-
-
Impairment
2
3
3
-
(3)
-
-
Reversal of impairment
(1,097)
-
(747)
(350)
-
-
-
Adjusted depreciation, amortisation and net
impairments
(2,279)
(1,219)
(433)
(363)
(236)
(1)
(26)
Exploration expenses
(396)
(101)
(266)
(29)
-
-
0
Adjusted exploration expenses
(396)
(101)
(266)
(29)
-
-
0
Net operating income/(loss)
16,584
14,386
1,822
821
(251)
(63)
(132)
Sum of adjusting items
1)
208
(1,147)
(348)
1)
(23)
73
Adjusted earnings/(loss)
1)
14,594
676
474
1)
(87)
(59)
Tax on adjusted earnings
1)
(11,294)
(308)
(24)
1)
(10)
(73)
Adjusted earnings/(loss) after tax
1)
3,300
367
450
1)
(97)
(132)
1) MMP segment and Equinor group are restated due to amended principles for adjusting items; 'changes in fair value of derivatives' and
'periodisation of inventory hedging effect'. For further information see Amended principles for Adjusted earnings in the section ‘Use and
reconciliation of non-GAAP financial measures’ in the Supplementary disclosures.
Equinor fourth quarter 2023 42
Items impacting net operating income/(loss) in the
third quarter of 2023
Equinor
group
Exploration
&
Production
Norway
Exploration
&
Production
Internationa
l
Exploration
&
Production
USA
Marketing,
Midstream
&
Processing
Rene-
wables
Other
(in USD million)
Total revenues and other income
26,024
7,938
1,990
1,162
25,712
(5)
(10,773)
Adjusting Items
(289)
226
(140)
(32)
(341)
-
(1)
Changes in fair value of derivatives
(206)
20
(6)
-
(219)
-
-
Periodisation of inventory hedging effect
(22)
-
-
-
(22)
-
-
Over-/underlift
72
206
(134)
-
-
-
-
Other adjustments
(100)
-
-
-
(100)
-
-
Gain/loss on sale of assets
(33)
-
-
(32)
-
-
(1)
Adjusted total revenues and other income
25,735
8,164
1,849
1,130
25,371
(5)
(10,773)
Purchases [net of inventory variation]
(12,269)
(1)
58
-
(22,987)
-
10,661
Adjusting Items
(123)
-
-
-
(97)
-
(27)
Operational storage effects
(92)
-
-
-
(92)
-
-
Provisions
(5)
-
-
-
(5)
-
-
Eliminations
(27)
-
-
-
-
-
(27)
Adjusted purchases [net of inventory variation]
(12,392)
(1)
58
-
(23,083)
-
10,634
Operating and administrative expenses
(2,715)
(788)
(541)
(293)
(1,181)
(103)
191
Adjusting Items
12
(61)
83
-
(13)
4
-
Over-/underlift
21
(61)
83
-
-
-
-
Other adjustments
4
-
-
-
-
4
-
Provisions
(13)
-
-
-
(13)
-
-
Adjusted operating and administrative expenses
(2,703)
(849)
(458)
(293)
(1,195)
(100)
191
Depreciation, amortisation and net impairments
(3,369)
(1,695)
(594)
(181)
(562)
(303)
(34)
Adjusting Items
943
588
-
(290)
346
300
-
Impairment
1,234
588
-
-
346
300
-
Reversal of Impairment
(290)
-
-
(290)
-
-
-
Adjusted depreciation, amortisation and net
impairments
(2,426)
(1,107)
(594)
(472)
(217)
(3)
(34)
Exploration expenses
(218)
(120)
(75)
(23)
-
-
-
Adjusting Items
28
-
28
-
-
-
-
Impairment
28
-
28
-
-
-
-
Adjusted exploration expenses
(190)
(120)
(47)
(23)
-
-
-
Net operating income/(loss)
7,453
5,335
838
666
982
(412)
45
Sum of adjusting items
571
752
(29)
(323)
(106)
304
(27)
Adjusted earnings/(loss)
8,024
6,087
809
343
876
(108)
18
Tax on adjusted earnings
(5,292)
(4,743)
(163)
(82)
(333)
11
17
Adjusted earnings/(loss) after tax
2,731
1,343
646
261
543
(97)
35
Equinor fourth quarter 2023 43
Items impacting net operating income/(loss) in the
full year of 2023
Equinor
group
Exploration
&
Production
Norway
Exploration
&
Production
Internationa
l
Exploration
&
Production
USA
Marketing,
Midstream
&
Processing
Rene-
wables
Other
(in USD million)
Total revenues and other income
107,174
38,340
7,032
4,319
105,908
17
(48,442)
Adjusting items
(1,303)
(128)
(76)
(32)
(1,049)
(17)
(1)
Changes in fair value of derivatives
(711)
128
(96)
-
(743)
-
-
Periodisation of inventory hedging effect
(183)
-
-
-
(183)
-
-
Impairment from associated companies
1
-
-
-
-
1
-
Over-/underlift
10
(35)
45
-
-
-
-
Other adjustments
(100)
-
-
-
(100)
-
-
Gain/loss on sale of assets
(319)
(221)
(25)
(32)
(23)
(17)
(1)
Adjusted total revenues and other income
105,871
38,213
6,956
4,286
104,860
(0)
(48,443)
Purchases [net of inventory variation]
(48,175)
(0)
(70)
-
(95,769)
0
47,664
Adjusting items
173
-
-
-
36
-
137
Operational storage effects
41
-
-
-
41
-
-
Provisions
(5)
-
-
-
(5)
-
-
Eliminations
137
-
-
-
-
-
137
Adjusted purchases [net of inventory variation]
(48,003)
(0)
(70)
-
(95,733)
0
47,801
Operating and administrative expenses
(11,800)
(3,759)
(2,176)
(1,178)
(4,916)
(462)
692
Adjusting items
260
29
261
22
(72)
20
-
Over-/underlift
7
29
(22)
-
-
-
-
Other adjustments
36
-
-
22
-
14
-
Gain/loss on sale of assets
289
-
283
-
-
6
-
Provisions
(72)
-
-
-
(72)
-
-
Adjusted operating and administrative expenses
(11,540)
(3,730)
(1,915)
(1,156)
(4,988)
(442)
692
Depreciation, amortisation and net impairments
(10,634)
(5,017)
(2,433)
(1,489)
(1,239)
(312)
(143)
Adjusting items
1,259
588
310
(290)
343
300
9
Impairment
1,550
588
310
-
343
300
9
Reversal of impairment
(290)
-
-
(290)
-
-
-
Adjusted depreciation, amortisation and net
impairments
(9,374)
(4,429)
(2,123)
(1,779)
(897)
(12)
(134)
Exploration expenses
(795)
(476)
(20)
(299)
-
-
-
Adjusting items
61
-
36
25
-
-
-
Impairment
61
-
36
25
-
-
-
Adjusted exploration expenses
(734)
(476)
16
(274)
-
-
-
Net operating income/(loss)
35,770
29,087
2,332
1,353
3,984
(757)
(229)
Sum of adjusting items
451
490
532
(277)
(742)
303
145
Adjusted earnings/(loss)
36,220
29,577
2,863
1,076
3,242
(454)
(84)
Tax on adjusted earnings
(25,850)
(23,083)
(1,213)
(304)
(1,364)
63
51
Adjusted earnings/(loss) after tax
10,371
6,494
1,650
773
1,877
(391)
(33)
Equinor fourth quarter 2023 44
Items impacting net operating income/(loss) in the
full year of 2022
Equinor
group
Exploration
&
Production
Norway
Exploration
&
Production
Internationa
l
Exploration
&
Production
USA
Marketing,
Midstream
&
Processing
Rene-
wables
Other
(in USD million)
Total revenues and other income
150,806
75,930
7,431
5,523
148,105
185
(86,367)
Adjusting Items
1,085
(487)
185
-
1,475
(110)
22
Changes in fair value of derivatives
1)
(263)
205
-
1)
-
-
Periodisation of inventory hedging effect
1)
-
-
-
1)
-
-
Impairment from associated companies
1
-
-
-
-
1
-
Over-/underlift
510
507
3
-
-
-
-
Other adjustments
(0)
-
(22)
-
-
-
22
Gain/loss on sale of assets
(850)
(731)
-
-
(9)
(111)
(0)
Adjusted total revenues and other income
1)
75,443
7,616
5,523
1)
75
(86,345)
Purchases [net of inventory variation]
(53,806)
0
(116)
(0)
(139,916)
-
86,227
Adjusting Items
(610)
-
-
-
(33)
-
(577)
Operational storage effects
(33)
-
-
-
(33)
-
-
Eliminations
(577)
-
-
-
-
-
(577)
Adjusted purchases [net of inventory variation]
(54,415)
0
(116)
(0)
(139,949)
-
85,650
Operating and administrative expenses
(10,593)
(3,782)
(1,698)
(938)
(4,591)
(265)
681
Adjusting Items
64
(54)
22
6
75
10
5
Over-/underlift
(41)
(54)
13
-
-
-
-
Change in accounting policy
7
-
2
-
-
-
5
Gain/loss on sale of assets
23
-
7
6
-
10
-
Provisions
75
-
-
-
75
-
-
Adjusted operating and administrative expenses
(10,530)
(3,836)
(1,675)
(933)
(4,516)
(255)
686
Depreciation, amortisation and net impairments
(6,391)
(4,167)
(1,731)
(361)
14
(4)
(142)
Adjusting Items
(2,488)
(819)
286
(1,060)
(895)
-
-
Impairment
1,111
3
1,033
-
75
-
-
Reversal of impairment
(3,598)
(821)
(747)
(1,060)
(970)
-
-
Adjusted depreciation, amortisation and net
impairments
(8,879)
(4,986)
(1,445)
(1,422)
(881)
(4)
(142)
Exploration expenses
(1,205)
(366)
(638)
(201)
-
-
0
Adjusting Items
59
4
65
(11)
-
-
-
Impairment
85
4
65
15
-
-
-
Reversal of impairment
(26)
-
-
(26)
-
-
-
Adjusted exploration expenses
(1,146)
(361)
(573)
(212)
-
-
0
Net operating income/(loss)
78,811
67,614
3,248
4,022
3,612
(84)
399
Sum of adjusting items
1)
(1,355)
559
(1,065)
1)
(100)
(550)
Adjusted earnings/(loss)
1)
66,260
3,806
2,957
1)
(184)
(151)
Tax on adjusted earnings
1)
(51,373)
(1,248)
(79)
1)
14
(38)
Adjusted earnings/(loss) after tax
1)
14,887
2,558
2,878
1)
(171)
(189)
1) MMP segment and Equinor group are restated due to amended principles for adjusting items; 'changes in fair value of derivatives' and
'periodisation of inventory hedging effect'. For further information see Amended principles for Adjusted earnings in the section 'Use and
reconciliation of non-GAAP financial measures' in the Supplementary disclosures.
Equinor fourth quarter 2023 45
Adjusted earnings after tax by reporting segment
Quarters
Q4 2023
Q3 2023
Q4 2022
1)
(in USD million)
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
E&P Norway
7,571
(6,001)
1,570
6,087
(4,743)
1,343
14,594
(11,294)
3,300
E&P International
690
(435)
255
809
(163)
646
676
(308)
367
E&P USA
168
(90)
78
343
(82)
261
474
(24)
450
MMP
424
(281)
143
876
(333)
543
1,416
(585)
831
REN
(179)
33
(146)
(108)
11
(97)
(87)
(10)
(97)
Other
7
(29)
(22)
18
17
35
(59)
(73)
(132)
Equinor group
8,681
(6,802)
1,879
8,024
(5,292)
2,731
17,014
(12,295)
4,719
Effective tax rates on adjusted
earnings
78.4%
66.0%
72.3%
1)
1) MMP segment and Equinor group have been restated due to amended principles for adjusting items; 'changes in fair value of derivatives'
and 'periodisation of inventory hedging effect'. For further information see Amended principles for Adjusted earnings in the section ‘Use and
reconciliation of non-GAAP financial measures’ in the Supplementary disclosures.
Full year
2023
2022
1)
(in USD million)
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
Adjusted
earnings
Tax on
adjusted
earnings
Adjusted
earnings
after tax
E&P Norway
29,577
(23,083)
6,494
66,260
(51,373)
14,887
E&P International
2,863
(1,213)
1,650
3,806
(1,248)
2,558
E&P USA
1,076
(304)
773
2,957
(79)
2,878
MMP
3,242
(1,364)
1,877
4,234
(1,517)
2,717
REN
(454)
63
(391)
(184)
14
(171)
Other
(84)
51
(33)
(151)
(38)
(189)
Equinor group
36,220
(25,850)
10,371
76,921
(54,241)
22,680
Effective tax rates on adjusted earnings
71.4%
70.5%
1)
1) MMP segment and Equinor group are restated due to amended principles for adjusting items; 'changes in fair value of derivatives' and
'periodisation of inventory hedging effect'. For further information see Amended principles for Adjusted earnings in the section ‘Use and
reconciliation of non-GAAP financial measures’ in the Supplementary disclosures.
Equinor fourth quarter 2023 46
Reconciliation of adjusted earnings after tax to net income
Reconciliation of adjusted earnings after tax to net income
Quarters
Full year
(in USD million)
Q4 2023
Q3 2023
Q4 2022
2023
2022
Net operating income/(loss)
A
8,748
7,453
16,584
35,770
78,811
Income tax less tax on net financial items
B
6,574
5,003
6,544
25,724
50,098
Net operating income after tax
C = A-B
2,174
2,450
10,039
10,046
28,713
Items impacting net operating income/(loss)
1) 2)
D
(67)
571
2)
451
2)
Tax on items impacting net operating income/(loss)
2)
E
228
289
2)
126
2)
Adjusted earnings after tax*
2)
F = C+D-E
1,879
2,731
2)
10,371
2)
Net financial items
G
589
13
(2,115)
2,114
(207)
Tax on net financial items
H
(155)
39
(28)
(256)
237
Net income/(loss)
I = C+G+H
2,608
2,501
7,897
11,904
28,744
1) For items impacting net operating income/(loss), see Reconciliation of adjusted earnings in the Supplementary disclosures.
2) Restated. For more information, see Amended principles for Adjusted earnings in the section ‘Use and reconciliation of non-GAAP
financial measures’ in the Supplementary disclosures.
Adjusted exploration expenses
Quarters
Change
Full year
(in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
E&P Norway exploration expenditures
213
179
144
48%
662
493
34%
E&P International exploration expenditures
125
52
114
10%
301
445
(32%)
E&P USA exploration expenditures
86
110
50
71%
312
149
>100%
Group exploration expenditures
423
341
307
38%
1,275
1,087
17%
Expensed, previously capitalised exploration expenditures
3
24
183
(98%)
(114)
283
N/A
Capitalised share of current period's exploration activity
(49)
(175)
(95)
(48%)
(427)
(224)
91%
Impairment (reversal of impairment)
25
28
0
>100%
61
59
4%
Exploration expenses according to IFRS Accounting Standards
402
218
396
1%
795
1,205
(34%)
Items impacting net operating income/(loss)
1)
(25)
(28)
(0)
>100%
(61)
(59)
4%
Adjusted exploration expenses*
377
190
396
(5%)
734
1,146
(36%)
1) For items impacting net operating income/(loss), see Reconciliation of adjusted earnings in the Supplementary disclosures.
Equinor fourth quarter 2023 47
Calculated ROACE
Calculated ROACE based on IFRS Accounting Standards
31 December
(in USD million, except percentages)
2023
2022
Net income/(loss)
A
11,904
28,744
Average total equity
1
51,244
46,506
Average current finance debt and lease liabilities
6,446
6,001
Average non-current finance debt and lease liabilities
25,536
28,202
- Average cash and cash equivalents
(12,610)
(14,853)
- Average current financial investments
(29,550)
(25,561)
Average net-interest bearing debt
2
(10,178)
(6,210)
Average capital employed
B = 1+2
41,066
40,296
Calculated ROACE based on Net income/loss and capital employed
A/B
29.0%
71.3%
Calculated ROACE based on Adjusted earnings after tax and capital employed adjusted
31 December
(in USD million, except percentages)
2023
2022
Adjusted earnings after tax
A
10,371
1)
Average capital employed adjusted
B
41,731
41,134
Calculated ROACE based on Adjusted earnings after tax and capital employed
A/B
24.9%
55.1%
1)
1) Restated. For more information, see Amended principles for Adjusted earnings in the section ‘Use and reconciliation of non-GAAP financial
measures’ in the Supplementary disclosures.
Equinor fourth quarter 2023 48
Calculation of CFFO after taxes paid and net cash flow
CFFO information
Quarters
Change
Full year
(in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Cash flows provided by operating activities before taxes paid and
working capital items
10,890
11,336
20,988
(48%)
48,016
83,608
(43%)
Taxes Paid
(8,103)
(3,743)
(14,188)
(43%)
(28,276)
(43,856)
(36%)
Cash flow from operations after taxes paid (CFFO after taxes
paid)
2,787
7,594
6,800
(59%)
19,741
39,752
(50%)
Net Cash Flow Information
Quarters
Change
Full year
(in USD million)
Q4 2023
Q3 2023
Q4 2022
Q4 on Q4
2023
2022
Change
Cash flow from operations after taxes paid (CFFO after taxes paid)
2,787
7,594
6,800
(59%)
19,741
39,752
(50%)
(Cash used)/received in business combinations
(40)
(100)
(0)
>100%
(1,195)
147
N/A
Capital expenditures and investments
(3,031)
(2,652)
(2,376)
28%
(10,575)
(8,758)
21%
(Increase)/decrease in other interest-bearing items
92
(219)
7
>100%
(87)
(23)
>100%
Proceeds from sale of assets and businesses
154
(0)
47
>100%
272
966
(72%)
Dividend paid
(2,706)
(2,613)
(2,231)
21%
(10,906)
(5,380)
>100%
Share buy-back
(518)
(531)
(577)
(10%)
(5,589)
(3,315)
69%
Net Cash Flow
(3,262)
1,479
1,669
N/A
(8,340)
23,388
N/A
Equinor fourth quarter 2023 49
Calculation of capital employed and net debt to capital employed ratio
Calculation of capital employed and net debt to capital employed ratio
At 31 December
At 31 December
(in USD million)
2023
2022
Shareholders' equity
48,490
53,988
Non-controlling interests
10
1
Total equity
A
48,500
53,989
Current finance debt and lease liabilities
7,275
5,617
Non-current finance debt and lease liabilities
24,521
26,551
Gross interest-bearing debt
B
31,796
32,168
Cash and cash equivalents
9,641
15,579
Current financial investments
29,224
29,876
Cash and cash equivalents and financial investment
C
38,865
45,455
Net interest-bearing debt [9]
B1 = B-C
(7,069)
(13,288)
Other interest-bearing elements
2,030
6,538
Net interest-bearing debt adjusted normalised for tax payment, including lease liabilities*
B2
(5,040)
(6,750)
Lease liabilities
3,570
3,668
Net interest-bearing debt adjusted*
B3
(8,610)
(10,417)
Calculation of capital employed*
Capital employed
A+B1
41,431
40,701
Capital employed adjusted, including lease liabilities
A+B2
43,460
47,239
Capital employed adjusted
A+B3
39,890
43,571
Calculated net debt to capital employed*
Net debt to capital employed
(B1)/(A+B1)
(17.1%)
(32.6%)
Net debt to capital employed adjusted, including lease liabilities
(B2)/(A+B2)
(11.6%)
(14.3%)
Net debt to capital employed adjusted
(B3)/(A+B3)
(21.6%)
(23.9%)
1)
Other interest-bearing elements are cash and cash equivalents adjustments regarding collateral deposits classified as cash and cash
equivalents in the Consolidated balance sheet but considered as non-cash in the non-GAAP calculations as well as financial investments
in Equinor Insurance AS classified as current financial investments.
Equinor fourth quarter 2023 50
FORWARD -LOOKING STATEMENTS
This report contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as
"ambition", "continue", "could", "estimate", "intend", "expect", "believe", "likely", "may", "outlook", "plan", "strategy", "will", "guidance",
"targets", and similar expressions to identify forward-looking statements. Forward-looking statements include all statements other than
statements of historical fact, including, among others, statements regarding Equinor's plans, intentions, aims, ambitions and
expectations; the commitment to develop as a broad energy company and diversify its energy mix; the ambition to be a leading
company in the energy transition and reduce net group-wide greenhouse gas emissions; our ambitions and expectations regarding
decarbonisation; future financial performance, including earnings, cash flow and liquidity; the ambition to grow cash flow and returns
and improve ROACE*; expectations regarding progress on the energy transition plan; expectations regarding cash flow and returns
from Equinor’s oil and gas portfolio, CCS projects and renewables and low carbon solutions portfolio; our expectations and ambitions
regarding operated emissions, annual Co2 storage and carbon intensity; plans to develop fields; expectations, plans and ambitions for
renewables production capacity and Co2 transport and storage and investments in renewables and low carbon solutions; expectations
and plans regarding development of renewables projects, CCUS and hydrogen businesses and production of low carbon energy and
CCS; our intention to optimise our portfolio; break-even considerations, targets and other metrics for investment decisions; future
worldwide economic trends, market outlook and future economic projections and assumptions, including commodity price, currency
and refinery assumptions; estimates of proved reserves; organic capital expenditures through 2024; expectations and estimates
regarding production and development and execution of projects; expectations regarding oil and gas and renewable power
production; estimates regarding tax payments; the ambition to keep unit of production cost in the top quartile of our peer group;
scheduled maintenance activity and the effects thereof on equity production; completion and results of acquisitions and disposals;
expected amount and timing of dividend payments and the implementation of our share buy-back programme; and provisions and
contingent liabilities. You should not place undue reliance on these forward-looking statements. Our actual results could differ
materially from those anticipated in the forward-looking statements for many reasons.
These forward-looking statements reflect current views about future events, are based on management’s current expectations and
assumptions and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on
circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ
materially from those expressed or implied by these forward-looking statements, including levels of industry product supply, demand
and pricing, in particular in light of significant oil price volatility; unfavourable macroeconomic conditions and inflationary pressures;
exchange rate and interest rate fluctuations; levels and calculations of reserves and material differences from reserves estimates;
regulatory stability and access to resources, including attractive low carbon opportunities; the effects of climate change and changes
in stakeholder sentiment and regulatory requirements regarding climate change; changes in market demand and supply for
renewables; inability to meet strategic objectives; the development and use of new technology; social and/or political instability,
including as a result of Russia’s invasion of Ukraine and the conflict in the Middle East; failure to prevent or manage digital and cyber
disruptions to our information and operational technology systems and those of third parties on which we rely; operational problems,
including cost inflation in capital and operational expenditures; unsuccessful drilling; availability of adequate infrastructure at
commercially viable prices; the actions of field partners and other third-parties; reputational damage; the actions of competitors; the
actions of the Norwegian state as majority shareholder and exercise of ownership by the Norwegian state; changes or uncertainty in
or non-compliance with laws and governmental regulations; adverse changes in tax regimes; the political and economic policies of
Norway and other oil-producing countries; regulations on hydraulic fracturing and low-carbon value chains; liquidity, interest rate,
equity and credit risks; risk of losses relating to trading and commercial supply activities; an inability to attract and retain personnel;
ineffectiveness of crisis management systems; inadequate insurance coverage; health, safety and environmental risks; physical
security risks to personnel, assets, infrastructure and operations from hostile or malicious acts; failure to meet our ethical and social
standards; non-compliance with international trade sanctions; and other factors discussed elsewhere in this report and in Equinor's
Integrated Annual Report for the year ended December 31, 2022 (including section 5.2 - Risk factors thereof). Equinor's 2022
Integrated Annual Report is available at Equinor's website www.equinor.com.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our
future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of the forward-looking statements. Any forward-looking statement speaks
only as of the date on which such statement is made, and, except as required by applicable law, we undertake no obligation to update
any of these statements after the date of this report, either to make them conform to actual results or changes in our expectations.
We use certain terms in this document, such as "resource" and "resources", that the SEC's rules prohibit us from including in our
filings with the SEC. U.S. investors are urged to closely consider the disclosures in our Annual Report on Form 20-F for the year
ended December 31, 2022, SEC File No. 1-15200. This form is available on our website or by calling 1-800-SEC-0330 or logging on
to www.sec.gov
Equinor fourth quarter 2023 51
END NOTES
1.
The group's
average liquids price
liquids (NGL).
2.
The
refining reference margin
and other feedstock, throughput, product yields, freight cost, inventory, etc
3.
Liquids volumes
quarter 2023 due to a change in the calculation methodology. See table below for further information.
4.
Equity volumes
production sharing agreement (PSA)
ownership share in a field.
Entitlement volumes
, on the other hand, represent Equinor’s share of the volumes distributed to the
partners in the field, which are subject to deductions for, among other things, royalty and the host government's share of profit oil.
Under the terms of a PSA, the amount of profit oil deducted from equity volumes will normally increase with the cumulative return
on investment to the partners and/or production from the licence. Consequently, the gap between entitlement and equity volumes
will likely increase in times of high liquids prices. The distinction between equity and entitlement is relevant to most PSA regimes,
whereas it is not applicable in most concessionary regimes such as those in Norway, the UK, the US, Canada and Brazil.
5.
Transactions with the
Norwegian State.
the majority shareholder of Equinor and it also holds major investments in other entities. This ownership structure means that
Equinor participates in transactions with many parties that are under a common ownership structure and therefore meet the
definition of a related party. Equinor purchases liquids and natural gas from the Norwegian State, represented by SDFI (the
State's Direct Financial Interest). In addition, Equinor sells the State's natural gas production in its own name, but for the
Norwegian State's account and risk, and related expenditures are refunded by the State.
6.
The production guidance reflects our estimates of
proved reserves
Commission (SEC) guidelines and additional production from other reserves not included in proved reserves estimates.
7.
The group's
average realised piped gas prices
paper positions. The realised piped gas price Europe for 2022 was restated in the first quarter of 2023 due to a change in the
definition and exclusion of LNG. This was done to report a realised European gas price that is comparable to relevant European
piped gas references/market prices. See table below for further information.
8.
The internal
transfer price
9.
Since different legal entities in the group lend to projects and others borrow from banks, project financing through external bank
or similar institutions is not netted in the balance sheet and results in over-reporting of the debt stated in the balance sheet
compared to the underlying exposure in the group. Similarly, certain net interest-bearing debt incurred from activities pursuant to
the Marketing Instruction of the Norwegian government are offset against receivables on the SDFI. Some interest-bearing
elements are classified together with non-interest bearing elements and are therefore included when calculating the net interest-
bearing debt.
Liquid sales volume restatement (mmbl)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Full year
2022
Liquid sales volume (old)
185.5
180.5
182.9
191.2
740.1
Liquid sales volume (new)
211.6
195.4
196.8
212.1
815.9
Average invoiced gas price restatement (mmbtu)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Full year
2022
Average invoice gas price - Europe (old)
29.60
27.18
43.65
29.80
32.46
Realised piped gas price Europe (new)
30.25
27.43
44.37
29.84
32.84
Equinor fourth quarter 2023 52
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorised.
EQUINOR ASA
(Registrant)
Dated: 7 February, 2024
By: ___/s/ Torgrim Reitan
Name: Torgrim Reitan
Title: Chief Financial Officer