Investor Presentation • Feb 8, 2023
Investor Presentation
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FEBRUARY 8TH, 2023 LONDON, UNITED KINGDOM Capital Markets Update 2023
Anders Opedal PRESIDENT AND CHIEF EXECUTIVE OFFICER
Serious incident frequency Per million hours worked
Serious well control incidents
0
Total recordable injury frequency Per million hours worked
SAFETY • SECURITY • SUSTAINABILITY
BN USD Net operating income
Adjusted earnings
32
BN USD
Free cash flow Before capital distribution 55
75
BN USD
PERCENT
Return on average capital employed Adjusted
6.9
KG / BOE
Scope 1 CO2 emissions, Equinor operated, 100% basis
30 MILLION TONNES / ANNUM
CO2 storage capacity accessed Equinor share
Step-up in ordinary cash dividend
Share buy-back as integrated part of ordinary capital distribution
The 4Q 2022 cash dividends are subject to approval by the AGM. The 1Q-3Q 2023 cash dividends and further tranches of the share buy-back programme will be decided by the Board on a quarterly basis in line with Equinor's dividend policy, and subject to existing and renewed authorizations from the AGM, including agreement with the Norwegian state regarding share buy-backs. Share buy-back amounts include government share.
First tranche of USD 1 billion including the government share to be launched after 4Q 2022 announcement
3
~
PERCENT Production growth 2022-23
30
USD / BBL Oil & gas cash flow neutral 2023-26 Real terms 2022, excluding tax payments related to 2022 results
Offshore wind lease auction price
MILLION TONNES / ANNUM
CO2 transport and storage capacity by 2035
Equinor share
3-5
MAJOR INDUSTRIAL CLUSTERS
Clean hydrogen projects by 2035
Net carbon intensity for energy provided Scope 1, 2 & 3
Oil and gas Low carbon solutions Established in 1972 Renewables Hywind Demo in 2009 12-16 GW renewables by 2030 15-30 mtpa CO2 transport & storage capacity by 2035 By 2050 Sleipner CCS in 1994 Annual reduction of over 7 million tonnes CO2e from own operation by 2030 Net Zero See equinor.com for more details around energy transition plan 1. Net scope 1 & 2, 100% operated, 2015 base year 2. Equinor gross capex to renewables and low carbon solutions 3. Net carbon intensity scope 1,2,3 from use of our products
Open 08 February 2023
BN USD Average annual cash flow from operations after tax 2023-30
PERCENT
Return on capital employed 2023-30
50
PERCENT
Increase in ordinary cash dividend
17
BN USD
Total expected 2023 capital distribution
50
PERCENT
Reduction of operated emissions by 2030
50 >
PERCENT
Gross capex to transition by 2030
Open
Capital Markets Update 2023
Torgrim Reitan CHIEF FINANCIAL OFFICER
2022
mboe/d
| E&P Norway − Strong earnings and cash flow − Solid production and high production efficiency |
E&P International − − and 2 |
Solid earnings and cash flow Ramp up Peregrino Phase 1 |
E&P USA − Solid flow − Major turnaround on Caesar Tonga |
earnings and cash | MMP − Strong results from gas and power sales and trading − Significant negative derivative timing effects (pre-tax) |
REN − Assets in operation contributed − Ongoing project activity |
USD 37 million | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Million USD | Pre tax | After tax | Pre tax | After tax | Pre tax | After tax | Pre tax | After tax | Pre tax | After tax | |
| 4Q '22 | 14,594 | 3,300 | 676 | 367 | 474 | 450 | (540) | 1,907 | (86) | (96) | |
| 4Q '21 | 14,809 | 3,496 | 689 | 508 | 587 | 574 | (997) | (83) | (38) | (30) | |
| FY '22 | 66,260 | 14,887 | 3,806 | 2,558 | 2,957 | 2,878 | 2,253 | 2,727 | (184) | (170) | |
| FY '21 | 29,099 | 7,274 | 2,028 | 1,358 | 1,297 | 1,281 | 1,424 | 426 | (136) | (112) |
Taxes paid (43,856) Capital distribution1 (8,696) Cash flow to investments4 (8,634) Proceeds from sale of assets 966 Net cash flow 23,388 Cash flow from operating activities3 83,608 Million USD
Cash flow 2022
FINANCIAL FRAMEWORK
Step-up in ordinary cash dividend
Share buy-back as integrated part of ordinary capital distribution
The 4Q 2022 cash dividends are subject to approval by the AGM. The 1Q-3Q 2023 cash dividends and further tranches of the share buy-back programme will be decided by the Board on a quarterly basis in line with Equinor's dividend policy, and subject to existing and renewed authorizations from the AGM, including agreement with the Norwegian state regarding share buy-backs. Share buy-back amounts include government share.
First tranche of USD 1 billion including the government share to be launched after 4Q 2022 announcement
30% by 2025; > 50% by 2030
BN USD, average per year
Based on reference case 70 USD/bbl, see appendix for key assumptions 2. Cashflow from operations after tax. See appendix. for key scenario assumptions
Organic capex net to Equinor after project finance
Open 08 February 2023
6 USD / BOE Unit production cost 2023-26 Real terms 2022 < 4
BN USD
Improvement ambition cash flow impact realised Before tax
Lower total project facility cost than industry
2022 benchmark performance1
PERCENT
Lower drilling cost per meter than peers 2021 benchmark performance2
Exploration and Production Norway and International
| Sanctioned projects | Non-sanctioned | ||
|---|---|---|---|
| Johan Castberg | Oseberg OGP | Fram Sør | Rosebank |
| Smørbukk Nord | Askeladd Vest | Ringvei Vest | Bay Du Nord |
| Breidablikk | Irpa | Johan Castberg Cluster 1 | BM-C-33 |
| Bacalhau Ph. 1 | Halten Øst | Johan Sverdrup Ph. 3 | Wisting |
| Kristin Sør | Snøhvit Future Project | Troll Phase 3 Future | Bacalhau Ph. 2 |
| Verdande | Åsgard Subsea Ph. 2 | Njord North West Area | Peon |
| Heidrun Extension | Several IOGR projects | ||
| Vito2 | Munin2 | ||
| Ormen Lange Ph. 32 | Fulla2 | Sparta2 |
USD / BBL
Break-even
Volume weighted average
Based on reference case 70 USD/bbl. Volume weighted average. Real terms
2.5 < ~
YEARS
Average pay-back time Based on reference case 70 USD/bbl. Volume weighted from production start
KG / BOE
Project lifetime intensity. Scope 1 CO2 emissions, Equinor operated, 100% basis
Open 08 February 2023
List not exhaustive
Partner operated
| In operation | Sanctioned (2023-2026) |
|---|---|
| Sheringham Shoal | Dogger Bank A |
| Dudgeon | Dogger Bank B |
| Hywind Scotland | Dogger Bank C |
| Apodi | Mendubim |
| Arkona | |
| Guañizuil IIA | |
| Hywind Tampen | |
| Under maturation (2025 ->) | Onshore2 platforms |
| Empire Wind 1+2 | Wento |
| Beacon Wind 1+2 | BeGreen |
| Bałtyk I, II & III | East Point Energy |
| TrollVind | Noriker (45%) |
| Firefly | |
| Sheringham Shoal and Dudgeon Extension |
|
| Donghae 1 |
Renewables real base project return
Excluding effects from farmdowns and project financing
| CO2 transport and storage |
|
|---|---|
| Northern Lights ph.1 (sanctioned) | |
| Northern Lights ph.2 | |
| Smeaheia | |
| Northern Endurance Partnership | |
| European CO2 pipeline |
|
| Hydrogen | |
| H2H Saltend | US Tristate |
| H2M Eemshaven | Cheyenne |
| NortH2 | Clean Hydrogen to Europe |
| H2BE | Aldbrough H2 storage |
| Low carbon/flexible power | |
| Keadby 3 | Peterhead |
| Net Zero Teeside | Keadby Hydrogen |
| RWE 3 GW |
BN USD Average annual cash flow from operations after tax 2023-30
PERCENT
Return on capital employed 2023-30
50
PERCENT
Increase in ordinary cash dividend
17
BN USD
Total expected 2023 capital distribution
50
PERCENT
Reduction of operated emissions by 2030
50 >
PERCENT
Gross capex to transition by 2030
This presentation 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; such as, but not limited to future, guiding on numbers and net debt ratio, the commitment to develop as a broad energy company; the ambition to be a leader in the energy transition and reduce net group-wide greenhouse gas emissions; future financial performance, including cash flow and liquidity and cash flow from operations after tax; free cash flow 2023-2026, accounting policies; the ambition to grow cash flow and returns and improve return on capital employed (ROACE); expectations regarding progress on the energy transition plan; expectations regarding cash flow and returns from Equinor's oil and gas portfolio; plans to develop fields and increase gas exports; expectations and plans for development of renewable projects, renewables installed capacity and production capacity, investments and power generation in renewables; 4-8 percent renewables real base project return, net zero by 2050, future power generation offtake, CCUS and hydrogen businesses; future production growth, oil & gas cash flow neutrality and unit production costs, future CO2 and transport storage capacity, CO2 upstream intensity, future number of clean hydrogen projects, reduction on operated emissions, gross capex to renewable, low carbon and transition and gross capex to oil & gas projects, portfolio geography and composition, future offshore wind connected to hydrogen infrastructure, capex flexibility, reduction in net carbon intensity and reduction in GHG emissions, short- and long-term value creation, future portfolio mix and robustness and internal rate of return (IRR), price scenario assumptions; climate ambitions, 12-16 GW installed renewable capacity at 2030, commercial operation dates start up, market outlook and future economic projections and assumptions, including commodity price and refinery assumptions; organic capital expenditures through 2026; expectations and estimates regarding production and execution of projects; expectations regarding growth in oil and gas and renewable power production; estimates regarding tax payments and expectations regarding utilisation of tax losses, 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 future fluctuations in oil & gas prices, in particular in light of significant oil price volatility and the uncertainty created by Russia's invasion of Ukraine; social and economic conditions in relevant areas of the world; levels and calculations of reserves and material differences from reserves estimates; natural disasters, adverse weather conditions, climate change, and other changes to business conditions; regulatory stability and access to attractive renewable opportunities; unsuccessful drilling; operational problems, in particular in light of supply chain disruptions; health, safety and environmental risks; the effects of climate change; regulations on hydraulic fracturing; security breaches, including breaches of our digital infrastructure (cybersecurity); ineffectiveness of crisis management systems; the actions of competitors; the development and use of new technology, particularly in the renewable energy sector; inability to meet strategic objectives; the difficulties involving transportation infrastructure; political instability; reputational damage; an inability to attract and retain personnel; risks related to implementing a new corporate structure; inadequate insurance coverage; changes or uncertainty in or non-compliance with laws and governmental regulations; the actions of the Norwegian state as majority shareholder; failure to meet our ethical and social standards; the political and economic policies of Norway and other oil-producing countries; non-compliance with international trade sanctions; the actions of field partners; adverse changes in tax regimes; exchange rate and interest rate fluctuations; factors relating to trading, supply and financial risk; general economic conditions; and other factors discussed elsewhere in this presentation, in the fourth quarter 2022 report and in Equinor's Annual Report on Form 20-F for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission (including section 2.13 Risk review - Risk factors thereof). Equinor's 2021 Annual Report and Form 20-F is available at Equinor's website www.equinor.com.
Prices used in this presentation material are given in real 2022 value, unless otherwise stated. Forward looking cash-flows are in nominal terms. Break-evens are in real 2023 terms and are based on life cycle cash-flows from Final Investment Decision dates..
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 Form 20-F, 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.
E-mail: [email protected]
| Fan Gao IR Officer |
[email protected] | +44 7771 918026 | ||
|---|---|---|---|---|
Amberley Doskey IR Officer [email protected] +44 7584 681246
Fan Gao IR Officer [email protected] +44 7771 918026 Dennis Arthur IR Officer [email protected] +44 7825 275429
Anne Sofie Dahle Senior Consultant [email protected] +47 90 88 75 54
| Ieva Ozola IR Officer |
[email protected] | +1 281-730-6014 |
|---|---|---|
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