Equinor — Earnings Release 2018

Jul 26, 2018

Equinor ASA: Second quarter 2018 and first half results

Equinor ASA: Second quarter 2018 and first half results

Equinor (OSE: EQNR, NYSE: EQNR), in its first financial report since the name

change, reports adjusted earnings of USD 4.3 billion and USD 1.7 billion after

tax in the second quarter of 2018. IFRS net operating income was USD 3.8 billion

and the IFRS net income was USD 1.2 billion.

The second quarter was characterised by:

* Solid results and cash flow from operations, strong adjusted earnings after

tax [5]

* Record high international production

* Value enhancing transactions and high project activity

"We capture value from higher prices and deliver solid results and cash flow

from operations. This quarter we deliver very strong results from our

international operations, while new fields, increased maintenance and some

quarter specific items contribute to somewhat higher costs at the NCS. This

underlines the importance of continued cost focus across the organisation. We

are on track to deliver on our guiding to the capital market," says Eldar Sætre,

President and CEO of Equinor ASA.

"We continue to build on our industrial strengths and develop our portfolio. In

the quarter we have closed the Roncador and Carcara transactions in Brazil and

the North Platte transaction in the US, and we have secured new and attractive

exploration acreage in Brazil, the UK and Norway. We have started field

installation at Johan Sverdrup and have high project activity with several

projects in execution. In July, we delivered the development plan for the very

profitable Troll Phase 3 project for approval," says Sætre.

Adjusted earnings [5] were USD 4.3 billion in the second quarter, up from USD

3.0 billion in the same period in 2017. Adjusted earnings after tax [5] were USD

1.7 billion in the second quarter, up from USD 1.3 billion in the same period

last year, which included a reversal of a provision in Angola of USD 0.7

billion. Higher prices for both liquids and gas, coupled with high production,

contributed to the increase. Due to increased maintenance and some quarter and

field specific items, underlying operating costs and administrative expenses per

barrel are slightly up compared to same quarter last year, adjusted for new

fields in production.

IFRS net operating income was USD 3.8 billion in the second quarter compared to

USD 3.2 billion in the same period of 2017. In the quarter, Equinor had a net

impairment reversal of USD 0.3 billion and a negative effect from changes in the

unrealised fair value of derivatives of USD 0.5 billion. IFRS net income was USD

1.2 billion, down from USD 1.4 billion in the second quarter of 2017.

Equinor delivered equity production of 2,028 mboe per day in the second quarter,

an increase from 1,996 mboe per day in the same period in 2017. The increase was

primarily due to higher production in the US. The production growth [7] was 2%

compared to the second quarter of 2017.

As of second quarter 2018, Equinor had completed 10 exploration wells with four

commercial discoveries. Adjusted exploration expenses [5] in the quarter were

USD 234 million, up from USD 224 million in the same quarter of 2017, mainly due

to higher drilling activity.

Cash flows provided by operating activities before taxes paid and changes in

working capital amounted to USD 13.2 billion for the first half of 2018 compared

to USD 10.5 billion same period 2017. Organic capital expenditure [5] was USD

4.6 billion for the first six months of 2018. End of June, net debt to capital

employed [5] increased from 25.1% to 27.2%, after value enhancing transactions

and increased working capital.

The board of directors has decided to maintain a dividend of USD 0.23 per share

for the second quarter.

The twelve-month average Serious Incident Frequency (SIF) was 0.5 for the twelve

months ended 30 June 2018, compared to 0.7 in the same period a year ago.

Further information from:

Investor relations

Peter Hutton, Senior vice president Investor relations,

+44 7881 918 792 (mobile)

Helge Hove Haldorsen, vice president Investor Relations North America,

+1 281 224 0140 (mobile)

Press

Bård Glad Pedersen, vice president Media relations,

+47 918 01 791 (mobile)

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.