Equinor

Earnings Release • May 7, 2020

Equinor first quarter 2020 results

Equinor first quarter 2020 results

Equinor ?(OSE: EQNR, NYSE: EQNR) reports adjusted earnings of USD 2.05 billion

and USD 0.56 billion after tax in the first quarter of 2020. IFRS net operating

income was USD 0.06 billion and the IFRS net income was negative USD 0.71

billion, following net impairments of USD 2.45 billion.

The first quarter was characterised by

* Rapid and forceful response to the Covid-19 pandemic, the fall in commodity

prices and the market uncertainty

- Launch of a USD 3 billion action plan for 2020 to strengthen financial

resilience

- Suspension of share buy-back under the share buy-back programme

- Cash dividend for first quarter reduced to USD 0.09 per share

* Solid cash flow and net debt ratio(1) at 25.8%

* Financial results impacted by lower commodity prices

* Solid operational performance with record high production and successful

ramp-up to a higher plateau production level at Johan Sverdrup at the end of

April

"The Covid-19 pandemic is impacting people, societies and industries across the

world. Joint efforts by individuals, governments and companies are necessary to

respond to the current global emergency. We are all in this together and Equinor

has launched a forceful and rapid response. Safety is our first priority and we

have taken actions to keep our people safe and healthy, contribute positively in

the societies in which we operate and mitigate spread of the virus. We have also

taken forceful actions to strengthen our financial resilience, and we are

prepared to take further measures as necessary to protect people, operations and

value creation," says Eldar Sætre, President and CEO of Equinor ASA.

"In times like this, with the current unprecedented market conditions and

uncertainties, it is more important than ever to have a clear direction for the

long-term development of the company. Our values and strategy remain firm, and

we are committed to develop Equinor as a broad energy company. It is a sound

business strategy to ensure competitiveness and drive change towards a low

carbon future, based on a strong commitment to value creation for our

shareholders," says Sætre.

"Our financial results in the quarter were impacted by the lower commodity

prices. However, we delivered strong operational performance with record high

production and solid cash flow under these market conditions. Uncertainty

remains high with very low commodity prices and increased differentials towards

the end of first quarter and in the start of the second quarter. We will

continue to prioritise value over volume and have already reduced activity,

particularly in the US onshore. We will consider further activity reductions and

use the flexibility we have in our portfolio as necessary," says Sætre.

Adjusted earnings [5] were USD 2.05 billion in the first quarter, down from USD

4.19 billion in the same period in 2019. Adjusted earnings after tax [5] were

USD 0.56 billion, down from USD 1.54 billion in the same period last year. Lower

prices for both liquids and gas impacted the earnings for the quarter.

In first quarter, Equinor announced a plan for reducing costs(2) for 2020 by

around USD 700 million compared to original estimates. Operating costs in first

quarter 2020, were improved from last quarter and we see lower unit production

costs. For E&P Norway Equinor saw lower prices with increased production and

high regularity. Results in the E&P International segment were impacted by the

low prices on both gas and liquids, despite a slight reduction of operating

costs and increase in production. The Marketing, Midstream and Processing

segment reported strong results from European natural gas offset by the effects

of weak refinery margins and product trading in a demanding volatile market.

Equinor delivered record high electricity production from the renewable

business.

IFRS net operating income was USD 0.06 billion in the first quarter, down from

USD 4.73 billion in the same period of 2019. IFRS net income was negative USD

0.71 billion in the first quarter, down from positive USD 1.71 billion in the

first quarter of 2019. Net operating income was impacted by net impairment

charges of USD 2.45 billion, of which USD 0.86 billion relates to assets at the

Norwegian continental shelf and USD 1.40 billion to the international portfolio.

Impairments are mainly triggered by reduction in short-term price assumptions.

Equinor delivered record high total equity production of 2,233 mboe per day in

the first quarter, up 3% from the same period in 2019. The flexibility in the

gas fields was used to defer production into periods with higher expected gas

prices. Successful rampup of new fields as well as new well capacity,

contributed to growth in production. The ramp- up of Johan Sverdrup contributes

significantly to the increased production in the quarter, and the field reached

a higher plateau production level at 470,000 boe per day in late April. Equinor

expects to deliver an average annual production growth of around 3% from 2019 to

2026. Due to market uncertainties, government-imposed production curtailments

and Equinor's value over volume approach, Equinor has suspended further

production guidance for 2020.

At the end of first quarter 2020 Equinor has completed 5 exploration wells with

3 commercial discoveries, and 17 wells were ongoing. Adjusted exploration

expenses in the quarter were USD 0.30 billion, compared to USD 0.27 billion in

the same quarter of 2019.

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

working capital amounted to USD 4.50 billion in the first quarter, compared to

USD 6.45 billion in 2019. Organic capital expenditure [5] was USD 2.30 billion

for the three first months of 2020. Equinor expects an organic capex of around

USD 8.5 billion for 2020 and is updating its organic capex expectation for 2021

to around USD 10 billion. At the closing of the quarter net debt to capital

employed(1) was 25.8%, up two percentage points mainly as a result of currency

impact on equity. Following the implementation of IFRS 16, net debt to capital

employed(1) was 31.3%.

The board of directors has decided a cash dividend of USD 0.09 per share for the

first quarter 2020, a reduction of 67% compared to the proposed fourth quarter

2019 dividend level.

The twelve-month average Serious Incident Frequency (SIF) for the period ending

31 March was 0.6 for 2020 and in 2019. The twelve-month average Recordable

Injury Frequency (TRIF) for the period ending 31 March was 2.3 for 2020,

compared to 2.9 in 2019.

* * *

(1) This is a non-GAAP figure. Comparison numbers and reconciliation to IFRS are

presented in the table Calculation of capital employed and net debt to capital

employed ratio as shown under the Supplementary section in the report.

(2) Operating cost (excluding variable cost such as transportation and

processing), sales and general administration and field development costs.

Expensed exploration costs are not included.

[5] For items impacting net operating income, see Use and reconciliation of non-

GAAP financial measures in the Supplementary disclosures.

* * *

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 the Norwegian Securities Trading Act