Equinor

Earnings Release • Feb 10, 2021

Equinor fourth quarter 2020 and year end results

Equinor fourth quarter 2020 and year end results

Equinor (OSE: EQNR, NYSE: EQNR) reports adjusted earnings of positive USD 0.76

billion and negative USD 0.55 billion after tax in the fourth quarter of 2020.

IFRS net operating income was negative USD 0.99 billion and the IFRS net income

was negative USD 2.41 billion, following net impairments of USD 1.30 billion and

a write down of USD 0.98 billion related to the Tanzania LNG project.

2020 was characterised by:

* Results impacted by low oil and gas prices

* Solid operational performance during extraordinary circumstances

* Positive cash flow in a low-price environment

* Delivering USD 3.7 billion in capex and cost reductions, well above ambition

for the action plan to strengthen financial resilience

* Progressing and capturing value within renewables

* Setting ambition to be a net-zero energy company by 2050 to create value as

a leader in the energy transition

"Our results are impacted by the market turmoil during the year, but with strong

cost improvements and capital discipline we delivered positive net cash flow for

the quarter and the full year. During 2020 we have delivered more than 3.7

billion dollars in savings, well above our ambition for the action plan we

launched in March to strengthen financial resilience. We are well positioned for

value creation and strong cash flow in 2021 and the coming years," says Anders

Opedal, President and CEO of Equinor ASA.

"I am impressed by how the organisation has responded, delivering strong

operational performance and production growth in a long-lasting challenging

situation during the pandemic. We are increasing production volumes from Johan

Sverdrup even further, and we used our flexibility to have high gas production

as gas prices increased in the quarter. In addition, we have started production

from Snorre Expansion ahead of time and well below cost estimates," says Opedal.

"Equinor is committed to ensuring long-term competitiveness and creating value

as a leader in the energy transition, setting an ambition to be a net-zero

energy company by 2050. During 2020 we delivered significant progress in our

renewables portfolio, taking the investment decision for Dogger Bank A and B,

winning the largest ever offshore wind award in the US, starting construction at

Hywind Tampen and capturing value from transactions. We are also taking actions

to optimise within oil and gas, building a more robust portfolio for the future,

but resulting in a write down in Tanzania and an impairment related to an

operated US onshore asset in the quarter," says Opedal.

Adjusted earnings [5] were USD 0.76 billion in the fourth quarter, down from USD

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

negative USD 0.55 billion, down from USD 1.19 billion in the same period last

year. Low prices for liquids impacted the earnings for the quarter.

Equinor launched an action plan of USD 3 billion in March 2020 to strengthen

financial resilience, including a reduction in operating costs of USD 0.70

billion. Delivery on the plan resulted in savings of more than USD 3.7 billion,

including a reduction in fixed operating costs of around USD 1 billion. Unit

production costs are reduced by 5% since 2019, realising the 2021 ambition

already in 2020.

In the E&P Norway segment, Equinor realised weaker liquids prices and the

production was reduced mainly as a result of turnarounds moved to fourth quarter

due to the ongoing pandemic.

Results in the E&P International segment were impacted by low prices and the

impairment of the Tanzania LNG project of USD 0.98 billion. The E&P USA segment

was also impacted by weak prices, partially offset by significant reductions in

operating costs.

The Marketing, midstream and processing segment captured value from strong

trading results from gas to Europe, partially offset by low refinery margins and

shutdown of production at Hammerfest LNG plant.

New energy solutions delivered high availability on offshore wind assets. A

capital gain of around USD 1 billion is expected to be booked from the

divestment of a 50% non-operated interest of the offshore wind projects Empire

Wind and Beacon Wind in the US. A capital gain from the farm down of 10% equity

interest in Dogger Bank A and B in the UK is expected to be booked in the first

quarter of 2021.

IFRS net operating income was negative USD 0.99 billion in the fourth quarter,

down from positive USD 1.52 billion in the same period in 2019. IFRS net income

was negative USD 2.42 billion in the fourth quarter, compared to negative USD

0.23 billion in the fourth quarter of 2019. Net operating income was negatively

impacted by net impairments of USD 1.30 billion, mainly relating to a refinery

as a result of reduced margin assumptions and some increase in cost estimates,

and to an operated unconventional onshore asset in North America due to

reclassification as held for sale.

Equinor delivered total equity production of 2,043 mboe per day in the fourth

quarter, down from 2,198 mboe per day in the same period in 2019, with a minor

increase in gas share due to high flexible production in gas fields. Adjusting

for portfolio transactions the production growth for 2020 was 2.4%.

In 2020, Equinor completed 34 exploration wells with 16 commercial discoveries

and 1 well under evaluation. At year end, 12 wells were ongoing. Adjusted

exploration expenses in the fourth quarter were USD 1.25 billion, compared to

USD 0.44 billion in the same quarter in 2019.

The proved reserves replacement ratio (RRR) was negative 5% in 2020, following

capital discipline and the prioritisation of financial flexibility during market

uncertainty, with a three-year average of 95%. With 5.26 billion barrels in

proved reserves, Equinor's reserves to production ratio (R/P) was 7.4 years.

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

working capital amounted to USD 14.0 billion in 2020, compared to USD 21.8

billion in 2019. Organic capital expenditure [5] was USD 7.8 billion for 2020.

At year end, net debt to capital employed(1) was 31.7%, stable from 31.6% at the

end of the third quarter of 2020. Following the implementation of IFRS 16, net

debt to capital employed(1) was 37.3%.

The board of directors proposes to the annual general meeting a cash dividend of

USD 0.12 per share for the fourth quarter 2020.

Average CO2-emissions from Equinor's operated upstream production, on a 100%

basis, was 8.0 kg per barrel in 2020.

The twelve-month average Serious Incident Frequency (SIF) for 2020 was 0.5, down

from 0.6 in 2019. The twelve-month average Recordable Injury Frequency (TRIF)

was 2.3 for 2020, compared to 2.5 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.

[5] These are non-GAAP figures. See Use and reconciliation of non-GAAP financial

measures in the report for more details. For ROACE, see table Calculated ROACE

in the Supplementary disclosures for more details.

* * *

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