Equinor

Earnings Release • Feb 7, 2024

Equinor fourth quarter and full year 2023 results

Equinor fourth quarter and full year 2023 results

Equinor (OSE:EQNR, NYSE:EQNR) 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:

* Strong financial performance

* 2.1% production growth in 2023

* Continued optimising of oil and gas portfolio, sanctioning projects for

future growth

* Growth in onshore renewables power production and portfolio

* Cost focus and capital discipline

Competitive capital distribution

* Proposed increase in ordinary cash dividend to USD 0.35 per share, set

ambition to grow quarterly cash dividend by 2 cents per year

* Proposed extraordinary cash dividend of USD 0.35 per share

* Announced two-year share buy-back programme of USD 10-12 billion, with USD

6 billion for 2024

* Expected total capital distribution in 2024 of USD 14 billion

Equinor is well positioned for profitable growth towards 2035 Key ambitions:

* Stronger cash flow and sustaining competitive returns. Growing cash flow

from operations after tax* towards 2030 and 2035 by adding material

contribution from renewables and low carbon solutions on top of stable cash

flow from oil, gas and trading.

* Broader energy. Maintaining high oil and gas production, significant

profitable growth in renewable power, decarbonised energy and CO2 storage.

* Lower emissions. Reducing operated emissions and increasing production of

low carbon energy and CCS to reduce carbon 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."

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.

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.

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:

* Stronger cash flow:

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.

* Broader energy:

Produce more than 80 TWh from renewables and decarbonised energy and deliver

transport and storage of 30-50 million tonnes CO2 annually by 2035. Maintain

oil and gas production of around 2 million barrels per day through 2030 and

produce around 1.2 million barrels per day from the Norwegian Continental

Shelf in 2035.

* Lower emissions:

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 CO2 intensity below 6 kg

per boe. Equinor expects to deliver above 5% production growth for oil and gas

from 2023 - 2026 and maintain production of around 2 million barrels per day in

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 CO2 storage 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 CO2 emissions. Reduced emissions, growth in renewables, decarbonised

energy and CCS, underpins the ambition to reduce net carbon intensity by 20% by

2030 and 40% by 2035.

* Organic capex* of around USD 13 billion (3).

* Stable oil and gas production from 2023.

* Doubling of annual power production from renewable sources compared to 2023.

This press release contains Forward Looking Statements. Please see the Forward

Looking Statement disclaimer published on Equinor.com/investors/cmu-2024-

forward-looking-statements

* * *

* For items marked with an asterisk throughout this report, see Use and

reconciliation of non-GAAP financial measures in the Supplementary disclosures

1) NOK 37 billion, USD estimate based on a USD/NOK exchange rate assumption of

(1) All forward looking financial numbers are based on 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) See Equinor Energy transition plan at https://www.equinor.com/magazine/our-

plan-the-energy-transition

(3) USD/NOK exchange rate assumption of 10.

* * *

Further information from:

Investor relations

Bård Glad Pedersen, Senior vice president Investor relations,

+47 918 01 791 (mobile)

Press

Sissel Rinde, vice president Media relations,

+47 412 60 584 (mobile)

This information is subject to the disclosure requirements pursuant to Section

5-12 of the Norwegian Securities Trading Act