Equinor posted a record $74.9 billion adjusted operating profit on Feb. 8, more than doubling its previous high and sending the Norwegian oil and gas producer's shares up more than 7%.
With net profit for the year of $28.7 billion, up from $8.6 billion a year earlier, Equinor joined global oil and gas majors such as Exxon Mobil, Shell and BP in reporting record returns for 2022.
Majority state-owned Equinor became Europe's largest supplier of natural gas last year as Russia's Gazprom cut deliveries over the west's support for Ukraine, sending European gas prices to all-time highs.
But gas prices have tumbled in 2023 and Equinor's Oslo-listed stocks have fallen 9% year-to-date, underperforming a 3.3% rise in European petroleum stocks.
Adjusted earnings before tax and interest for October-December hit $15.1 billion, from $15 billion a year before and above the $14.4 billion forecast in an Equinor poll of analysts.
RBC analyst Biraj Borkhataria said in a note this was due to better than expected results in Equinor's refining and trading operation, which was boosted by LNG and gas sales.
Equinor also raised its regular quarterly dividend and said it expected to see annual cash flow from operations after tax of around $20 billion per year for the rest of the decade.
"On the back of strong earnings, outlook, and balance sheet, we step up capital distribution to [an] expected $17 billion in 2023," Equinor CEO Anders Opedal said in a statement.
Equinor said it would pay a regular quarterly dividend of $0.30 per share, up from $0.20, and make an additional, extraordinary payment of $0.60 per share for four consecutive quarters, totaling about $11 billion in dividends this year.
The board reaffirmed a regular share buyback plan of $1.2 billion per year and said it would make an extraordinary buy back in 2023 of $4.8 billion, for a total of $6 billion.
Equinor said its overall oil and gas production fell by 2% year-on-year to 2.04 MMboe/d in 2022, but it expected this to grow by 3% in 2023.
A senior executive said it is investigating the possibility of boosting output from western Europe's largest oilfield, Johan Sverdrup, to 755,000 bbl/d from 720,000 bbl/d.
Gas output from its Norwegian fields was up by 8% on a year earlier as the company focused on replacing lost Russian supplies to Europe, while oil output declined by 6%, it added.
Equinor's previous adjusted earnings record was $36.2 billion in 2008, when North Sea oil prices hit record highs.
The company, which makes most of its profit in Norway, where oil firms are subject to a tax rate of 78%, said it expected to pay a record $49.9 billion in taxes for 2022.
"The combination of this [of dividend and share buybacks] is likely to be well ahead of market expectations and signals a strong message to the market on intentions to pay out to shareholders," RBC's Borkhataria said.
Recommended Reading
Hess Corp. Boosts Bakken Output, Drilling Ahead of Chevron Merger
2024-01-31 - Hess Corp. increased its drilling activity and output from the Bakken play of North Dakota during the fourth quarter, the E&P reported in its latest earnings.
The OGInterview: Petrie Partners a Big Deal Among Investment Banks
2024-02-01 - In this OGInterview, Hart Energy's Chris Mathews sat down with Petrie Partners—perhaps not the biggest or flashiest investment bank around, but after over two decades, the firm has been around the block more than most.
Some Payne, But Mostly Gain for H&P in Q4 2023
2024-01-31 - Helmerich & Payne’s revenue grew internationally and in North America but declined in the Gulf of Mexico compared to the previous quarter.
Petrie Partners: A Small Wonder
2024-02-01 - Petrie Partners may not be the biggest or flashiest investment bank on the block, but after over two decades, its executives have been around the block more than most.
BP’s Kate Thomson Promoted to CFO, Joins Board
2024-02-05 - Before becoming BP’s interim CFO in September 2023, Kate Thomson served as senior vice president of finance for production and operations.