Equinor will reduce its capex as a result of significant cost cuts in recent years, the company said Oct. 25 as it reported a slightly smaller than expected increase in third-quarter profit.
Adjusted earnings before interest and taxes rose to $4.8 billion in the quarter, a four-year high, from $2.35 billion during the same quarter in 2017, and compared with $4.9 billion in a Reuters poll of analysts.
"As a result of capital discipline and efficient project execution, we are able to reduce our organic capex guiding for 2018 to around $10 billion," the Norwegian oil and gas firm, previously known as Statoil, said in a statement.
The previous guidance had been for capex of $11 billion for the year.
Teodor Sveen-Nilsen at Sparebank 1 Markets said he expected consensus for 2018 free cash flow estimates to increase to about $8 billion from about $7.4 billion due to updated capex guidance, with the market focused on a potential dividend rise in future quarters.
Equinor's CFO Lars Christian Bacher, however, told Reuters the company continued to prioritize reduction of its net debt ratio and assets acquisition, with no immediate plans to increase dividends or launch share buybacks.
The company maintained its guidance for exploration spending in 2018 at $1.5 billion and annual production growth at 1-2%, and has decided to keep a dividend of $0.23 per share as expected.
Equinor's total equity production stood at 2.1 million barrels of oil per day (MMboe/d) in the third quarter, a 1% increase from a year ago.
Its international production hit another record high of 0.831 MMboe/d in the quarter, accounting for 40% of its total output.
The increase was primarily driven by new fields in Brazil and offshore North America, and new onshore wells in the United States, the company added.
Equinor's CEO Eldar Saetre said he expected U.S. production to keep growing.
"The U.S. is a strong position and we will continue to work on the opportunities in the U.S Gulf of Mexico," Saetre told Reuters when asked whether company could divest its non-operated U.S. offshore assets.
Saetre also said the company was on track to start its giant Johan Sverdrup Field off Norway in November 2019.
However, Equinor said the startup of its Mariner oilfield off Britain would be delayed until the first half of 2019 from end-2018 due to bad weather preventing the project's completion.
Equinor shares traded 0.75% higher by 09:40 GMT, while the overall European oil and gas index was broadly flat.
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