The FINANCIAL -- Equinor reports adjusted earnings of USD 4.8 billion and USD 2.0 billion after tax in the third quarter of 2018. IFRS net operating income was USD 4.6 billion and the IFRS net income was USD 1.7 billion.
The third quarter was characterised by:
Strong results and cash flow from operations. Net debt ratio reduced to 25.7%
Reduced organic capex guiding to around USD 10 billion, continued strong cost focus
Value enhancing transactions to strengthen and sharpen the portfolio
Adjusted earnings were USD 4.8 billion in the third quarter, up from USD 2.3 billion in the same period in 2017. Adjusted earnings after tax were USD 2.0 billion in the third quarter, up from USD 0.8 billion in the same period last year. Higher prices for both liquids and gas, coupled with high production, contributed to the increase. Adjusted for new fields in production and portfolio changes, underlying operating costs and administrative expenses per barrel are up slightly compared to the same quarter last year, mainly due to increased turnarounds and preparation for start-up of new fields.
IFRS net operating income was USD 4.6 billion in the third quarter compared to USD 1.1 billion in the same period of 2017. IFRS net income was USD 1.7 billion, up from negative USD 0.5 billion in the third quarter of 2017.
Equinor delivered total equity production of 2,066 mboe per day in the third quarter, an increase of 1% from 2,045 mboe per day in the same period in 2017. The increase was primarily due to start-up of new fields, portfolio changes and additional wells coming on stream, partially offset by high maintenance.
As of third quarter 2018, Equinor had completed 15 exploration wells with seven commercial discoveries. The appraisal of the Cape Vulture discovery confirmed the doubling of the remaining reserves at Norne, extending the life and value of the field. Adjusted exploration expenses in the quarter were USD 239 million, down from USD 416 million in the same quarter of 2017, mainly due to a higher capitalisation rate and lower drilling activity.
Cash flows provided by operating activities before tax amounted to USD 20.4 billion in the first nine months of 2018 compared to USD 15.2 billion for the same period last year. Organic capital expenditure was USD 7.2 billion for the first nine months of 2018. At the end of the quarter, net debt to capital employed was reduced from 27.2% to 25.7%.
The board of directors has decided to maintain a dividend of USD 0.23 per share for the third quarter.
The twelve-month average Serious Incident Frequency (SIF) was 0.5 for the twelve months ending 30 September 2018, compared to 0.7 in the same period a year ago.