Norwegian energy company Equinor reported a strong second quarter of 2016, achieving a net operating profit of $12.99 billion, more than double the figure for the same period last year. The increase was primarily driven by higher oil and gas prices in Europe, coupled with increased production and robust cash flow generation.
Energy prices strengthen financial results
During the period, adjusted operating profit totaled $11.48 billion, while net income was $4.84 billion, adjusted net income reached $3.22 billion, equivalent to $1.33 per share.
The company explained that the improvement was supported by higher prices for liquids and gas traded in Europe. These factors partially offset the weakness observed in the US gas market. The results were also boosted by the positive effects of financial transactions and the sale of assets in Argentina.
During the quarter, Equinor obtained an average price of $97.9 per barrel for liquids and $15.8 per million British thermal units (MMBtu) for European gas.
Production is increasing thanks to new developments in Norway
Attributable production reached 2.165 million barrels of oil equivalent per day, representing a 3% increase compared to the same quarter of the previous year.
Growth was led by the Norwegian continental shelf, where production advanced 4% thanks to the start of operations at the Eirin and Symra fields, in addition to the high performance of Johan Sverdrup and the addition of new producing wells.
During the quarter, contracts were also awarded for new tie-back projects, and activities related to the development of Ringvei Vest continued. According to the company, the Eirin project will extend the productive life of the Gina Krog platform by approximately seven years.
In terms of exploration, Equinor drilled ten wells and completed seven, while three appraisal wells confirmed previously announced commercial discoveries on the Norwegian continental shelf.
Scheduled maintenance shutdowns and the natural decline of some fields partially limited production growth.
International operations continue to show positive growth
The international oil and gas business saw a 4% increase, driven by the start of production at the Adura project in the UK and the Bacalhau field in Brazil. A reduction in maintenance shutdowns also contributed to the positive operational performance.
However, changes in the asset portfolio, the natural performance of some mature fields, and operational difficulties at Roncador, Brazil, reduced some of that growth. Meanwhile, production in the United States remained virtually unchanged from the previous year.
The company also confirmed the final investment decision for the Greater PAJ oil development in Angola together with its partners.
Dogger Bank B promotes renewable energy generation
In the renewable energy business, Equinor produced 1.19 TWh during the quarter, electricity generation increased by 11% compared to the same period of the previous year thanks to the start of operations of Dogger Bank B, one of the largest offshore wind farms in the world, in addition to the incorporation of new onshore assets.
Equinor’s president and CEO, Anders Opedal, highlighted that the combination of strong production and a favorable price environment helped strengthen the company’s cash flow and financial results during the quarter.
Source: Energyvoice
Photo: Shutterstock
