Equinor Beats Profit Estimates, Boosts Shareholder Payout

(Bloomberg) -- Equinor SA�s third-quarter profit beat analyst estimates, prompting Norway�s biggest oil and gas producer to boost its extraordinary dividend.

The company followed on the heels of European peers including Shell Plc and TotalEnergies SE, which continued a run of historically high earnings and rising shareholder payouts. The performance is keeping the oil industry in the cross-hairs of governments that are grappling with the high cost of energy and considering further market interventions. �

Equinor�s Chief Executive Officer Anders Opedal said on Friday that Norway is providing record volumes of gas to Europe and warned that European Union proposals to cap the price of the fuel could be �counterproductive.��

Adjusted net income was $6.72 billion in the third quarter, up from $2.78 billion a year earlier and above analyst estimates. Gas shipped to Europe climbed 11% in the period, bolstered by the ramp up in production of liquefied natural gas at the Hammerfest plant. The extraordinary dividend rose to 70 cents a share for the quarter, up from 50 cents previously.�

�Norway�s and Equinor�s role as a reliable energy provider is more important than ever,� Opedal said in a statement. �The Russian war in Ukraine has changed the energy markets, reduced energy availability and increased prices. Equinor continues to provide stable flow and high production, with record-levels of gas from the Norwegian continental shelf.�

Equinor shares rose 2.5% to 384.6 Norwegian kroner at 11:14 a.m. in Oslo.

Demand for gas in particular has driven a sharp increase in Norway�s petroleum fortunes. In a draft budget earlier this month, the government said it expects to sell about 8% more of the fuel this year than it did in 2021 and keep production �relatively high� through 2030.

Equinor�s realized European gas price was 60% higher in the third quarter, compared with the three months through June. The realized liquids price was 13% lower.

READ: Total Posts Record Profit as Europe Pays Up to Avoid Gas Crunch

While ample supplies of liquefied natural gas and high winter stockpiles have helped bring down Europe�s benchmark gas futures from August highs, prices are still three times higher than the five-year average for this time of year. Dutch front-month gas, Europe�s benchmark, closed at �107.38 per megawatt-hour on Thursday.

Price swings in the energy markets have driven the European Commission to propose an upper limit on the cost of gas using a dynamic mechanism. Technical details are still subject to political wrangling and energy ministers set a new deadline of Nov. 24 to clinch a deal on the latest proposals. Equinor executives urged a cautious approach.�

�The gas markets have been built up over many decades and are well functioning markets, where prices define where gas should go,� Chief Financial Officer Torgrim Reitan said in an interview. �Any sort of limitations to competition could potentially give the wrong signal,� resulting in higher demand and insufficient supply, he said.�

(Updates with CFO comments in 11th paragraph.)

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