Equinor ASA (EQNR) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 26, 2023 5:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Thank you for standing by. My name is Ellie, and I'll be your conference operator for today. At this time, I would like to welcome everyone to the Equinor Analyst Conference Call. At this time, all lines have been placed on mute to prevent any background noise. [Operator Instructions] Thank you.

Bård, you may now begin the conference.

Bård Glad Pedersen

Thank you, operator, and good morning, everybody. It's a pleasure to welcome you to the analyst call for Equinor's second quarter result. My name is Bård Glad Pedersen. I'm heading up Investor Relations. I'm here together with Torgrim Reitan, our CFO, and he will present the results before we open for questions as usual.

So with that, I hand it over to you, Torgrim.

Torgrim Reitan

Thank you Bård, and good morning, everyone. We appreciate you joining us, and I hope you all are enjoying your summer and that you also get some time for vacation. So let's go straight to the results. We are delivering solid earnings this quarter with adjusted earnings totaling $7.5 billion and $2.2 billion after tax. The main explanation for the drop in the results is of course, the energy prices are significantly down from the extraordinary levels we saw last year. But compared to prior years, these are still solid results. Particularly, European gas prices are lower. And after a record warm winter, current storage levels in Europe are more than 80% full. Still we see that the market is very sensitive to minor events and only small supply disruptions. And going into autumn, we expect more volatility.

Prices will depend on weather impacting both heating demand and renewable energy production, and also Chinese and Asian demand competing for LNG will impact prices. We believe this vulnerability will continue into this winter and for the coming years. Longer term, we expect to get more LNG into the market and that LNG will be the price setter, providing fundamental support for higher gas prices.

We take a role as perhaps the most important energy provided to Europe very seriously. And towards the end of this decade and beyond, we can deliver 40 bcm annually. We have a very competitive cost for piped gas from the Norwegian continental shelf below $2 per MBtu, and that puts us in a strong position.