Equinor Announces $5 Billion Share Buyback and Adjusts Renewables Strategy

Equinor ASA (NYSE: EQNR) has recently announced its fourth-quarter earnings for FY24, which showed a slight decline in revenue year-over-year. The company's total revenue and other income dropped by 5% to $27.654 billion, while the adjusted revenue came in at $26.418 billion, marking a 7% decline. This adjusted figure surpassed analysts' expectations, which had set the estimate at $25.973 billion.

In terms of production, Equinor reported a 6% decrease in total equity liquids and gas production, totaling 2,072 mboe per day. Specifically, the equity liquids production decreased by 6% to 1,081 mboe per day, and equity gas production fell by 5% to 991 mboe per day. The company noted that production on the Norwegian continental shelf (NCS) remained stable with the ramp-up of the Breidablikk field, although it was lower compared to the previous year due to natural declines, maintenance activities, and an outage at Sleipner B.

The average group liquids price declined by 10% to $68.50 per barrel, while the realized price for piped gas in the U.S. was recorded at $2.36 per MMBtu. Despite this, Equinor managed to increase its renewable output, producing 829 GWh from renewable sources, which is a 19% increase year-over-year.

Equinor's adjusted operating income stood at $7.90 billion for the quarter. This includes $6.81 billion from Exploration & Production (E&P) Norway, $303 million from E&P International, and $184 million from E&P USA. The company's adjusted earnings per share (EPS) of $0.63 beat expectations of $0.62. However, operating cash flow dropped by 12% to $2.42 billion compared to the previous year.

Dividends: Equinor's board declared an ordinary cash dividend of $0.37 per share for the fourth quarter, alongside an extraordinary cash dividend of $0.35. These dividends are payable on May 28, with a record date of May 16.

Share Buyback Program: The company announced the launch of the first tranche of its share buyback program, totaling up to $1.2 billion, which will run until April 2, 2025. Additionally, Equinor plans a larger share buyback program worth up to $5 billion throughout 2025, fulfilling its two-year plan that was initially laid out in February 2024.

Future Outlook: Looking ahead, Equinor anticipates total capital distributions of approximately $9 billion for 2025. The company aims to deliver over 15% return on capital employed by 2030, focusing on increasing free cash flow to $23 billion for the period from 2025 to 2027. It projects an oil and gas production growth of over 10% from 2024 to 2027 while reducing investments in renewables and low-carbon solutions to $5 billion after securing necessary project financing. By 2030, Equinor expects its renewable capacity to reach between 10 and 12 GW.

Furthermore, the company forecasts an organic capital expenditure of $13 billion for 2025, with oil and gas production anticipated to grow by 4% compared to 2024 levels. Anders Opedal, President and CEO of Equinor, stated, “Equinor is well positioned for further growth and competitive shareholder returns. We expect to deliver industry-leading returns on average capital employed, above 15% all the way to 2030.” He highlighted improvements in the production outlook for the Johan Sverdrup field, indicating a systematic approach to enhancing production assets.

Equinor's stock saw a decline of 3.5% in premarket trading, settling at $23.90 at the last check.

Equinor, Buyback, Dividends