Q2 2025 Equinor ASA Earnings Call

Operator: Call, second quarter. All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

Brad Pedersen: I would now like to turn the call over to Brad Pedersen, Senior Vice President and Head of Investor Relations. Please go ahead. Thank you, operator. And thank you to all of you for calling in.

And I will be your conference operator. Today at this time, I would like to welcome everyone to the equinor analyst call second quarter all lines have been placed on you to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press 4 followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again, thank you. I would now like to turn the call over to board clad Peterson, senior vice, president and head of investor relations. Please go ahead.

Brad Pedersen: I'm here today together with our CFO, Torgrim Reitan. As usual, he will present our second quarter results before we open up for a Q&A session. As usual, we will keep this within one hour in total.

Torgrim Reitan: So with that, I hand it to you, Torgrim, to take us through the numbers.

Torgrim Reitan: Thank you, board, and good morning, and thank you for joining us. I hope you are enjoying your summer.

Thank you, operator. And thank you to all of you for, uh, calling in. I'm here today together with our CFO tour game, uh, Ron as usual, he will, uh, uh, present our second quarter results before we open up, uh, for a Q&A, uh, session as usual, we will, uh, keep this within, uh, 1 hour in total. So with that, I hand it to you to take us to uh, the numbers. Okay? Thank you board. And, um, good morning and thank you for joining us. I hope you are enjoying your summer.

Torgrim Reitan: But before we get to our result, let me draw your attention to the photo of Johan Casperg, a truly impressive field. Johan Casperg has ramped up to plateau production in less than three months, through 220,000 barrels per year. The oil is of high quality and we are now realizing a premium around $6 per barrel compared to brand new.

Speaker Change: Before we get to our result, let me draw your attention to the photo of your home. Casper. A truly impressive Hill, your hausberg has ramped up to Plateau production in less than 3 months to 220,000 barrels per day.

The oil is of high quality.

Speaker Change: And we are no realizing a premium around 6 dollars per barrel compared to brands.

Torgrim Reitan: Today we report solid financial results, driven by strong operational performance, new fields on stream, and strong production growth from U.S. We report adjusted operating income of $6.5 billion before tax. Our IFRS net income of $1.3 billion was impacted by an impairment on our U.S. offshore wind.

Today, we report solid Financial results driven by strong operational performance. New fields on stream and strong production growth from us onshore

Speaker Change: We report adjusted operating income of 6 and a half billion dollars before tax.

Torgrim Reitan: I will come back. Year to date, our cash flow from operations after tax has been strong at 9.3 billion. or Adjusted Earnings Per Share was 64%.

Speaker Change: Our ifs. Net income of 1.3 billion was impacted by an impairment on our us offshore winds. I will come back to this.

Speaker Change: Yet today or cash flow from operations. Of the tax has been strong at 9.3 billion.

Or just the earnings per. Share was 64 cents.

Torgrim Reitan: Energy markets continue to be impacted by geopolitical unrest, conflicts, and uncertainty around tariffs and trade. We have seen significant volatility in Nordmark. The European gas market is impacted by lower storage levels. Inventories are now almost 20 percentage points lower than last year. and also well below the average of the last five years. Warm weather in Europe has, over the past weeks, driven additional gas to power the market. At the same time, we see storage filling in Asia also driving demand and less LNG is now coming to Europe.

Energy markets. Continue to be impacted by geopolitical, unrest conflicts and uncertainty around tariffs and trade Wars.

Speaker Change: We have seen significant volatility in oil, markets.

Speaker Change: The European gas market is impacted by lower storage levels.

Speaker Change: Inventories are now almost 20 percentage points lower than last year.

Speaker Change: And also well, below the average of The Last 5 Years.

Speaker Change: Warm weather in Europe, has over the past weeks, driven additional gas to power demand.

Speaker Change: At the same time, we see storage filling in Asia, also driving the demand and less LNG is no coming to Europe.

Torgrim Reitan: In these times of uncertainty, we continue to focus on what we are able to control. or Operations, and how we maintain. We are committed to cost and capital discipline and we report a flat cost development in the quarter, which is our goal for the year. or Coppix Guidance, stay firm. and our balance sheet remains robust through a lower price environment.

Speaker Change: In these times of uncertainty, we continue to focus on what we are able to control.

Speaker Change: Our operations and how we maintain resilience.

Speaker Change: We are committed to cost and capital discipline and we report a flat cost development in the quarter which is our goal for the year.

Our topics guidance. Stay firm.

Speaker Change: And our balance sheet remains robust through a lower price environment.

Torgrim Reitan: Across the portfolio, we are making strategic progress. Johan Cosberg reached Plateau quickly, as I mentioned. We took the final investment decision on Johannesburg phase 3 and from source in the trolley. All of this supports longevity on the NCS, maintaining production levels all the way to 2016.

Speaker Change: Across the portfolio. We are making strategic progress.

You hunt cost per reach Plateau quickly, as I mentioned.

Speaker Change: We took the final investment decision on your Hardin Square group. Phase 3 and from Source in the troll area.

Speaker Change: All of this supports longevity on the NCS maintaining production levels all the way to 2035.

Torgrim Reitan: Recently, we announced two large long-term contracts, long-term agreements. for the supply of gas to UK and Germany. This demonstrates that large commercial players in Europe see the need for Norwegian gas for poor production and for industry. for decades to come.

Speaker Change: recently, we announced 2, large long-term contract, long-term agreements

Speaker Change: for the supply of gas to UK and Germany.

Speaker Change: This demonstrates that large commercial players in Europe. See the need for Norwegian gas for pole production and for industry

For decades to come.

Torgrim Reitan: Internationally, we continue to optimize the portfolio. This quarter we increased our U.S. onshore gas production by 50% based on the transactions we did last year, and we captured almost 80% higher gas emissions.

Speaker Change: Internationally. We continue to optimize the portfolio.

Speaker Change: This quarter, we increase our us onshore gas production by 50%. Based on the transactions we did last year, and we captured almost 80% higher gas prices.

Torgrim Reitan: In Brazil, we have announced the divestment of the peregrinophile for a value of $3.5 billion. And we now focus our attention on the development of Bacalao and Rai. We expect first oil at Bacalao this autumn, and Raya, a domestic gas field, is expected to start production in 2028.

Speaker Change: In Brazil, we have announced the domestic of the field for a value of 3 and a half billion dollars.

Speaker Change: And we now focus our attention on the development of bacalao and ra.

You know, a domestic gas field is expected to start production in 2028.

Torgrim Reitan: Within our renewables business, we have secured a project financing package of 6 billion euros. for the Baltic Two and Three Offshore Wind Farms in... This is that favorable terms supporting double-digit equity returns. and Empire Wind Wombs.

Speaker Change: Within our Renewables business. We have secured a project financing package of 6 billion euros.

For the Baltic 2 and 3 offshore wind farms in Poland.

Speaker Change: This is that favorable terms supporting double digit Equity returns.

Torgrim Reitan: The stop work order was lifted in May and the project is back in execution. This is positive and I'm very glad to report.

On Empire, win 1.

Speaker Change: The stop work. Order was lifted in May and the project is back in execution.

Speaker Change: This is positive and I'm very glad to report that.

Torgrim Reitan: However, we are making an impairment of 955 million dollars in the The main driver for this is the changes in regulations for future offshore wind projects in the UK. Part of the impairment is related to the undeveloped Phase II of Empire. However, the largest portion is related to the South Brooklyn Marine Terminal. The development of the terminal assumed future projects would use it. This is now unlikely with the current framework conditions. And this new reality is reflected in the updated book value for Empire Wind I and the South Brooklyn Marine II. The impairment also includes the effect of higher tariffs on steel and a more limited amount related to the stop work.

Speaker Change: However, we are making an impairment of 955 million in the quarter.

Speaker Change: The main driver for, this is the changes in regulations for future offshore wind projects in the US.

Speaker Change: Part of the impairment is related to the undeveloped Phase 2 of Empire wins.

However, the largest portion is related to the South Brooklyn marine terminal

Speaker Change: the development of the terminal assumed future projects would use it.

This is no unlikely.

Speaker Change: With a current framework conditions.

Speaker Change: And this new reality is reflected in the updated Book. Value for Empire wind 1 and the South Brooklyn marine terminal

The impairment also includes the effect of higher tariffs on steel and are more limited amounts related to the stop work order.

Torgrim Reitan: The development we have seen leads to lower life cycle returns on Empire Wind.

Speaker Change: The developments we have seen leads to lower life cycle, Returns on Empire wins.

Torgrim Reitan: The best way to predict value for our shareholders in the current situation was clearly to move forward with the project. and on a portfolio basis, our offshore wind projects in operations and execution still deliver double-digit equity returns.

Way to protect value for or shareholders in the current situation was clearly to move forward with the project.

Speaker Change: And on the portfolio basis, our offshore wind projects in operations and execution. Still deliver double digit Equity returns.

Torgrim Reitan: then to capital distribution.

Torgrim Reitan: For the quarter, the board approved an ordinary cash dividend of $0.37 per share.

Speaker Change: Then to Capital distribution.

Torgrim Reitan: and a third tranche of share buyback of up to $1.265 billion, including the state's In total, we expect to deliver around $9 billion in capital distribution for the year, in line with what we said at the CME.

For the quarter, the board approved and ordinary cash dividend of 37 cents per share.

Speaker Change: And a third branch of share buyback of up to 1.265%. Share.

Speaker Change: In total, we expect to deliver around 9 billion dollars in capital distribution for the year in line with what we said at the CMU.

Torgrim Reitan: So let's dive into our research. Safety remains our top priority. We again deliver our best safety results with a serious incident frequency of 0.27 and a personal injury rate of 2.2. We continue to learn from incidents and work hard towards improvement. In the second quarter, we produced 2,096,000 barrels per minute. with more than 2% from last year. We are on track to deliver 4% production growth for the year. On the NCS, our liquids production is up 4%, driven by the ramp-up of Johan Casper and starting Halten-I. and also high regularity on Johan Sverdrup and other fields had a significant impact.

so,

Speaker Change: let's dive into our results.

Safety remains our top priority.

We again deliver or best safety results.

Speaker Change: with a serious incident frequency of 0.27,

And a personal injury rate of 2.2.

Speaker Change: We continue to learn from incidents and work hard towards improvements.

Speaker Change: In the second quarter, we produced 2,096,000 barrels per day.

Earth more than 2%, from last year.

We are on track to deliver 4% production growth for the year.

On the NCS or liquids production is up, 4% driven by the ramp up of your Hong Kong cost per and starting Halton East.

And also High regularity on your hands. Wardrobe and all the fields had a significant impact.

Torgrim Reitan: NCS production was impacted by planned maintenance and the shutdown of Hammerfest LNG.

Speaker Change: And CS production was impacted by plan maintenance, and the shutdown of Humber Fest LNG.

Torgrim Reitan: Our increased U.S. natural gas production is around double the production loss from divesting Nigeria and Azerbaijan, which impacted our international economy. We produced 1.1 terawatt-hours this... Renewable production increased by 26%, mainly driven by the ramp-up of DOGMAG-A in the UK.

Speaker Change: Our increased us onshore gas production is around, double the production loss from divesting, an idea, Nigeria and AA, which impacted our International production.

We produced 1.1 terawatt hours, this quarter.

Speaker Change: Renewable production increased by 26%, mainly driven by the ramp up of dogger Bank, a in the UK.

Torgrim Reitan: Now over to our financial liquids prices were lower than the same quarter last year, while gas prices were higher in Europe and the US. This has impacted our results across... Adjusted Operating Income in EMP Norway totaled $5.7 billion before tax and $1.2 billion after Our EMT international business delivers higher production from Brazil and new wealth in Argentina and Angola. Peregrino and assets under our UK IGB are classified as health. These represent around 10 billion dollars. and we do not report depreciation for these assets any longer. Our EMPUS results were driven by high onshore gas production.

Now, over to our financial results.

Liquid prices were lower than the same quarter last year while gas prices were higher in Europe and the US.

Speaker Change: This has impacted or results across segments.

Speaker Change: Adjusted operating income in EMP. Norway total 5.7 billion dollars before tax and 1.2 billion of the tax.

Our EMT international business, delivered higher production, from Brazil and new wells in Argentina and Angola.

Speaker Change: And acids under our UK, igv are classified as health for sale.

this represents around 10 billion dollars,

For these assets and the longer.

Torgrim Reitan: Also, there was a one-off related to an increased cost estimate in the abandonment obligations for Title IX. M&P delivered solid gas trading, but the results were below the guided range impacted by the Hammerfest LNG maintenance and weaker crude trading. Our renewables results reflect higher project activity, but also significantly lower business development and early phases. This quarter, cash flow from operations was $9.2 billion. Total taxes paid was $7.2 billion, driven by two NCS tax installments totaling around $6.8 billion. For the second half of this year, the NCS tax payments are expected to be 100 billion kroner.

Speaker Change: Our EMP, us results were driven by high onshore gas production.

Speaker Change: Also, there was a 1-off related to an increased cost, estimate estimate in the abandonment of obligations for Titan.

Speaker Change: MMP, delivered solid gas Trading.

But, the results were below the guided range impacted by the homerfest LNG, maintenance and weaker crude Trading.

Speaker Change: Our Renewables results, reflects higher, project activity, but also significantly lower Business Development and early phase costs.

Speaker Change: this quarter cash flow from operations was

9.2 billion.

Speaker Change: Total taxes paid was 7.2 billion driven by 2 NC tax installments totaling around. 6.8 billion.

For the second half of this year, the NCS tax payments are expected to be 100 billion croner.

Torgrim Reitan: These taxes will be paid across five equal installments from August through December. This reflects a change from previously paying six tax installments to now paying ten annual tax installments in Norway.

Speaker Change: These taxes will be paid across 5 equal installments from August through December.

Speaker Change: This reflects a change from previously, paying fixed tax installments to know paying 10 annual tax installments, in Norway.

Torgrim Reitan: This quarter, we distributed $1.3 billion to our shareholders. Organic CapEx was $3.4 billion and our net cash flow was negative $2.6 billion. We have a solid financial position with around $24 billion in cash and cash equivalents.

Speaker Change: This quarter, we distributed 1.3 billion to our shareholders.

Organic topics was 3.4 billion and our net cash flow was negative. 2.6 billion.

Speaker Change: We have a solid financial position with around 24 billion dollars in cash and cash, equivalents.

Torgrim Reitan: debt-to-capital-employed ratio increased to 15.2% this quarter. This reflects the state's share of the buyback from last year, booked as final. impacting the net debt ratio by around 8 percentage points as we said last time. The cash flow impact of this will be next. At current forward prices, we expect the net ratio to remain around current level. around current levels towards the end of the year.

On net.

Speaker Change: Uh, debt to Capital. Uh employed ratio increased to 15.2% this quarter.

And this reflects, the state's share.

Speaker Change: of the buyback from last year, booked as Finance debt impacting, the net debt ratio by around 8 percentage points, as we said last quarter,

Speaker Change: The cash flow impact of this will be next quarter.

Um, at current forward prices, we expect the net ratio to remain, um, uh, uh, around current level.

Speaker Change: Uh, around current levels towards the end, uh, of the year.

Torgrim Reitan: Finally, to our guidance. We maintain the guidance we communicated at our CMU in February. Our progress is in line with those ambitions, both in terms of production growth and investments, as well as capital distribution.

To our guidance.

Speaker Change: Um,

Speaker Change: we maintain the guidance we communicated at or CMU in February or progress is in line with those Ambitions both in terms of production growth and Investments as well as capital distribution.

Speaker Change: So,

Brad Pedersen: Now back to you, Bård, and then I look forward to the Q&A session. So please. Thank you, Torgrim.

No back to you bored. Uh and then I look forward to um to to the Q&A session so please support them.

Brad Pedersen: I remind you all that if you want to sign up to ask a question, you can press star one on your phone. We have a good list already.

Thank you, uh, to them. Uh, I remind you all that. If you want to sign up to ask a question, you can press uh, star 1, uh, on your phone.

Biraj Borkhataria: And the first one on my list is Biraj Borkhataria from RBC. So please, Biraj, go ahead with your question. Thank you for taking my questions. The first one's just on the Empire Wind impairment and the impairment testing. The 3% discount rate, I think it's probably the lowest I've seen and looks a bit odd relative to sort of 10 or 30 year treasury. So could you just help give me some rationale as to why you use that number?

We have a good list, uh, uh, already and uh the first 1 on my list is Bashar from RBC. So please bear with us ahead. Video question,

Thank you for taking my questions. Um the first 1's just on the Empire wind um impairment and the impairment testing the the 3% discount rate.

I think it's probably the lowest I've seen um and looks a bit odd relative to sort of 10 or 30 year treasury. So could you just help? Give me some rationale as to why

Torgrim Reitan: And then the second one is on working capital with another release this quarter. You talked about the low volatility in trading. I'm trying to understand whether Is this a more structural level of working capital that we should be at relative to the last few years? Because I guess low volatility means less capital for trading. What should we expect going forward? Thank you. Okay, thanks, Biraj.

Speaker Change: You use that number. Um, and then the second 1 is on working capital. We have another release, uh, this quarter. Um, you talked about the, the, the lower volatility in trading. Um, I'm trying to understand whether

Speaker Change: You know, there is this a more structural level of working capital that we should be at relative to the last few years because I guess low volatility means less capital for trading. You know, what should we expect going forwards. Thank you.

Torgrim Reitan: So first on Empire Wind. Yeah. So the 3% discount rate we use, I just want to be clear on a couple of things. That is an unlevered discount rate. And it is a real discount rate after tax assets. So I think that's, that's, you know, two very important parameters going into that. You know, oil and gas investments are the discount rate we use for them is five and a half percentage points. So there's a difference here, five and a half and 3% between those two projects. What justifies a lower discount rate within this project is actually that the revenue profile is fixed, and it's fixed for 25 years as such.

Bosch: Okay, thanks Bosch. Uh, so first on Empire, wind

Yeah. Um,

Bosch: so, the Chiefs had this contract we use and just want to to, um,

Are the discount rate we use for them is 5 and a half, uh, percentage points. So, there's a difference here, 5 and a half, and 3% between those 2 projects.

Torgrim Reitan: So there is a lot of reasoning and analysis behind all the discount rates we are using. So these should be consistent and applied consistently across the portfolio that we use.

Bosch: What, uh, you know, justifies a lower discount rate. Uh, within this project is actually that the revenue profile is fixed, um, and is fixed for for 25 years as such. So there is a lot of, uh,

Bosch: Uh, you know, reasoning and anal analysis behind all the discount rates, we are using. So these should be consistent, uh, and applied consistently across the portfolio that that we, we use.

Torgrim Reitan: Your second question, Biraj, was related to working capital movements. So working capital is now $5 billion and is a reduction of $550 million as far as I remember. It is actually not driven by the trading activities. It is driven by movements in the upstream segments as such. And on your question whether this is sort of a normal level, it has been stable. The working capital within the trading environment has remained stable for the time being. But on your point on sort of the volatility, there is a lot of volatility. The point is that the volatility is different than sort of the traditional volatility and the volatility is driven by political decisions, which makes it harder for traders to trade around.

um your second question Bosch was related to working capital um movements

Bosch: so, working capital is now, um,

Bosch: 5 billion dollars and is a reduction of 550 million as a forest. I I remember, um, it is actually not driven by the trading activities. Uh, it is driven by, by movements in the in the Upstream segments as such, uh, and on your question, whether this is sort of um, a normal level, you know?

It has been stable, uh, the working capital within the trading environment has remained stable for, for the time being. Um, but on your point on sort of the volatility, you know,

Torgrim Reitan: So there is less risk taking, you know, in the trading environment currently, and this is going across the whole trading environment as such. And that's sort of the nature of what's happening in the world for the time being. So thanks. Thank you.

Bosch: There is a lot of volatility. The, the, the point is that the volatility is different than sort of the traditional volatility. In the volatility is driven by political decisions, which makes it harder for Traders to to, to to, to trade around. So there is less risk-taking, uh, you know, uh, in in, in the trading environment, currently, and this is going across the whole trading environment as such, uh, and and and, and, and, and, and that sort of the nature of what what's happening in the in the world for the time being. So, thanks very much.

Irene Jimona: Next one on my list is Irene Jimona from Bernstein. So please go ahead. Irene, your line is open. Thank you for taking my questions. My first one, on the new tax system in Norway, just to clarify, I think you said that all of the 10 installments for 2025 are payable over the five months August to December. Is that correct? And then how will it be spread into 2026? My second question on gearing at 15%, so you've now reached the low end of your through the cycle range of 15% to 30%. I just wonder, with brand at less than 70% and this higher but unstructured volatility, is perhaps 15% to 20% preferable to 15% to 30% when the board sets investor distributions?

Thank you. Uh, thank you bash. Uh, next 1 on my list is uh, Irene himono from Bernstein. So please go ahead. Uh, Irene your line is open

Irene Himono: Uh, thank you for taking my questions. My first 1, uh, on the new tax system, in no way just to clarify. I think you said that all of the 10 installments for 2025 are payable, over the 5 months.

Irene Himono: August to December. If is that correct? And then how will it be spread into 2026?

Uh, my second question on gearing at 15%. So you've now reached the low end of your uh, through the cycle. Range of 15 to 30. I just wonder with branded less than 70.

Torgrim Reitan: Thank you.

Torgrim Reitan: Okay, thanks. Thanks, Irene.

Torgrim Reitan: So first on the structure of the tax payments. So the tax payment will be evenly distributed over the years. So in the second half of this year, there will be five installments, and then there will be five installments in the first half next year. So there are tax payments in all months, except from July and January. So it's just a way of distributing it even more evenly throughout the year than the six. So this is a minor adjustment to the payment schedule and we'll see to that, we guide you for every quarter coming, how many installments you should expect for the next quarter and all of that.

Speaker Change: Um, and these higher. But, uh, unstructured volatility is perhaps 15 to 20% preferable to 15 to 30% when, when the board sets? Uh, uh, investor distributions. Thank you. Okay. Well, thanks, uh, thanks Irene. Um, so first on the, on the, on the tax, the structure of the tax payments. So so, um, the tax payment will be evenly distributed over the years. So in the second half of this year, there will be 5 installments and then there will be 5 installments in the first half next year.

So the tax payments in all months expect ex except from uh July and January.

Speaker Change: Uh, so it's just a way of Distributing it e, more, even more evenly throughout the year than than, than the 6. So, so, so this is, this is, um, you know, a minor adjustments to the payment schedule and we'll see to that we guide you.

for every quarter coming home, man, installments, you should expect

Torgrim Reitan: So the reason why I bring it up is if you want to update your cash flow models, please do and Investor Relations is happy to provide even more details to this as necessary.

Um, for the next quarter and all of that. So so the reason why I bring it up is is all of it. It it if you want to update your cash flow models you know please do and investor relation is is happy to to provide even more details uh to this as necessary.

Torgrim Reitan: Your second question around gearing 15%, yeah, so the increase of 8 percentage points from last quarter is driven by sort of the annual payments to the state regarding share buyback programs. So 15%, we expect that to increase. around that level towards the end of the year. So it is very important for us to run with a conservative balance sheet and a robust financial position and that is going to I'm going to be the case going forward as well. We have no intention to sort of change the range. The range is not a target in itself.

Speaker Change: Um your second question along gearing 15%? Yeah. So the the the increase of 8 percentage points from last quarter is is driven by sort of them annual payments to the states. Uh

Torgrim Reitan: It's something that is broadly seen as consistent with our rating ambitions. So there is no sort of mathematic. link here. When it comes to sort of the link to share buyback, and I think you mentioned that, I mean, I mean, share buyback is an important part of a capital distribution. structure. We have not linked our capital distribution to development in cash flow from operations or free cash flow or what have you. But we are committed to remain competitive. you know, using those metrics, when we compare ourselves to two pairs going forward, meaning that there will be times where we're sort of the balance sheet will strengthen and there are times when the balance sheet will sort of be weakened.

Speaker Change: so, there is no sort of mathematical

Speaker Change: link here as such, um,

Speaker Change: When it comes to sort of the link to share buyback and I think you mentioned that. I mean, uh, I mean, share buyback is an important part of our Capital distribution. Um,

Structure. Uh, we have not linked or Capital distribution to development in, uh, in, uh, you know, cash flow from operations or free cash flow or what have you. Um, but we are committed to to remain competitive.

Torgrim Reitan: So there's not sort of a mathematical relationship here. And then these boundaries are not seen as absolute in any way, we want to run with a very strong balance sheet and a strong position, you know, as you know that.

Speaker Change: You know, using those metrics as when we compare ourselves to to pairs going forward, meaning that there will be times where, where sort of the balance sheet will strengthen. And there are times when the, the balance sheet will will sort of be be weakened, so there's not sort of a mathematical relationship here and then these boundaries are not seen as absolute in any way we want to run with a very strong balance sheet and a and a strong cash. Push is position, you know, as we have as you know, that we have

Alejandro Vigil: Alejandro Vigil, Santander Bank Yes, thank you for taking my questions. The first one is about Brazil and just trying to understand the timing of the Peregrino divestment and also the Bacalao project, the expectations of production next year. Trying to understand if the Peregrino divestment is going to be offset by Bacalao volumes next year.

Speaker Change: Thank you very much. Thank you. Uh Irene. Uh next on my list is Alejandro vigil from Santander Bank. Alex please, your mark is open.

Alejandro Vigil: And the second question is about the US onshore gas business that has been a clear focus of your strategy recently. If you see more opportunities of growth there through acquisitions and also if you are planning some investments in the downstream, in the gas file projects, for example, trying to leverage the AI boom in the US. Thank you. Okay, thanks Alejandro. So yeah, so the divestment of Peregrino is, you know, it is signed, it is not closed yet, so we expect to close the deal towards the end of the year. We are, you know, very satisfied with the price that we achieved, and it's a value-creative So, and the reasoning behind doing that now is to, you know, concentrate on the new developments, Bacalao and Raya, and quite a few people will be moved from the Peregrino organization into a new organization too.

Alejandro Vigil: Yes, thank you for taking my questions. The first 1 is about the Brazil and just trying to understand the timing of the of the Perino divestment and, and also the vikala project, the the the expectations of of production next year, trying to understand if the Perino divers is going to be offset by by Bacala volumes next year. And, and the second question is about the US Honore, gas business, that has been clear, a clear focus of your strategy recently, if you see more opportunities of growth there through Acquisitions and and also, if you are planning some investments in the downstream know, in the gas file projects, for example know, they're trying to Leverage The the AI boom in the US. Thank you. Okay thanks Alejandro. So um,

Speaker Change: So um, um yeah, so the the best of perigo is is um, you know, it is signed, it is not closed yet. So we expect to to, to to, to close the deal towards the the end of the year. Uh, we are, you know, very satisfied with the price that we achieved and it's a value creative as such. So so and and the the reasoning behind doing that now is to, you know, concentrate on the new developments bakalo and Royal and quite a few people will be moved from the organization into a new organization.

Alejandro Vigil: So this is from a portfolio high grading point of view. And then Peregrino has been through a long life already. We have invested in to solidify it and make it high quality. And it was a good time to realize that value currently. Brazil remains. Very, very important and key country for us going forward and we will keep sort of investing and that brings me over to Bacalao. So Bacalao is progressing well. commissioning is ongoing on the remaining systems. We have two drilling rigs, drilling wells working, and we have two installation vessels, you know, working on SUDC.

Speaker Change: Too. So this is from a portfolio High grading point of view and that period has been through, uh, a long life already. Uh, we have invested into solidify it and make it high quality and it was a a good time to to to to realize realize that value currently in Brazil remains

Speaker Change: U, uh, very, very important and key country for us going forward. Um, and and we will keep sort of investing and that brings me over to to bakalo. Uh, so bakalo is progressing. Well um,

Commissioning is ongoing on the remaining systems.

Alejandro Vigil: So this is going according to plan. And we will have quite, you know, a handful of wells producing by year end on Bacalao. And then, of course, there will be, so we assume, you know, production contribution in the second half from Bacalao. Yeah, and then, you know, there will be a lot of drilling activities going forward on Bacalao, and it will be a significant contributor to our international production.

Alejandro Vigil: on US onshore gas. Yes, so around a year ago or nine months ago, we made two acquisitions from EQT into the Marcellus Play, increasing our exposure quite a bit into that asset. That adds close to 100,000 barrels a day with gas production under the operatorship of Xpand. Since then, gas prices have increased quite a bit. significantly. And that is now contributing very well to to the cash flow and earnings of the company. A little bit of color to why we do that we do believe in natural gas in the long term, we see as a very important part of energy transition, and a significant part of the electrification of the world that is ongoing.

Speaker Change: We have um, 2 dealing rigs, uh, drilling Wells, uh, working and we have 2 installation vessels, you know, uh, working on on Subs, so. So this is going according to plan and and, and we we will have um, quite you know, a handful of wealth um, producing by by year and on on on balogh. And then of course there will be. So we we assume you know, production contribution um in the second half from from uh, from bakalo. Um, yeah. And then um uh you know, there is will be a lot of drilling activities going forward uh on bakalo and and and and and and it will be a significant contributor to to our International production.

Speaker Change: Uh, on us onshore gas.

Yes. Uh, so um around uh, a year ago or 9 months ago, we made

Speaker Change: 2 Acres from eqt into the Marcellus play, um, increasing or exposure quite a bit, uh, into into that assets, that adds close to 100,000 barrels of day with with gas production. Uh, uh, under operator, ship of expand, um uh, since then gas prices has increased um,

Alejandro Vigil: And you're absolutely right, the location of Marcellus gas in the fits well with sort of big drive in the US. to focus on data centers and build competitiveness related to AI and energy is seen as the big facilitator for competitiveness of the US economy over the next years. So we are well positioned with what we have and on your question on whether we could be interested in sort of seeing more opportunities and into gas-fired power plants, it is no concrete plans but we do see that there is a stronger and stronger link between gas markets and power markets going forward so we are watching that space naturally.

Uh, of the company, uh, a little bit of color to why we do that. We do believe in natural gas in the long term. We see it as a very important, part of energy, transition, and a significant part of the electrification of the world that is ongoing and you're absolutely right. The location of Marcellus gas in the Northeast fits well with sort of uh a big Drive in the US.

Alejandro Vigil: All right. Thanks, Alejandro. Thank you.

To focus on data centers, um and build competitiveness uh, related to AI. Um, and energy is seen as the big facilitator for competitiveness of the US economy, uh, over the next years. So, we are well, positioned with what we have. Um, and uh, and on your question on you, whether we could be interested in sort of seeing more opportunities and into gas fire, power plants, you know, it's it's, it's it, it is no concrete plans. But, but but, you know, um, uh, we do see that there is a stronger and stronger link between gas markets and power markets going forward. So we we are watching watching that space naturally.

Speaker Change: All right, thanks alander.

Peter Low: Next one is from Redburn, Peter Low. Peter, please, your line is open. Hi, thanks. The first was just on unit OPEX costs in Norway. It looks like they've increased by around 10% year over year. I think part of that is just FX, but I'm not sure that explains all of it. I was just wondering what else was going on there. Does it relate to the cost profile of some of the projects that are ramping up?

Thank you. Thank you. Uh, next 1 is from uh, Redbarn, uh, Peter Lowe Peter, please, your line is open.

Torgrim Reitan: The second question was just, is there any notable maintenance or turnarounds expected in the third quarter that you're able to flag? Okay, thanks, Peter. When it comes to unit costs for NCF, unit production costs, we see that as a stable quarter on quarter. A broader topic is, and that's a level of $6.7 per barrel. You know, but it's sort of a good opportunity to broaden the discussion on costs. We said earlier this year that we aim this year to keep costs flat. and Fighting Inflation and Neutralizing the Impact on Inflation across the Portfolio. So that is, we really started seeing the impact of that and there's a lot of initiatives and actions and momentum across the portfolio within operating and maintenance, strong push on efficiency.

Hi, thanks. Um, the first was just on unit Opex costs in Norway. Uh, it looks like they've increased by around 10% year-over-year, I think part of that is just FX, but I'm not sure that explains all of it. Uh, I was just wondering what else was going on there. Does it relate to the cost profile? It's not the projects that are ramping up.

Um, the second question was just, um, is there any notable maintenance or turnarounds expected in the third quarter that you're able to flag? Thanks.

Speaker Change: Okay, thanks Peter. So, um,

When it comes to to unit costs, uh for NCS uh unit production cost. We see that as stable quarter on the quarter. Um a broader topic is uh and that's a level of 6.7 dollar per per barrel. Um uh you know, but it's it's sort of um, a good opportunity to broaden the the discussion on cost.

um, they said earlier this year that we

Aim this year to keep cost flat.

Torgrim Reitan: We have significantly reduced early phase in business development costs and also staff costs are coming down and you know we hardly do external recruitment. and the longer search, so, so, so, So this is, and you see it in the number, you see that on a quarter to quarter basis, we have been able to keep that flat, even if we are growing production. So that this will also be reflected in the unit production cost.

Um, and fighting inflation and neutralizing, the impact on inflation across the portfolio. So that that is that we we we really start to seeing the impacts of that and there's a lot of initiatives and actions and momentum across the, uh, across the portfolio within operating and maintenance, strong push on efficiency.

We have significant reduced early facing Business Development cost and also staff costs are coming down. And you know we we hardly do external recruitments

Speaker Change: Um, and the longer as such. So, so, um, so um, um,

Torgrim Reitan: So when it comes to turnaround, maybe one thing to mention is Hammerfest LNG, which has been in a turnaround situation for in the second quarter, that is, you know, still, you know, in maintenance, but we actually expect it to come back by the end of July and then being back in production in August and September. So other than that, when it comes to the coming quarters, we see. Let's see here, is it 45,000, around 45,000 battles per day in turnaround impact in the third quarter and a lower in the fourth quarter, maybe 14,000 to 15,000 battles per day.

So, this is, and you see it in the number. You see that on the quarter to quarter basis, we have been able to, to keep that flat even if we are growing production. So so so that this will also be reflected in the unit, uh, unit production cost. Um, uh, so when it comes to turnaround, uh, maybe 1 thing to to mention is Homer Fest LNG, which has been in the turnaround situation for, uh, in the second quarter, uh, that is, you know, still, um, you know, in in maintenance, but we actually expected to come back, uh, by the end of July.

Speaker Change: And, and being back in production, in, in August and, uh, and September. Um, so, uh, other than that, um, when it comes to, to, to the, the coming quarters, uh, we see, um,

Speaker Change: let's see here, is it 45 around 45,000 BS per day in, in, in in, um,

Torgrim Reitan: So the third quarter in total is on par with the second quarter, as such. Yeah. Thanks, Peter. Thank you.

Speaker Change: Turn around impact in the third quarter and a lower in the fourth quarter, maybe 14 to 15,000 barrels per day as such. So the third quarter in total is is on par with the second quarter as well. Yeah, thanks Peter.

Thank you.

Torgrim Reitan: Thank you, Peter.

Henri Patricot: We are then turning to Henri Patricot from UBS. So, Henri, please ask your question. Yes, thank you, everyone.

Thank you. Uh Peter, we are learning to Henry patrico from UBS, so Henry, please ask your question.

Henri Patricot: Two questions, please. The first one, going back to the Perugino disposal and the proceeds of close to $3 billion. How should we think about these? Is it mostly about strengthening the balance sheet or potentially opens up the potential for some acquisitions, maybe to replace Perugino volumes in international E&P or elsewhere?

Torgrim Reitan: And then secondly, on the two deals that you mentioned, Torgrim, in the UK and Germany on natural gas sales, could you go through the benefits for Equinor of signing these long-term contracts and maybe also the rationale for sticking to spot prices rather than maybe find another pricing mechanism that could reduce your exposure to spot prices in a few years when we could see potentially low prices as the market is perspired? Yeah, okay. Thanks, Henry. So first on Perugino, so the headline value of the deal is at $3.5 billion. The effective date was 1st of January 2024, which is important to note.

Seats of your clothes to 23 billion dollars? Oh, should we think about these? Is it mostly about, you know, strengthening the balance sheet or potentially opens up the potential for um, some Acquisitions to replace Paragon of volumes in international, um, enp or or elsewhere.

Torgrim Reitan: So since then, there will be a pro and contra settlement, you know, in sort of ultimately when they close this deal towards the end of the year. So the proceeds that we will receive is less than $3.5 billion, depending on the prices, it is a little bit, but it is actually quite a bit of cash that sort of has been generated over the last two years that will need to be...

And then, secondly, on the, the 2, uh, deals that you you mentioned algorithm, um, in the UK and Germany on natural gas sales. Um, it could go through the, you know, the benefits for equinor of signing these, these long-term contracts and, uh, maybe also the, the rationale for, you know, sticking to, to spot prices, rather than maybe find another, uh, pricing mechanism that could reduce your exposure to spot prices, uh, in a few years when we could see potentially lower prices as the market is bursted. Yeah. Okay, thanks Andre. So, first on the, the, the the headline value of the deal is at 3 and a half billion dollar, uh, the effective date was first of January 2024, uh, which is important to note so. So since then, there will be a provide contrast settlement, uh, you know, in sort of ultimately, when they close this deal towards end of the year. So so the proceeds that we will receive is less than 3 and a half. Uh

uh, depending on the prices is a little bit, but it it you it is actually quite quite quite a bit of cash that sort of has been generated over the last 2 years that we'll need to be

Torgrim Reitan: On your question whether this opens up for other acquisitions, well you know we do acquisitions and we do divestments more driven by the strategic reasoning and the value creation opportunities behind it and over the last years we have done quite a few, maybe worth mentioning a few, we have divested out of Nigeria and Azerbaijan bringing in value, we have made acquisitions into US onshore, we have the Pellegrino divestments and then we are combining our portfolios in the UK with Shell and creating the largest operator in the UK as such so there has been quite an active couple of years within M&A and you can rest assured that we will have a focus on a strong balance sheet no matter what we do on the M&A front.

Speaker Change: Um, uh, taken away from the headline number, um, on your question, whether this opens up or other Acquisitions well, uh, you know, we do Acquisitions and we do divestments, uh, more driven by the Strategic reasoning and the value creation opportunities behind it. Um, and over the last years, we haven't done quite a few maybe worth mentioning of you. We have the vested out of Nigeria, and, and also bringing in value. We have made a aquisitions into US. Honore. We have um, uh, we have the best and then we are combining our portfolios in the UK with shell and creating the largest operator in in in the UK as such. So has been quite an active, active, uh, uh

Couple of years within m&a. Uh and and and and, and you can invest assure that we will have a focus on a strong balance sheet and no matter what we do on the m&a m&a front,

Torgrim Reitan: Then on gas contracts, I think it's important for me to leave you with, well, first of all, I mean, those contracts really demonstrate the attractiveness of Norwegian gas to EU. This is clearly driven by security of supply for our long-term customers. So we have signed three long-term contracts over the last one and a half years. That is actually 20% of our natural gas position on the NCS. And it actually covers 6% of the EU imports. And then your question is, so how does this work? Well, they are priced based on spot prices in general. They also have free sourcing associated with it.

Torgrim Reitan: So we don't need to source them with our own gas. We can buy gas in the market if we find that. that's suitable. So it sort of it maintains full, we have full flexibility in our gas production system. And also, it doesn't limit us in any way. It's just contract that sort of adds value.

Speaker Change: Um, then on gas contracts. I think it's important for me to, to leave you with a a well, first of all, I mean, those contracts really demonstrate the attractiveness of of Norwegian gas to EU. This says, clearly driven by security of supply for or long-term customers. So, we have signed 3, long-term contracts, uh, over the last 1 and a half years, that is actually 20% of our natural gas position uh on the on the NCS. And it actually covers 6% of, you know, the EU Imports. And then your question is you so so how does this work? Well they are priced based on spot prices in general. They also have free sourcing associated with it, so we don't need to Source them with our own gas, we can buy gas in the market, if we can find that, uh, that suitable. So it, it, it's all of it. Maintains

Speaker Change: Fulfill. We have full flexibility.

Torgrim Reitan: It is important for me that you as investors Ham. exposure to the European gas market when you buy the Equinor share. And we will continue to swap everything to an exposure equal to 70% day ahead and 30% month ahead in the portfolio, meaning that when you see volatility in the gas markets in Europe, you can rest assured that we will be able to capitalize on it and it will find its way to our earnings. Thanks. Thank you.

Speaker Change: In in, in in, in our gas production, uh, Pro, uh, system. And, and also, um, it doesn't limit Us in any way, uh, as such. It's just contract, that sort of adds, uh, adds value. Um,

Speaker Change: It is important for me that you, as investors.

Speaker Change: Have.

Speaker Change: Exposure to the European gas market. When you buy uh the Equinox share, and we will continue to swap everything to an exposure, equal to 70%, a day ahead and 30% month ahead in in, in in, in in, in the portfolio. Meaning that when you see volatility uh, in the gas markets in Europe, um, you can rest assured that we will be able to capitalize on it and it will find its way to our earnings.

Speaker Change: Thanks, Andre.

Teodor Sveen Nielsen: The next one on my list is Teodor Sveen Nielsen from Sparbank and Markets. Teodor, please, the line is open. Good afternoon. Thanks for taking my questions. First question that is on visiting.

Speaker Change: Thank you. Uh, the next 1 on my list is uh, tailor Nelson from Spider-Man and markets. Tailor, please, the line is open.

Teodor Sveen Nielsen: Could you please provide an update on visiting and also maybe how visiting's role will be in your ambition of keeping NCS production flat from 2020 to 2035? Second question, I just want to go back to the 3% discount rate you use for impairment testing for Empire. I definitely understand there's a difference between the rate you use for impairment testing and the rate you use for investment decisions. Still, I just wanted to explain the relation between the 3% you use for impairment testing and the 4% to 8% real return that you indicate as ambition for renewal projects.

Speaker Change: Maybe how these things role will be in your ambition or keeping and CS production flat from 2022. 2035.

Speaker Change: Uh, second question. Just want to go back to the

3%, discount rate to use for impairment testing for for Empire definitely understand this difference between the rate to use for uh impairment testing and the rate to use for investment decision still. I just want to explain the relation between the 3%.

Torgrim Reitan: Thanks. Okay. Thanks, Teodor.

Speaker Change: Uh, you use, for impairment testing and the 4 to 8% rate of return that you're in the get SMP ambition, for Renewal projects. Thanks.

Torgrim Reitan: So... This thing is, you know, a promising discovery in the very north in the Barents Sea, as some of you would know, and we are actively working that to bring it forward to an investment decision. And the investment decision might come next year, might come later, so we'll see. We do believe that the project absolutely have, you know, the characteristics to become a good development for Equinor in the future. When it will ultimately be sanctioned and put in production, you know, we will have to come back to when, of course, when we know more about that.

Speaker Change: Okay, thanks tailor. So, um,

Speaker Change: uh this thing is um um you know a promising Discovery in the very North in the barren sea as some of you we would know um and uh we are actively working that

Speaker Change: To um to to bring it forward to an investment decision um and and uh investment decision. Might come next year, might come later so so we'll see. Um, we do believe that, uh that's the project absolutely have. Uh, uh, you know, the the characteristics to become uh uh, good development for actor in, in, in the, in the future. Um, when it will ultimately be be be sanctioned and

Torgrim Reitan: When it comes to the 2035 ambition and keeping NCS flat. The main driver behind that is projects that we have, you know, concrete and specific plans for. We have more than 200 IOR projects that are currently being matured to deliver into that. And also, we have more than 200 prospects that we are maturing to get into that portfolio. And then, you know, this is sort of a risk portfolio. So it's very hard to say whether this thing is in or out. But it's a natural part that we take that into the portfolio from a risk perspective towards 2035.

Put in production, you know, we will have to come back to when when of course when we we know more about that.

Speaker Change: uh, when it comes to the 20135 ambition and keeping NCS flat,

Speaker Change: The main driver behind that.

Torgrim Reitan: You know, when I'm touching that point, you know, I. I am an old man, and I remember in the IPO in 2001, that concern with investors was, you know, but NCS is declining, you know, why is this attractive? And here we are, after 25 years, producing more than in 2001, and actually looking at a production in 2035 on the same level. So I mean, it's a remarkable story of a basin that has kept giving.

Speaker Change: Is, uh, projects that we have, uh, you know, concrete that specific plans for we have more than uh, 200. Uh, I projects, um, that are currently being matured to deliver into that and also we have more than 200 prospects that we are maturing to to, to, to get into that portfolio. Um, and then, you know, this is sort of a risk portfolio. So it's very hard to say whether this thing is in or out, that is a natural part. That we take that into the portfolio from a risk perspective towards 2035. You know, when I'm touching that point, you know, I

I am an old man, and I remember in the IPO in 2001.

Torgrim Reitan: I used the opportunity for sales pitch here, Teodor, but anyway, it is an important part of the portfolio. On the 3% discount rate versus what we do for investment decisions, so that the discount rate that we use for these purposes is meant to mirror our cost of capital, a relevant cost of capital for these investments. For investment decisions, we clearly are not satisfied with the cost of capital. We need a significant premium to that. And for renewables projects, we want to see double-digit returns on the money that we invest, the equity that we invest. So these are not consistent.

Speaker Change: Uh, that concerned with investors was, you know, but NCS is declining. Uh, you know, why is this attractive? And here we are of the 25 years producing more than in 2001 and actually looking at a production in 2035, on the same level. So, so, I mean it it's, it's, it's a remarkable story of a base in that as kept giving, um,

Give me, are you the opportunity for Saints to share Taylor? But anyway, it is it is an important part of of the portfolio.

Uh, on on the 3% discount rate versus what we do for in investment decision. So that the discount rate that we use for this purposes is meant to mirror or cost of capital, uh, a relevant cost of capital for these Investments.

Torgrim Reitan: The port rate we have abandoned. We don't use that anymore, Teodor. So we use more than 10% of the money that we invest. Thank you, Teodor.

Um, for investment decisions, we clearly are not satisfied with the cost of capital. We we need a significant premium to that. And and and and um and and and for Renewables projects, uh, we want to see double digit returns, uh, on the, on the money that we invest Equity, that invests. So there's a, this are not consistent, the 48, we have abandoned, we don't use that anymore. Um, uh, so we use more than 10% on the money that we invest.

Paul Redman: Next on is Paul Redman from BNP Paribas Exxon. Paul, your line is open. Yeah, thank you very much for your time. I guess my first question just I think you said in the prelim remarks that the view is that debt would remain flat at current levels or the gearing would remain flat at current levels. I just wanted to ask what's included in that assumption. Is there a view on working capital included, how much peregrino inflows do you expect? So kind of just some of the steps that are taken to get to that assumption.

Speaker Change: Thank you. Uh to uh,

Next 1 is uh Paul Redmond from BNP party on Paul uh your line is open.

Speaker Change: Yeah. And thank you very much for your time. Um, I guess my first question is just I think you said in the uh prelim uh remarks that

Speaker Change: The view is that debt would remain flat at current levels or the gearing would remain flat at current levels. I just want to ask what's included in that assumption uh price.

Torgrim Reitan: And then a second question on CapEx. I think for your $13 billion guidance for the year, you're using an $11 NOP USD rate. What's the impact if that goes down to 10, that FX rate impact? Thank you. Okay, thanks, Paul. So, when it comes to net debt towards the year-end, So around current levels, I mean, it's, it's, we all know that prices can, can fluctuate. So in that statement, it's sort of based on where the prices are currently, you know, forward prices as such. And, and working capital assumptions in that is sort of you know, fairly stable working capital assumptions.

Speaker Change: Is there a view on working capital included? How much per agrino inflow? Do you expect? So kind of just some of the steps that are taken to get to that assumption and then a second question, on capex, I think for your 13 billion guidance, for the year, you're using an 11 knot USD rate. Um what's the impact of that goes down to 10 that uh FX rate impact. Thank you.

Speaker Change: Okay. Thanks, Paul. Um, so in, um,

Speaker Change: Uh, when it comes to net debt, uh, towards the year end. Um

Current levels. I mean, it's it's we all know that prices can, um, can fluctuate. So, in that statement, uh, sort of based on on where the prices are currently, you know, forward prices, uh, as such. Um, and uh, and and working capital assumptions, uh, in that is, is sort of a

Torgrim Reitan: And Peregrino is, the closing of Peregrino is there are two separate transactions there. And, you know, we assume at least one of them to be in this side of New Year and then the other one is a little bit more uncertain. So that's why we say around because I mean, it's, there are so many moving parts there. But I just want to give you some sort of guidance on that the step up during this year is happening in the second quarter. And after the second quarter, it is a stable, stable development. Then on sort of your CAPEX, yeah, so $13 billion, we maintain that guidance, and we have used the currency assumption of LMS, as you say.

You know, fairly fairly stable, uh, working capital assumptions. And Pedigo is, uh, is, um, the closing of pedigree or is there. There are 2 separate transactions there. Uh, and, uh, you know, we assume at least 1 of them to, to, to be in in this side of New Year. And, and, and the other 1 is, is a little bit more uncertain. So that's why we say around. Because I mean, it's it's, uh,

Speaker Change: There are so many moving Parts there, but I just want to give you some sort of guidance on that the step up during this year, is happening in the second quarter. And after the second quarter it is a stable stable development.

Um, then on sort of your topics. Um, yeah, so 13 billion, we we, we, we, we, we maintain, uh, that guidance and we have used the currency Assumption of, of 11, as, as you say,

Torgrim Reitan: So there is a certain part of investments that is in Norwegian kroner, so, you know, hard to give an exact number, but around 30-ish percentage points, I would say, is exposed to Norwegian kroner, so, with a stronger Norwegian kroner, you know. It has sort of a pressure into the number, but you know, we work very hard to manage all of this, and with all the efforts going on currently in the portfolio, we have decided to maintain the guidance. Thank you, Paul.

um, so, um, so um

Speaker Change: There is a certain part of Investments that is in Norwegian, kroner. So, you know how to give an exact, uh, number but around 30-ish percentage point I would say, is, is exposed to, to Norwegian kroner. So, um, so, um, uh, with a, with a stronger Norwegian coroner, you know,

Speaker Change: It has sort of a, a pressure into the number, but, you know, we were very hard to to, to, um, to to, to, to manage all of this. And, and, and with all the efforts going on, currently in the portfolio. Uh, we have decided to maintain maintain the guidance.

Michele Vigna: Let's move on to Michele de la Vigna from Goldman Sachs. Michele, please, we are ready for your question. Thank you very much. Thank you for your time, Torgrim. Two questions, if I may. I wanted to refer back to your comment on maintaining a competitive cash return to shareholders and whether perhaps you could elaborate a bit more on what matrix you are mostly looking at. If I look at your peers, most of them are using an operating cash flow payout. So I wonder if that would be something that you're referring to. And then secondly, thinking about some of the opportunities opening up globally, there is a very public process led by GALP on Namibia, which is one of the interesting new bases that are opening up.

Thank you, Paul. Uh, let's move on to Mika from Goldman Sachs. Mikaella, please. Uh, you ready for your question.

Mikaella: Thank you very much. Thank you for your time to Green, uh, 2 questions. If I may, I wanted to refer back to your comment on, maintaining a competitive cash return to shareholders and with a, perhaps you could elaborate a bit more on what Matrix you are mostly looking at. I, if I look at your peers, most of them are using an operating cash flow payout. So, I wonder if if that would be something that you're referring to, and then secondly, uh, thinking about some of the opportunities.

Michele Vigna: I was wondering if you're actively participating in that one. Thank you.

Um, opening up globally, there is a very public process led by galp, on on Namibia, which is 1 of the interesting. Um, new bases that are opening up. I was wondering if, uh, if you're actively participating in that 1, thank you.

Torgrim Reitan: Okay, thanks, Michele. So capital distribution to be competitive, so of course we know very well what our peers are using and all of that, so we want to remain competitive in that setting. I can give you maybe a couple of data points, you know the cash dividend. It's currently at 37 cents per share. We have grown that by $0.02 per year and we want to keep growing that cash dividend sort of also in the future. So you should see that part of capital distribution as bankable, you know, this will be something that we are extremely committed to keep on delivering through the cycle.

Mikaella: Okay. Thanks Mela.

so,

Mikaella: So, Capital distribution to be be competitive. So,

Of course, we know very well what uh, our peers are using um, and, uh, and all of that. Um, so we want to remain competitive in that, um, in in that setting, um,

I, I can give you maybe a couple of data points, uh, you know, the the, the, the cash dividend.

Is currently at 37 cents per share.

Mikaella: Um, we have grown that by 2 cents per year.

Torgrim Reitan: Then we will use on top of that, share buyback. to see to that the total package is compatible. And we will also use Share Buy Back to sort of... You know, we had an extreme. situation in 2022, with very, very high prices, and we use share buyback to sort of distribute that part of the part of the earnings in a way. So we want to use share buyback as that tool. So so we don't have a formula. And I don't intend to introduce a formula. We know what the others are doing. And we want to put forward a share buyback program that keeps us competitive versus peers.

Mikaella: And we want to keep growing that um cash dividends sort of um also uh in the future. Uh, so you should see that part of capital distribution as bankable, you know, this will be something that we are extremely committed to to, to keep on delivering, uh, through the cycles.

Mikaella: Uh, then we will use on top of that. Uh, share buyback.

To see to that, the total package is competitive.

Mikaella: um, and we will also use share buyback to to sort of um, you know, we had an extreme

Torgrim Reitan: When you measure us against, you know, those types of metrics, I'm not talking about yield, I'm talking about those type of metrics as others. When that is said, from time to time we are willing to use the balance sheet if we find that appropriate. And all the time we find it appropriate to strengthen the balance sheet. So yeah, so thanks, Michele.

Mikaella: You see?

Torgrim Reitan: Then you have a second one that was on the Namibia. You know, I'm not in a, you know, clearly we know what's going on, and, and, and, and And I won't comment on, you know, specifics on Namibia, You know, what we have done over the last few years is focusing your upstream EMP portfolio internationally and that has served us well and clearly deepening into areas where we are is something that, you know, typically has priority. Thank you.

Mikaella: Uh, when that is said, uh, you know, uh, uh, from time to time, we are willing to use the balance sheet. Uh, if we find that appropriate and all this time, we, we find it appropriate to strengthen the balance sheet as such so. So, uh, yeah. So thanks Miguel

then you have a second 1 that was on the Namibia, you know, I I'm not in a, you know, uh, you know, clearly we know what's going on and and and um, and um,

Mikaella: And and I won't comment on, you know, specifics on Namibia. But what I would like to say is that

Mikaella: um, you know what, we have done over the last few years is focusing uh, your or Upstream, EMP, portfolio internationally and that has served as well. Uh and clearly deepening into areas where we are is something that you know typically has priority.

Martijn Rats: Next one on my list is Morgan Stanley, Martijn Rats. Martijn, please go ahead. Yeah, a lot of good questions have already been asked, but the answer, I just wanted to sort of follow up on what you just replied to Michele. And I think this point about being competitive compared to us is really sort of quite crucial and important. As you can imagine, we're all very interested in what the buyback will be in 2026. But if the buyback is meant to, if the buyback also has to be competitive, in the sense that if, you know, in an overall financial framework, you can only be sort of competitive in one area if you do something similar in another area too.

Speaker Change: Thank you. Uh, next 1 on my list is Morgan. Stanley. Martin rats Martin, please go ahead.

Martin Rats: Yeah. Um a lot of good questions have already been asked, but, um, it, I the answer I just wanted to sort of follow up on what you just replied to Mikey. And as in this point about, um, being competitive compared to us is really sort of quite crucial and and important as you can imagine we're all very interested in what the buyback will be in 2026. But if the buyback is meant to is, if the buyback is going to be competitive,

Martin Rats: Um then you you it sort of implies that the capex also has to be competitive.

Martijn Rats: And relative to CFFO, Equinor's capex is quite high. The sort of capex percentage of CFFO is much higher than, you know, many of the other Europeans bear. So I understand that you're also be competitive, but how can the distributions be competitive if the capex is at a much higher percentage of CFFO? How are we ending up in a competitive space then?

Martijn Rats: And secondly, the other point I wanted to ask about the buyback is sort of somewhat of a mechanical point. But would you envision to continue to simply communicate to the markets what the buyback is for the following year results? Or could you also move to more of a sort of quarterly sort of, you know, sort of come as it go type guidance? Because I can imagine that, yeah, looking into 2026, it might be quite hard to, you know, make up your mind on how the entire year is going to pan out already, like right at the start.

Speaker Change: Um, in the sense that, um, if you know, in an overall Financial framework, um, you can only be sort of competitive in 1 area. If you do something, similar in another area, too, and relative to CFO equinos capex is is is quite High. Um, the the sort of capex percentage of CFO is much higher than, um, than you know, many of the other Europeans beer. So, I, I understand that you're saying, well, the the distribution should also be competitive but how can the distributions be competitive? If the capex is, is at a much higher percentage of CFO? How, how, how, how are we ending up in a competitive space then? And and secondly, the the other point I wanted to ask about the, um,

Torgrim Reitan: So I'm hoping you could say a few things about these two things. Okay, thanks.

Speaker Change: Um, about the buyback sort of somewhat of a mechanical point, but would you envision to continue to Simply communicate to the markets? What the buyback is for the following year at the full year results? Or, or could you also move to more of a sort of quarterly, sort of, you know, sort of Come As It Go type guidance? Because I can imagine that. Yeah, looking into 2026, it might be quite hard to, you know, make up your mind on how the entire year is going to pan out already like right at the start. Um, so hoping you could say a few things about these 2 things.

Torgrim Reitan: Thanks, Martin. So on the first one, actually, a very good question, and I'm very glad you asked it. Because there's something to... to you. Cash flow from operation is an after-tax number. And when you look at our CAPEX profile, a significant part of that is sort of in the Norwegian continental shelf, with 78% tax deduction as we spend. So as you would understand, our after-tax... is significantly lower. And if you compare that number to our peers, you probably will get to another conclusion as such. And then that number needs to be prepared on an equal basis, you know, with the cash flow operations post-tech.

Speaker Change: Okay, thanks. Thanks Martin. Uh, so on the first 1, actually, a very good question and I'm very glad you asked it, uh, because, um, there's something to

To comment around that uh, because the Norwegian tax system creates a disturbance. When you compare us to others, CeX is a pre-tax number.

Speaker Change: Uh, cash off of operation is an after tax number. And when you look at our copics profile, um, significant part of that is sort of in the Norwegian continental shelf, uh, with 78% tax deduction as we spend. So. So as you would understand, or after tax cash flow to CeX,

Speaker Change: Is significantly lower.

Torgrim Reitan: There's a lot of details, you know, in this and I'm clearly more than happy to follow up with you afterwards, Martin, through investor relations and all of that. But I'm very glad you asked that, because it's such an important driver behind why we might look different than the others, while we are actually more similar than you should believe.

Torgrim Reitan: Then on your second question on buyback, you know, that is not a topic for discussion today. If there will be any changes to this, I mean, we will typically do that on a capital markets day or something like that. But, you know, it's something that has nothing to say about currently. And then if there is something new to it, it will have to come at certain events. Well, thanks, Martin.

Speaker Change: And if you compare that number to appears you probably will get to another conclusion as such and then that number needs to be prepared on an equal basis. You know, with the customer from operations post that there's a lot of details, you know, in this and, and clearly more than happy to follow up with you afterwards, uh, Martin through investor relations and all of that. But I'm very glad you asked that because it's a, such an important driver. Why behind why we might look different than the others while we are actually more similar than you, you should, you should believe. Okay. Um,

Speaker Change: Then on your second question on buyback, you know, that is that that is not a a topic for for discussion today if there will be any changes to to this. I mean we will typically do that on a capital markets day or something like that. But but uh, but uh you know, it's it's something that we, you know, has nothing to say about currently. And then if there is something new to it, it will have to come at certain elements. Well, thanks, Martin.

Jon Olaisen: Thank you. Next one is Jon Olaisen from ABG, Sundal, Collier. Jon, please go ahead. Good morning, everybody. Actually, good afternoon right now. But a couple of questions very quickly.

Speaker Change: Uh, next 1, uh, is uno license from uh, ABG sundal Collier uh, yum. Please go ahead.

Torgrim Reitan: What is your latest view of the timing of when you and Sverdre will come off the plateau? And secondly, you talked about cost inflation and the fighting cost inflation. Do you still see the same cost inflation? Or has cost inflation come down? Is cost inflation about to coming down a little bit? And maybe are there differences between Norway and outside of Norway when it comes to cost inflation? Maybe some deflation onshore in the U.S.? So if you could comment a little bit on these things, it would be great, thank you.

Torgrim Reitan: Yeah, perfect, perfect, John and Yoann. So first, on your Hans Sverdrup. This quarter, we had a very high regularity of New Hansford, of actually 99%. So there's a great job done by the organization to keep it that way. Production this year in 2025, we say that that's pretty close to the production levels we saw in 2023, 2024, maybe around 720,000 barrels per day. So there are a couple of things I really would like to underline here that is going very well. One is sort of the work related to water management. And as you would understand, as you produce these wells, there will be sort of water produced and our ability to manage water as sort of that increases is extremely important.

Everybody uh Alexa good afternoon right now. But uh a couple of questions very quickly, what is your latest view of the timing of when you on schedule will come off plateau and secondly you you talked about cost inflation and the fighting cost inflation, you still still see the same cost inflation or has cost inflation. Come down is custom placement about coming down a little bit and maybe are the differences between the Norway and outside of Norway when it comes to contemplation, I will assume this is maybe some deflation in Honore in the US. So if you could comment a little bit on the list of the great things. Yeah, perfect. Perfect, John, uh, on. So first on your hands for, um,

Torgrim Reitan: And, you know, this is a core capability that we have done for 40 years. So that is going well. We are also now drilling or retrofitting multilaterals into wells we have drilled earlier, and multilaterals, you know, several wells in one, out of one well bore. That is also producing, producing wells. So, and then lastly, you know, we made a final investment decision on New Hansford phase three earlier this year. And all of these, all of these elements have enabled us to increase our assumptions when it comes to recovery rates from 65% to 75%. So, so, so, I mean, it's, it's, it's, it's going well with New Hansford.

This quarter. We had a very high regularity on Nuance for actually 99%, so there's a great job done by by the organization to to keep it that way. Uh, production this year in 2025, we say that that's, you know, pretty close to the production levels. We saw in in 2023 24, maybe around 720,000 barrels per day. So there are a couple of things. I really would like to underline here. That is going going very well. 1 is sort of the work related to water management and as you would understand as you produce, these Wells, there will be sort of um, water produced and our ability to manage water as sort of that increases is extremely important. And, you know, this is a core capability that we have done for for 40 years, so that but that is going going well.

Speaker Change: We are also now um, drilling or retrofitting multi multilateral in into into Wells we have drilled earlier and and multilateral, you know, several wells in, in 1 out of 1, well bore, um, uh, that is also, um, producing producing well. So, so, uh, so. And then lastly, you know, we, we we made a final investment decision on your hands for the phase 3.

Speaker Change: Uh, earlier this year.

Torgrim Reitan: You know, we have the phase two of New Hansford was, you know, designed to bring forward volumes. at a very much higher level, but of course coming off-plateau earlier as such.

Speaker Change: And all of these, all of these elements have enabled us to increase or assumptions when it comes to recovery rates from 65% to 75%. So, so, so, I mean, it's, it's, it's, it's going well, uh, with your hands further, you know, we have, um, The Phase 2,

Of your honor was you know designed to bring forward volumes.

Torgrim Reitan: So the field will come off-plateau, and I don't have a number for you, but I just want to leave it to you that this has a high attention, and we have our very best people working on these topics, and we will give you an update later on that. When it comes to cost inflation, You know, we see that, you know, we continue to be able to take out efficiency. in the organization and in the portfolio. It comes from scale in our operations. We can put on new developments without increasing the organization and without even limited cost.

Uh, at a very much higher level, but of course, coming, uh, off Plateau earlier as such. So the field will come off plateau. Uh, and I don't have a, a, a a a number for you. But I just want to leave with you that this this has a higher attention and we have our very best people working on these topics and we will give you give you give you an update later, uh, on that

Speaker Change: um, when it comes to cost uh in inflation,

Speaker Change: um,

Speaker Change: you know, um,

we see that, you know, we, we continue to be able to take out efficiency

Speaker Change: in the organization and in the portfolio, it comes from scale um in our operations, we can put on new developments without increasing the organization and without it with limited cost,

Torgrim Reitan: We are prioritizing very hard. We have a lot of opportunities, but prioritizing very hard and taking out sort of efficiency across the more administrative or structural part of the company. So that sort of internal thing is going well. You know, looking outside and inflation, you know, there is still a tight market within the oil and gas sector, still a heated market, but maybe a couple of points. We see that, you know, within drilling and well, High-end floater market has softened a bit. We also see that within engineering and construction, it is tight in Norway currently due to the tax package, and you know that very well, Yoann, but that will drop off.

Speaker Change: Uh, we are prioritizing very hard. We have a lot of opportunities, but prioritizing very hard, and taking all sort of, uh, efficiency across the more administrative or structural part, part of the company. So that, that sort of internal thing is going, well, you know, looking outside and inflation. Um,

Speaker Change: You know, there is still a tight Market within the oil and gas sector, uh, still a heated Market, but but maybe a couple of points we see that, you know, within Drilling and well.

um, high-end floater, uh Market has softened a bit

Speaker Change: um, we also see that within engineering and construction it is tight in our we currently

Torgrim Reitan: So we actually see that sort of the pressure there will come off in the next maybe 12 months, and also a little bit coming off in sort of the high-end floater market in Norway. When it comes to the yards and Asian yards, we see that is busy. We do think that will continue. There's a lot of FPSOs being built, and that leads me to subsea and marine, which sort of we do think will remain tight because FPSO going forward, they always have a large subsea scope as such.

Um, due to the tax package, and, you know that very well you own, uh, but that will drop off. So, we actually see that sort of the pressure. There will come off in the next maybe 12 months. Uh, and also a little bit coming off in sort of the high-end floater Market in Norway.

Torgrim Reitan: So, you know, to summarize, I think in Norway, there might be a little bit of easing when sort of all this activity related to the tax package is coming off. Apart from that, it's a... fairly tight market. So thank you very much.

Speaker Change: Uh, when it comes to the yards and Asian yards, we see that is busy. We do think that will continue. There's a lot of fpso being built and that leads me to subzi and Marine we sort of, we do think will remain tight because fpso going forward. Um, they always have a large sub subzi scope as such. So, uh, you know, to summarize, I think in Norway, there might be a little bit of easing. When sort of all these activity related to the tax package, is coming off. Apart from that is a, is a is a

Speaker Change: Fairly tight Market in June. So, thank you very much.

Torgrim Reitan: Thank you, Joon. Time is moving and I still have a few on the list. So I ask that you limit yourself to one question and we'll try to cover as many as possible.

Kim Foustiere: Next is Kim Foustiere from HSBC.

Torgrim Reitan: Kim, please go ahead. Right. Yeah. Hi. Thank you for taking my question. Singular, I guess. I wanted to ask about operations and just that ramp up on your cascode was remarkably fast. I mean, was that ramp up in line with your plan and your expectations, or was it in fact better than expectations? And what did you do in terms of preparation or anything that made this ramp up faster than others we've seen before? Thank you.

Speaker Change: Thank you. Uh, uh, you time is moving and I still have a few on the list. So I ask that you limit yourself to to 1 question, and we'll try to cover as many as possible. Uh, next is Kim first year from HSBC. Kim. Please. Go ahead.

Torgrim Reitan: Okay. Thanks. Thanks, Kim. Yeah. Thank you for the question. Yeah. You know, it is, Johannes Casper is, you know, a mega greenfield development. And the fact that we were able to bring it on plateau. in less than three months is just remarkable. We had assumed in our plans that we should be able to go quickly, but we actually ended up doing it even quicker than we had planned to. So Johan Cotsberg is at 220,000 barrels per day, you know, at Plateau production, and it's going to be a significant contribution to the production growth this year and have a impact in the second half of this year, you know, into the 4% production growth that we have put forward.

Speaker Change: Right. Yeah hi. Thank you for taking my question um singular I guess. Um I wanted to ask about operations and just that that ramp up on your cascode was remarkably fast. I mean, was that ramp up in line with your your plan and your expectations or or was it in fact better than expectations? And what did you what did you do in terms of preparation or anything that made maybe this ramp up faster than others? We've seen before. Thank you. Okay, thanks. Thanks Kim. Yeah. Thank you for the question. Yeah, you know, it is um, uh, yuan kosberg is is uh, you know, a mega Green Field development and and the fact that we were able to to bring it on plateau,

Speaker Change: In less than 3 months is, is just remarkable. And we had assumed in in our plans that we should be able to go quickly, but we actually ended up doing it. It it, even even quicker than we had planned to. Um, so yuan kosberg is a 220,000 batters per day, uh, you know, at Plateau production, um, and it's going to be a significant contribution to to the production growth this year. Uh and have a fully impacted in the second half of this year, you know, into the

% production growth that we, we, we, we have

Torgrim Reitan: So, you know, it ended up, you know, good installation of the ship and assets on the Thank you.

Have put put forward. Um, so, um, so a, you know, in the last, you know, good, good installation of the, of the, of, the of the ship and, and assets on the field,

Nash Khoi: Moving on to Nash Khoi in Barclays. Nash, please go ahead. Hey, good morning and good afternoon. Thanks for taking my question. Just a follow up on the cost inflation side. I think one of your Norwegian peers mentioned about CapEx cost inflation. And I wonder, and it's interesting, Torgrim, earlier you mentioned about 30% of your 25 CapEx is exposed to Norwegian Crown. Just wonder, how should you think about 2026 impact? And you still want to keep the CapEx guidance? Do you have to give up any opportunities? Thank you.

Speaker Change: Thank you. Uh moving on to Nash Choir in Barclays. Nash. Please go ahead.

Hi, good morning and good afternoon. Thanks for taking my question. Just a follow-up on the uh cost inflation side. I think 1 of your knowledge and peers mention about cap has cost inflation. And I want and it's interesting top. Brand earlier, you mentioned about 30% of the 25th is exposed to Norwegian crown.

Just wonder how should you think about 2026 impact and you mentioned that you still want to keep the capex guidance? Do you have to give up any opportunities? Thank you.

Torgrim Reitan: Thanks, Nash. So, you know, managing currency exposure is a natural part of what we do. We define ourselves as a dollar company. Revenues are in dollars, accounts are in dollars, you know, investments largely in dollars, cost also in dollars. And you should think about us as a dollar company as such. And then, you know, we'll have to manage fluctuations in other currencies like Norwegian kroner and particularly the Norwegian kroner and so on. So, clearly, we have the intention to be able to tighten up the portfolio further so we can actually stay within our current guiding, even if there will be a little bit Norwegian kroner exposure in there.

Yeah, no, thanks Nash. So, uh, you know, managing currency exposure is a natural part of what we do. We Define yourself as a dollar company. Uh, revenues are in dollars or counts are in dollars, you know, Investments largely in dollars, uh, cost also in in dollars. Uh, uh, and uh, and, and, and you should think about us as a dollar company as such. And then, you know, we'll, we'll have to manage, uh, fluctuations in, in, in other currencies, like Norwegian, kroner and particularly the particularly Norwegian corner, and, and so on. So,

Torgrim Reitan: That's the plan.

Matt Lofting: Thank you.

So, so kindly we, we we, we have the intention to be able to tighten up the portfolio further. So we can actually stay within our current guiding even if there will be a little bit no vision from the exposure in there. So that's that's the plan.

Torgrim Reitan: Then it's Matt Lofting from J.P. Morgan. Matt, please go ahead. Yeah, thanks for taking the question. Most of mine have been asked, but I'll just ask you, Torgrim, on MNP. I think you made some comments earlier around the challenges in the recent environment around the trading businesses less apt to take risk in the second quarter. How do you see the environment going forward from here, thinking about the second half of the year? Do you expect or sort of see any changes around that? And or is the business in a position where if it doesn't change that the set up and the exposures can be better adapted to work around it?

Thank you. Uh, then it's Matt lofting from JP Morgan, Matt. Please go ahead.

Torgrim Reitan: Thank you. Okay, no, thanks, Matt. Yeah, it's is a good question. You know, there is still a lot of value to be had within the trading environment, even if the risk is different. And I can give you a couple of examples. Within our gas trading, we see geographical arbitrage opportunities that is not linked to political risk in any way. For instance, with Russian gas now getting out of the market, we see higher prices in the east than in the west. And we have access to all these markets through our pipeline systems and contracts and all of that.

Matt: Yeah, thanks for taking the question. Um, most of mine have been asked but, but I'll just ask you to agree on Mmp. I think you made some comments earlier around. Um, so the challenge is in, in the recent environment around the trading businesses, um, less appetite time to take risk in the second quarter. How do you see the environment going forward from here? Thinking about the second half of the year? Do you expect or sort of see as with today? Any changes around that. Uh, and or is the business in a position where if it doesn't change that that, um, the, um, the, the setup. And the exposures can be better adapted to work around it. Thank you. Okay. No, thanks Matt. Uh yeah it's um,

Speaker Change: Is it is it is a good question.

Um, you know, there are still a lot of value to be had been in the trading environment, even if the risk is different, uh, and I can give you a couple of examples, um, within our gas trading, we see a geographical Arbitrage opportunities that is not linked to political, uh, risk in.

Torgrim Reitan: So currently, we are actually selling more gas towards the east than the west and taking out arbitrage opportunities. And you'll see that in M&P results. You saw that in the second quarter. Also, you know, based on your portfolio of oil qualities and shipping fleets and contracts enables you to take out value of trading. So this is sort of a little bit back to basic when it comes to trading and sort of asset-backed trading and physical training and all of that. That will still continue. However, within sort of the more… Trades that are exposed to geopolitical changes and all of that.

Quarter also, you know, based on based on your your your portfolio of of of qual oil qualities and shipping fees and contracts, enables you to take out the value of trading. So this is sort of a little bit back to basic when it comes to trading, and sort of assets back trading and physical trading and all of that, that will still continue. However, within sort of the more, um,

Trades that are exposed to geopolitical changes and all of that.

Torgrim Reitan: Traders are struggling for the time being and there's a little bit of risk off on that part of the portfolio. Something that we see across the whole trading community as such. Still quite a bit of value to be had but The volatility is different than it used to be, and it's harder for traders to create value automatically.

Speaker Change: uh, Traders are struggling for the time being uh, and and and and there's a little bit of risk off on that, part of the portfolio, something that we see across the whole trading, uh, Community, uh, as such still still quite a bit of, um, value to be had, but but, but, but, uh, but the volatility

Almost a volatility is different than it used to be uh and it's harder for Traders to to to create value out of it.

Torgrim Reitan: Thank you, Torgrim.

Brad Pedersen: There was a lot of questions today, but we have now passed the hour and I want to be respectful for everybody's time. We didn't manage to get fully through the list, but of course, the Investor Relations team remain available for calls during today and later in the week to follow up.

Brad Pedersen: So then we can conclude the call and I thank you all for calling in and for asking your questions. Have a good rest of the day.

Thank you, uh, to them. Um, there was a lot of, uh, questions today but we have no post the hour and I want to be respectful for, uh, everybody's, uh, time. We didn't manage to get fully through the list. But, of course, uh, the investor relations team remain available for calls, uh, during today and, and later in the week to, uh, follow up.

Speaker Change: So then, uh, we can conclude the call and I thank you all for calling in and for asking your questions have a good rest of the day.