Q3 2025 Equinor ASA Earnings Call

October 29, 2025

Speaker #2: Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Equinor analyst call for Q3.

Operator: Thank you for standing by. My name is Kate and I will be your conference operator today. At this time I would like to welcome everyone to Equinor ASA analyst call Q3. All lines have been placed on mute 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 star followed with the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Bård Glad Pedersen, Senior Vice President and Head of Investor Relations. Please go ahead.

Speaker #2: All lines have been placed on mute to prevent any background noise . After the speakers remarks , there will be a question and answer session .

Speaker #2: If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad.

Speaker #2: If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to the board.

Speaker #2: Glad Peterson, Senior Vice President and Head of Investor Relations. Please go ahead.

Speaker #3: Thank you very much, Operator, and welcome to everybody who has called in for the analyst call for Equinor's third quarter results.

Bård Glad Pedersen: Thank you very much, operator. Welcome to everybody who has called in for the analyst call for Equinor ASA's third quarter results. Torgrim Reitan, our CFO, is here with me and he will take you through the results before we open for the Q and A. As usual, we will close this session within one hour. With that, Torgrim, I hand it to you to take us through the results.

Bård Glad Pedersen: Thank you very much, operator, and welcome to everybody who has called in for the analyst call for Equinor's Q3 results. Torgrim Reitan, our CFO, is here with me, and he will take you through the results before we open for the Q&A. As usual, we will close this session within one hour. With that, Torgrim, I hand it to you to take us through the results.

Speaker #3: Torgrim Reitan, our CFO, is here with me, and he will take you through the results before we open up for the Q&A.

Speaker #3: As usual, we will close this session within one hour. So, with that, I hand it to you to take us through the results.

Speaker #3: Okay , so thank you board and good morning . And thank you for joining us . Before we get to our results , you know , have a look at the photo of Bacalao , which came on stream in October .

Torgrim Reitan: Okay, so thank you Bård and good morning and thank you for joining us. Before we get to our results, have a look at the photo of Bacalhau which came on stream in October. It is the first pre-salt project in Brazil developed by an international operator with reserves more than 1 billion barrels and production capacity of 220,000 barrels per day. This will contribute significantly to our international growth. The results and cash flow we report today are driven by strong operational performance. Production is up 7% from third quarter last year. Johan Sverdrup delivered close to 100% regularity and Johan Castberg is producing at plateau with a premium to Brent of around $5. The adjusted operating income was $6.2 billion before tax and our net income was negative $0.2 billion, impacted by net impairments mainly due to lower long-term oil price outlook.

Torgrim Reitan: Okay. Thank you Bård, and good morning, and thank you for joining us. Before we get to our results, you know, have a look at the photo of Bacalhau, which came on stream in October. It is the first pre-sold project in Brazil developed by an international operator. With reserves more than 1 billion barrels and production capacity of 220,000 barrels per day, this will contribute significantly to our international growth. The results and cash flow we report today are driven by strong operational performance. Production is up 7% from Q3 last year. Johan Sverdrup delivered close to 100% regularity, and Johan Castberg is producing at plateau with a premium to Brent of around $5.

Torgrim Reitan: Okay. Thank you Bård, and good morning, and thank you for joining us. Before we get to our results, you know, have a look at the photo of Bacalhau, which came on stream in October. It is the first pre-sold project in Brazil developed by an international operator. With reserves more thanone billion barrels and production capacity of 220,000 barrels per day, this will contribute significantly to our international growth. The results and cash flow we report today are driven by strong operational performance. Production is up 7% from Q3 last year. Johan Sverdrup delivered close to 100% regularity, and Johan Castberg is producing at plateau with a premium to Brent of around $5.

Speaker #3: It is the first Pre-Salt project in Brazil developed by an international operator, with reserves of more than 1 billion barrels and a production capacity of 220,000 barrels per day.

Speaker #3: This will contribute significantly to our international growth. The results and cash flow we report today are driven by strong operational performance.

Speaker #3: Production is up 7% from the third quarter last year. Johan Sverdrup delivered close to 100% regularity, and Johan Kobborg is producing at plateau with a premium to Brent of around $5.

Speaker #3: The adjusted operating income was $6.2 billion before tax , and a net income was -0.2 billion , impacted by net impairments , mainly due to lower long term oil price outlook .

Torgrim Reitan: The adjusted operating income was $6.2 billion before tax. Our net income was -$0.2 billion, impacted by net impairments, mainly due to lower long-term oil price outlook. Year to date, our cash flow from operations after tax has been strong at $14.7 billion. Our adjusted earnings per share was $0.37, impacted by negative results from financial items and a one-off effect related to decommissioning of Titan. Energy markets continue to be volatile. Geopolitical unrest, tariffs, and trade tensions continue to impact pricing and trading conditions. We are prepared for this. We have a solid balance sheet, strong production, and a robust portfolio. In addition, we take forceful action to manage costs. These efforts are visible in our results.

Speaker #3: Yet to date, our cash flow from operations after tax has been strong at $14.7 billion. Our adjusted earnings per share was $0.37, impacted by negative results from financial items and a one-off effect related to the decommissioning of Titan.

Torgrim Reitan: Year to date our cash flow from operations after tax has been strong at $14.7 billion. Our adjusted earnings per share was $0.37, impacted by negative results from financial items and a one-off effect related to decommissioning of Titan. Energy markets continue to be volatile. Geopolitical unrest, tariffs, and trade tensions continue to impact pricing and trading conditions. We are prepared for this. We have a solid balance sheet, strong production, and a robust portfolio. In addition, we take forceful action to manage cost. These efforts are visible in our results. Costs are now stable year to date compared to last year and this is in line with what we said at the Capital Markets update in February. Operating costs for our renewables business have decreased by around 50% compared to the third quarter last year and we expect it to be down by 30% on an annual basis.

Speaker #3: Energy markets continue to be volatile. Geopolitical unrest, tariffs, and trade tensions continue to impact pricing and trading conditions. We are prepared for this.

Speaker #3: We have a solid balance sheet, strong production, and a robust portfolio. In addition, we take forceful action to manage costs.

Speaker #3: These efforts are visible in our results . Costs are now stable year to date compared to last year , and this is in line with what we said at the Capital Markets update in February .

Torgrim Reitan: Costs are now stable year-to-date compared to last year. This is in line with what we said at the Capital Markets Update in February. Operating costs for our renewables business have decreased by around 50% compared to Q3 last year. We expect it to be down by 30% on an annual basis. This is driven by less business development and reduced early phase work. On the NCS, we have stopped two early phase electrification projects that were not sufficiently profitable. This reduces costs now and CapEx going forward. By this, we are demonstrating that we can beat inflation. We can keep costs flat even if we are delivering strong production growth. At Bacalhau, we started production from the first producer. Ramp up will continue through 2026.

Speaker #3: Operating costs for our renewables business have decreased by around 50% compared to the third quarter last year, and we expect it to be down by 30% on an annual basis.

Speaker #3: And this is driven by less business development and reduced early phase work on the NCS . We have stopped two early phase electrification projects that were not sufficiently profitable , and this reduces costs .

Torgrim Reitan: This is driven by less business development and reduced early phase work. On the NCS, we have stopped two early phase electrification projects that were not sufficiently profitable and this reduces costs now and CapEx going forward. By this we are demonstrating that we can beat inflation and we can keep cost flat even if we are delivering strong production growth. At Bacalhau we started production from the first producer and ramp-up will continue through 2026. On the NCS we had seven commercial discoveries and I want to highlight Aker BP's important discovery in the Yggdrasil area where we have a material ownership position. Let me also mention Smørbukk Midt. It was discovered and put in production during the third quarter and we expect payback within six months. As you know, we participated in Ørsted's rights issue. It was executed at a significant discount.

Speaker #3: Now . And CapEx going forward . By this , we are demonstrating that we can beat inflation and we can keep costs flat even if we are delivering strong production growth .

Speaker #3: At Bacalao, we started production from the first producer, and ramp-up will continue through 2026. On the NCS, we had seven commercial discoveries, and I want to highlight an important discovery in the Hydrocil area, where we have a material ownership position.

Torgrim Reitan: On the NCS, we had 7 commercial discoveries. I want to highlight Aker BP's important discovery in the Yggdrasil area where we have a material ownership position. Let me also mention Smørbukk Midt. It was discovered and put in production during Q3, and we expect payback within 6 months. As you know, we participated in Ørsted's rights issue. It was executed at a significant discount. An overview of the underlying value in Ørsted supported our participation. The cash flow impact of around $900 million will be in Q4, impacting our net debt ratio by around 2 percentage points. Following this decision, we will now seek a more active role by nominating a candidate for the board. We believe a closer industrial and strategic collaboration between Ørsted and Equinor can create value for shareholders in both companies. To capital distribution.

Speaker #3: And then let me also mention the SMR book myth. It was discovered and put into production during the third quarter, and we expect payback within six months.

Speaker #3: As you know, we participated in a rights issue. It was executed at a significant discount, and an overview of the underlying value inserted supported our participation.

Torgrim Reitan: An overview of the underlying value in Ørsted supported our participation. The cash flow impact of around $900 million will be in the fourth quarter, impacting our net debt to capital employed ratio by around 2 percentage points. Following this decision, we will now seek a more active role by nominating a candidate for the Board. We believe a closer industrial and strategic collaboration between Ørsted and Equinor ASA can create value for shareholders in both companies. To capital distribution for the quarter, the Board approved an ordinary cash dividend of $0.37 per share and a fourth and final tranche launch of the share buyback program for 2025 of up to $1.266 billion, including the state's share. With this, total capital distribution for the year will be around $9 billion. Safety remains our top priority this quarter. We continue to have strong safety results.

Speaker #3: The cash flow impact of around $900 million will be in the fourth quarter, impacting our net debt ratio by around two percentage points.

Speaker #3: Following this decision, we will now seek a more active role by nominating a candidate for the board. We believe that closer industrial and strategic collaboration between Erstad and Equinor can create value for shareholders in both companies.

Speaker #3: Then, to capital distribution for the quarter, the board approved an ordinary cash dividend of $0.37 per share and a fourth and final tranche of the share buyback program for 2025.

Torgrim Reitan: For the Q4, the board approved an ordinary cash dividend of $0.37 per share and a fourth and final tranche of the share buyback program for 2025 of up to $1.266 billion, including the state's share. With this, total capital distribution for the year will be around $9 billion. Safety remains our top priority. This Q4, we continue to have strong safety results. However, we had a tragic fatality at Mongstad, and we know that safety work needs to continue with full force. Learnings from the accident will be implemented. In the Q4, we produced 2,130,000 barrels per day. This is 7% up from last year and we are on track to deliver on our guiding of 4% production growth for the year. On the NCS, production was even stronger with 9% growth.

Speaker #3: Of up to $1.266 billion, including the state's share. With this total capital distribution for the year, it will be around $9 billion.

Speaker #3: Safety remains our top priority this quarter. We continue to have strong safety results. However, we had a tragic fatality at Monster, and we know that safety work needs to continue with full force.

Torgrim Reitan: However, we had a tragic fatality at Mongstad and we know that safety work needs to continue with full force. Learnings from the accident will be implemented. In the quarter we produced 2,130,000 barrels per day. This is 7% up from last year and we are on track to deliver on a guiding of 4% production growth for the year. On the Norwegian Continental Shelf production was even stronger with 9% growth. Johan Castberg, a new field on stream, developments in Barents and strong performance at Johan Sverdrup are important contributors. Norwegian Continental Shelf gas production was impacted by planned maintenance and the prolonged shutdown of Hammerfest LNG. U.S. onshore gas production was up 40% capturing higher prices and U.S. offshore was up 9% from last year. Internationally, outside the U.S., production was down due to the temporary stop at Peregrino and the divestment in Azerbaijan and Nigeria.

Speaker #3: Learnings from the accident will be implemented in the quarter. We produced 2,130,000 barrels per day, which is a 7% increase from last year, and we are on track to deliver on our guidance of 4% production growth for the year.

Speaker #3: On the NCS , production was even stronger , with 9% growth . Johan Kosberg , you know , a new field on stream , you know , or developments in balance and strong performance at Johan Sverdrup are important contributors .

Torgrim Reitan: Johan Castberg, you know, a new field on stream, you know, of developments in Barents and strong performance at Johan Sverdrup are important contributors. NCS gas production was impacted by plant maintenance and the prolonged shutdown of Hammerfest LNG. US onshore gas production was up 40%, capturing higher prices, and US offshore was up 9% from last year. Internationally, outside the US, production was down due to the temporary stop at Peregrino and the divestment in Azerbaijan and Nigeria. We produced around 1.4 TWh of power this quarter, mainly driven by the start-up of new turbines at Dogger Bank A and contributions from onshore renewable assets. At Empire Wind in New York, all 54 monopiles are now installed and the project execution is progressing well.

Speaker #3: NCS gas production was impacted by planned maintenance and the prolonged shutdown of Hammerfest LNG. US onshore gas production was up 40%, capturing higher prices, and US offshore was up 9% from last year.

Speaker #3: Internationally , outside the US , production was down due to the temporary stop at Peregrino and the divestment in Azerbaijan and Nigeria . We produced around 1.4 terawatt hours of power this quarter , mainly driven by the start up of new turbines at Dogger Bank , a and contributions from onshore renewable assets at MP Wind in New York .

Torgrim Reitan: We produced around 1.4 terawatt hours of electrical power this quarter, mainly driven by the startup of new turbines at Dogger Bank A and contributions from onshore renewable assets at Empire Wind in New York. All 54 monopiles are now installed and the project execution is progressing well. In October, Maersk informed us of an issue concerning its contract for the wind turbine installation vessel that is planned to be used at Empire Wind in 2026. We are working to solve this quickly. Now over to our financial results. Liquids prices were lower than the same quarter last year, while average gas prices were higher, particularly in the U.S. Adjusted operating income from E&P Norway totaled $5.6 billion before tax and $1.3 billion after tax. These results were impacted by production growth, but also increased depreciations due to new fields coming on stream.

Speaker #3: All 54 monopiles are now installed, and the project execution is progressing well. In October, Maersk informed us of an issue concerning its contract for the wind turbine installation vessel that is planned to be used at Empire Wind in 2026.

Torgrim Reitan: In October, Maersk informed us of an issue concerning its contract for the wind turbine installation vessel that is planned to be used at Empire Wind in 2026. We are working to solve this quickly. Now over to our financial results. Liquids prices were lower than the same quarter last year, while average gas prices were higher, particularly in the US. Adjusted operating income from E&P Norway totaled $5.6 billion before tax and $1.3 billion after tax. These results were impacted by production growth, but also increased depreciations due to new fields coming on stream. Our E&P international results reflect lower production, but also lower depreciation. Peregrino and our assets tied to Adura IGV are classified as held for sale. As such, we no longer depreciate them.

Speaker #3: We are working to solve this quickly. Now, over to our financial results. Liquids prices were lower than in the same quarter last year.

Speaker #3: While average gas prices were higher, particularly in the U.S., adjusted operating income from ERP Norway totaled $5.6 billion before tax and $1.3 billion after tax.

Speaker #3: These results were impacted by production growth, but also increased depreciation due to new fields coming on stream. Our EMP international results reflect lower production, but also lower depreciation.

Torgrim Reitan: Our E&P International results reflect lower production, but also lower depreciation. Peregrino and our assets tied to Adura IGD are classified as held for sale. As such, we no longer depreciate them. Our E&P U.S. results are driven by increased production, but these results were impacted by a one-off effect related to decommissioning of the U.S. offshore Titan field of $268 million. It has very limited cash flow effect in the quarter, but we are now booking expected future operating costs related to this. For MMP, we are changing our guiding and expect to deliver average adjusted operating income of around $400 million per quarter. The upside potential is larger than the downside risk to this guiding. The updated guiding is mainly due to changed market conditions. In addition, it reflects that we have previously divested some gas infrastructure.

Speaker #3: Peregrino and our assets tied to a Dura IJV are classified as held for sale. As such, we no longer depreciate them.

Speaker #3: Our EMP US results are driven by increased production, but these results were impacted by a one-off effect related to the decommissioning of the US offshore Titan field of $268 million.

Torgrim Reitan: Our EMP US results are driven by increased production, but these results were impacted by a one-off effect related to decommissioning of the US offshore Titan field of $268 million. It has very limited cash flow effect in the quarter, but we are now booking expected future operating costs related to this. For MMP, we are changing our guiding and expect to deliver average adjusted operating income of around $400 million per quarter. The upside potential is larger than the downside risk to this guiding. The updated guiding is mainly due to change market conditions. In addition, it reflects that we have previously divested some gas infrastructure. Our renewables results reflect high project activities, but also significantly lower business development and early phase costs. In our reported Yes.

Speaker #3: It has very limited cash flow effect in the quarter, but we are now booking expected future operating costs related to this for MMP.

Speaker #3: We are changing our guidance and expect to deliver average adjusted operating income of around $400 million per quarter. The upside potential is larger than the downside risk to this guidance.

Speaker #3: The updated guiding is mainly due to changes in market conditions. In addition, it reflects that we have previously divested some gas infrastructure.

Speaker #3: Our renewables results reflect high project activity , but also significantly lower business development and early phase costs . In our reported financial yeah , in the reported financial results , we have net impairments of $754 million .

Torgrim Reitan: Our renewables results reflect high project activities, but also significantly lower business development and early phase costs. In our reported financial results, we have net impairments of $754 million. The main driver for these impairments is lower long-term oil price assumptions. Our E&P International business booked an impairment of $650 million tied to our assets being transferred to the Adura IGD due to lower price assumptions. More than half of the impairment is due to no depreciation on the assets held for sale. In the U.S. offshore assets, we have impairments of $385 million, mainly due to lower price assumptions. In MMP, we have a reversal at Mongstad of $300 million due to higher expected refinery margins. This quarter, cash flow from operations was $9.1 billion. We paid two NCS tax installments totaling $3.9 billion. Next quarter, we will have three installments of around NOK 20 billion each.

Torgrim Reitan: In our reported financial results, we have net impairments of $754 million. The main driver for these impairments is lower long-term oil price assumptions. Our EMP International business booked an impairment of $650 million tied to our assets being transferred to the Adura IGV due to lower price assumptions. More than half of the impairment is due to no depreciation on the assets held for sale. In the US offshore assets, we have impairments of $385 million, mainly due to lower price assumptions. In MMP, we have a reversal at Mongstad of $300 million due to higher expected refinery margins. This quarter, cash flow from operations was $9.1 billion. We paid two NCS tax installments totaling $3.9 billion.

Speaker #3: The main driver for these impairments is lower long-term oil price assumptions. Our EMP international business booked an impairment of $650 million tied to our assets being transferred to the Azura IGD due to lower price assumptions.

Speaker #3: More than half of the impairment is due to depreciation on the assets held for sale . In the US , offshore assets we have impairments of 385 million , mainly due to lower price assumptions in MMP , we have a reversal at monster of $300 million due to higher expected refinery margins .

Speaker #3: This quarter , cash flow from operations was $9.1 billion . We paid two NRCS tax instalments totaling $3.9 billion next quarter , we will have three instalments of around 20 billion Norwegian , Norwegian kroner each .

Torgrim Reitan: Next quarter, we will have three installments of around 20 billion Norwegian kroner each. We distributed $5.6 billion to our shareholders, including the state's share of buybacks from last year of $4.3 billion. Organic CapEx was $3.4 billion, and our net cash flow was -$3.6 billion. We have a solid financial position with more than $22 billion in cash and cash equivalents. Our net debt to capital employed ratio decreased to 12.2% this quarter. At current forward prices, we expect the net debt ratio at the end of the year to be in the lower end of the guided range, 15% to 30%, the same as we have said at earlier quarters. Finally, we maintain our guiding from CMU in February, both in terms of production and CapEx as well as capital distribution.

Speaker #3: We distributed $5.6 billion to our shareholders, including the state's share of buybacks from last year of $4.3 billion. Organic CapEx was $3.4 billion, and our net cash flow was negative $3.6 billion.

Torgrim Reitan: We distributed $5.6 billion to our shareholders, including the state's share of buybacks from last year of $4.3 billion. Organic capex was $3.4 billion and our net cash flow was negative $3.6 billion. We have a solid financial position with more than $22 billion in cash and cash equivalents. Our net debt to capital employed ratio decreased to 12.2% this quarter. At current forward prices, we expect the net debt ratio at the end of the year to be in the lower end of the guided range, 15% to 30%. The same as we have said at earlier quarters. Finally, we maintain our guidance from CMU in February both in terms of production and capex as well as capital distribution. Thank you. Over to you Bård, for the Q&A session.

Speaker #3: We have a solid financial position with more than $22 billion in cash and cash equivalents. Our net debt to capital employed ratio decreased to 12.2% this quarter.

Speaker #3: At current forward prices, we expect the net debt ratio at the end of the year to be in the lower end of the guided range of 15% to 30%, the same as we have stated in earlier quarters.

Speaker #3: Finally, we maintain our guiding from CMU in February, both in terms of production and CapEx, as well as capital distribution. So, thank you.

Torgrim Reitan: Thank you. Over to you, Bård, for the Q&A session.

Speaker #3: And then over to you , board for the Q&A session . Thank you . Jim . Let me remind you that if you want to sign up to ask your questions , you can press Star one on your phone .

[Analyst]: Thank you.

Bård Glad Pedersen: Thank you, Torgrim. Let me remind you that if you want to sign up to ask your questions, you can press star one on your phone. We have a good list already, let's get going. First one on the list is Irene Himona from Bernstein. Irene, please go ahead with your question.

Bård Glad Pedersen: Torgrim, let me remind you that if you want to sign up to ask questions, you can press Star one on your phone. You have a good list already. Let's get going. The first one on the list is Irene Hymona from Bernstein. Irene, please go ahead with your question.

Speaker #3: We have a good list already, so let's get going. And the first one on the list is Irene Himona from Bernstein. So please go ahead with your question.

Speaker #4: Thank you very much. Good morning. So my first question is on the unit depreciation charge in Norway. It's up about 13% from Q2.

[Analyst]: Thank you very much. Good morning. My first question is on the unit depreciation charge in Norway. It's up about 13% from Q2. Can we assume that that is the new normal level going forwards? My second question is on Ørsted. You obviously decided to participate in the rights issue and to turn from a passive to an active shareholder with a board seat. Can you elaborate a little bit on what it is that you think Ørsted is perhaps not doing very well, where your active participation may help them improve, and what type of industrial cooperation you envisage that would benefit both sides? Thank you.

Irene Himona: Thank you very much. Good morning. My first question is on the unit depreciation charge in Norway. It's up about 13% from Q2. Can we assume that is the new normal level going forward? My second question is on Ørsted. You obviously decided to participate in the rights issue and to turn from a passive to an active shareholder with a board seat. Can you elaborate a little bit on what it is that you think Ørsted is perhaps not doing very well, where your active participation may help them improve? What type of industrial cooperation do you envisage that would benefit both sides? Thank you.

Speaker #4: Can we assume that this is the new normal level going forward? And then my second question is on Ørsted. You obviously decided to participate in the rights issue.

Speaker #4: And to turn from a passive to an active shareholder with a board seat , can you elaborate a little bit on what it is that you think Orsted is ?

Speaker #4: Perhaps not doing very well, where your active participation may help them improve? And then, what type of industrial cooperation do you envisage that would benefit both sides?

Speaker #4: Thank you .

Torgrim Reitan: Thank you, Irene. First of all, the unit depreciation charge on EPN is up. That is driven by new assets on stream this quarter, and in particular, Johan Castberg. Also, you know, smaller developments coming on stream as well. These will sort of depreciate over time. You should expect a gradual reduction going forward on that on that basis. That's the first one. The second one was related to Ørsted. Yes. Let me give you a little bit of further context around that. We participated in the rights issue, clearly, that's sort of a recommitment to our shareholding.

Speaker #3: Thank you Irene . So first of all , the unit depreciation charge on EPs is up . So that is driven by new assets on stream this quarter .

Torgrim Reitan: Thank you, Irene. First of all, the unit depreciation charge on EPN is up. That is driven by new assets on stream this quarter and in particular Johan Castberg and also, you know, smaller developments coming on stream as well. These will sort of depreciate over time. You should expect a gradual reduction going forward on that basis. That's the first one. The second one was related. Thank you, Ørsted. Let me give you a little bit of further context around that. We participated in the rights issue and clearly there's sort of a recommitment to our shareholding and we would like to use the opportunity to clarify more around how we think around the ownership position.

Speaker #3: And in particular the Johann Kaspar . And also . You know , smaller developments coming coming on stream as well . So these will sort of depreciate over time .

Speaker #3: So you should expect a gradual reduction going forward on that . On that basis . So , so that's the first one . The second one was related to Erstad .

Speaker #3: Yes . So . Let me give you a little bit of further context around that . We participated in the in the rights issue .

Speaker #3: And clearly that's a recommitment to all shareholding . And we would like to use the opportunity to to clarify more around how we think around ownership position and , and we do want to take a more active role as shareholder with also board seats in due time .

Torgrim Reitan: We would like to use the opportunity to clarify more around how we think around the ownership position. Then, we do want to take a more active role as a shareholder with also a board seat in due time. Important for me to say that the offshore wind industry is, you know, living through its first real downturn. With a lot of challenges, and we have seen that with Ørsted, and we have seen that in the share price development in Ørsted. In times like that, you know, consolidation is typically what happens. We also do think that this industry needs consolidation.

Torgrim Reitan: We do want to take a more active role as a shareholder with also a board seat in due time. It is important for me to say that the offshore wind industry is living through its first real downturn with a lot of challenges. We have seen that with Ørsted and we have seen that in the share price development. In times like that, you know, consolidation is typically what happens. We also do think that this industry needs consolidation. We do think that a closer collaboration industrially and strategically between Ørsted and ourselves will create shareholder value for, you know, our shareholders, I mean Equinor ASA shareholders, but also shareholders in a way.

Speaker #3: Then important for me to say that the offshore wind industry is , you know , living through its first real downturn . So with a lot of challenges and we have seen that with Erstad and we have seen that in the share price development in Erstad .

Speaker #3: So in times like that , you know , consolidation is typically what happens . And we also do think that this industry needs a consolidation .

Speaker #3: We do think that that a closer collaboration industrially and strategically between Erstad and ourselves will create shareholder value for , you know , our shareholders .

Torgrim Reitan: We do think that a closer collaboration industrially and strategically between Ørsted and ourselves will create shareholder value for, you know, our shareholders. I mean, Equinor shareholders, but also Ørsted's shareholders in a way. We do believe that sort of the competence base that we have, you know, very well complement Ørsted and being part of the board with a long-term industrial perspective in a company like this will benefit both parties. You know, I do appreciate that there are uncertainties related to what this means. Let me be very clear that in the current environment, we are going to limit sort of capital commitments into offshore wind. It is an industry that is challenged.

Speaker #3: I mean , you shareholders , but also Erstad shareholders in a way . And we do believe that sort of the competence base that we have , you know , very well complement Erstad .

Torgrim Reitan: We do believe that sort of the competence base that we have, you know, very well complement Ørsted and being part of the board with a long-term industrial perspective in a company like this will benefit both parties. I do appreciate that there are uncertainties related to what this means. Let me be very clear that in the current environment we are going to limit sort of capital commitments into offshore wind. It is an industry that is challenged. The assets that we have in our own portfolio we will continue to develop, you know, Empire Wind, Dogger Bank and Baltic projects. Beyond that, we will be very, very careful with further commitments into offshore wind. The same goes to our holding in Ørsted. The threshold to commit new significant capital is high for the time being.

Speaker #3: And being part of the board with a long term industrial perspective in a company like this will benefit both parties . Then , you know , I do appreciate that there are uncertainties related to what this means .

Speaker #3: And let me be very clear that in the current environment, we are going to limit sort of capital commitments into offshore wind.

Speaker #3: It is it is an industry that is challenged . So the assets that we have in our own , we will continue to develop , you know , wind , Dogger Bank and Baltic projects .

Torgrim Reitan: The assets that we have in our own portfolio, we will continue to develop, you know, Hywind, Dogger Bank, and Baltic projects. Beyond that, we will be very, very careful with further commitments into offshore wind. The same goes to our holding in Ørsted. The threshold to commit new significant capital is high for the time being. Just want to leave that with you because I do appreciate that there are sort of questions to what might happen here.

Speaker #3: Beyond that , we will be very , very careful with further commitments into offshore wind . And the same goes to to our holding in , in , in Erstad .

Speaker #3: So the threshold to commit new significant capital is high for the time being . So I just want to leave that with you because I do appreciate that there are sort of questions to to what might happen here .

Torgrim Reitan: I just want to leave that with you because I do appreciate that there are sort of questions to what might happen here.

Speaker #5: Thank you very much. Thank you.

[Analyst]: Thanks so much.

Irene Himona: Thank you.

Bård Glad Pedersen: Thank you. Thank you, Irene. The next question is from Biraj Borkhataria from RBC. Please, Biraj, your line should be open.

Speaker #3: Thank you . Adrian . The next question is from Biraj Borkhataria from RBC . Please ask . Your line should be open .

Bård Glad Pedersen: Thank you, Irene. The next question is from Biraj Borkhataria from RBC. Please, Biraj, your line should be open.

Speaker #6: Hi . Thank you both . Just the first one is on the . MMP guidance . I wonder if you could just dive into a bit more detail around the change in factors .

[Analyst 3]: Hi, thank you both. Just the first one's on the MMP guidance. I wonder if you could just dive into a bit more detail around the change in factors there. Also, you've gone from a range, the 400 to 800, to a single figure. I was wondering if there's a sort of signal factor in there that either you see fewer opportunistic opportunities to trade or if you're just taking less risk given the environment's changing. Just to follow up on the question before on Ørsted, just trying to understand why you didn't consider a board seat in the first place because I recall it just wasn't really part of the discussion at the time or at the CMU. Just trying to get the understanding of, you know, obviously the environment has changed, politics has changed, but has your investment thesis on that business investment changed? Thank you.

Torgrim Reitan: Hi. Thank you both. Just the first one's on the MMP guidance. I wonder if you could just dive into a bit more detail around the changing factors there.

Speaker #6: There . And also , you've gone from a a range of 400 to 800 to to a single figure . And I was wondering if there's a sort of signal factor in there that either you see fewer opportunistic opportunities to , to trade or if you're just taking less risk , given the is changing .

Teodor Sveen-Nilsen: Also you've gone from a range of 400 to 800 to a single figure. I was wondering if there's a sort of signal factor in there that either you see fewer opportunistic opportunities to trade or if you're just taking less risk, given the environment's changing. Just to follow up on the question before on Ørsted. Just trying to understand why you didn't consider a board seat in the first place. Because I recall it just wasn't really part of the discussion at the time or at the CMU. Just trying to get the understanding of, you know, obviously the environment has changed, politics has changed, but has your the-investment thesis on that business investment changed? Thank you.

Biraj Borkhataria: Also you've gone from a range of 400 to 800 to a single figure. I was wondering if there's a sort of signal factor in there that either you see fewer opportunistic opportunities to trade or if you're just taking less risk, given the environment's changing. Just to follow up on the question before on Ørsted. Just trying to understand why you didn't consider a board seat in the first place. Because I recall it just wasn't really part of the discussion at the time or at the CMU. Just trying to get the understanding of, you know, obviously the environment has changed, politics has changed, but has your the-investment thesis on that business investment changed? Thank you.

Speaker #6: And then just to follow up on the question before on Ørsted, I just tried to understand why you didn't consider a board seat in the first place, because I recall it just wasn't really part of the discussion at the time or at the CMU.

Speaker #6: So just just trying to get the understanding of , you know , obviously the environment has changed , politics has changed , but has your investment thesis on that business investment changed ?

Speaker #6: Thank you .

Speaker #3: All right . So thanks , Biraj . So first on MMP guiding . Yes . So we are changing the guiding to around $400 million on a quarterly basis .

Torgrim Reitan: All right. Thanks, Viraj. First on MMP guiding. Yes, we are changing the guiding to around $400 million on a quarterly basis where we see that the risk is asymmetrical here, so more upside than risk to the downside. It is a change. We used to have $400 to $800 million, as you might know. I think it's important to remind you what we had before the war in Ukraine. The guiding was $250 to $500 million as such. What we see now is that the market has changed rather a lot on the gas side in Europe. The situation has normalized with both the absolute price levels and volatility, and also the volatility globally. The market globally is driven to a larger extent by political decisions than actually structural structures in the market, making it quite harder to trade around and position ourselves around.

Torgrim Reitan: All right. Thanks, Biraj. First on the MMP guiding. Yes. We are changing the guiding to around $400 million on a quarterly basis. We see that the risk is asymmetrical here, so more upside, than risk to the downside. It is a change. We used to have $400 to $800, as you might know. I think it's important to remind you what we had before the war on Ukraine. Then the guiding was $250 million to $500 million as such. What we see now is that the market has changed rather a lot. On the gas side in Europe, the situation has normalized, with, both on the absolute price levels, and volatility.

Speaker #3: We're sort of we see that the risk is asymmetrical here . So so more upside than than risk to to to the downside .

Speaker #3: It is a change; we used to have 400 to 800. As you might know, I think it's important to remind you what we had before the war in Ukraine.

Speaker #3: Then the guiding was 250 to 500 million . As such . So what we see now is that the market has changed rather rather a lot on the gas side in Europe , the situation has normalized with in both on the absolute price levels and volatility , and also the the volatility globally and sort of the market globally is driven to a large extent by political decisions than actually structural .

Torgrim Reitan: Also the volatility globally, and sort of the market globally is driven to a large extent by political decisions than actually structural, you know, structures in the market, making it, you know, quite harder to trade around and position ourselves around. There's sort of market dynamics that drives this. In addition, we have earlier divested gas transportation assets that we don't have any more, so we take the opportunity to take that out as well. Why not a range? Because, I mean, you have seen that even if we had a broad range from $400 to 800 earlier, we tended to overshoot, yeah, and quite a bit actually, even with a range.

Speaker #3: You know , structures in in the market making it , you know , quite harder to trade around and position ourselves around . So the sort of market dynamics that drives this , in addition , sort of we have earlier divested gas transportation assets that we are sort of we don't have anymore .

Torgrim Reitan: The market dynamics that drive this, in addition, we have earlier divested gas transportation assets that we don't have anymore. We take the opportunity to take that out as well. Why not the range? I mean, you have seen that even if we had a broad range from $400 to $800 million earlier, we tended to overshoot quite a bit actually, even with the range. It just explains that opportunity might be very good and we don't want to have it limited by a range. What we want to do is that on the invite to consensus that we send out a few weeks ahead of the quarter, we will give an update related to MMP results and specialties to give you a little bit more guiding into it, but on a regular basis on the longer term, around $400 million is a prudent number.

Speaker #3: So we we take the opportunity to to take that out as well . So and then why not arrange ? Because I mean , you have seen that even if we had a broad range from 4 to 800 earlier , we tended to overshoot and quite a bit actually , even with the range , they just , you know , explains the , the that opportunity might be very good and it might sort of we don't want to limit it , have it limited by by a range .

Torgrim Reitan: It just, you know, explains that opportunity might be very good and it might sort of. We don't want to limit it, have it limited by a range. What we want to do is that on the invite to consensus that we send out a few weeks ahead of the quarter, we will give an update related to MMP reserves and specialties to give you a little bit more guiding into it. On a regular basis, on a longer term, I mean, around 400 is a prudent number. Last point on this, that this is not Equinor specific. This is what sort of all of us are currently experiencing.

Speaker #3: What we want to do is that, on the invite to consensus that we send out a few weeks ahead of the quarter, we will give an update related to MMP results and specialties to give you a little bit more guidance into it.

Speaker #3: But for the on a regular basis , on a longer term , I mean , around 400 is a prudent number . Last point on this , that this is not Equinor specific .

Torgrim Reitan: Last point on this, this is not Equinor ASA specific. This is what all of us are currently experiencing. If you listen to your peers and if you listen to the trading houses, we all see that you need to work much harder for every dollar you can make in the trading environment for the time being. That is that one. The second question was related to Ørsted. We do believe that we have something to offer in the board in Ørsted and it is particularly related to having a long-term industrial owner that the company can rely on through cycles and through developments. As a company, we have extensive experience in managing cycles and thinking long term. In addition, we have clearly a lot of competencies related to project developments and risk management. We do see that as something that can benefit both parties.

Speaker #3: This is this is what sort of all of us are currently experiencing . So if you if you listen to your peers and if you listen to the trading houses , we all see that you need to work much harder for every dollar you have to .

Torgrim Reitan: If you listen to our peers and if you listen to the trading houses, we all see that you need to work much harder for every $ you have to, you can make in the trading environment for the time being. Yeah, that is that one. The second question was related to Ørsted. We do believe that we have something to offer in the board in Ørsted. It is particularly related to having a long-term industrial owner that the company can rely on through cycles and through developments. As a company, we have extensive experience in managing cycles and thinking long term.

Speaker #3: You can make in the trading environment for the time being . So yeah , so that is that one . The second question was related to to Erstad .

Speaker #3: We we do believe that that we have something to offer in , in , in in the board in and it is particularly related to having a long term industrial owner to , to to that the company can rely on through cycles and and through developments and , and as a company , we had extensive experience in managing cycles and thinking long term .

Speaker #3: In addition , we have clearly a lot of competencies related to to project developments and , and risk management . So so we do see that as something that can benefit , benefit both parties .

Torgrim Reitan: In addition, we have clearly a lot of competencies related to project developments and risk management as such. We do see that as something that can benefit both parties.

Speaker #3: Okay . Thank you . Baroque . Next one on my list is Theodore Sven Nilsson from Sparbanken Markets . Theodore , please go ahead with your question .

Bård Glad Pedersen: Okay, thank you, Bhiraj. Next one on my list is Theodor Svennilssen from SpareBank 1 Markets. Theodor, please go ahead with your question.

Bård Glad Pedersen: Okay, thank you, Biraj. Next one on my list is Teodor Sveen-Nilsen from SpareBank 1 Markets. Teodor, please go ahead with your question.

Speaker #7: Good morning and thanks for taking my question . First one , just want to follow up on the . The question recently asked her , I just want to know what has actually changed in what you can offer from the first time you acquired shares .

[Analyst 3]: Good morning and thanks for taking my question. First one, just want to follow up on the question recently asked. I just want to know what has actually changed in what you can offer from the first time you acquired shares until now, the recent shares issue. That is the first question. Second question is on Bacalhau. Congrats on First Oil there. How should you think around the ramp up pace to Bacalhau? Thank you.

Teodor Sveen-Nilsen: Good morning, and thanks for taking my question. First one, just want to follow up on the Ørsted question recently asked here. I just want to know what has actually changed in what you can offer from the first time you acquired shares until now, the recent shares issue. That is the first question. Second question, that is on Bacalao. Congrats on first oil there. How should you think around the ramp-up pace to plateau? Thank you.

Speaker #7: Until now , the recent share issue . So so that is the first question and second question that is on on Bacalao . Congrats on first oil .

Speaker #7: There. How should we think about the ramp-up pace at all? Thank you.

Speaker #3: Yeah . So thanks Theodore . On your first question , well , you know , in the current situation it was also important to signal that we were supportive shareholder in what has sort of happened over the last few months .

Torgrim Reitan: Yeah, thanks Theodore. On your first question, in the current situation it was also important to signal that we were a supportive shareholder in what has happened over the last few months. As part of that, taking a board seat is important on Bacalhau. Bacalhau started up on October 15 and it is probably the most complex development that we have done. It is at more than 2,000 meters water depth and it is massive. I'm very proud of reporting that it has started. On your question on the ramp up, there are two drill ships on location currently. There will be 19 wells being drilled on phase one, 11 producers, but also injectors, both water injectors and gas injectors. This will sort of gradually happen. This is not going to be a ramp up like you have seen on Johan Castberg.

Torgrim Reitan: Yeah. Thanks, Teodor. On your first question, well, you know, in the current situation, it was also important to signal that we were a supportive shareholder in what has sort of happened over the last few months. As part of that, taking a board seat is important. On Bacalao. Yeah. Bacalao started up on 15 October. You know, it is probably the most complex developments that we have done. It is at more than 2,000 meters water depth, and it is massive. I'm very proud of reporting that it is started. On your question on the ramp-up. I mean, there are two drill ships on location currently.

Speaker #3: And as part of that , being taking a board seat is is important on Bacalao . Yeah . So it all started up on 15th of October and , you know , it is probably the most complex development that we have , have , have done .

Speaker #3: It is at more than 2000m water depth and , and it is massive . So I'm very proud of of , of reporting that it is , it is started on your question on the ramp up .

Speaker #3: So I mean , there are two ships on location currently . There will be 19 wells being drilled on phase one , 11 producers , but also injectors .

Torgrim Reitan: There will be 19 wells being drilled on phase I. 11 producers, but also injectors, both water injectors and gas injectors as such. This will sort of gradually happen. This is not going to be a ramp-up like you have seen on Johan Castberg, but this is sort of continuous drilling and completion, you know, through 2025, and it will continue in 2026 as such. This, it's too early to say, give an exact date when it will be on plateau, but things are progressing well. Yes.

Speaker #3: Both water injectors and gas injectors . As such . So this will sort of gradually happen . This is this is not going to be a ramp up like you have seen on Johann Caspar .

Speaker #3: So this is sort of continuous drilling and completion , you know , through 2025 . And it will continue in 2020 , 2026 .

Torgrim Reitan: This is sort of continuous drilling and completion through 2025 and it will continue in 2026 as such. It's too early to give you an exact date when it will be on plateau, but things are progressing well. Yes.

Speaker #3: As such . So so this it's too early to say give you an exact date when it will be on plateau . But things are progressing .

Speaker #3: Progressing well. Yes. Thank you.

Bård Glad Pedersen: Thank you.

Speaker #8: Thank you and thank you . Next one is Jason Gabelman from TD Cowan . Good morning . And please go ahead with your question .

[Analyst 3]: Okay, thank you.

Torgrim Reitan: Okay. Thank you.

Bård Glad Pedersen: Thank you, Teodor. Next one is Jason Gabelman from TD Cowen. Good early morning, please go ahead with your question.

Bård Glad Pedersen: Thank you, Theodore. Next one is Jason Gabelman from TD Cowen. Good early morning, and please go ahead with your question.

Bård Glad Pedersen: Thank you, Teodor. Next one is Jason Gabelman from TD Cowen. Good early morning, please go ahead with your question.

Speaker #9: Yeah . Hey good morning . Thanks for taking my questions . I am going to start also on Orsted . And it's I guess a bit tangentially related to what's going on .

[Analyst 4]: Yeah. Hey, morning. Thanks for taking my questions. I am going to start also on Ørsted and it's, I guess, a bit tangentially related to what's going on. As we think about potential outcomes, one of the thoughts in the market is formation of a joint venture between the two parties. With that, there's a lot of speculation on cash that would need to be contributed into the joint venture from Equinor ASA's standpoint. The question is really, as you look at your three offshore wind projects, how much equity capital have you spent in those projects thus far and how much is left to be spent on those three projects? My follow up is on the global gas market. There's been maybe a surprising amount of LNG projects sanctioned year to date. You've seen China demand slowing down.

Jason Gabelman: Yeah. Hey, morning. Thanks for taking my questions. I am gonna start also on Ørsted, and it's, I guess, a bit tangentially related to what's going on. As we think about potential outcomes, one of the thoughts in the market is, you know, formation of a joint venture between the two parties. With that, there's a lot of speculation on cash that would need to be contributed into the joint venture from Equinor's standpoint. The question is, really, as you look at your 3 offshore wind projects, how much equity capital have you spent in those projects thus far? How much is left to be spent on those 3 projects? My follow-up is on the global gas market. There's been maybe a surprising amount of LNG projects sanctioned year to date.

Speaker #9: But as as we think about potential outcomes , one of the thoughts in the market is , you know , formation of a joint venture between the the two parties .

Speaker #9: And with that, there's a lot of speculation on cash that would need to be contributed into the joint venture from Equinor's standpoint.

Speaker #9: So the question is really, as you look at your three offshore wind projects, how much equity capital have you spent in those projects thus far?

Speaker #9: And how much is left to be spent on those three projects? And then my follow-up is on the global gas market.

Speaker #9: There's been maybe a surprising amount of LNG projects sanctioned year-to-date. You've seen China demand slowing down. Some thoughts on Power of Siberia Two coming online at some point next decade.

Jason Gabelman: You've seen China demand slowing down. Some thoughts on Power of Siberia II coming online at some point next decade. Can you just talk about your outlook for the global gas market and if it's shifted at all, just given the developments that we've seen, year-to-date in that market? Thanks.

[Analyst 4]: Some thoughts on Power of Siberia 2 coming online at some point next decade. Can you just talk about your outlook for the global gas market and if it's shifted at all just given the developments that we've seen year to date in that market? Thanks.

Speaker #9: Can you just talk about your outlook for the global gas market? And if it's shifted at all, just given the developments that we've seen year to date in that market. Thanks.

Speaker #3: Okay . Well , thanks . Thanks , Jason . On you know , the potential outcome here is is , you know , I don't want to speculate on that .

Torgrim Reitan: Okay, thanks, Jason. On that, the potential outcome here is, I don't want to speculate on that and it's not natural to say much more on that now, but clearly there are various alternatives. I can give a little bit of insight in what it is that we will be looking for in this. We will be looking for improving the free cash flow for Equinor ASA. That is one driver. The other one is, are there ways where we can visualize or make clearer the underlying valuation within the offshore activity that we currently have, are there ways to do that. The third one is that clearly we will be very careful with significant further capital commitments within offshore wind in the current environment. Those are the things which are driving us when it comes to the three projects and remaining equity injections.

Torgrim Reitan: Okay. No, thanks, Jason. On Ørsted, you know, the potential outcome here is, you know, I don't want to speculate on that, and it's not natural to say much more on that now. Clearly, there are various alternatives. I can give a little bit insight in sort of what is it that, the sort of, you know, we will be looking for in this. We will be looking for in sort of improving the free cash flow for Equinor. That is one driver. The other one is, you know, are there ways where we can, you know, visualize or make clearer the underlying valuation within the offshore activity that we currently have? Are there ways to do that?

Speaker #3: And it's not natural to to say much more . On that note . But clearly there are various various alternatives . I can give you a little bit insight in sort of what is it that the sort of , you know , we will be looking for in this , we will be looking for in sort of improving the free cash flow for Equinor .

Speaker #3: That is one driver , the other one is , you know , are there ways where we can . You know , visualize or make clearer the underlying valuation within the offshore activity that we currently have ?

Speaker #3: Are there ways to do that ? And the third one is that clearly we we will be very careful in with significant , you know , further capital commitments within offshore wind in the current current environment .

Torgrim Reitan: The third one is that clearly we will be very careful in with significant, you know, further capital commitments within offshore, in the current environment. Those are the things which are sort of driving us. When it comes to the three projects and remaining, you know, equity injections, I can give you a little bit of insight into it. Dogger Bank is well underway and sort of production is gradually being started up. There are sort of, there are some more equity that will be injected, but clearly project financing. I mean, the leverage on those projects is in sort of in the seventies as such.

Speaker #3: So those are the things which are sort of driving us when it comes to the three projects, and remaining, you know, equity injections.

Speaker #3: I can give you a little bit of insight into it. Dogger Bank is well underway, and sort of production is gradually being started up.

Torgrim Reitan: I can give you a little bit of insight into it. Dogger Bank is well underway and production is gradually being started up. There is some more equity that will be injected, but clearly project financing, the leverage on those projects is in the 70% range as such. Within Empire Wind, what you will see there is that we have a significant equity injection in 2020, which is close to $2 billion. The year after, we expect to receive investment tax credit for approximately the same amount. Empire Wind over the next two years is pretty cash flow neutral before it is finalized. Then we have the Baltic 2 and 3 projects in Poland with a very high leverage, good projects. It's fairly limited equity that is needed to fund those.

Speaker #3: So , so , so there are sort of there are some more equity that will be injected , but clearly project financing , I mean , the leverage on those projects is in sort of in the , in the 70s , as such , we did Empire Wind .

Torgrim Reitan: d, what you will see there is that we have a significant equity injection in 2026, which is close to $2 billion. The year after, we expect to receive investment tax credit for approximately the same amount. Empire Wind over the next two years is pretty cash flow neutral before it is finalized. Then we have the Baltic Two and Three projects in Poland, with a very high leverage, you know, good projects. So it's fairly limited equity that is needed to fund those. I just want to leave with you that clearly, there are three mega projects underway with limited remaining capital needs associated with them. Okay, let's see here. That was a long answer, but it was an important question.

Speaker #3: What you will see there is that we have a significant equity injection in 2026, which is close to $2 billion. The year after, we expect to receive an investment tax credit for approximately the same amount.

Speaker #3: So, Empire Wind, over the next two years, is pretty cash flow neutral before it is finalized. And then we have the Baltic II and III projects in Poland, which have a very high leverage.

Speaker #3: You know , good projects . So it's fairly limited equity that is needed to to fund those . So I just want to leave with you that sort of clearly there are three mega projects underway with limited remaining capital needs associated with them .

Torgrim Reitan: I just want to leave with you that clearly there are three mega projects underway with limited remaining capital needs associated with them. That was a long answer, but it was an important question on the global gas market. First of all, I would like to say that in the short term, this winter the market seems tighter than many actually think. We are on the storage levels around 83%, which is 12 percentage points below last year. If we see a cold winter, it can really have a significant impact on the market. If we see a normal winter, we might see prices where last year set as such. The short term price is very much driven by weather and temperature as such. If you look a little bit further and that's sort of where you have your question related to more LNG. Yes, there are more LNG coming.

Speaker #3: Okay . Let's see here . That was a long answer , but it was an important question . Then on sort of the global gas market .

Torgrim Reitan: On sort of the global gas market. First of all, I would like to say that in the short term, you know, this winter, the market seems tighter than many actually thinks. We are on the storage levels around 83%, which is 12 percentage points below last year. If we see a cold winter, you know, it can really have a significant impact on the market. I would say if we see normal winter, you know, we might see prices, you know, where last year sat as such. I would say in the short term, price is very much driven by weather and temperature as such.

Speaker #3: So first of all , I would like to say that in the short term , you know , this winter the market seems tighter than than many actually thinks we are on a storage levels around 83% , which is 12 percentage point below the last year .

Speaker #3: So if we see a cold winter , you know , it can really have a significant impact on the market . I would say if we see normal winter , you know , we might see prices , you know , where where last year a set as such .

Speaker #3: So so I would say in the short term price is very much driven by weather and temperature . As such , if you look a little bit further and that's sort of where you have your question related to more LNG .

Torgrim Reitan: If you look a little bit further, and that's sort of where you have your question related to more LNG, yes, there are more LNG coming. This is not new information. This is not a surprise. This is what the whole world has been sort of planning for quite a while. The question is, of course, you know, how fast will this come on stream and will there be delays? Clearly something to watch. We see, you know, still actually a quite healthy demand from Asia. Asia in totality, around 3% growth per year, and that sort of will take up significant part here. What else is to watch is actually US gas prices.

Speaker #3: And yes , there are more LNG coming . This is not new information . This is not a surprise . This is what the whole world has been sort planning for , for quite a while .

Torgrim Reitan: This is not new information. This is not a surprise. This is what the whole world has been sort of planning for, for quite a while. The question is, of course, you know, how fast will this come on stream and will there be delays. Clearly something to watch. We see, you know, still actually quite healthy demand from Asia. Asia in totality around 3% growth per year, and that sort of will take up significant part here. What else is to watch is actually U.S. gas prices. U.S. gas prices have become recently much more a political topic internally domestically in the U.S. because everyone sees that with all data center and AI will have a significant impact on solar prices and power has to come from somewhere and natural gas clearly important source. Utility bills in households is more and more becoming an election topic as such.

Speaker #3: And the question is , of course , you know how fast will this come on stream ? And will there be delays ? So clearly something to watch .

Speaker #3: We see, you know, still actually quite healthy demand from Asia. Asia, in totality, is around 3% growth per year, and that sort of will take up a significant part here.

Speaker #3: What else is to watch this actually a US gas prices and and US gas prices has become recently much more a political topic internally domestically in the US because everyone sees that with all data centers and AI will have a significant impact on power prices and power has to come from somewhere and natural gas clearly important source .

Torgrim Reitan: US gas prices has become recently much more a political topic internally, domestically in the US. Everyone sees that with all data center and AI, we'd have a significant impact on solar prices, and power has to come from somewhere, and natural gas clearly important source. Utility bills in households is more and more becoming an election topic as such, and that might put limitations on exports of natural gas. This is clearly an area we follow very closely. There's no doubt there is significant amount of LNG coming. You know, our gas, $2 per MMBtu, you know, cost and transportation, selling into an $11 market, you know, we are very, very robust.

Speaker #3: So utility bills in households is more and more becoming an election topic as such . And that might put limitations on on exports of natural gas .

Torgrim Reitan: That might put limitations on exports of natural gas. This is clearly an area we follow very closely. There's no doubt there is significant amount of LNG coming and, you know, over gas, $2 per MBTU, you know, cost and transportation selling into an $11 market, you know, we are very, very robust. Here's one maybe last point to mention here, that is sort of the sanctioning on Russian LNG that will lead the European markets as well.

Speaker #3: So , so I this is clearly an area we , we , we , we , we follow very closely . But but but there's no doubt there is significant amount of LNG coming .

Speaker #3: And you know our gas $2 . Per MMBtu , you know , cost and transportation selling into an $11 market . You know , we are very , very robust .

Speaker #3: And as one last point to mention here, that is regarding the sanctions on Russian LNG in DCM, which will leave the European markets as well.

Torgrim Reitan: You know, as one maybe last point to mention here, that is sort of the sanctioning on Russian LNG. Sanctioned DCM, that will leave the European markets as well. All right. Okay. Thanks, Jason.

Speaker #3: All right. Okay. Thanks, Jason.

[Analyst]: All right.

Torgrim Reitan: Okay, thanks Jason.

Speaker #8: Thanks , Jason . Next question is from Chris Cooper from Bank of America . Please , Chris , your line should be open .

Bård Glad Pedersen: Thanks, Jason. Next question is from Christopher Kuplent from Bank of America. Please, Chris, your line should be open.

Bård Glad Pedersen: Thanks, Jason. Next question is from Chris Coupland from Bank of America, please. Chris, your line should be open.

Speaker #10: Yeah . Hi there . Thank you . I hope you can hear me . Okay . Just some I guess , rather boring questions .

[Analyst 3]: Yeah, hi there. Thank you. Hope you can hear me okay. Just some, I guess, rather boring questions, Torgrim, about detail. I wonder whether you can help us review what's happened in the nine months on your net working capital. Great results, I guess, and whether you can combine that review with an outlook where you think we're heading. If I could ask you to do the same, particularly for your Norwegian business. I understand there's a lot of moving parts in terms of assets for sale outside of Norway, but Norway has seen a significant decline in the discount to Brent that you've been able to achieve in Q3. Again, would love to have your review of that and an outlook if possible. Thank you.

Christopher Kuplent: Yeah, hi there. Thank you. Hope you can hear me okay. Just some, I guess, rather boring questions to talk about detail. I wonder whether you can help us review what's happened in the 9 months on your net working capital. Great results, I guess. Whether you can combine that review with an outlook where you think we're heading. If I could ask you to do the same, particularly for your Norwegian business, I understand there's a lot of moving parts in terms of assets for sale outside of Norway. Norway has seen a significant decline in the discount to Brent that you've been able to achieve in Q3. Would love to have your review of that and an outlook if possible. Thank you.

Speaker #10: Torgrim about detail . I wonder whether you can help us review what's happened in the nine months on your net working capital . Great results , I guess , and whether you can combine that review with an outlook where you think we're heading .

Speaker #10: And if I could ask you to do the same , particularly for your Norwegian business , I understand there's a lot of moving parts in terms of assets for sale outside of Norway , but but Norway has seen a significant decline in the discount to Brent that you've been able to achieve in Q3 .

Speaker #10: Again, I would love to have your review of that and an outlook if possible. Thank you.

Speaker #3: All right . Thanks , Chris . Yeah . So working capital is is clearly , you know , very important part of what we manage and manage diligently .

Torgrim Reitan: All right, thanks, Chris. Yeah, so working capital is clearly a very important part of what we manage and manage diligently. This quarter, working capital is down by $1 billion 3 points. The total working capital now is $3.7 billion. That is the reduction, and it's during the year actually done by some $3 billion. The question you had is what is sort of normal level and what have you. The reduction we have seen is very much linked to commodity prices as an MMP related reduction. I won't sort of give any outlook on this. I would say that given the structures in the markets, the volatility in the markets, and absolute price levels, it is sort of a fair level. You remember during the energy crisis we had a massive amount of working capital and of course earned a lot of money.

Torgrim Reitan: All right. Thanks, Chris. Yeah. Working capital is clearly, you know, a very important part of what we manage and manage diligently. This quarter, working capital is down by $1 billion, 3 points. The total working capital now is $3.7 billion. So that's that is the reduction. During the year, you know, actually down by some $3 billion. The question you had is what is sort of, you know, normal level and what have you. I mean, the reduction we have seen is very much linked to commodity prices, as an M&P-related reductions.

Speaker #3: So this quarter working capital is down by $1 billion . Three point the you know the total working capital now is $3.7 billion .

Speaker #3: So so that's that is the reduction . And it's during the year , you know , actually down by some $3 billion . So the question you had is what is sort of a .

Speaker #3: Normal level. And what have you? I mean, the reduction we have seen is very much linked to commodity prices as an MMP-related reduction.

Speaker #3: So so I won't sort of give any outlook on this , but I would say that that given the the structures in the markets , the volatility in the markets and the absolute price levels , it is sort of a fair level .

Torgrim Reitan: I won't sort of give any outlook on this, but I would say that given the structures in the markets, the volatility in the markets, and the absolute price levels, it is sort of a fair level. I mean, you remember during the energy crisis, we had a massive amount of working capital and of course earned a lot of money. You know, volatility and price levels are not there anymore. You know, I would say it's a fair level. It's a fair level. The second question was sort of discount to Brent. Yeah, I mean, Johan Castberg came on stream during the summer. Johan Castberg is able to achieve a $5 premium to Brent as such.

Speaker #3: I mean, remember during the energy crisis, we had a massive amount of working capital. And of course, we earned a lot of money.

Speaker #3: But you know , volatility and price levels are not there anymore . So but you know , I would say it's a fair level .

Torgrim Reitan: Volatility and price levels are not there anymore. I would say it's a fair level. It's a fair level. The second question was sort of discounted Brent. Johan Castberg came on stream during the summer, and Johan Castberg is able to achieve $5 premium to Brent, and that clearly has an impact to the discount to Brent overall on the shelf.

Speaker #3: It's a fair level . Then the second question was sort of this country . Brent . Yeah I mean you oncaspar came on stream during during the summer and , and Johann Kaspar is able to achieve $5 premium to Brent .

Speaker #3: And that clearly has an impact on the discounter brand overall on the shelf.

Torgrim Reitan: That clearly has an impact to the discount to Brent overall, on the shelf.

Speaker #10: Great . Thank you .

[Analyst 3]: Great, thank you.

Christopher Kuplent: Great. Thank you.

Speaker #8: Thank you, Chris. The next question is from Henry Pacheco from UBS. Henry, please go ahead.

Bård Glad Pedersen: Thank you, Chris. The next question is from Henri Patrico from UBS. Henri, please go ahead.

Bård Glad Pedersen: Thank you, Chris. The next question is from Henri Patricot from UBS. Henry, please go ahead.

Speaker #11: Yes. Thank you for taking my questions. I have two, please. The first one, I was wondering if you can give us an update on the latest thinking on the timing of the Peregrino disposal.

Torgrim Reitan: Yes, Lewan, thank you for taking my questions. I have two, please. The first one, I was wondering if you can give us an update on latest thinking on timing of the Peregrino disposal. And then secondly on your drop you mentioned the field continues to produce at a very high level. Are you thinking about the evolution of that going into 2026 and to what extent do we start to see a Dec next year? Thank you. All right. Okay. Thanks, Henry. First, Peregrino. So Peregrino was shut in during the autumn. It came back on stream on October 17 as such and is currently producing at more than 100,000 barrels per day. We have transacted and we will divest out of our 60% ownership position in the assets and that will be divested to PRIO in Brazil. There are two legs of this transaction.

Henri Patricot: Yes. Everyone, thank you for taking my questions. I have two, please. The first one, I was wondering if you can give us an update on latest thinking on timing of the Peregrino disposal. Secondly, on Johan Sverdrup, you mentioned, you know, the field continues to produce at a very high level. Are you thinking about the devolution of that going into 2026? To what extent do we start to see a decline next year? Thank you.

Speaker #11: And then secondly , on your Android , you you mentioned that the field continues to to produce at a very high level . Or are you thinking about the the evolution of that going into 2026 and to what extent do we start to see a decline in next year ?

Speaker #11: Thank you .

Speaker #3: All right . Okay . Thanks , Henry . First Peregrino so Peregrino was rushed in during the autumn . It came back on stream on October 17th as such .

Torgrim Reitan: All right. Okay. Thanks, Henry. First, Peregrino. Peregrino was shut in during the autumn. It came back on stream on 17 October as such, and is currently producing at more than 100,000 barrels per day. We have, you know, transacted and we will divest out of our 60% ownership position in the assets. That will be divested to PRIO in Brazil. There are two legs of this transaction. 40% of the 60% we expect to close during Q4 and the remaining 20% in Q1 next year. The headline transaction value was $3.5 billion with an effective date of 1 January 2024, which is quite a while.

Speaker #3: And is currently producing at more than 100,000 barrels per day . So ? So we have , you know , transacted and we will we will divest out of our 60% ownership position in the assets .

Speaker #3: And that will be divested to Prio in Brazil. So there are two legs of this transaction: 40% of the 60%. We expect to close during the fourth quarter.

Torgrim Reitan: 40% of the 60% we expect to close during the fourth quarter and the remaining 20% in the first quarter next year. The headline transaction value was $3.5 billion with an effective date of January 1, 2024, which is quite a while. There will be pro et contra settlement since then. What you should expect is that the consideration we will receive is a little bit below $3 billion. That will be split into 2/3 of that in the fourth quarter and 1/3 in the first quarter. This in Brazil is still very important to us. The reason why we did it was twofold. It was an attractive opportunity. Also, we are redeploying resources to Bacalhau and Raia in Brazil, hydrating the portfolio in Brazil. The long term commitment to Brazil is very much intact. Johan Sverdrup. Johan Sverdrup keeps delivering very well in the quarter.

Speaker #3: And the remaining 20% in the first quarter next year . So the headline transaction value was $3.5 billion , with an effective date of first or 1st of January , 24 , which is quite a while .

Speaker #3: So there will be , you know , pro contra settlement . Since then . So what you should expect is that that the consideration we will receive is , is , is a little bit below $3 billion .

Torgrim Reitan: There will be, you know, pro et contra settlements since then. What you should expect is that the consideration we will receive is a little bit below $3 billion, and that will be split into sort of two-thirds of that in Q4 and one-third in Q1. Just want to leave with you that, you know, this is, Brazil is still very important to us. The reason why we did it was twofold. It was attractive opportunity. Also we are redeploying resources to Bacalhau and Raia in Brazil, sort of high grading the portfolio in Brazil. The long-term commitment to Brazil is very much intact. Johan Sverdrup. Yeah.

Speaker #3: That will be split into sort of two thirds of that in , in the fourth quarter and one third in the , in the , in the first quarter , just want to to leave with you that , that you know , this the this is in Brazil is still very important to us .

Speaker #3: The reason why we did it was twofold . It was a attractive opportunity . And also we are redeploying resources to Bacalao and in Brazil , sort of high grading , hydrating the portfolio in in Brazil .

Speaker #3: So , so the long term commitment to Brazil is very much intact . Then Johan Sverdrup . Yeah . So Johan Sverdrup keeps delivering very well in the quarter , close to 100% regularity , which is a very good achievement in itself .

Torgrim Reitan: Johan Sverdrup keeps delivering very well in the quarter, close to 100% regularity, which is a very good achievement in itself. You know, we have worked the asset very, very hard to optimize production and recovery rates. Now we are looking at a recovery rate of 75% in that asset. It was 65% when we sanctioned it, and 65 is still a very, very high number. What we are currently working on is multilateral wells, retrofit existing wells into multilateral wells. We have successfully done that. Water management is very, very important because water management will continue to increase as we produce this well. That has also been done in a very good way.

Torgrim Reitan: Close to 100% regularity, which is a very good achievement in itself. We have worked the asset very, very hard to optimize production and recovery rates. Now we are looking at a recovery rate of 75% in that asset. It was 65% when we sanctioned it. 65% is still a very, very high number. What we are currently working on is multilateral wells, retrofit existing wells into multilateral wells. We have successfully done that. Water management is very, very important because water management will continue to increase as we produce this well. That has also been done in a very good way. We sanctioned phase three this summer, which will come on stream end 2027. In 2025, we were able to maintain the production more or less on the same level as 2023 and 2024. We have fast forwarded a lot of production, so this asset will start to decline.

Speaker #3: You know , we have worked worked the asset very , very hard to optimize production and recovery rates . Now we are looking at a recovery rate of 75% in that asset .

Speaker #3: It was 65% when we sanctioned it . At 65 is still a very , very high number . So what we are currently working on is , is multilateral wealth a existing wells into multilateral wells .

Speaker #3: So we have successfully done that. And then, water management is very, very important because water management will continue to increase as we produce this well.

Speaker #3: And that has also been done in a in a very good , good way . And then , you know , we we sanctioned phase three this summer , which will come on stream by end 2027 .

Torgrim Reitan: You know, we sanction phase 3 this summer, which will come on stream by end 2027. In 2025, we were able to maintain the production more or less on the same level as 2023 and 2024. We have fast-forwarded a lot of production, so this asset will start to decline. Next year you should expect lower production from Johan Sverdrup than in 2025. What we're doing. This is at core of our competent space, so we will clearly work very hard on maintaining as high production as possible from that asset.

Speaker #3: So in 2025 we were able to maintain the production more or less on the same level as 23 and 24 . But , you know , we have fast forwarded a lot of production .

Speaker #3: So , so this this asset will start to decline . So next year you should expect lower production from Johan Sverdrup than in 2025 .

Torgrim Reitan: Next year you should expect lower production from your Johan Sverdrup group than in 2025. What we're doing, this is at core of our competence base. We will clearly work very hard on maintaining as high production as possible from that asset. Thank you, Anders.

Speaker #3: But you know what we're doing. This is at the core of our competence base. So we will clearly work very hard on maintaining as high production as possible from that asset.

Michele Della Vigna: Understood. Thank you.

Speaker #11: Thank you .

Bård Glad Pedersen: Thank you, Andre. I still have quite a few on the list. I will ask now that you limit yourself to one question so that we are able to cover as many as possible. The next question is Michele Della Vigna from Goldman Sachs. Michele, please go ahead.

Speaker #8: I still have quite a few on the list. I will ask now that you limit yourself to one question so that we are able to cover as many as possible. The next question is from Michaela de la Vina from Goldman Sachs.

Bård Glad Pedersen: I still have quite a few on the list, so I will ask now that you limit yourself to one question so that we are able to cover as many as possible. The next question is Michele de la Vigna from Goldman Sachs. Michele, please go ahead.

Speaker #3: Michaela, please go ahead.

Speaker #12: Thank you. And thank you for all of the clear explanations. I wanted to come back to your comment about effectively restricting or being very capital efficient on offshore wind, given the acceleration in power demand we're seeing globally.

Torgrim Reitan: Thank you. Thank you for all of the clear explanations. I wanted to come back to your comment about effectively restricting or being very capital efficient on offshore wind given the acceleration in power demand we're seeing globally. I was just wondering, are there some other areas in the power markets where instead you see opportunities and you could look at redeploying some of the capital you're taking away from offshore wind at this time of low returns for those developments. Thank you. Okay, thanks, Michele. We do believe that there is value to be had within the power segment. We have recently established a new business area called Exactly Power as such. What we clearly will be looking for are opportunities that build on the portfolio we have and the customer base that we have.

Michele Della Vigna: Thank you. Thank you for all of the clear explanations. I wanted to come back to your comment about effectively restricting or being very capital efficient on offshore wind. Given the acceleration in power demand we're seeing globally, I was just wondering, are there some other areas in the power markets where instead you see opportunities and you could look at redeploying some of the capital you're taking away from offshore wind at this time of low returns for those developments? Thank you.

Speaker #12: I was just wondering , are there some other areas in the power markets where instead you see opportunities and you could look at redeploying some of the capital you're taking away from offshore wind at this time of of low returns for for those developments .

Speaker #12: Thank you .

Speaker #3: Okay . Thanks , Michaela . So . We we we we do believe that there is value to be had within of the power segment .

Torgrim Reitan: Okay. Thanks, Michele. We do believe that there is value to be had within sort of the Power segment. We have recently established a new business area, called exactly Power as such. What we clearly will be looking for are sort of opportunities that sort of builds on the portfolio we have. And clearly and the customer base that we have, and we have, you know, a big presence related to our gas positions in Europe and in the US. That's sort of, you know, the totality, the way we think about it. I have to be very clear that sort of, we have no intentions to significantly step up investments into this area. We are facing a period with lower prices.

Speaker #3: And we have recently established a new business area called exactly power . As such . So so what we clearly will be looking for are sort of opportunities that sort of builds on the portfolio .

Speaker #3: We have . And , and clearly , and the customer base that we have and we have , you know , a big presence related to or gas positions in Europe and in the US .

Torgrim Reitan: We have a big presence related to our gas positions in Europe and in the U.S., so that's the totality, the way we think about it. I have to be very clear that we have no intentions to significantly step up investments into this area. We are facing a period with lower prices. For us it will be very important to remain very capital disciplined in anything that we do, and everything we do needs to have a significant profitability and returns before we commit any capital to it. Thank you.

Speaker #3: So , so , so that's sort of , you know , the totality , the way we think about it . I have to be very clear that sort of we have no intentions to significantly step up investments into , into this area .

Speaker #3: We are facing a period with lower prices, and for us, it will be very important to remain very capital disciplined in anything that we do.

Torgrim Reitan: For us it will be very important to remain very capital disciplined in anything that we do. Everything we do need to have a significant profitability and returns before we commit any capital to it.

Speaker #3: And everything we do needs to have a significant profitability on returns before we commit any capital to it.

Speaker #12: Thank you .

Michele Della Vigna: Thank you.

Speaker #5: Thank you . Michaela .

Bård Glad Pedersen: Thank you, Michele. Next is one question from you too, Peter Lowe from Rothschild and Redburn. Peter, please go ahead. Your line is open.

Bård Glad Pedersen: Thank you, Michele. next one, please. One question from you, too. Peter Low, from Rothschild & Co. Peter, please go ahead. Your line is open.

Speaker #3: Next one please . One question from you to Peter Lowe from Rothschild . And Redburn . Peter , please go ahead . Your line is open .

Speaker #13: Hi . Yeah , thanks . Perhaps a question on the cash tax paid in the quarter , which I think was maybe a bit lower than expected .

Michele Della Vigna: Hi. Thanks. Perhaps a question on the cash tax paid in the quarter, which I think was maybe a bit lower than expected.

Torgrim Reitan: Hi. Yeah, thanks. Perhaps a question on the cash tax paid in the quarter, which I think was maybe a bit lower than expected. It looks like you paid two NCS installments for $3.9 billion, but the total cash tax paid in the cash flow statement was $3.8 billion. Were you getting refunds in other regions or can you perhaps explain that number a little bit? Thanks. Yeah, thanks. Thanks, Peter. A couple of things. Two tax installments in the second quarter. There will be three next quarter in Norway. Just be aware of that. There is a timing effect related to falling prices. We are still paying taxes based on a higher price environment. You can just be aware of that. Also, internationally, the reported tax is much higher than paid tax.

Peter Low: Hi. Thanks. Perhaps a question on the cash tax paid in the quarter, which I think was maybe a bit lower than expected.

Speaker #13: So it looks like you paid two installments of $3.9 billion, but the total cash tax paid in the cash flow statement was $3.8 billion.

Peter Low: It looks like you paid 2 NCS installments, the $3.9 billion, but the total cash tax paid in the cash flow statement was $3.8 billion. Were you getting refunds in other regions, or can you perhaps explain that number a little bit? Thanks.

Speaker #13: And were you getting refunds in other regions, or can you perhaps explain that number a little bit? Thanks.

Speaker #3: Yeah . So no thanks . Thanks , Peter . So a couple of things . So two tax installments in the second quarter .

Torgrim Reitan: No, thanks, Peter. A couple of things. 2 tax installments in Q2, there will be 3 next quarter. In Norway. Just be aware of that. There is a timing effect related to falling prices. We are still paying taxes based on a higher price environment. You can just be aware of that. Also internationally, you know, the reported tax is much higher than paid tax. That goes particularly across the UK with the EPL and then sort of Rosebank investments being offset against tax and in the US as well.

Speaker #3: There will be three next quarter. So, so, so, so in Norway. So just be aware of that. There is a timing effect related to falling, falling prices.

Speaker #3: So, we are still paying taxes based on a higher price environment. So, just be aware of that. And also, internationally, you know the reported tax is much higher than the paid tax.

Speaker #3: That goes particularly across the UK with the EPL and sort of Rosebank investments being offset against tax. And in the US as well.

Torgrim Reitan: That goes particularly across the UK with the EPL and sort of Rosebank investments being offset against tax and in the U.S. as well. Yeah.

Speaker #3: So yeah .

Speaker #5: Thank you. The next one is Nash QE from Barclays. Nash, please go ahead.

Bård Glad Pedersen: Thank you. The next one is Nash Kiwi from Barclays. Nash, please go ahead.

Bård Glad Pedersen: Thank you. The next one is Naisheng Cui from Barclays. Nash, please go ahead.

Speaker #14: Hey, good afternoon, everyone. Just one follow-up on MMP guidance, please. I think you mentioned in your report that part of the reason you cut MMP guidance is because of some divestment of gas infrastructure assets.

[Analyst 3]: Hey, good afternoon everyone. Just one follow up on MMP guidance, please. I think you mentioned in your report that part of the reason you cut MMP guidance is because of divestment of gas infrastructure assets. I wonder if you could isolate the impact on that place rather than the market condition change. Thank you.

Operator: Hey, good afternoon, everyone. Just one follow-up on MMP guidance, please. I think you mentioned in your report that part of the reason you cut MMP guidance is because of divestment of gas infrastructure assets. I wonder if you could isolate the impact on that please, rather than the market condition change. Thank you.

Naisheng Cui: Hey, good afternoon, everyone. Just one follow-up on MMP guidance, please. I think you mentioned in your report that part of the reason you cut MMP guidance is because of divestment of gas infrastructure assets. I wonder if you could isolate the impact on that please, rather than the market condition change. Thank you.

Speaker #14: I wonder if you could isolate the impact on that place rather than the market condition change. Thank you.

Speaker #5: Okay .

Torgrim Reitan: Okay, thanks. I can do that. That's $40 million per year. We did that a year and a half ago or something like that, or two years ago. At that point in time, we delivered above our guiding repeatedly in the quarter. We didn't see the need to strip that out. When we changed the guiding, we thought it was useful to mention it.

Torgrim Reitan: Okay, thanks. You know, I can do that's $40 million per year. We did that sort of a year and a half ago or something like that, or 2 years ago. At that point in time, you know, we, you know, delivered above sort of our guiding repeatedly in the quarter. We didn't see the need to sort of strip that out. When we now change the guiding, we thought it was useful to mention it.

Speaker #3: Thanks. I can do that; it's $40 million per year. We did that sort of a year and a half ago or something like that, or two years ago.

Speaker #3: At that point in time , you know , we , we , we , we , you know , delivered above sort of our guiding repeatedly in the quarter .

Speaker #3: So we , we didn't see the need to to sort of strip that out . But when we now change the guiding , we thought it was useful to mention it .

Speaker #3: .

Speaker #5: Just to be clear ,

Bård Glad Pedersen: Just to be clear, the $40 million.

Bård Glad Pedersen: Just to be clear, Nash, the $40 million effect is on a quarterly basis.

Speaker #3: The 40 million effect is on a quarterly basis . I think you might have said the earlier , but it's per quarter . Yeah , that's per quarter .

Torgrim Reitan: Effect is on a quarterly basis. I think you might have said it's per quarter. Yeah, that's per quarter, yeah. Thanks, boss.

Torgrim Reitan: Yeah.

Bård Glad Pedersen: I think you might have said though, per year, but it's per quarter.

Torgrim Reitan: Yeah, that's per quarter. Yeah. Thanks, Paul.

Speaker #3: Yeah. Thanks, Bert.

Speaker #14: That's very helpful. Thank you.

Operator: That's very helpful. Thank you.

[Analyst 3]: That's very helpful. Thank you.

Speaker #3: Thank you, Nash. Next one is Paul Redman from BNP Paribas. Paul, please go ahead.

Bård Glad Pedersen: Thank you, Nash. Next one is Paul Redman from BNP Paribas. Paul, please go ahead.

Speaker #15: Yeah . Thank you very much . And I might be a little bit early , but I just wanted to ask about how you're thinking about your distribution program for next year .

[Analyst 2]: Thank you very much. I might be a little bit early, but I just wanted to ask about how you're thinking about your distribution program for next year. We're going into 2026 with quite a volatile view on oil prices, difficult view into gas prices. Your debt came down this quarter, and I think you're guiding to a reversion of some of that into Q4. I just wanted to ask about how we should maybe think about a distribution program for 2026 and then just confirmation of whether you're going to guide to that at the Q4 results or at the capital markets day later in the year.

Paul Redman: Yeah, thank you very much. I might be a little bit early, but I just wanted to ask about how you're thinking about your distribution program for 2026. We're going into 2026 with quite volatile view on oil prices, difficult view into gas prices. Your debt came down this quarter, I think you're guiding to a reversion of some of that into Q4. I just wanted to ask about how we should maybe think about a distribution program for 2026. Just confirmation of whether you're going to guide to that, the Q4 results or at the Capital Markets Day later in the year.

Speaker #15: We're entering 2026 with quite a volatile view on oil prices. There's a difficult outlook for gas prices. Your debt came down this quarter, and I believe you're guiding to a reversion of some of that into a fork.

Speaker #15: So, I just wanted to ask about how we should maybe think about a distribution program for 2026, and then just confirmation of whether you're going to guide to that at the Q4 results or at the Capital Markets Day later in the year.

Speaker #3: Okay . Thanks . Thanks , Paul . Yeah . All right . So first of all , there's a lot of good reasons to be prepared for lower prices .

Torgrim Reitan: Okay, thanks. Thanks, Paul. All right. First of all, there's a lot of good reasons to be prepared for lower prices. We are. Last year we took down investments by $8 billion for a few years and also cost down. We will continue to push on this to improve free cash flow in the current environment. This is an ongoing thing. I just want you to be aware of that. Secondly, capital distribution will have a priority in our capital allocation model. Cash dividend. The cash dividend, you should consider that as bankable. That will come. On top of that, we will use share buyback and share buyback will be used on a regular basis. It is a natural part of our capital distribution framework. As such, we clearly aim to be competitive when it comes to the overall capital distribution.

Torgrim Reitan: Okay, thanks. Thanks, Paul. Yeah. All right. First of all, there's a lot of good reasons to be prepared for lower prices, and we are that. Last year, we took down investments by $8 billion over for a few years and also cost down. We will continue to push on this to improve, you know, free cash flow, you know, in the current environment. This is an ongoing thing. I just want you to be aware of that. That is so. Secondly, you know, capital distribution will have a priority in our capital allocation model. The cash dividend, you should consider that as bankable. I mean, that will come. On top of that, we will use share buyback, and share buyback will be used on a regular basis.

Speaker #3: And we are not, at last year, we took down investments by $8 billion over a few years. And also cost down.

Speaker #3: We will continue to push on this to improve . You know , free cash flow , you know , in the current environment .

Speaker #3: So this is an ongoing thing . I just want you to be aware of that so that that is secondly , you know , capital distribution will have a priority in our capital allocation model .

Speaker #3: Cash dividends , the cash dividend . You should consider that as a I mean , that will come on top of that . We will use share buyback and share buyback will be used on a regular basis .

Speaker #3: It is a natural part of our capital distribution framework . As such . So so so and so so so . Any and we we clearly aim to be competitive when it comes to the overall capital distribution .

Torgrim Reitan: It is a natural part of our capital distribution framework as such. And so and we clearly aim to be competitive when it comes to the overall capital distribution. To be precise or competitive, you know, I'll leave with you a couple of things. We know that our peers are using a formulas related to cash flow. You should think about that type of sort of levels as sort of being competitive when it comes to ourselves. I think it's worth mentioning that sort of we have specialities around the Norwegian tax. Percentage points, you know, should be a little bit lower for consistency as such. Your question on sort of what will happen next year as such.

Speaker #3: And to be precise on competitive , you know , I'll live with you a couple of things . We know that our peers are using a formulas related to cash flow .

Torgrim Reitan: To be precise or competitive, I'll leave with you a couple of things. We know that our peers are using formulas related to cash flow. You should think about that type of levels as being competitive. When it comes to ourselves, I think it's worth mentioning that we have specialties around the Norwegian tax, so percentage points, you know, we should be a little bit lower for consistency as such. Your question on what will happen next year as such. We will announce this on the fourth quarter results in February. There are a couple of specialties I would like to draw your attention to and that is next year we have a significant investment related to Empire Wind equity that is around $2 billion. The year after we will get it back through the investment tax credit. When we consider capital distribution for 2026, we will look through that.

Speaker #3: You should think about that type of sort of levels as sort of being competitive when it comes to ourselves . I think it's worth mentioning that sort of we have specialties around the Norwegian tax .

Speaker #3: So percentage points , you know , we are it should be a little bit lower for consistency . As such . Then your question on sort of what will happen next year as such , we will announce this on the fourth quarter results in February .

Torgrim Reitan: We will announce this on the Q4 results in February. There are a couple of specialties I would like to draw your attention to, and that is next year, we have a significant investments related to Empire Wind equity that is around $2 billion. The year after, we will get it back through the Investment Tax Credit. When we consider capital distribution for 2026, we will look through that. We will take a 2-year perspective when we do consider our capital distribution for the year. You know, and this is why it doesn't make sense to have...

Speaker #3: There are a couple of specialties I would like you to draw your attention to, and that is next year. We have significant investments related to Empire Wind Equity that is around $2 billion.

Speaker #3: The year after, we will get it back through the investment tax credit. So when we consider capital distribution for 2026, we will look through that.

Speaker #3: We will take a two year perspective . When we do consider our capital distribution for the year . So , you know , and this is why it doesn't make sense to have that's why we are not sort of running with a formula , because there might be years where we would like to lean on the balance sheet , and there are other years where we clearly would like to build a balance sheet as well .

Torgrim Reitan: We will take a two year perspective when we do consider our capital distribution for the year. This is why it doesn't make sense to have a formula because there might be years where we would like to lean on the balance sheet and there are other years where we clearly would like to build a balance sheet as well. I think that is very important for me to say that those type of effects we will see through and we will see to that we are competitive when it comes to capital distribution. You also mentioned the net debt and I just want to use the opportunity to say a few words there. We are currently at 12%. We expect to be in the low end of the range by year end. There are a couple of things I would like to bring with you.

Torgrim Reitan: That's why we are not sort of running with a formula, because there might be years where we would like to lean on the balance sheet, and there are other years where we clearly would like to build a balance sheet as well. I think that is very important for me to say that those type of effects we will see through, and we will see to that we are competitive when it comes to capital distribution. You also mentioned the net debt, I just want to use the opportunity to say a few words there. We are currently at 12%. We expect to be in the low end of the range by year end. There are a couple of things I would like to bring with you. Point one, there are 3 tax installments.

Speaker #3: But I think it is very important for me to say that those types of effects we will see through, and we will see through that we are competitive when it comes to capital distribution.

Speaker #3: You also mentioned the net debt, and I just want to use the opportunity to say a few words. There, we are currently at 12%.

Speaker #3: We expect to be in the low end of the range by year end . There are a couple of things I would like to to to bring with you .

Speaker #3: There are two . You point one , there are three tax instalments . There will be payments of the rights issue , $900 million in the quarter , and they will also be part of the Peregrine transaction .

Torgrim Reitan: To your point, one, there are three tax installments. There will be payment of the rights issue, $900 million in the quarter, and they will also be part of the Peregrino transaction, you know, funds coming back. My point is we maintain the guiding for net debt to year end. Even if we have participated in the rushed rights issue with $900 million, it is driven by strong underlying operations and cash flow and also improvement in the working capital as we talked about earlier. Long answer, Paul, but an important question.

Torgrim Reitan: There will be payment of the rights issue, $900 million in the quarter, and there will also be part of the Peregrino transaction, you know, funds coming back. My point is, we maintain the guiding for net debt to year-ends, even if we have participated in the Ørsted right issue with $900 million. It is driven by strong underlying operations and cash flow, and also improvement in the working capital, as we talked about earlier. Long answer, Paul, but an important question.

Speaker #3: You know, funds are coming back. But my point is we maintain the guidance for net debt to year-end, even if we have participated in the rights issue with $900 million.

Speaker #3: It is driven by strong underlying operations and cash flow, as well as improvements in working capital, as we discussed earlier.

Speaker #3: So long answer , Paul , but an important question . Thank you Paul . Next one on the list is Martin . Rats from Morgan Stanley .

Bård Glad Pedersen: Thank you, Paul. Next one on the list is Martin Ratz from Morgenstern. Martin, your line should be open.

Bård Glad Pedersen: Thank you, Paul. Next one on the list is Martijn Rats from Morgan Stanley. Martijn, your line should be open.

Speaker #3: Martin, your line should be open.

Speaker #16: Yeah . Hi . Good morning . Well , only one for me . I wanted to ask about the impairment charge because I .

[Analyst 4]: Yeah, hi, good morning. Only one for me. I wanted to ask about the impairment charge because it's more of a question of just sort of trying to make sure I interpret this correctly. The long term oil price assumption has come down, but it's still $75 a barrel. That has triggered $750 million of impairments, which sort of suggests that there were projects in your portfolio that had breakevens well above $75 a barrel. I was wondering if that is the correct interpretation. If your projects have breakevens below $75 but you lower the long term assumption, that wouldn't trigger an impairment, right? Am I interpreting this correctly?

Martijn Rats: Yeah. Hi, good morning. Well, only one for me. I wanted to ask about the impairment charge because I've It's more of a question of just, sort of, trying to make sure I interpret this correctly. The long-term oil price assumption has come down, but it's still $75 a barrel. That has triggered $750 million of impairments, which sort of suggests that there were projects in your portfolio that had breakevens well above $75 a barrel. I was wondering if that is the correct interpretation. If your projects have breakevens below $75 bucks, but you lower the long-term assumption, it wouldn't trigger an impairment, right? Am I interpreting this correctly?

Speaker #16: And it's more of a question of just sort of trying to make sure I interpret this correctly . So the long term oil price assumption has come down , but it's still $75 a barrel .

Speaker #16: But that has triggered $750 million of impairments, which sort of suggests that there were projects in your portfolio that had breakevens well above $75 a barrel.

Speaker #16: And I was wondering if that is the correct interpretation . If , if , if your projects have breakevens below $75 , but you lower the the long term assumption , it wouldn't trigger an impairment , right ?

Speaker #16: Am I am I interpreting this correctly ?

Torgrim Reitan: Martin, thank you for your question. Well, there are qualifications that needs to be made. First of all, we have the assets on the UK side, which are impaired with $650 million. First of all, I would like to say this has absolutely nothing to do with a transaction with Shell. This is an isolated effect, and it is driven by lower oil price assumption, as you said. You know, a very important driver for this is that these assets are held for sale in the book, so they haven't been depreciated for since the beginning of the year. If they had been depreciated on a normal basis, you know, the impairment would have been significantly lower.

Speaker #3: Martin . Thank you for your question . Well , there are qualifications that needs to be made . So first of all , we have the assets on the UK side , which are in impaired with $650 million .

Torgrim Reitan: Martin, thank you for your question. There are qualifications that need to be made. First of all, we have the assets on the UK side which are impaired with $650 million. I would like to say this has absolutely nothing to do with a transaction with Shell. This is an isolated effect and it is driven by lower oil price assumption, as you said. A very important driver for this is that these assets are held for sale in the book. They haven't been depreciated since the beginning of the year. If they had been depreciated on a normal basis, the impairment would have been significantly lower. The second point on the UK portfolio is that part of that asset base is linked to the acquisition we did with Suncor and the Buzzard Field, which sits in the balance sheet at acquisition cost as such.

Speaker #3: First of all, I would like to say this has absolutely nothing to do with the transaction with Shell. This is an isolated effect, and it is driven by lower oil price assumptions.

Speaker #3: As you said , the , you know , a very important driver for this is that these assets are held for sale in the book .

Speaker #3: So they haven't been depreciated for since since the beginning of the year . If they had been depreciated on a normal basis , you know , the impairment would have been significantly lower .

Speaker #3: The second point on the UK portfolio is that part of that asset base is linked to the acquisition we did with Suncor and the Buzzard field, which sits on the balance sheet at sort of, you know, acquisition cost.

Torgrim Reitan: The second point on the UK portfolio is that part of that asset base is linked to the acquisition we did with Suncor and the Buzzard field, which sits in the balance sheet at sort of, you know, acquisition cost as such. That has also had an impact for that asset. There are two assets in the Gulf of Mexico also, impaired. Those are also mainly driven by price. Those are assets run by, operated by significant US operators, as such. One of the assets has been a challenging asset operational-wise for several years, as such. I mean, it's, it's... Yeah. I mean, it is one asset in the US Gulf of Mexico that has been a challenge.

Speaker #3: As such, and that has also had an impact on that asset. There are two assets in the Gulf of Mexico that are also impaired.

Torgrim Reitan: That has also had an impact for that asset. There are two assets in the Gulf of Mexico also impaired. Those are also mainly driven by price. Those are assets run by, operated by significant U.S. operators. On one of the assets, it has been a challenging asset operational wise for several years. It is one asset in the U.S. Gulf of Mexico that has been a challenge. The remainder of the asset portfolio there is very robust for impairments. Thanks, Martin.

Speaker #3: Those are also mainly driven by price . Those are assets run by operated by significant US operators . As such . And one of the assets has been a challenging asset operational wise for for for for for for for for several years as such .

Speaker #3: So, I mean, it's, it's – yeah, I mean, it is one asset in the U.S. Gulf of Mexico that has been a challenge.

Speaker #3: The remainder of the asset portfolio . There is is very robust for impairments . So thanks , Martin .

Torgrim Reitan: The remainder of the asset portfolio there is, you know, very robust for impairments. Thanks, Martin.

Speaker #16: Okay . Thank you .

[Analyst 3]: Okay, thank you.

Martijn Rats: Okay. Thank you.

Speaker #3: Thank you, Martin. Next one is JP Morgan. Matt Lofting, please go ahead.

Bård Glad Pedersen: Thank you, Martin. Next one is JP Morgan. Matt Lofting. Matt, please go ahead.

Bård Glad Pedersen: Thank you, Martin. Next one is J.P. Morgan, Matthew Lofting. Matt, please go ahead.

Speaker #17: Hi. Thanks for still going on the questions. I just wanted to come back to Empire Wind, Torgrim. I think you mentioned in your opening remarks that there was.

Torgrim Reitan: Hi.

Matthew Lofting: Hi. Thanks for still going on the questions. I just wanted to come back to Empire Wind, Torgrim. I think you mentioned in your opening remarks that there was an availability issue that's emerged on an installation vessel with Maersk. Could you just expand on what's happening there and sort of any risk that that poses to the future development progress of Empire Wind into next year? Thank you.

[Analyst 2]: Thanks for still going on the questions. I just wanted to come back to Empire Wind. Torgrim, I think you mentioned in your opening remarks that there was an availability issue that's emerged on an installation vessel with Maersk.

Speaker #17: An availability issue has emerged on an installation vessel with Maersk. Can you expand on what's happening there and sort of any risk that that poses to the future development progress of Empire Wind into next year?

Torgrim Reitan: Could you just expand on what's happening?

[Analyst 2]: Is there any risk that that poses to the future development progress of Empire Wind into next year?

Speaker #17: Thank you . Yeah .

Torgrim Reitan: Thank you. Thanks, Matt. First of all, I think it's fair to say that employment has had a demanding year with a stop work order that has been reversed. I just want to use the opportunity to say that the lost time has been caught up and we are back on track. I must say that I'm very proud of what the organization has been able to do in a critical year like this. We are 55% complete. All monopiles are in the seabed. On this issue, this is a dispute between Maersk and Ctium, which is the yard in Singapore. The vessel is more or less completed and finished and Maersk has cancelled the contract. We are close to the situation. We are working to either see that this solution is solved or, you know, looking for other opportunities.

Torgrim Reitan: Yeah. Thanks, Matt. First of all, I think it's fair to say that Empire Wind has had a demanding year with a stopped work order that has been reversed. I just want to use the opportunity to say that the lost time has been catched up, we are back on track. I must say that I'm very proud of what the organization have been able to do in a critical year like this. We are 55% complete. All monopiles are in the seabed. On this issue, this is a dispute between Maersk and Seatrium, which is the yard in Singapore.

Speaker #3: Thanks , Matt . So , so first of all , I think it's fair to say that Empire Wind has had a demanding year with the stop work order that has been reversed .

Speaker #3: And I just want to use the opportunity to say that the lost time has been caught up, and we are back on track.

Speaker #3: And I must say that I'm very proud of what the organization has been able to do in a critical year like this. We are 55% complete, with all monopiles in the seabed.

Speaker #3: So on this on this issue , this , this is this is dispute between Maersk and and CTM , which is the yard in in Singapore .

Speaker #3: The vessel is in more or less completed and finished . And Maersk has sort of canceled . Canceled . The contract . So we are close to the situation .

Torgrim Reitan: The vessel is more or less completed and finished, and Maersk has sort of canceled the contract as such. We are close to the situation. We are working, you know, to either, you know, see to that this solution is solved or, you know, looking for other opportunities. Important for me to say that this is a well-functioning market, and there are other opportunities available in the market. We will manage this. We will manage this, you know, not risk-free naturally, but we will give you an update as this progress.

Speaker #3: We are working . You know , to to either , you know , see to that this solution is is solved or , you know , looking for other opportunities .

Torgrim Reitan: It is important for me to say that this is a well-functioning market and there are other opportunities available in the market. We will manage this, not risk free naturally, but we will give you an update as this progresses.

Speaker #3: It's important for me to say that this is a well-functioning market and there are other opportunities available in the market. So, we will manage this.

Speaker #3: We will manage this. You know, it's not risk-free, naturally. But, but, but we will give you an update as this progresses.

Speaker #3: Thank you, Matt. We move on to James Carmichael from Berenberg. James, please go with your question.

Bård Glad Pedersen: Thank you, Matt. We move on to James Carmichael from Bernstein. James, please go with your question.

Bård Glad Pedersen: Thank you, Matt. We move on to James Carmichael from Berenberg. James, please go with your question.

Speaker #18: Hi . Morning , guys . Just one just quickly on the UK and Rosebank . I was just wondering what the latest is on that approval process .

Torgrim Reitan: Hi.

Martijn Rats: Hi. morning, guys. just wanna actually just quickly on the UK and Rosebank. I was just wondering what the latest is on that approval process. Then I guess maybe just sort of general thoughts on the UK as we maybe get a bit closer to some clarity on the fiscal outlook here. Thanks.

[Analyst 3]: Morning guys.

[Analyst 2]: Just want to show you quickly on the UK and Rosebank. I was just wondering what the latest.

Torgrim Reitan: Is on that approval process.

Speaker #18: And then I guess maybe just sort of general thoughts on the UK as we maybe get a bit closer to some clarity on the fiscal outlook here.

[Analyst 2]: I guess just sort of general thoughts on the UK as we maybe get a bit closer to some clarity.

Torgrim Reitan: On the fiscal outlook here.

Speaker #18: Thanks .

[Analyst 3]: Thanks.

Speaker #3: Okay . All right . Thanks . Thanks , James . So on on Rosebank , as you might be aware of sort of the permit was sort of , you know , taken away due to , you know , that scope three emissions should have been taken care of into the , in the , in the , in the award .

Torgrim Reitan: All right, thanks. Thanks, James. On Rosebank, as you might be aware, the permit was taken away due to Scope 3 emissions that should have been taken care of in the award. We have submitted our response recently to the regulator, and they turned around and put it into public consultation right away. That has started, and we expect the consultation to end at the 20th of November. There is no set date for the decision, but clearly we work very closely with the ministries to get this moving as quickly as possible. The second part of your question, what was that, James, about fiscal outlook in the UK? Yeah, I guess your general thoughts on the UK. Obviously, some uncertainty on the fiscal outlook.

Torgrim Reitan: Okay. All right. Thanks. Uh, thanks, James. So on, on Rosebank, um, uh, as you might be aware of, sort of, um, the permit was sort of, um, uh, you know, taken away due to, uh, you know, that scope three emissions should have been taken care of into the... In the, in the, in the award. Uh, so we have submitted our response, uh, recently to the regulator and the, and the, they turn around and put it into public consultation right away. That has started and, uh, and we expect the consultation to end at the twentieth of November. Uh, there is no set date for the decision, but clearly we work very closely with the, with the ministries to, to get this moving as quickly as possi-posi-po-possible, uh, as such.

Speaker #3: So we have submitted our response recently to the regulator, and they turned around and put it into public consultation right away.

Speaker #3: That has started . And and we expect the consultation to end at 20th of November . There is no set date for the decision , but clearly we work very closely with with the ministries to , to get this moving as quickly as possible .

Speaker #3: Positive possible as such , the second part of your question , what was that ? James , about fiscal outlook in in the UK ?

Torgrim Reitan: The second part of your question, what was that, James, about fiscal outlook in the UK?

Speaker #18: Yeah , I guess just , you know , general thoughts on the UK . Obviously some uncertainty on the fiscal outlook . Hopefully we'll get some clarity there soon .

James Carmichael: Yeah, I guess just your, you know, your general thoughts on the UK. Obviously, some uncertainty on the fiscal outlook, but hopefully we'll get some clarity there soon. Yeah, just some context around that.

[Analyst 2]: Hopefully we'll get some clarity there soon.

Speaker #18: Yeah. Just some context around that.

Torgrim Reitan: Just some context around that. I think it's fair to say that there has been repeatedly tax changes on the UK side over years. This is nothing that we appreciate and clearly would advocate for a strong and stable fiscal framework to create a basis for investing as such. Thank you, James.

Speaker #3: I think it's fair to say that there have been repeated tax changes on the UK side over the years. This is nothing that we appreciate.

Torgrim Reitan: Yeah, no. I think it's fair to say that there has been repeatedly tax changes on the UK side over years. This is nothing that we appreciate, and clearly would advocate for a strong and stable fiscal framework to create a basis for investing as such. Yeah.

Speaker #3: And clearly, I would advocate for a strong and stable fiscal framework to create a basis for investing. As such, yeah. Thank you.

Bård Glad Pedersen: Thank you, James. Kim Fustier from HSBC is next on my list. Kim, please go ahead with your question.

Speaker #3: James Kim, first here from HSBC, is next on my list. Kim, please go ahead with your question.

Bård Glad Pedersen: Kim Firstier from HSBC is next on my list. Kim, please go ahead with your question.

Speaker #19: Oh , hi . Yeah . Good afternoon and thanks for taking my question . I noticed that one of your Norwegian competitors has recently expressed some concerns that there may not be enough projects on the NCS within a year or two to sustain a healthy domestic supply chain .

[Analyst]: Oh, hi. Good afternoon and thanks for taking my question. I noticed that one of your Norwegian competitors has recently expressed some concern that there may not be enough projects on the Norwegian Continental Shelf within a year or two to sustain a healthy domestic supply chain. Obviously you're also moving away from big greenfield projects to smaller brownfields. It's kind of an industry-wide issue. Just interested in hearing your views on the outlook for the Norwegian Continental Shelf supply chain and contemplation.

Operator: Oh, hi. Yeah, good afternoon, and thanks for taking my question. I noticed that one of your Norwegian competitors has recently expressed some concern that there may not be enough projects on the NCS within a year or two to sustain a healthy domestic supply chain. Obviously, you're also moving away from big greenfield projects to smaller brownfields, so it's kind of an industry-wide issue. Just interested in hearing your views on sort of, you know, the outlook for the NCS supply chain and cost inflation.

Kim Fustier: Oh, hi. Yeah, good afternoon, and thanks for taking my question. I noticed that one of your Norwegian competitors has recently expressed some concern that there may not be enough projects on the NCS within a year or two to sustain a healthy domestic supply chain. Obviously, you're also moving away from big greenfield projects to smaller brownfields, so it's kind of an industry-wide issue. Just interested in hearing your views on sort of, you know, the outlook for the NCS supply chain and cost inflation.

Speaker #19: Obviously , you're also moving away from Big greenfield projects to smaller brownfield . So it's kind of an industry wide issue . Just interested in hearing your views on sort of , the outlook for for the NCS supply chain and , and , and contemplation .

Speaker #3: Yeah . All right . Thanks , Kim . You know , we are currently having a period with very high activity , a bit of that is driven by the tax incentive program put in place during Covid as such .

Torgrim Reitan: Yeah, all right, thanks Kim. We are currently having a period with very high activity. A bit of that is driven by the tax incentive program put in place during COVID as such, and many of these projects are soon coming into production. It is natural that there will be a lower activity past that asset. I think our job as a company is to adapt to that and adjust. I think it's, you know, I just want to use the opportunity to talk about a project that we have established called NCS 2035. This links very much to what we said at the capital markets day in the winter. Maintaining production level on the Norwegian Continental Shelf all the way to 2035. That future will contain more but smaller discoveries, it will take quicker developments, and we have to operate at lower cost.

Torgrim Reitan: Yeah. All right. Thanks, Kim. You know, we are currently having a period of very high activity. A bit of that is driven by the tax incentive, you know, program put in place during COVID as such, and many of these projects are soon coming into production. It is natural that there will be a lower activity past that as such. I think our job as a company is to adapt to that and adjust. You know, I just want to use the opportunity to talk about a project that we have established called NCS 2035, and this links very much to what we said at the Capital Markets Update in the winter, you know, maintaining production level on the NCS all the way to 2035. That future will contain more but smaller discoveries.

Speaker #3: And many of these projects are soon coming in to into production . So it is natural that there will be a lower activity past that Asearch .

Speaker #3: So so I think our job as a company is to adapt to that and adjust . I think it's , you know , I just want to use the opportunity to talk about a project that we have established called NCS 2035 .

Speaker #3: And this links very much to what we said at the Capital Markets Day in the winter: you maintaining production levels on the NCS all the way to 2035.

Speaker #3: That future will contain more but smaller discoveries . It will take quicker developments and we have to operate at lower costs . So , for instance , we will drill 30 exploration wells per year and that is more than we do currently .

Torgrim Reitan: It will take quicker developments, we have to operate at lower costs. For instance, we will drill 30 exploration wells per year, that is more than we do currently. We will put forward six to eight subsea developments per year, which is also more than what we have done currently. By what we are doing, clearly we will be a significant contributor to maintaining a high activity level on the Norwegian Continental Shelf and also the industry in Norway. Very optimistic about what we can achieve through a different way of working and different way of working with suppliers.

Torgrim Reitan: For instance, we will drill 30 exploration wells per year. That is more than we do currently. We will put forward six to eight subsea developments per year, which is also more than what we have done currently. By what we are doing, clearly we will be a significant contributor to maintaining a high activity level on the Norwegian Continental Shelf and also the industry in Norway. Very optimistic about what we can achieve through different way of working and different way of working with suppliers. Thank you.

Speaker #3: And we will put forward 6 to 8 subsea developments per year , which is also more than what we have done currently . So but by what they are doing , clearly we will be a significant contributor to maintaining a high activity level on the Norwegian continental shelf and also the industry in Norway .

Speaker #3: I'm very optimistic about what we can achieve through different ways of working and different ways of working with suppliers. Thank you. Kim.

Bård Glad Pedersen: Thank you, Kim. We are fast approaching the hour. Let's take one final question. That is you, Steffen Evjen from DNB. Steffen, please go ahead with your question.

Bård Glad Pedersen: Kim, we are fast approaching the hour, but let's take one final question, and that is you, Stephan Evjen from DNB. Stephan, please go ahead with your question.

Speaker #3: We are fast approaching the hour , but let's take one final question and that is you , Stephan Evian from DMV . Stephan , please go ahead with your question .

Speaker #20: Yeah . Thanks . So quick . One . Just to remind me on the tax credit in the US , what's the milestone ?

Torgrim Reitan: Yeah, thanks. Quick one, just remind me, on the tax credit in the U.S., what's the milestone you have to get that to get that credit paid? Is that first power or COD on the project? Yeah, it is production. Production start, that is sort of the criteria, and it is first power. That is sort of the ultimate. That is what we plan for in 2027. Okay, thank you. Thanks.

Steffen Evjen: Yeah, thanks. Quick one. Just remind me on the tax credit in the US, what's the milestone you have to get that credit paid? Is that first power or COD on the project?

Speaker #20: You have to to get that to get that credit paid . Is that the first power or Cod on the project ?

Speaker #3: Yeah , yeah , it is . Production . Production start that is sort of the the criteria and it is first power that is all of the ultimate .

Torgrim Reitan: Yeah, it is production start, that is sort of the criteria, and it is first Power that is sort of the ultimate. That is what we plan for in 2027.

Speaker #3: So that is what we plan for in 2027.

Speaker #20: Okay . Thank you .

Steffen Evjen: Okay. Thank you.

Speaker #21: Thanks .

Torgrim Reitan: Thanks.

Speaker #3: Thank you very much. We are now at the hour. I would like to thank you all for calling in and for your questions.

Bård Glad Pedersen: Thank you very much. We are now at the hour. I would like to thank you all for calling in and for your questions. As always, the Investor Relations team remains available. If there's any outstanding question, please give us a call and we will do our best to help you. Thank you very much and have a good rest of the day.

Bård Glad Pedersen: Thank you very much. We are now at the hour. I would like to thank you all for calling in and for your questions. As always, the investor relations team remain available, so if there's any outstanding questions, please give us a call, and we will do our best to help you. Thank you very much, and have a good rest of the day.

Speaker #3: As always, the Investor Relations team remains available, so if there are any outstanding questions, please give us a call, and we will do our best to help you.

Speaker #3: Thank you very much, and have a good rest of the day.

Operator: Ladies and gentlemen, that concludes today's call. You may now disconnect. Thank you and have a great day. Sam.

[Analyst] (Aiera): Ladies and gentlemen, that concludes today's call. You may now disconnect. Thank you and have a great day.

Operator: Ladies and gentlemen, that concludes today's call. You may now disconnect. Thank you and have a great day.

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