Equinor Q4 2025 Equinor ASA Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Equinor ASA Earnings Call
Bård Glad Pedersen: Good morning to all, both here in the room in Oslo and to all our participants online. Welcome to the presentation of Equinor's fourth quarter and full year results for 2025. My name is Bård Glad Pedersen. I'm head of Investor Relations in Equinor. To those of you who are in the room, I want to inform you that there are no emergency drills planned for today. So if there is an alarm, we will evacuate and follow instructions. Today, we will have a presentation first from our CEO, Anders Opedal, followed by a presentation from our CFO, Torgrim Reitan, before we start the Q&A. For participants on the phones, the system is as with all the normal quarters; you can press star one to sign up to ask a question.
Speaker #1: Good
Bård Glad Pedersen: Good morning to all, both here in the room in Oslo and to all our participants online. Welcome to the presentation of Equinor's fourth quarter and full year results for 2025. My name is Bård Glad Pedersen. I'm head of Investor Relations in Equinor. To those of you who are in the room, I want to inform you that there are no emergency drills planned for today. So if there is an alarm, we will evacuate and follow instructions. Today, we will have a presentation first from our CEO, Anders Opedal, followed by a presentation from our CFO, Torgrim Reitan, before we start the Q&A. For participants on the phones, the system is as with all the normal quarters; you can press star one to sign up to ask a question.
Speaker #1: Good morning to all, both here in the room in Oslo and to all our participants online. Welcome to the presentation of Equinor's fourth quarter and full year results for 2025.
Speaker #1: My name is Bor Glad Pedersen. I'm Head of Investor Relations at Equinor. To those of you who are in the room, I want to inform you that there are no emergency drills planned for today.
Speaker #1: So if there is an alarm, we will evacuate and follow instructions. Today, we will have a presentation first from our CEO, Anders Opedal, followed by a presentation from our CFO, Torgrim Reitan, before we start the Q&A.
Speaker #1: For participants on the phones, the system is as with all the normal quarters. You can press star one to sign up to ask a question.
Speaker #1: Here in the room, you can raise your hands when we get to the Q&A session. So with that, I hand it to you, Anders, for your
Speaker #1: Here in the room, you can raise your hands when we get to the Q&A session. So, with that, I hand it to you, Anders, for your presentation.
Bård Glad Pedersen: Here in the room, you can raise your hands when we get to the Q&A session. So with that, I hand it to you, Anders, for your presentation.
Bård Glad Pedersen: Here in the room, you can raise your hands when we get to the Q&A session. So with that, I hand it to you, Anders, for your presentation.
Speaker #2: Thank you very much, Bor, and thank you all for joining here in the room. And thank you for participating on digital. So for Equinor, 2025 was a year of strong deliveries.
Anders Opedal: Thank you very much, Bård, and thank you all for joining here in the room, and thank you for participating on digital. So, for Equinor, 2025 was a year of strong deliveries, but it was also a year of increased geopolitical tension and market uncertainty. Our job is to ensure we allocate our resources in a way that maintain a competitive business, creating value at all times. Today, Torgrim and I will show how we take the necessary measures to further strengthen our competitiveness, cash flow, and robustness. This makes sure that we can navigate through and leverage market volatility and the current macro environment. So we have three key messages for you today. First, we are well-positioned for maximizing long-term shareholder value.
Anders Opedal: Thank you very much, Bård, and thank you all for joining here in the room, and thank you for participating on digital. So, for Equinor, 2025 was a year of strong deliveries, but it was also a year of increased geopolitical tension and market uncertainty. Our job is to ensure we allocate our resources in a way that maintain a competitive business, creating value at all times. Today, Torgrim and I will show how we take the necessary measures to further strengthen our competitiveness, cash flow, and robustness. This makes sure that we can navigate through and leverage market volatility and the current macro environment. So we have three key messages for you today. First, we are well-positioned for maximizing long-term shareholder value.
Speaker #2: But it was also a year of increased geopolitical tension and market uncertainty. Our job is to ensure we allocate our resources in a way that maintains a competitive business, creating value at all times.
Speaker #2: Today, Torgrim and I will show how we take the necessary measures to further strengthen our competitiveness, cash flow, and robustness. This makes sure that we can navigate through and leverage market volatility and the current macro environment.
Speaker #2: So, we have three key messages for you today. First, we are well positioned for maximizing long-term shareholder value. Today, we will share how clear, strategic priorities guide capital allocation for 2026 and 2027, and we will revert at our Capital Markets Day in June to present our strategy towards 2030.
Anders Opedal: Today, we will share how clear strategic priorities guide capital allocation for 2026 and 2027, and we will revert at our capital market day in June to present our strategy towards 2030. Second, we take firm actions to strengthen free cash flow. We reduce our CapEx outlook with $4 billion and maintain strong cost discipline. This makes us more robust towards lower prices and ensure that we can maintain a solid balance sheet through the cycles. Third, we continue to develop an attractive portfolio, delivering oil and gas production growth. With this, we are prepared for volatility ahead. The energy transition is shifting gears in many markets, with governments and companies changing priorities.
Anders Opedal: Today, we will share how clear strategic priorities guide capital allocation for 2026 and 2027, and we will revert at our capital market day in June to present our strategy towards 2030. Second, we take firm actions to strengthen free cash flow. We reduce our CapEx outlook with $4 billion and maintain strong cost discipline. This makes us more robust towards lower prices and ensure that we can maintain a solid balance sheet through the cycles. Third, we continue to develop an attractive portfolio, delivering oil and gas production growth. With this, we are prepared for volatility ahead. The energy transition is shifting gears in many markets, with governments and companies changing priorities.
Speaker #2: Second, we take firm actions to strengthen free cash flow. We reduce our CapEx outlook by €4 billion and maintain strong cost discipline. This makes us more robust towards lower prices and ensures that we can maintain a solid balance sheet through the cycles.
Speaker #2: And third, we continue to develop and attract the portfolio delivering oil and gas production growth. With this, we are prepared for volatility ahead. The energy transition is shifting gears in many markets, companies changing with government and priorities.
Anders Opedal: Current oil prices are supported by geopolitical risk, but we are prepared for strong supply combined with moderate demand growth, putting pressure on the oil price in the near term. For gas, the European market has seen cold weather and high draw on storage in late December and in January. Storage levels are now around 40%, significantly below average for the last 5 years, and also lower than last year. We expect continued volatility ahead and more LNG coming into the market. In the US, low temperatures have driven up local demand and reduced exports of LNG. But before I progress any further, I will always start with safety. Despite fewer people being hurt and our safety numbers moving in the right direction, we still have serious incidents and need to improve. In September, a colleague was fatally injured during a lifting operation at Mongstad.
Anders Opedal: Current oil prices are supported by geopolitical risk, but we are prepared for strong supply combined with moderate demand growth, putting pressure on the oil price in the near term. For gas, the European market has seen cold weather and high draw on storage in late December and in January. Storage levels are now around 40%, significantly below average for the last 5 years, and also lower than last year. We expect continued volatility ahead and more LNG coming into the market. In the US, low temperatures have driven up local demand and reduced exports of LNG. But before I progress any further, I will always start with safety. Despite fewer people being hurt and our safety numbers moving in the right direction, we still have serious incidents and need to improve. In September, a colleague was fatally injured during a lifting operation at Mongstad.
Speaker #2: Current oil prices are supported by geopolitical risk, but we are prepared for strong supply, combined with moderate demand growth, putting pressure on the oil price in the near term.
Speaker #2: For gas, the European market has seen cold weather and high draw on storage in late January. Storage levels are now around 40%, significantly below the average for the last five years.
Speaker #2: And also lower than last year. We expect continued volatility ahead, and more LNG coming to the market. In the US, low temperatures have driven up local demand and reduced exports of LNG.
Speaker #2: But before I progress any further, I will always start with safety. Despite fewer people being hurt and our safety numbers moving in the right direction, we still have serious incidents and need to improve.
Speaker #2: In September, a colleague was fatally injured during a lifting operation at Monkstad. A stark reminder that we cannot rest until everyone returns safely home from work, every day.
Anders Opedal: A stark reminder that we cannot rest until everyone returns safely home from work every day. Our safety trend reflects years of good work from the people in our organization and our suppliers. Safety remains our first priority. Throughout 2025, we have delivered strong performance, despite geopolitical uncertainty, high inflation in the supply chain, and lower commodity prices. This results in all-time high record production, thanks to good operational performance and new fields on stream. We have matured a competitive project portfolio across the Norwegian Continental Shelf and internationally. With Johan Castberg on stream, we open a new region in the Barents Sea. In Brazil, we started production from Bacalhau, the first pre-salt operatorship awarded to an international company. We continue high-grading our portfolio, and we maintain cost and capital discipline.
Anders Opedal: A stark reminder that we cannot rest until everyone returns safely home from work every day. Our safety trend reflects years of good work from the people in our organization and our suppliers. Safety remains our first priority. Throughout 2025, we have delivered strong performance, despite geopolitical uncertainty, high inflation in the supply chain, and lower commodity prices. This results in all-time high record production, thanks to good operational performance and new fields on stream. We have matured a competitive project portfolio across the Norwegian Continental Shelf and internationally. With Johan Castberg on stream, we open a new region in the Barents Sea. In Brazil, we started production from Bacalhau, the first pre-salt operatorship awarded to an international company. We continue high-grading our portfolio, and we maintain cost and capital discipline.
Speaker #2: Our safety trend reflects years of good work from the people in our organization and our suppliers. Safety remains our first priority. Throughout 2025, we have delivered strong performance.
Speaker #2: Despite geopolitical uncertainty, high inflation in the supply chain, and lower commodity prices, this results in all-time high record production, thanks to good operational performance and new fields on stream.
Speaker #2: We have matured a competitive project portfolio across the Norwegian continental shelf and internationally. With Johan Castberg on stream, we open a new region in the Barents Sea.
Speaker #2: In Brazil, we started production from Bacalhau. The first pre-salt operator ship was awarded to an international company. We continue hydrating our portfolio, and we maintain cost and capital discipline.
Speaker #2: All this has enabled us to deliver industry-leading return on average capital employed of 14.5%, and €18 billion in cash flow from operations after tax.
Anders Opedal: All this has enabled us to deliver industry-leading return on average capital employed of 14.5%, and $18 billion in cash flow from operations after tax. We have delivered $9 billion in capital distribution to our shareholders, as we said at the start of the year. Last year, we received 2 stop work orders for Empire Wind. In our view, both are unlawful. The first one was lifted by the new administration in May. The second stop work order came just before Christmas. This cited national security reasons, already a central part of an extensive approval process, where we have complied with all requirements. In January, we were granted a preliminary injunction allowing us to resume construction. There will be a continued legal process, and we remain in dialogue with US authorities to resolve any issues.
Anders Opedal: All this has enabled us to deliver industry-leading return on average capital employed of 14.5%, and $18 billion in cash flow from operations after tax. We have delivered $9 billion in capital distribution to our shareholders, as we said at the start of the year. Last year, we received 2 stop work orders for Empire Wind. In our view, both are unlawful. The first one was lifted by the new administration in May. The second stop work order came just before Christmas. This cited national security reasons, already a central part of an extensive approval process, where we have complied with all requirements. In January, we were granted a preliminary injunction allowing us to resume construction. There will be a continued legal process, and we remain in dialogue with US authorities to resolve any issues.
Speaker #2: We have delivered €9 billion in capital distribution to our shareholders, as we said at the start of the year. Last year, we received two stop work orders for Empire Wind.
Speaker #2: In our view, both are unlawful. The first one was lifted by the EU administration in May. The second stop work order came just before Christmas.
Speaker #2: This cited national security reasons. Already, a central part of an extensive approval process, where we have complied with all requirements. In January, we were granted a preliminary injunction, allowing us to resume construction.
Speaker #2: There will be a continued legal process, and we remain in dialogue with US authorities to resolve any issues. Despite the significant challenges caused by the stop work orders, the project execution is according to plan.
Anders Opedal: Despite the significant challenges caused by the stop work orders, the project execution is according to plan. The project is now over 60% complete. We have successfully installed all monopiles, the offshore substation, and almost 300km of subsea cables. The total CapEx for Empire Wind is now expected to be around $7.5 billion. Around $3 billion is remaining, and we, like other companies, remain exposed to uncertainty when it comes to possible future tariffs... The project qualifies for tax credits as decided by the US Congress. The cash effect of this is expected to be around $2.5 billion. So far, we have drawn $2.7 billion from project financing. We expect to draw the remaining $400 million this year. For 2027 and 2028 combined, we expect around $600 million in cash flow from operations.
Anders Opedal: Despite the significant challenges caused by the stop work orders, the project execution is according to plan. The project is now over 60% complete. We have successfully installed all monopiles, the offshore substation, and almost 300km of subsea cables. The total CapEx for Empire Wind is now expected to be around $7.5 billion. Around $3 billion is remaining, and we, like other companies, remain exposed to uncertainty when it comes to possible future tariffs... The project qualifies for tax credits as decided by the US Congress. The cash effect of this is expected to be around $2.5 billion. So far, we have drawn $2.7 billion from project financing. We expect to draw the remaining $400 million this year. For 2027 and 2028 combined, we expect around $600 million in cash flow from operations.
Speaker #2: The project is now over 60% complete. We have successfully installed all monopiles, the offshore substation, and almost 300 kilometers of subsea cables. The total CapEx for Empire Wind is now expected to be around €7.5 billion, with around €3 billion remaining. We, like other companies, remain exposed to uncertainty when it comes to possible future tariffs.
Speaker #2: The project qualifies for tax credits, as decided by the US Congress. The cash effect of these is expected to be around €2.5 billion. So far, we have drawn €2.7 billion from project financing, and we expect to draw the remaining €400 million this year.
Speaker #2: For 2027 and 2028 combined, we expect around €600 million in cash flow from operations. Combined with the ITC, this covers the remaining CapEx in the period.
Anders Opedal: Combined with the ITC, this covers the remaining CapEx in the period. We have continued high-grading our portfolio. We announced the latest move earlier this week, divesting onshore assets in Argentina for a total consideration of $1.1 billion, unlocking capital for high value creation opportunities. The establishment of Adura was a major milestone last year. Our joint venture with Shell has created a leading operator on the UK Continental Shelf, fully self-funded, covering all Rosebank CapEx and well-positioned for growth. The JV company expects to distribute more than 50% of cash flow from operation to its shareholders, starting from the first half of 2026. Based on Adura's plans, we expect total dividends of more than $1 billion for 2026 and 2027 combined, with growth from 2026 to 2027.
Anders Opedal: Combined with the ITC, this covers the remaining CapEx in the period. We have continued high-grading our portfolio. We announced the latest move earlier this week, divesting onshore assets in Argentina for a total consideration of $1.1 billion, unlocking capital for high value creation opportunities. The establishment of Adura was a major milestone last year. Our joint venture with Shell has created a leading operator on the UK Continental Shelf, fully self-funded, covering all Rosebank CapEx and well-positioned for growth. The JV company expects to distribute more than 50% of cash flow from operation to its shareholders, starting from the first half of 2026. Based on Adura's plans, we expect total dividends of more than $1 billion for 2026 and 2027 combined, with growth from 2026 to 2027.
Speaker #2: We have continued hydrating our portfolio. We announced the latest move earlier this week, divesting onshore assets in Argentina for a total consideration of €1.1 billion, unlocking capital for high-value creation opportunities.
Speaker #2: The establishment of Adura was a major milestone last year. Our joint venture with Shell has created a leading operator on the UK continental shelf.
Speaker #2: Fully self-funded, covering all Roseben CapEx and well-positioned for growth. The JV company expects to distribute more than 50% of cash flow from operations to its shareholders, starting from the first half of 2026.
Speaker #2: Based on Adura's plans, we expect total dividends of more than €1 billion for 2026 and 2027 combined, with growth from 2026 to 2027. This moves our UK portfolio from being cash negative due to CapEx to cash positive from dividends.
Anders Opedal: This moves our UK portfolio from being cash negative, due to CapEx, to cash positive from dividends. These two transactions build on previous high grading of the portfolio, divesting mature assets, and invest more in long-term gas production onshore US. Through this, we have created a more future-proof international portfolio, focusing on prospective core areas, increasing free cash flow, strong production, lowering costs, and a portfolio with low carbon intensity. Now on to our strategic priorities for 2026 and 2027, and how they guide our capital allocation. The world is changing, but one thing remains firm, energy demand continues to grow. We are well positioned to contribute to energy security, affordability, and sustainability. So first, after more than 50 years of developing the Norwegian Continental Shelf, we are uniquely positioned for value creation here, and we continue to invest.
Anders Opedal: This moves our UK portfolio from being cash negative, due to CapEx, to cash positive from dividends. These two transactions build on previous high grading of the portfolio, divesting mature assets, and invest more in long-term gas production onshore US. Through this, we have created a more future-proof international portfolio, focusing on prospective core areas, increasing free cash flow, strong production, lowering costs, and a portfolio with low carbon intensity. Now on to our strategic priorities for 2026 and 2027, and how they guide our capital allocation. The world is changing, but one thing remains firm, energy demand continues to grow. We are well positioned to contribute to energy security, affordability, and sustainability. So first, after more than 50 years of developing the Norwegian Continental Shelf, we are uniquely positioned for value creation here, and we continue to invest.
Speaker #2: These two transactions build on previous hydrating of the portfolio, divesting mature assets and investing more in long-term gas production onshore US. Through this, we have created a more future-proof international portfolio, focusing on prospective core areas, increasing free cash flow, strong production, lowering costs, and a portfolio with low carbon intensity.
Speaker #2: Now on to our strategic priorities for 2026 and 2027, and how they guide our capital allocation. The world is changing. But one thing remains firm: energy demand continues to grow.
Speaker #2: We are well-positioned to contribute to energy security, affordability, and sustainability. So first, after more than 50 years of developing the Norwegian continental shelf, we are uniquely positioned for value creation here, and we continue to invest.
Speaker #2: The Norwegian continental shelf remains the backbone of the company. In 2026, the NCS will contribute to our production growth, and we work to maintain strong production well into the next decade.
Anders Opedal: The Norwegian Continental Shelf remains the backbone of the company. In 2026, the NCS will contribute to our production growth, and we work to maintain strong production well into the next decade. In the future, as you know, we expect to make more but smaller discoveries. To ensure commerciality, we will work with partners, suppliers, authorities, and unions to change the way we operate on the Norwegian Continental Shelf. We will develop future discoveries faster, become more efficient, and increase return while improving safety further. Next, we are set to deliver strong production and cash flow growth from our high-graded international oil and gas portfolio. We are progressing project execution and exploration across key geographies, adding new volumes and opportunities for longevity in the portfolio. On power, we combine our renewable portfolio with flexible power to build an integrated power business and strengthen our competitiveness.
Anders Opedal: The Norwegian Continental Shelf remains the backbone of the company. In 2026, the NCS will contribute to our production growth, and we work to maintain strong production well into the next decade. In the future, as you know, we expect to make more but smaller discoveries. To ensure commerciality, we will work with partners, suppliers, authorities, and unions to change the way we operate on the Norwegian Continental Shelf. We will develop future discoveries faster, become more efficient, and increase return while improving safety further. Next, we are set to deliver strong production and cash flow growth from our high-graded international oil and gas portfolio. We are progressing project execution and exploration across key geographies, adding new volumes and opportunities for longevity in the portfolio. On power, we combine our renewable portfolio with flexible power to build an integrated power business and strengthen our competitiveness.
Speaker #2: In the future, as you know, we expect to make more, but smaller, discoveries. To ensure commerciality, we will work with partners, suppliers, authorities, and unions to change the way we operate on the Norwegian Continental Shelf.
Speaker #2: We will develop future discoveries faster, become more efficient, and increase returns while improving safety further. Next, we are set to deliver strong production and cash flow growth from our high-graded international oil and gas portfolio.
Speaker #2: We are progressing project execution and exploration across key geographies, adding new volumes and opportunities for longevity in the portfolio. On power, we combine our renewable portfolio with flexible power to build an integrated power business and strengthen our competitiveness.
Speaker #2: We are value-driven in all we do and disciplined in execution and capital allocation. The main focus for 2026 and 2027: deliver safe operations and strong project execution of already sanctioned portfolio.
Anders Opedal: We are value-driven in all we do, and discipline in execution and capital allocation. The main focus for 2026 and 2027, deliver safe operations and strong project execution of already sanctioned portfolio. All this, Norwegian oil and gas, international oil and gas, power, are tied together by our marketing and trading capabilities, creating value uplift across our business. We are positioned to create value within low-carbon solutions, like carbon capture and storage, but markets are developing at a slower pace than anticipated. In addition to the execution of Northern Lights and Northern Endurance, we will continue to mature a few selected options and markets at low cost. We will, we will be positioned to invest as markets develops, customers are in place, and returns are robust. We grow our production to even higher levels in 2026 from our record high production level in 2025.
Anders Opedal: We are value-driven in all we do, and discipline in execution and capital allocation. The main focus for 2026 and 2027, deliver safe operations and strong project execution of already sanctioned portfolio. All this, Norwegian oil and gas, international oil and gas, power, are tied together by our marketing and trading capabilities, creating value uplift across our business. We are positioned to create value within low-carbon solutions, like carbon capture and storage, but markets are developing at a slower pace than anticipated. In addition to the execution of Northern Lights and Northern Endurance, we will continue to mature a few selected options and markets at low cost. We will, we will be positioned to invest as markets develops, customers are in place, and returns are robust. We grow our production to even higher levels in 2026 from our record high production level in 2025.
Speaker #2: All this Norwegian oil and gas, international oil and gas power, are tied together by our marketing and trading capabilities, creating value uplift across our business.
Speaker #2: We are positioned to create value within low-carbon solutions, like carbon capture and storage, but markets are developing at a slower pace than anticipated.
Speaker #2: In addition to the execution of Northern Lights and Northern Endurance, we will continue to mature a few selected options and markets at low cost.
Speaker #2: We will be positioned to invest at markets where developed customers are in place and returns are robust. We grow our production to even higher levels in 2026 from our record-high production level in 2025.
Speaker #2: For the year, we expect a production growth of around 3%. We are ramping up new fields, which more than offset divestment and natural decline.
Anders Opedal: For the year, we expect a production growth of around 3%. We are ramping up new fields, which more than offset divestment and natural decline. We are replenishing our portfolio and have three-year average reserve replacement ratio of 100%. On the NCS, we made 14 commercial discoveries last year, mainly close to existing infrastructure, adding to longevity. We continue to explore. We have added attractive acreage in Norway, Brazil, and Angola, where we expect to drill around 30 exploration wells in 2026. We expect to reduce our unit production cost to $6 per barrel. We continue to focus on delivering a carbon-efficient portfolio with a CO₂ upstream intensity of 6.3 kg per barrel. We take firm actions to strengthen our cash flow and further increase resilience, facing higher market uncertainty.
Anders Opedal: For the year, we expect a production growth of around 3%. We are ramping up new fields, which more than offset divestment and natural decline. We are replenishing our portfolio and have three-year average reserve replacement ratio of 100%. On the NCS, we made 14 commercial discoveries last year, mainly close to existing infrastructure, adding to longevity. We continue to explore. We have added attractive acreage in Norway, Brazil, and Angola, where we expect to drill around 30 exploration wells in 2026. We expect to reduce our unit production cost to $6 per barrel. We continue to focus on delivering a carbon-efficient portfolio with a CO₂ upstream intensity of 6.3 kg per barrel. We take firm actions to strengthen our cash flow and further increase resilience, facing higher market uncertainty.
Speaker #2: We are replenishing our portfolio and have a three-year average reserve replacement ratio of 100%. On the NCS, we made 14 commercial discoveries last year, mainly close to existing infrastructure, adding to longevity.
Speaker #2: And we continue to explore. We have added attractive acreage in Norway, Brazil, and Angola, where we expect to drill around 30 exploration wells in 2026.
Speaker #2: We expect to reduce our unit production cost to $6 per barrel. We continue to focus on delivering a carbon-efficient portfolio with a CO2 upstream intensity of 6.3 kilos per barrel.
Speaker #2: We take firm actions to strengthen our cash flow and further increase resilience, facing higher market uncertainty. In 2026, we expect around $16 billion in cash flow from operations after tax.
Anders Opedal: In 2026, we expect around $16 billion in cash flow from operations after tax. This reflects a lower price outlook and is also impacted by the tax lag effect in Norway. At flat price assumptions, it's growing to around $18 billion in 2027. We have strengthened our investment program for 2026 and 2027, reflecting market realities. We have reduced our CapEx outlook for these two years with around $4 billion, mainly within power and low carbon. This also influenced our net carbon intensity reduction for 2030 and 2035. No change to 5 to 15, and 15 to 30, respectively. We maintain a stable investments of around $10 billion annually to oil and gas. Our CapEx guiding for 2026 is around $13 billion.
Anders Opedal: In 2026, we expect around $16 billion in cash flow from operations after tax. This reflects a lower price outlook and is also impacted by the tax lag effect in Norway. At flat price assumptions, it's growing to around $18 billion in 2027. We have strengthened our investment program for 2026 and 2027, reflecting market realities. We have reduced our CapEx outlook for these two years with around $4 billion, mainly within power and low carbon. This also influenced our net carbon intensity reduction for 2030 and 2035. No change to 5 to 15, and 15 to 30, respectively. We maintain a stable investments of around $10 billion annually to oil and gas. Our CapEx guiding for 2026 is around $13 billion.
Speaker #2: This reflects a lower price outlook and is also impacted by the tax leg effect in Norway. At flat price assumptions, it is growing to around $18 billion in 2027.
Speaker #2: We have strengthened our investment program for 2026 and 2027, reflecting market realities. We have reduced our CapEx outlook for these two years by around $4 billion, mainly within Power and Low Carbon.
Speaker #2: This also influences our net carbon intensity reduction for 2030 and 2035. No change to 5 to 15 and 15 to 30, respectively. We maintain a stable investment of around $10 billion annually to oil and gas.
Speaker #2: Our CapEx guiding for 2026 is around $13 billion; this includes Empire Wind, where we in 2027 expect to monetize investment tax credits for around $2 billion.
Anders Opedal: This includes Empire Wind, where we, in 2027, expect to monetize investments tax credits for around $2 billion. With this, we indicate CapEx of $9 billion for 2027. In the current situation for the offshore wind industry, we are focusing on projects in execution and have a high bar for committing capital towards new offshore wind projects. This includes our ownership in Ørsted. We will continue driving cost improvements, including the portfolio high grading we have done. We aim for 10% OpEx reduction in 2026, even while growing production. We continue with strategic portfolio optimization to strengthen future cash flow. Proceeds from the divestment of Peregrino and onshore Argentina assets is expected to contribute more than $1.1 billion this year. The action we take to strengthen our cash flow and robustness supports sustainable, competitive capital distribution.
Anders Opedal: This includes Empire Wind, where we, in 2027, expect to monetize investments tax credits for around $2 billion. With this, we indicate CapEx of $9 billion for 2027. In the current situation for the offshore wind industry, we are focusing on projects in execution and have a high bar for committing capital towards new offshore wind projects. This includes our ownership in Ørsted. We will continue driving cost improvements, including the portfolio high grading we have done. We aim for 10% OpEx reduction in 2026, even while growing production. We continue with strategic portfolio optimization to strengthen future cash flow. Proceeds from the divestment of Peregrino and onshore Argentina assets is expected to contribute more than $1.1 billion this year. The action we take to strengthen our cash flow and robustness supports sustainable, competitive capital distribution.
Speaker #2: With this, we indicate CapEx of $9 billion for 2027. In the current situation for the offshore wind industry, we are focusing on projects in execution and have a high bar for committing capital towards new offshore wind projects.
Speaker #2: This includes our ownership in Ørsted. We will continue driving cost improvements, including the portfolio hydrating we have done; we aim for a 10% OPEX reduction in 2026 even while growing production.
Speaker #2: We continue with strategic portfolio optimization to strengthen future cash flow. Proceeds from the divestment of Peregrino and onshore Argentina assets are expected to contribute more than $1.1 billion this year.
Speaker #2: The action we take to strengthen our cash flow and robustness supports sustainable, competitive capital distribution. This is important to me, and a priority for the Board of Directors.
Anders Opedal: This is important to me and a priority for the board of directors. The starting point is the cash dividend. We have set an ambition to grow the quarterly cash dividend with two cents per share on an annual basis. We continue to deliver on this. It represents an industry-leading increase of more than 5%. We also continue to use share buybacks to deliver competitive total distribution. For 2026, we announced a share buyback program of $1.5 billion, including the state share. The first tranche of $375 million starts tomorrow. As previously communicated, we see through timing effects, like the tax lag in Norway and the phasing of Empire Wind, and lean on the balance sheet to deliver competitive capital distribution in 2026.
Anders Opedal: This is important to me and a priority for the board of directors. The starting point is the cash dividend. We have set an ambition to grow the quarterly cash dividend with two cents per share on an annual basis. We continue to deliver on this. It represents an industry-leading increase of more than 5%. We also continue to use share buybacks to deliver competitive total distribution. For 2026, we announced a share buyback program of $1.5 billion, including the state share. The first tranche of $375 million starts tomorrow. As previously communicated, we see through timing effects, like the tax lag in Norway and the phasing of Empire Wind, and lean on the balance sheet to deliver competitive capital distribution in 2026.
Speaker #2: The starting point is the cash dividend. We have set an ambition to grow the quarterly cash dividend by $0.02 per share on an annual basis.
Speaker #2: We continue to deliver on this. It represents an industry-leading increase of more than 5%. We also continue to use share buybacks to deliver competitive total distribution for 2026.
Speaker #2: We announced a share buyback program of $1.5 billion, including the state share. The first tranche of $375 million starts tomorrow. As previously commented and communicated, we see, through timing effects like the tax leg in Norway and the phasing of Empire Wind, and lean on the balance sheet to deliver competitive capital distribution in 2026.
Speaker #2: In 2027, we have taken action to deliver stronger free cash flow. This is important to ensure that we can deliver competitive capital distribution in a long-term, sustainable manner.
Anders Opedal: In 2027, we have taken action to deliver stronger free cash flow. This is important to ensure that we can deliver competitive capital distribution in a long-term, sustainable manner. So with our guiding in the background, I will give the floor to Torgrim, that will take you through, you know, further through the details, and then I look forward to questions together with Torgrim when he is finished. So, Torgrim, please.
Anders Opedal: In 2027, we have taken action to deliver stronger free cash flow. This is important to ensure that we can deliver competitive capital distribution in a long-term, sustainable manner. So with our guiding in the background, I will give the floor to Torgrim, that will take you through, you know, further through the details, and then I look forward to questions together with Torgrim when he is finished. So, Torgrim, please.
Speaker #2: So, with our guiding in the background, I will give the floor to Torgrim, who will take you further through the details, and then I look forward to questions together with Torgrim when he is finished.
Speaker #2: So, Torgrim, please—so thank you, Anders. And good morning and good afternoon, and thank you for joining us here today. So, 2025, it was a good year for Equinor.
Torgrim Reitan: So thank you, Anders, and good morning and good afternoon, and thank you for joining us here today. So, 2025 was a good year for Equinor. We delivered strong performance and record high production. But before we dive into the financial results, you know, I want to expand on how we will manage through a period of volatility. So we are prepared for lower prices. We have a strong balance sheet, lower cost and CapEx, and an attractive project portfolio.... Our financial framework sets the boundary conditions for whole capital allocation, for our capital allocation, and how we manage our company. So to start, our highest priority will be to deliver a robust and a growing cash dividend in line with our dividend policy, and this reflects growth in our long-term underlying earnings.
Torgrim Reitan: So thank you, Anders, and good morning and good afternoon, and thank you for joining us here today. So, 2025 was a good year for Equinor. We delivered strong performance and record high production. But before we dive into the financial results, you know, I want to expand on how we will manage through a period of volatility. So we are prepared for lower prices. We have a strong balance sheet, lower cost and CapEx, and an attractive project portfolio.... Our financial framework sets the boundary conditions for whole capital allocation, for our capital allocation, and how we manage our company. So to start, our highest priority will be to deliver a robust and a growing cash dividend in line with our dividend policy, and this reflects growth in our long-term underlying earnings.
Speaker #2: We delivered strong performance, and record-high production. But before we dive into the financial results, I want to expand on how we will manage through a period of volatility.
Speaker #2: So we are prepared for lower prices. We have a strong balance sheet, lower cost and CapEx, and an attractive project portfolio. Our financial framework sets the boundary conditions for our capital allocation and how we manage our company.
Speaker #2: So, to start, our highest priority will be to deliver a robust and growing cash dividend, in line with our dividend policy. This reflects growth in our long-term underlying earnings.
Speaker #2: Then, we will continue to invest in an attractive and high-graded investment portfolio with low breakevens and strong returns, in line with the following priorities.
Torgrim Reitan: Then we will continue to invest in an attractive and high-graded investment portfolio with low breakevens and strong returns in line with the following priorities. First, our unique position on the Norwegian Continental Shelf gives us competitive advantages, and this is why we will continue to prioritize developing this area and allocating almost 60% of our investments to an area we know better than anyone. In 2026, we have 16 projects in execution in Norway. Many of these are tie-ins to existing infrastructure with low cost and very low breakevens. Then we will allocate 30% of our capital to our international oil and gas business. This is mainly to sanction projects, and we expect to increase production to more than 900,000 barrels per day in 2030.
Torgrim Reitan: Then we will continue to invest in an attractive and high-graded investment portfolio with low breakevens and strong returns in line with the following priorities. First, our unique position on the Norwegian Continental Shelf gives us competitive advantages, and this is why we will continue to prioritize developing this area and allocating almost 60% of our investments to an area we know better than anyone. In 2026, we have 16 projects in execution in Norway. Many of these are tie-ins to existing infrastructure with low cost and very low breakevens. Then we will allocate 30% of our capital to our international oil and gas business. This is mainly to sanction projects, and we expect to increase production to more than 900,000 barrels per day in 2030.
Speaker #2: First, our unique position on the Norwegian continental shelf gives us competitive advantages. And this is why we will continue to prioritize developing this area and allocating almost 60% of our investments to an area we know better than anyone.
Speaker #2: In 2026, we have 16 projects in execution. In Norway, many of these are tie-ins to existing infrastructure, with low cost and very low breakevens.
Speaker #2: Then we will allocate 30% of our capital to our international oil and gas business. This is mainly to sanction projects, and we expect to increase production to more than 900,000 barrels per day in 2030.
Speaker #2: And then, around 10% of our capital will be allocated to building an integrated power business, where the main focus is on delivering our offshore wind projects in execution—safely, on time, and on cost.
Torgrim Reitan: And then around 10% of our capital will be allocated to building an integrated power business, where the main focus is on delivering our offshore wind projects in execution, you know, safely, on time, and on cost. Outside these three areas, we expect limited investments over the next two years. As you know, we will prioritize having a strong balance sheet and liquidity necessary at all times, and this is important to manage risk and to continue to deliver value. Over the next two years, we will see through the timing effect, such as the NCS tax lag and the tax credit on Empire Wind, impacting our cash flow from operations, and we will lean on the balance sheet. We will lean on the balance sheet in 2026 to cover CapEx and distribution.
Torgrim Reitan: And then around 10% of our capital will be allocated to building an integrated power business, where the main focus is on delivering our offshore wind projects in execution, you know, safely, on time, and on cost. Outside these three areas, we expect limited investments over the next two years. As you know, we will prioritize having a strong balance sheet and liquidity necessary at all times, and this is important to manage risk and to continue to deliver value. Over the next two years, we will see through the timing effect, such as the NCS tax lag and the tax credit on Empire Wind, impacting our cash flow from operations, and we will lean on the balance sheet. We will lean on the balance sheet in 2026 to cover CapEx and distribution.
Speaker #2: Outside these three areas, we expect limited investments over the next two years. As you know, we will prioritize having a strong balance sheet and liquidity necessary at all times.
Speaker #2: And this is important to manage risk and to continue to deliver value. Over the next two years, we will see through the timing effect, such as the NCS tax leg and the tax credit on Empire Wind, impacting our cash flow from operations, and we will lean on the balance sheet.
Speaker #2: We will lean on the balance sheet in 2026 to cover CapEx and distribution. Next year, in 2027, cash flow from operations is stronger, and we have lowered CapEx.
Torgrim Reitan: Next year, in 2027, cash flow from operation is stronger, and we have lowered CapEx, significantly improving the free cash flow. So we will manage the balance sheet through this period and continue to deliver competitive capital distribution, including share buybacks. For more than a decade, we have consistently delivered an industry-leading return on capital employed, and if you ask me, that is a premium KPI that we hold very high in our company. And with this financial framework, we expect to deliver around 13% over the next two years, now using a lower price deck than what we have used earlier as such. So that is comparable to what we have said earlier. We are used to managing volatility and deliver value through cycles.
Torgrim Reitan: Next year, in 2027, cash flow from operation is stronger, and we have lowered CapEx, significantly improving the free cash flow. So we will manage the balance sheet through this period and continue to deliver competitive capital distribution, including share buybacks. For more than a decade, we have consistently delivered an industry-leading return on capital employed, and if you ask me, that is a premium KPI that we hold very high in our company. And with this financial framework, we expect to deliver around 13% over the next two years, now using a lower price deck than what we have used earlier as such. So that is comparable to what we have said earlier. We are used to managing volatility and deliver value through cycles.
Speaker #2: Significantly improving the free cash flow. So, we will manage the balance sheet through this period and continue to deliver competitive capital distribution, including share buybacks.
Speaker #2: For more than a decade, we have consistently delivered an industry-leading return on capital employed. And if you ask me, that is a premium KPI that we hold very high in our company.
Speaker #2: And with this financial framework, we expect to deliver around 13% over the next two years. Not using a lower price deck than what we have used earlier, as such.
Speaker #2: What we have said so far is comparable to earlier. We are used to managing volatility and delivering value through cycles. First, to manage cycles, we have to run with a strong balance sheet and a robust credit rating.
Torgrim Reitan: First, to manage cycles, we have to run with a strong balance sheet and a robust credit rating, and we have that. We have that. And having liquidity available is key. We have close to $20 billion for the time being. Second, a low-cost base is important to ensure that we make money at low prices, and we continue to reduce our costs. We have a low unit production cost, and in 2026, we will further reduce it by around 10%, to $6 per barrel. We are the lowest cost supplier of piped gas to Europe, with our all-in costs of less than $2 per MBTU, and we are sure that we will create significant, significant value in any price scenario in Europe.
Torgrim Reitan: First, to manage cycles, we have to run with a strong balance sheet and a robust credit rating, and we have that. We have that. And having liquidity available is key. We have close to $20 billion for the time being. Second, a low-cost base is important to ensure that we make money at low prices, and we continue to reduce our costs. We have a low unit production cost, and in 2026, we will further reduce it by around 10%, to $6 per barrel. We are the lowest cost supplier of piped gas to Europe, with our all-in costs of less than $2 per MBTU, and we are sure that we will create significant, significant value in any price scenario in Europe.
Speaker #2: And we have that. We have that. And having liquidity available is key. We have close to $20 billion for the time being. Second, a low-cost base is important to ensure that we make money at low prices.
Speaker #2: And we continue to reduce our costs. We have a low unit production cost, and in 2026, we will further reduce it by around 10%.
Speaker #2: To $6 per barrel. We are the lowest-cost supplier of piped gas to Europe, with our all-in costs of less than $2 per MMBtu.
Speaker #2: And we are sure that we will create significant value in any price scenario in Europe. Through strong cost performance and a high portfolio rating, we aim to reduce OPEX and FDNA by 10% in 2026.
Torgrim Reitan: Through strong cost performance and portfolio high grading, we aim to reduce OpEx and SG&A by 10% in 2026. This corresponds to a flat underlying cost development, overcoming inflation while growing production. We are adjusting costs in all parts of the organization, and I want to highlight that in 2025, we brought down OpEx and SG&A in renewables by 27%, mainly due to reductions in early phase costs. Then thirdly, it is key to have a competitive project portfolio that makes sense at lower prices. We operate a majority of our projects, giving us the flexibility needed to adjust when we want to do that.
Torgrim Reitan: Through strong cost performance and portfolio high grading, we aim to reduce OpEx and SG&A by 10% in 2026. This corresponds to a flat underlying cost development, overcoming inflation while growing production. We are adjusting costs in all parts of the organization, and I want to highlight that in 2025, we brought down OpEx and SG&A in renewables by 27%, mainly due to reductions in early phase costs. Then thirdly, it is key to have a competitive project portfolio that makes sense at lower prices. We operate a majority of our projects, giving us the flexibility needed to adjust when we want to do that.
Speaker #2: This corresponds to a flat underlying cost development overcoming inflation while growing production. We are addressing cost in all parts of the organization. And I want to highlight that in 2025, we brought down OPEX and FDNA in renewables by 27%.
Speaker #2: Mainly due to reductions in early phase costs. And then, thirdly, it is key to have a competitive project portfolio that makes sense at lower prices.
Speaker #2: And we operate a majority of our projects, giving us the flexibility needed to adjust when we want to do that. Through portfolio flexibility and high grading, we have reduced CapEx over the next two years by $4 billion.
Torgrim Reitan: Through portfolio flexibility and high grading, we have reduced CapEx over the next two years by $4 billion, made investments totaling more than $6 billion since 2024, and strengthened the quality of our portfolio. Our average break even is around $40, and we see an internal rate of return of 25%, in the portfolio at a $65 oil. We remain a leader on CO2 efficiency and an average payback of 2.5 years. So I will call this a robust, low risk, and high value project portfolio that will create value also at low prices. In periods of volatility, our NCS position and our international portfolio complement each other.
Torgrim Reitan: Through portfolio flexibility and high grading, we have reduced CapEx over the next two years by $4 billion, made investments totaling more than $6 billion since 2024, and strengthened the quality of our portfolio. Our average break even is around $40, and we see an internal rate of return of 25%, in the portfolio at a $65 oil. We remain a leader on CO2 efficiency and an average payback of 2.5 years. So I will call this a robust, low risk, and high value project portfolio that will create value also at low prices. In periods of volatility, our NCS position and our international portfolio complement each other.
Speaker #2: Made investments totaling more than $6 billion since 2024 and strengthened the quality of our portfolio. Our average breakeven is around $40, and we see an internal rate of return of 25% in our portfolio.
Speaker #2: At a $65 oil, at a $65 oil. We remain a leader on CO2 efficiency. And an average payback of two and a half years.
Speaker #2: So, I will call this a robust, low-risk, and high-value project portfolio that will create value also at low prices. In periods of volatility, our NCS position and our international portfolio complement each other.
Speaker #2: In Norway, we are more robust to lower prices. While internationally, and particularly in the US, where we have strengthened our gas position, we have a large exposure to upside in prices.
Torgrim Reitan: In Norway, we are more robust to lower prices, while internationally, and particularly in the US where we have strengthened our gas position, we have a large exposure to upside in prices. So Norway first. We have immediate deductions for CapEx against the special petroleum tax, and with full consolidation between fields and low asset ring-fencing, our pre-tax CapEx of around $6 billion translates into an after-tax investments of less than $1.5 billion. And when prices change, 78% of the effect on the revenue is absorbed by reduced taxes. So this makes the NCS less exposed to lower prices than other basins. So what happens if prices change?
Torgrim Reitan: In Norway, we are more robust to lower prices, while internationally, and particularly in the US where we have strengthened our gas position, we have a large exposure to upside in prices. So Norway first. We have immediate deductions for CapEx against the special petroleum tax, and with full consolidation between fields and low asset ring-fencing, our pre-tax CapEx of around $6 billion translates into an after-tax investments of less than $1.5 billion. And when prices change, 78% of the effect on the revenue is absorbed by reduced taxes. So this makes the NCS less exposed to lower prices than other basins. So what happens if prices change?
Speaker #2: So Norway first. We have immediate deductions for CapEx against the special petroleum tax. And with full consolidation between fields and no asset ring fencing, our pre-tax CapEx of around 6 billion dollars translates into an after-tax investment of less than one and a half billion dollars.
Speaker #2: And when prices change, 78% of the effect on the revenue is absorbed by reduced taxes. So, this makes the NCS less exposed to lower prices than other basins.
Speaker #2: So what happens if prices change? With a $10 move in oil prices, the cash flow is only impacted by $1.2 billion. And this is across the global portfolio.
Torgrim Reitan: With a $10, with a $10 move, in oil prices, the cash flow is only impacted by $1.2 billion, and this is across the global portfolio and adjusted for tax lag. For European gas, a $2 change equals $800 million. What is particularly interesting is the US gas, where the production is now 1/3 of our Norwegian gas position. But still, a $2 movement in gas price has a similar effect on cash flow of the tax as in Norway. So let me elaborate more on the US gas, as that has become even more important to us. So in 2025, we delivered around $1 billion in cash flow from operations out of that asset.
Torgrim Reitan: With a $10, with a $10 move, in oil prices, the cash flow is only impacted by $1.2 billion, and this is across the global portfolio and adjusted for tax lag. For European gas, a $2 change equals $800 million. What is particularly interesting is the US gas, where the production is now 1/3 of our Norwegian gas position. But still, a $2 movement in gas price has a similar effect on cash flow of the tax as in Norway. So let me elaborate more on the US gas, as that has become even more important to us. So in 2025, we delivered around $1 billion in cash flow from operations out of that asset.
Speaker #2: And, adjusted for tax lag, for European gas, a $2 change equals $800 million. What is particularly interesting is the US gas, where the
Speaker #1: Reduction is now one third of all Norwegian gas position, but still, a $2 movement in gas price has a similar effect on cash flow after tax as in Norway.
Speaker #1: So, a $2 movement in gas price has a similar effect on cash flow after tax as in Norway. So, let me elaborate more on the US gas, as that has become even more important to us.
Torgrim Reitan: Production increased by 45% on back of well-timed acquisitions to around 300,000 barrels per day, capturing gas prices that were more than 50% higher than in 2024. We have a low unit production cost for our US gas, US gas, around $1 per barrel, and we are well-positioned to benefit from robust power load growth and increased demand in the Northeast. We are marketing our gas ourselves, and we are able to add value through trading, pipeline capacity, and access to premium markets such as New York City and Toronto. So in January this year, gas prices in the Northeast reached very high levels, driven by, you know, the winter storms, and we used our infrastructure and trading to capture, you know, quite a bit of value out of that, volatility.
Torgrim Reitan: Production increased by 45% on back of well-timed acquisitions to around 300,000 barrels per day, capturing gas prices that were more than 50% higher than in 2024. We have a low unit production cost for our US gas, US gas, around $1 per barrel, and we are well-positioned to benefit from robust power load growth and increased demand in the Northeast. We are marketing our gas ourselves, and we are able to add value through trading, pipeline capacity, and access to premium markets such as New York City and Toronto. So in January this year, gas prices in the Northeast reached very high levels, driven by, you know, the winter storms, and we used our infrastructure and trading to capture, you know, quite a bit of value out of that, volatility.
Speaker #1: So, in 2025, we delivered around $1 billion in cash flow from that asset. Production increased by 45% on the back of operations.
Speaker #1: well-timed acquisitions Out to around 300,000 barrels per day . Capturing gas prices that than were more 50% higher than in 2024 . We have a low unit production cost for gas , US gas around $1 per barrel , and they are well positioned to benefit from robust power load growth and increased demand in the northeast .
Speaker #1: Are we marketing our gas or sales, and are we able to add value through trading pipeline capacity and access to premium markets such as New York City and Toronto? So in...
Speaker #1: In January this year, gas prices in the Northeast reached high levels, driven by the winter storms. And we used our infrastructure and trading to capture quite a bit of value out of that volatility.
Torgrim Reitan: Okay, so now to our fourth quarter and full year results. These slides sums up the key numbers you heard from Anders. Safety is our first priority. We see strong safety results, but we need to continue improving with force. Return on average capital employed in 2025 was 14.5%. Cash flow from operations after tax came in at $18 billion, and earnings per share were strong at $0.81. For the year, we produced 2,137,000 barrels per day. This is record high and up 3.4% from last year, driven by ramp-up on Johan Castberg and Halten East on the NCS, US onshore gas, and new wells coming on stream. In the quarter, production was up 6%, despite some operational issues in Norway and in Brazil. On the NCS, Johan Sverdrup had another strong year.
Torgrim Reitan: Okay, so now to our fourth quarter and full year results. These slides sums up the key numbers you heard from Anders. Safety is our first priority. We see strong safety results, but we need to continue improving with force. Return on average capital employed in 2025 was 14.5%. Cash flow from operations after tax came in at $18 billion, and earnings per share were strong at $0.81. For the year, we produced 2,137,000 barrels per day. This is record high and up 3.4% from last year, driven by ramp-up on Johan Castberg and Halten East on the NCS, US onshore gas, and new wells coming on stream. In the quarter, production was up 6%, despite some operational issues in Norway and in Brazil. On the NCS, Johan Sverdrup had another strong year.
Speaker #1: Okay , so note fourth quarter and full year results . These slides are sums up the key numbers you heard from Andy's . Safety is our first priority .
Speaker #1: We see strong safety results as we need to continue improving with force return. On average, capital employed in '25 was 14.5%. Cash flow from operations after tax came in at $18 billion, and earnings per share were strong at $0.81.
Speaker #1: For the year, we produced 2,137,000 barrels per day. This is a record high and up 3.4% from last year, driven by the ramp-up on Johannesburg and Halton East on the NCS, US onshore gas, and new wells coming on stream in the quarter.
Speaker #1: Production was up 6%, despite some operational issues in Norway and in Brazil. On the NCS, Johan Sverdrup had another strong year for power.
Torgrim Reitan: For power, we produced 5.65 TWh, and renewables power generation was up by 25%. So then to our Q2 financials. Adjusted operating income from EMP Norway totaled $5 billion, driven by increased production at lower prices. Depreciation was up compared to last year due to new fields on the stream. Our EMP international results were impacted by portfolio changes and an underlift situation in the quarter. In the US, results were driven by significantly higher gas production, capturing higher prices. And in our MMP segments, results were driven by gas trading and optimization, and a favorable price review result in January. So the result of this price review explains the difference from the MMP guidance.
Torgrim Reitan: For power, we produced 5.65 TWh, and renewables power generation was up by 25%. So then to our Q2 financials. Adjusted operating income from EMP Norway totaled $5 billion, driven by increased production at lower prices. Depreciation was up compared to last year due to new fields on the stream. Our EMP international results were impacted by portfolio changes and an underlift situation in the quarter. In the US, results were driven by significantly higher gas production, capturing higher prices. And in our MMP segments, results were driven by gas trading and optimization, and a favorable price review result in January. So the result of this price review explains the difference from the MMP guidance.
Speaker #1: We produced 5.65 terawatt hours and renewables , power generation was up by 25% . So then tour to financials , adjusted operating income from EMP , Norway totaled $5 billion , driven by increased production at lower prices .
Speaker #1: Depreciation was up compared to last year due to new fields on stream. Our E&P International results were impacted by portfolio changes under lift quarter and the situation in.
Speaker #1: In the US driven by , results were significantly higher gas production , capturing higher prices and MMP segments were driven by gas trading and optimization and a favorable price review result in January , so the result of this price review explains the difference from the MMP guidance .
Torgrim Reitan: So this is a one-off, however, important enough, and the cash flow impact will be somewhat higher than the accounting effect, and it will come in 2026. On a group level, we had net impairments of $676 million and losses on sale of assets of $282 million. These do not impact adjusted numbers. A significant part of this relates to the Peregrino and the Adura transactions, and they are mainly driven by, you know, accounting treatment of these transactions, more of a technical nature. Adjusted OpEx and SG&A was up 7% compared to the same quarter last year, and up 9% for the year. These are driven by transportation costs, insurance claims, and currency.
Torgrim Reitan: So this is a one-off, however, important enough, and the cash flow impact will be somewhat higher than the accounting effect, and it will come in 2026. On a group level, we had net impairments of $676 million and losses on sale of assets of $282 million. These do not impact adjusted numbers. A significant part of this relates to the Peregrino and the Adura transactions, and they are mainly driven by, you know, accounting treatment of these transactions, more of a technical nature. Adjusted OpEx and SG&A was up 7% compared to the same quarter last year, and up 9% for the year. These are driven by transportation costs, insurance claims, and currency.
Speaker #1: So, this is a one-off. However, it's important enough, and the cash flow impact will be somewhat higher than the accounting effect, and it will come in 2026.
Speaker #1: On a group level, we had net impairments of $626 million and losses on asset sales of $282 million. These are not adjusted numbers.
Speaker #1: Part of this impact is significant, A, to the Peregrino transactions, and they are mainly driven by the accounting treatment of these transactions.
Speaker #1: More of a technical nature. Adjusted OpEx and SG&A was up 7% compared to the same quarter last year, and up 9% for the year.
Torgrim Reitan: For the year, underlying OpEx was, and SG&A was up 1%, and if you adjust for currency headwinds, it was actually slightly down. For the year, our cash flow from operations came in at $18 billion after tax, in line with our guidance when we adjust for changes in prices. Organic CapEx for the year was $13.1 billion, also in line with what we said. Our net debt to capital employed ended at 17.8%. This increase from last quarter is mainly driven by NCS tax payments and Ørsted rights issue participation, and somewhat increasing working capital. So let me conclude with our guidance. For 2026, we expect $13 billion in organic CapEx and a 3% growth in oil and gas production.
Torgrim Reitan: For the year, underlying OpEx was, and SG&A was up 1%, and if you adjust for currency headwinds, it was actually slightly down. For the year, our cash flow from operations came in at $18 billion after tax, in line with our guidance when we adjust for changes in prices. Organic CapEx for the year was $13.1 billion, also in line with what we said. Our net debt to capital employed ended at 17.8%. This increase from last quarter is mainly driven by NCS tax payments and Ørsted rights issue participation, and somewhat increasing working capital. So let me conclude with our guidance. For 2026, we expect $13 billion in organic CapEx and a 3% growth in oil and gas production.
Speaker #1: These are driven by transportation costs , insurance claims , and currency year for the . Underlying underlying opex was an SG&A was up 1% .
Speaker #1: And if you're for currency headwinds , it was actually slightly down . For the year , our cash flow from operations came in and came in at $18 billion after tax in line with our guidance .
Speaker #1: When we adjust for changes in prices, organic CapEx for the year was $13.1 billion. Also, in line with what we said, our net debt to capital employed ended at 17.8%.
Speaker #1: This increased from last quarter, mainly driven by NRCS tax payments and Erstad rights issue. Participation and somewhat increasing working capital.
Speaker #1: So, let me conclude with our guidance for 2026. We expect $13 billion in organic investment and a 3% growth in oil and gas production.
Torgrim Reitan: We have increased our quarterly cash dividend by more than 5%, now at $0.39 per share, and announced a share buyback of up to $1.5 billion for the year, starting with the first tranche tomorrow. So thank you very much for the attention, and now I will leave the word back to you, Bård, for the Q&A session. So thanks. Mm-hmm.
Torgrim Reitan: We have increased our quarterly cash dividend by more than 5%, now at $0.39 per share, and announced a share buyback of up to $1.5 billion for the year, starting with the first tranche tomorrow. So thank you very much for the attention, and now I will leave the word back to you, Bård, for the Q&A session. So thanks. Mm-hmm.
Speaker #1: We have increased our quarterly cash dividend by more than 5%, now at $0.39 per share. And announced a share buyback of up to $1.5 billion for the year, starting with the first tranche tomorrow.
Speaker #1: So, thank you very much for the attention. And now, I will leave the word back to you, Board, for the Q&A session.
Speaker #1: So, thanks. Thank you both, Anders and Torgrim. We will now start the Q&A. You can ask two questions each in one go, and we do it like this to make sure that we can cover as many as possible.
Bård Glad Pedersen: Thank you, both, Anders and Torgrim. We will now start the Q&A. You can ask two questions each in one go, and we do it like this to make sure that we can cover as many as possible and conclude the session within 1:00 PM CET, as scheduled. For those of you on the phone, let me remind you that to ask a question, you need to press star one on your phone, and then we will let you know when it's your turn. Here in the room, the system is simpler. You just raise your hand, but please use the microphone in front of you so that those on the call also hear the questions.
Bård Glad Pedersen: Thank you, both, Anders and Torgrim. We will now start the Q&A. You can ask two questions each in one go, and we do it like this to make sure that we can cover as many as possible and conclude the session within 1:00 PM CET, as scheduled. For those of you on the phone, let me remind you that to ask a question, you need to press star one on your phone, and then we will let you know when it's your turn. Here in the room, the system is simpler. You just raise your hand, but please use the microphone in front of you so that those on the call also hear the questions.
Speaker #1: And conclude the session within 1300 CET . As a scheduled for those of you on the phone , let me remind you that to ask a question , you need to press star one on your phone and then we will let you know when it's your turn .
Speaker #1: Here in the room , the system is simpler . You just raise your hand . But please use of microphone in front the you so that those on the call also hear the the questions .
Bård Glad Pedersen: So then we'll start, and the first hand I saw was Teodor Sveen-Nilsen from SpareBank. Teodor, please.
Bård Glad Pedersen: So then we'll start, and the first hand I saw was Teodor Sveen-Nilsen from SpareBank. Teodor, please.
Speaker #1: So then we'll start on the first hand I saw, which was Theodore Nilsson from Sparbanken. Theodore, please.
Teodor Sveen-Nilsen: Thank you, congrats on strong results. So two questions. First of all, on CapEx. You obviously reduced guidance for 2027. I just wonder how we should interpret the run rate into 2028. Should we also assume that the 2028 CapEx will be well below the $13 billion you previously announced, or is that too early to say anything about that? Second question, that also, that is on MMP. Could you just explain what's behind the price review that boosted the results? Thanks.
Teodor Sveen-Nilsen: Thank you, congrats on strong results. So two questions. First of all, on CapEx. You obviously reduced guidance for 2027. I just wonder how we should interpret the run rate into 2028. Should we also assume that the 2028 CapEx will be well below the $13 billion you previously announced, or is that too early to say anything about that? Second question, that also, that is on MMP. Could you just explain what's behind the price review that boosted the results? Thanks.
Speaker #2: Thank you and congrats on strong results . So so two questions . First on on on CapEx . You obviously reduce guidance for 2027 .
Speaker #2: Just wonder how we should interpret the run rate into 2028 . Should we also assume that 2028 CapEx will be well below the 13 billion you previously announced , or is that too , too early to to say anything about that ?
Speaker #2: Second question, that is on, could you just explain what's behind the price? Was it a review that boosted the results? Thanks.
Anders Opedal: Thank you very much. So you can think about the price review, Torgeir, while I talking about the CapEx. Yeah, you're right, we have reduced the CapEx. When we are looking in the CapEx profile over the last years, we have had consistency. We have seen a very consistency investing into Norwegian oil and gas and in international oil and gas. Last year and this year, we are reducing the CapEx outlook for our renewables and low-carbon solutions, and this is due to that 2, 3 years ago, we had a different market view than we have today. We don't expect that this market will change dramatically over the next years.
Anders Opedal: Thank you very much. So you can think about the price review, Torgeir, while I talking about the CapEx. Yeah, you're right, we have reduced the CapEx. When we are looking in the CapEx profile over the last years, we have had consistency. We have seen a very consistency investing into Norwegian oil and gas and in international oil and gas. Last year and this year, we are reducing the CapEx outlook for our renewables and low-carbon solutions, and this is due to that 2, 3 years ago, we had a different market view than we have today. We don't expect that this market will change dramatically over the next years.
Speaker #1: Thank you very much. So, you can think about the price review while I’m talking about the CapEx. Yeah, you're right.
Speaker #1: We have reduced the CapEx . We have when we are looking into profile CapEx over the last years , we have have consistency .
Speaker #1: We have seen that we have consistency investing into Norwegian oil and gas, and in international oil and gas. And last year, and this year, we are reducing the CapEx outlook for our renewables and low carbon solutions.
Speaker #1: And this is due to that two, three years ago, we had a different market view than we have today. We don't expect that this market will change dramatically over the next.
Anders Opedal: We intend to continue focusing, investing consistently into our attractive oil and gas portfolio that, Torgrim, demonstrated. And be market driven, and invest in low-carbon solution and power when the time is right, the profitability is right, and the market comes. So I cannot give you the guiding for 2028 already, but with this consistent investments in oil and gas and this change we have done in the CapEx for renewables and low-carbon solutions, and the market will probably not change very much over the next years, I think you will see somewhat consistent in our CapEx guiding going forward, and we will come back to more details about this in June.
Anders Opedal: We intend to continue focusing, investing consistently into our attractive oil and gas portfolio that, Torgrim, demonstrated. And be market driven, and invest in low-carbon solution and power when the time is right, the profitability is right, and the market comes. So I cannot give you the guiding for 2028 already, but with this consistent investments in oil and gas and this change we have done in the CapEx for renewables and low-carbon solutions, and the market will probably not change very much over the next years, I think you will see somewhat consistent in our CapEx guiding going forward, and we will come back to more details about this in June.
Speaker #1: The next years . We intend to continue focusing , investing consistently into our attractive oil and gas portfolio that target demo demonstrated and we driven and and invest low carbon in solution and power .
Speaker #1: When the time is right, the profitability is right, and the market comes. So I cannot give you the guidance for '28 already.
Speaker #1: But with this consistency , investments in oil and gas and this change , we have done in the in the CapEx for renewables and low carbon solutions and the market will probably not change very much over the next years .
Speaker #1: I think you will see somewhat consistency in our CapEx guiding going forward, and we will come back to more details about this in June.
Torgrim Reitan: Then thanks, Theodore. On the price review, that is a normal mechanism in many of the gas contracts, where sort of if the price in the contract dislocates from what the market should have been and the price should have been, we have a mechanism to renegotiate or open up that.
Torgrim Reitan: Then thanks, Theodore. On the price review, that is a normal mechanism in many of the gas contracts, where sort of if the price in the contract dislocates from what the market should have been and the price should have been, we have a mechanism to renegotiate or open up that.
Speaker #1: And then thanks , Theodore . On the on the price , price review . That is a normal mechanism in many of the gas contracts where sort of if the if price in the contract dislocates from what the market should have been and the price should have been .
Anders Opedal: ... we often disagree with customers in processes like this, and often we take such things into arbitration, as we have done in this case. So that has gone on for a while, and we won in that arbitration. Over the year, we have accrued revenue related to that because we considered that we had a strong case. We had an even better outcome than what we accrued, such. So this will be a one-off payment during the year, and from now on, there is a new mechanism in place on that contract, as such.
Torgrim Reitan: ... we often disagree with customers in processes like this, and often we take such things into arbitration, as we have done in this case. So that has gone on for a while, and we won in that arbitration. Over the year, we have accrued revenue related to that because we considered that we had a strong case. We had an even better outcome than what we accrued, such. So this will be a one-off payment during the year, and from now on, there is a new mechanism in place on that contract, as such.
Speaker #1: We have a mechanism to , to , to to renegotiate or up open that often we disagree with customers in processes like this and often we take such things into arbitration as we have done in this case , so that has gone on for a while .
Speaker #1: And we won in that arbitration over the year. We have accrued revenue related to that because we consider that we had a strong case.
Speaker #1: We had a we had an even better outcome than what we accrued , as such . So this will be a one off payment during the year .
Bård Glad Pedersen: Sorry, Torolv, I need to stick to the two questions because we want to cover as many as possible, and the next one on my list is John Olaisen, ABG Sundal Collier.
Bård Glad Pedersen: Sorry, Torolv, I need to stick to the two questions because we want to cover as many as possible, and the next one on my list is John Olaisen, ABG Sundal Collier.
Speaker #1: And from now on , there is a new mechanism in place on that . As contract such . And sorry , I need to stick to the two questions because we want to cover as many as possible and the next one is on my list is ABG is there ?
John Olaisen: From Sverdrup.
John Olaisen: From Sverdrup.
Bård Glad Pedersen: Jon, please use the microphone so people can hear you online. You need to push the button. Push the button, please.
Bård Glad Pedersen: Jon, please use the microphone so people can hear you online. You need to push the button. Push the button, please.
Torgrim Reitan: Yeah, okay. Yeah, sorry. It's John Olaisen from ABG. Thanks for taking my question. My first question is regarding you on Sverdrup. Anders, you were quoted in the media today saying that you expect it to decline by more than 10% this year. I would- I want you to elaborate a little bit more on that. How much more, and is it- do we expect the same for the next few years? That's only my first question on Sverdrup production profile. The second question is regarding M&A. You sold a lot of assets internationally, so I wonder, do you have, still have assets on the sales list internationally? And also, secondly, it's, it's a long time since you bought assets internationally. Do you have... Do- are you looking at potential acquisitions internationally? Those are the two questions, Sverdrup and M&A.
John Olaisen: Yeah, okay. Yeah, sorry. It's John Olaisen from ABG. Thanks for taking my question. My first question is regarding you on Sverdrup. Anders, you were quoted in the media today saying that you expect it to decline by more than 10% this year. I would- I want you to elaborate a little bit more on that. How much more, and is it- do we expect the same for the next few years? That's only my first question on Sverdrup production profile. The second question is regarding M&A. You sold a lot of assets internationally, so I wonder, do you have, still have assets on the sales list internationally? And also, secondly, it's, it's a long time since you bought assets internationally. Do you have... Do- are you looking at potential acquisitions internationally? Those are the two questions, Sverdrup and M&A.
Speaker #1: Please use the microphone so people can hear you online. Push the button. You need to push the button, please. Yeah.
Speaker #1: Okay . Yeah . Sorry . It's generalized . Or maybe . Thanks for taking my question . My first question is regarding you on Sverdrup .
Speaker #1: You've quoted in the media today, saying that you expect it to decline by more than 10% this year. I want to elaborate a little bit more on that.
Speaker #1: How much more, and do we expect the same for the next few years? That's my first question. Johan Sverdrup, production profile.
Speaker #1: The second question is regarding M&A. We've sold a lot of assets internationally, so I wonder, do you still have assets on the sales list internationally?
Speaker #1: And also, secondly, it's been a long time since you bought assets internationally. Do you have any? Are you looking at potential acquisitions internationally?
Anders Opedal: Thank you. First of all, when it comes to Sverdrup, I think we have demonstrated over many, many years how we've been able to keep up the production, even increase it, due to the fantastic work that is done by the people working with Johan at Sverdrup. Then, a field like this is like all other fields; eventually it will come into decline, and we see that now. So we see a decline in Johan Sverdrup for 2026, which is more than 10%, but well below 20%, and that is what we put into our numbers. Still, we will have a growth in Equinor of 3% for 2026, and actually also a growth both on the Norwegian Continental Shelf and internationally.
Anders Opedal: Thank you. First of all, when it comes to Sverdrup, I think we have demonstrated over many, many years how we've been able to keep up the production, even increase it, due to the fantastic work that is done by the people working with Johan at Sverdrup. Then, a field like this is like all other fields; eventually it will come into decline, and we see that now. So we see a decline in Johan Sverdrup for 2026, which is more than 10%, but well below 20%, and that is what we put into our numbers. Still, we will have a growth in Equinor of 3% for 2026, and actually also a growth both on the Norwegian Continental Shelf and internationally.
Speaker #1: Those are the two questions . And Emma , thank you . First of all , when it comes to Sverdrup , I think we have demonstrated over many , many years how we've been able to keep up the production , even increase it due to the fantastic work that is done by the people working with Johan Sverdrup .
Speaker #1: Then this, I feel like, is like all other fields. Eventually, it will come into decline, and we see that now. So, we see decline.
Speaker #1: In Johan Sverdrup for 2026, which is more than 10%, but well below 20%. And that is what we put into our numbers.
Speaker #1: Still , we will have a growth in in Equinor , 3% for 2026 and actually also growth both on the Norwegian continental shelf and internationally .
Anders Opedal: And of course, based on all the good work, drilling new wells, placing the wells better, retrofitting the wells, high production efficiency, have a high water cut, you know, and flow through the separators. The team is working to make sure that this decline is as low as possible. But above ten, well below twenty, is what we see and kind of planning for in 2026.
Anders Opedal: And of course, based on all the good work, drilling new wells, placing the wells better, retrofitting the wells, high production efficiency, have a high water cut, you know, and flow through the separators. The team is working to make sure that this decline is as low as possible. But above ten, well below twenty, is what we see and kind of planning for in 2026.
Speaker #1: And of course , based on all the good work drilling new wells , placing the wells better , retrofitting the wells , high production efficiency have a high water cut , you know , and flow through the separators .
Speaker #1: The team is working to make sure that this decline is as low as possible, but above ten, well below 20 is what we see.
Anders Opedal: Well, we don't have a specific list of M&A sales candidates and targets that we disclose, but I think what you have seen, what we have done in the past, we have been active both in divestment, where we think the timing is right to create value, and where we see that future investment can be used better elsewhere, that we have monetized those assets. And when we have seen opportunistic opportunities to invest, we have done it, like twice, in the US, I guess, in the Marcellus. You can expect us to be active going forward, and we have had a strategy of optimizing the international business, and we have optimized it now and set it clear for growth.
Anders Opedal: Well, we don't have a specific list of M&A sales candidates and targets that we disclose, but I think what you have seen, what we have done in the past, we have been active both in divestment, where we think the timing is right to create value, and where we see that future investment can be used better elsewhere, that we have monetized those assets. And when we have seen opportunistic opportunities to invest, we have done it, like twice, in the US, I guess, in the Marcellus. You can expect us to be active going forward, and we have had a strategy of optimizing the international business, and we have optimized it now and set it clear for growth.
Speaker #1: And kind of planning for in 2026. Well, we don't have a specific list of M&A sales candidates and targets that we disclose.
Speaker #1: But I think what you have seen , what we have done in the past , we have been active both in divestment , where we think the timing is right , to create value and where we see that future investment can be used better elsewhere than we have monetized those assets .
Speaker #1: And when we have seen opportunistic opportunities to invest , we have done it like twice in the in the US , gas in the , you can expect us to be active going forward .
Speaker #1: We have had a strategy of optimizing the international business, and we have optimized it now. And set it clear for growth.
Anders Opedal: Now is the focus to deliver on that growth, finding more attractive exploration opportunities within those selected areas, and at the same time, we open for value accretive opportunities in the market.
Anders Opedal: Now is the focus to deliver on that growth, finding more attractive exploration opportunities within those selected areas, and at the same time, we open for value accretive opportunities in the market.
Speaker #1: And now the focus is to deliver on that growth, finding more attractive exploration opportunities within those selected areas. And at the same time, we are open for value-accretive opportunities in the market.
Bård Glad Pedersen: Thank you. Next, on my list is, Henri Patricot from, UBS.
Bård Glad Pedersen: Thank you. Next, on my list is, Henri Patricot from, UBS.
Henri Patricot: Yes, thank you, thank you for the presentation. Two questions from me. The first one on the cash flow guidance for 2026, 2027. You do show this meaningful improvement in 2027 to $18 billion. Could you give us a bit more of a breakdown behind this improvement? I think you mentioned Empire Wind starting up, some tax-like effect. What else is contributing to this sharp increase? And then secondly, I was wondering, there's uncertainty still around Empire Wind 1. What would be the impact to the financial framework you presented today if the project does not complete, or any implications for the broader CapEx and shareholder returns? Thank you.
Henri Patricot: Yes, thank you, thank you for the presentation. Two questions from me. The first one on the cash flow guidance for 2026, 2027. You do show this meaningful improvement in 2027 to $18 billion. Could you give us a bit more of a breakdown behind this improvement? I think you mentioned Empire Wind starting up, some tax-like effect. What else is contributing to this sharp increase? And then secondly, I was wondering, there's uncertainty still around Empire Wind 1. What would be the impact to the financial framework you presented today if the project does not complete, or any implications for the broader CapEx and shareholder returns? Thank you.
Speaker #3: Thank you . Next on my list is Henry Patricof from UBS . Yes . Thank you . Thank you for your presentation . Two questions for me .
Speaker #3: one on the cash The first flow guidance for 2627 . You do show this meaningful improvement in 27 to to $18 billion . Could you give us a bit more of a breakdown behind this this improvement ?
Speaker #3: Thank you, mentioned, and starting up some tax effect. What else is contributing to this sharp increase? And then secondly, I was wondering about the uncertainty that's still around Empire Wind.
Speaker #3: What would be the financial impact you've frameworked to today? If the presented project does not complete, are there any implications for the broader CapEx, and can you share the returns?
Anders Opedal: So if you told him, start with Empire Wind, then I can take on the CapEx reduction for 2027 afterwards.
Anders Opedal: So if you told him, start with Empire Wind, then I can take on the CapEx reduction for 2027 afterwards.
Torgrim Reitan: Okay, thanks. So, thanks, Henri. On Empire Wind, clearly, we are steered by sort of forward-looking economics and forward-looking cash flows when we make up our minds. So from now on, the remainder of investments will be covered by the ITC and cash flow from operations over the next two years in a way. So the threshold for not moving forward with it is extremely high, in a way. I mean, the total economics of that project lifecycle is something else, but clearly the decision that we have to make is actually how it looks going forward. And going forward, it actually, you know, pretty solid. So the threshold for-
Torgrim Reitan: Okay, thanks. So, thanks, Henri. On Empire Wind, clearly, we are steered by sort of forward-looking economics and forward-looking cash flows when we make up our minds. So from now on, the remainder of investments will be covered by the ITC and cash flow from operations over the next two years in a way. So the threshold for not moving forward with it is extremely high, in a way. I mean, the total economics of that project lifecycle is something else, but clearly the decision that we have to make is actually how it looks going forward.
Speaker #3: Thank you .
Speaker #1: So if you talking , start with Empire Wind , then I take on the CapEx reduction for 27 afterwards . Okay .
Speaker #3: Thanks. So, thanks, Henry. On.
Speaker #1: On Empire. Clearly, we...
Speaker #3: Are steered by sort of forward looking economics and forward looking cash flows . When we make up our mind . So from now on , the remainder of investments will be covered by the ITC and cash flow from operations over the next two years .
Speaker #3: In a way . So , so , so the threshold for not moving forward with it is extremely high in a way . I mean , the total economics of that project lifecycle is something else .
Torgrim Reitan: And going forward, it actually, you know, pretty solid. So the threshold for stopping it is very high. Our job is to deliver this on time and schedule, and I must say, I am extremely proud of what that project organization has been able to do through all of this volatility this year, to keep it steady on the track. So we are on track to deliver, and we have no other plans than that.
Speaker #3: But clearly the decision that we have to have to make is actually how it looks , looking going forward and going forward . It actually , you know , pretty solid .
Anders Opedal: ... stopping it is very high. Our job is to deliver this on time and schedule, and I must say, I am extremely proud of what that project organization has been able to do through all of this volatility this year, to keep it steady on the track. So we are on track to deliver, and we have no other plans than that. Yeah, and then the cash flow from operation that is increasing from $16 to $18 towards $27. This is based on flat price assumption, $65 on the oil price, and $9 and $3.5 for Europe and US respectively. And the answer here is that this is the tax leg.
Speaker #3: The threshold for stopping it is very high. Our job is to deliver this on time and on schedule. And I must say, I am extremely proud of what that project organization has been able to do through all of this volatility this year, to keep it steady.
Anders Opedal: Yeah, and then the cash flow from operation that is increasing from $16 to $18 towards $27. This is based on flat price assumption, $65 on the oil price, and $9 and $3.5 for Europe and US respectively. And the answer here is that this is the tax leg. We are, this year, paying a higher tax based on higher prices, yes, last year, on the Norwegian Continental Shelf. It's also a 3% production increase in 2026 that will also contribute to a higher cash flow.
Speaker #3: On the track. So, we are on track to deliver and we have no other plans than that.
Speaker #1: Yeah. And then the cash flow from operations is increasing from 16 to 18 towards 27. This is based on a flat price assumption of $65 on the oil price.
Speaker #1: And nine and three and a half for Europe and US, respectively. And the issue is that this is the tax leg.
Anders Opedal: We are, this year, paying a higher tax based on higher prices, yes, last year, on the Norwegian Continental Shelf. It's also a 3% production increase in 2026 that will also contribute to a higher cash flow.
Speaker #1: We are this year paying a higher tax based on higher prices . Yes . Last year on the Norwegian continental shelf . And it's also a 3% production increase in in will 2026 .
Bård Glad Pedersen: Good. I have a long list also online, so let's take a few from there. The first one to raise his hand was Biraj Borkhataria from RBC. Please, Biraj, your line should be open.
Bård Glad Pedersen: Good. I have a long list also online, so let's take a few from there. The first one to raise his hand was Biraj Borkhataria from RBC. Please, Biraj, your line should be open.
Speaker #1: also contribute to a higher cash flow.
Speaker #4: I have a long list, also online, so let's take a few from there. The first one to raise the sand was Biraj Borkhataria from RBC.
Biraj Borkhataria: Hi, thanks for taking my questions. Just the first one was just a follow-up on Johan Sverdrup. You mentioned the decline for 2026. What is in your base case for 2027 and beyond? Because obviously it's quite a big part of your portfolio. It'd be good to get some clarity there on the decline rates. And then the second question is just on the Empire Wind budget, which has obviously gone up a little bit. How should we think about how much contingency you have in that new $7.5 billion budget? Thank you.
Biraj Borkhataria: Hi, thanks for taking my questions. Just the first one was just a follow-up on Johan Sverdrup. You mentioned the decline for 2026. What is in your base case for 2027 and beyond? Because obviously it's quite a big part of your portfolio. It'd be good to get some clarity there on the decline rates. And then the second question is just on the Empire Wind budget, which has obviously gone up a little bit. How should we think about how much contingency you have in that new $7.5 billion budget? Thank you.
Speaker #4: Please, your line should be open.
Speaker #5: Hi , thanks for taking my questions . I just the first one is a follow up on Johan Sverdrup . You mentioned the decline for 2026 .
Speaker #5: What is in your base case for 2027 ? And beyond ? Because obviously it's quite a big part of your portfolio . It'd be good to get some On the decline clarity there .
Speaker #5: Rates. And then the second question is, the Empire Wind budget has obviously gone up a little bit. How should we think about how much contingency you have in that $7.5 billion budget?
Anders Opedal: Well, when it comes to, we are guiding now on Johan Sverdrup for 2026, and to say what it will be in 2027 is too early. As I said, we have a fantastic team there that will do everything they can to reduce this decline. We will drill new wells. And I also remind you that in end of 2027, we will have Johan Sverdrup phase three coming on stream as well. We have, you know, ramp-up of other fields on the Norwegian Continental Shelf, meaning that, despite this reduction in 2026, decline in Johan Sverdrup, we will still have a production growth.
Anders Opedal: Well, when it comes to, we are guiding now on Johan Sverdrup for 2026, and to say what it will be in 2027 is too early. As I said, we have a fantastic team there that will do everything they can to reduce this decline. We will drill new wells. And I also remind you that in end of 2027, we will have Johan Sverdrup phase three coming on stream as well. We have, you know, ramp-up of other fields on the Norwegian Continental Shelf, meaning that, despite this reduction in 2026, decline in Johan Sverdrup, we will still have a production growth.
Speaker #5: new Thank you .
Speaker #1: Well, when it comes to Johan Sverdrup, we are guiding now for 2026, and to say what it will be in 2027.
Speaker #1: It's too early. As I said, we have a fantastic team there that will do everything they can to reduce this decline.
Speaker #1: We will drill new wells, and also remind you that at the end of '27, we will have Johan Sverdrup, phase three.
Speaker #1: Coming on , on , on stream as , as as as as well . We have , you know , ramp up of other fields on the Norwegian continental shelf , meaning that despite this reduction in 26 decline in value , we will still have our production growth and then we will , you know , see now how Johan Sverdrup behave during the first part of the decline and and how we are mitigated , and then we will come back to it .
Anders Opedal: Then we will, you know, see now how Johan Sverdrup behave during the first part of the decline and how we are mitigated, and then we'll come back to it. So it's too early to say. When the increases on the Empire Wind, it's very much related to two elements. It's tariffs that has been imposed to the project, and is also an effect of the first stop work order that we had. The second stop work order, we were able to execute part of the project, most of the project, in the beginning of the stop work order. The most important parts of the progress, you know, we were able to do after the preliminary injunction.
Anders Opedal: Then we will, you know, see now how Johan Sverdrup behave during the first part of the decline and how we are mitigated, and then we'll come back to it. So it's too early to say. When the increases on the Empire Wind, it's very much related to two elements. It's tariffs that has been imposed to the project, and is also an effect of the first stop work order that we had. The second stop work order, we were able to execute part of the project, most of the project, in the beginning of the stop work order. The most important parts of the progress, you know, we were able to do after the preliminary injunction.
Speaker #1: Too early. So it’s safe to say when the increases on the Empire Wind—it's very much related to two elements. It’s tariffs.
Speaker #1: That has been imposed to the project and is also an effect of the first stop work order that we had. The second stop work order, we were able to execute part of the project.
Speaker #1: Most of the project in the beginning of the work stop order and the most important parts of the the progress , you know , we were able to do after the preliminary injunction .
Anders Opedal: So very little, very little effect of the project. So it's, so the execution part of it, it's going, going well in terms of CapEx, use of CapEx in this project, but there is a remaining uncertainty on tariffs. You might remember a couple of weeks ago, a 10% tariffs due to Greenland. That was removed a little bit, a few days later, and that is some of the uncertainty that we are facing with this project.
Anders Opedal: So very little, very little effect of the project. So it's, so the execution part of it, it's going, going well in terms of CapEx, use of CapEx in this project, but there is a remaining uncertainty on tariffs. You might remember a couple of weeks ago, a 10% tariffs due to Greenland. That was removed a little bit, a few days later, and that is some of the uncertainty that we are facing with this project.
Speaker #1: So very little , very little effect of the project . So it's so the execution part of it , it's going going well in terms of CapEx , use of CapEx in this project , but there is a remaining uncertainty on tariffs .
Speaker #1: You might remember a couple of weeks ago, a 10% tariff due to Greenland that was removed a little bit, a few days later.
Bård Glad Pedersen: The next one on the list is Alastair Syme from Citi. Alastair, please go ahead.
Bård Glad Pedersen: The next one on the list is Alastair Syme from Citi. Alastair, please go ahead.
Speaker #1: And that is some of the uncertainty that we are facing with this project.
Alastair Syme: Yeah, thanks, Board. Just one question, really, to Anders. I just wanted to reflect on the journey that Equinor's been on in recent years with respect to the transition, because you are signaling today a further scaling back in ambitions with a lower CapEx. And look, I know you're not alone in doing this in the industry, but if I go back a few years ago, you had outlined, you know, a competitive position where Equinor could be differentiated in the transition space. So I guess my question is, you know, what are your reflections on this journey, and what do you think has happened that is different to what you anticipated several years ago? Thank you.
Alastair Syme: Yeah, thanks, Board. Just one question, really, to Anders. I just wanted to reflect on the journey that Equinor's been on in recent years with respect to the transition, because you are signaling today a further scaling back in ambitions with a lower CapEx. And look, I know you're not alone in doing this in the industry, but if I go back a few years ago, you had outlined, you know, a competitive position where Equinor could be differentiated in the transition space. So I guess my question is, you know, what are your reflections on this journey, and what do you think has happened that is different to what you anticipated several years ago? Thank you.
Speaker #4: The next one on the list is Alastair Sim from Citi. Alastair, please go ahead.
Speaker #6: Yeah . Thanks . Board . Just one , one question really to Andrew . I just wanted to reflect on the journey that Equinor has been on in recent years with respect to the transition , because you are signaling today a further scaling back in ambitions with that lower CapEx .
Speaker #6: And look , I know you're not alone in doing this in the industry . But if I go back a few years ago , you had outlined , you know , a competitive position where Ecuador could be differentiated in the transition space .
Speaker #6: So, I guess my question is: What are your reflections on this journey? And what do you think has happened that is different from what you anticipated several years ago?
Anders Opedal: Thank you. That's a, it's a really, it's a really good question, and, I think kind of this is where, you know, what we were saying today, that we are signaling a consistency. We have, over the last five years, been extremely consistent in our communication around oil and gas and how we will develop the oil and gas portfolio, optimize it, and we have delivered on that. But we also had a different market view on offshore wind and transportation and storage of CO2 in particular. This is where, you know, we had experience. We saw a market growing for transportation and storage of CO2 growing faster than we actually have seen.
Anders Opedal: Thank you. That's a, it's a really, it's a really good question, and, I think kind of this is where, you know, what we were saying today, that we are signaling a consistency. We have, over the last five years, been extremely consistent in our communication around oil and gas and how we will develop the oil and gas portfolio, optimize it, and we have delivered on that. But we also had a different market view on offshore wind and transportation and storage of CO2 in particular. This is where, you know, we had experience. We saw a market growing for transportation and storage of CO2 growing faster than we actually have seen.
Speaker #6: Thank you .
Speaker #4: Thank you .
Speaker #1: That's a that's a really it's a really good question . And I think kind of this is where you know , what we were saying today that we we are signaling a consistency .
Speaker #1: We have, over the last five years, been extremely consistent in our communication around oil and gas, and how we will develop the oil and gas portfolio, optimize it.
Speaker #1: And we have delivered on that. But we also had a different market view on offshore wind and transportation and storage of CO2 in particular.
Speaker #1: This is where , you know , we . We're had experience . We saw a market growing for transportation and storage of CO2 going faster than we actually have .
Anders Opedal: For instance, also for hydrogen a couple of years ago, we actually had head of terms contracts with customers. Those has been canceled, meaning that we have not been able to progress a lot of these projects within that area. But keeping in mind, we were able to do, been able to do Northern Lights, Northern Lights phase two, Northern and Durres. So we see now that the licensing for our support regimes and applications for capturing CO2 goes slower, despite that the framework and the laws are much more in favor of CO2 now than it was before. So to summarize very quickly, we had a different market view some years ago, based on real discussions with governments and potential customers than we have today.
Anders Opedal: For instance, also for hydrogen a couple of years ago, we actually had head of terms contracts with customers. Those has been canceled, meaning that we have not been able to progress a lot of these projects within that area. But keeping in mind, we were able to do, been able to do Northern Lights, Northern Lights phase two, Northern and Durres. So we see now that the licensing for our support regimes and applications for capturing CO2 goes slower, despite that the framework and the laws are much more in favor of CO2 now than it was before. So to summarize very quickly, we had a different market view some years ago, based on real discussions with governments and potential customers than we have today.
Speaker #1: Have , have , have , have seen . We , for instance , also for hydrogen a couple of years ago , we we actually had head of terms contracts with customers .
Speaker #1: Those have been canceled , meaning that we have able to not been progress a lot of these projects within that area . But keeping in mind we were able to be able to do Northern Lights , Northern Lights , phase two , Northern and so we see now that the licensing for or support regimes and applications for capturing CO2 goes slower .
Speaker #1: This despite that the framework and the laws are much more in favor of CO2 . Now than it than it was before . So to summarize very quickly , we had a different market view some years ago based on real discussions with governments and potential customers .
Anders Opedal: Three, four years ago, customers called us to buy natural gas and was also asking for potential hydrogen and transportation and storage of CO2. Today, they continue to buy natural gas, but they have postponed their own targets for reducing emissions beyond 2030. Some years ago, when everyone had a 2030 target, there are much more focus from customers to have this market up and running very fast. Now, with different targets beyond 2030, to collect enough CO2 to have long-term contracts, we have found it very difficult. That's why we are allocating no more CapEx into that area due to the market conditions. So that is what had happened. And we have focused on business to business with hard-to-abate industry that has postponed the targets. Thank you.
Anders Opedal: Three, four years ago, customers called us to buy natural gas and was also asking for potential hydrogen and transportation and storage of CO2. Today, they continue to buy natural gas, but they have postponed their own targets for reducing emissions beyond 2030. Some years ago, when everyone had a 2030 target, there are much more focus from customers to have this market up and running very fast. Now, with different targets beyond 2030, to collect enough CO2 to have long-term contracts, we have found it very difficult. That's why we are allocating no more CapEx into that area due to the market conditions. So that is what had happened. And we have focused on business to business with hard-to-abate industry that has postponed the targets. Thank you.
Speaker #1: Then we have today, three or four years ago, customers called to buy natural gas from us and were also asking about potential hydrogen, and transportation and storage of CO2.
Speaker #1: They today continue to buy natural gas, but they have postponed their own targets for reducing emissions beyond 2030. So we have to go on, and everyone had a 2030 target.
Speaker #1: Much more focus from customers to have this market up and running very fast. Now with different targets beyond 2030, to collect enough CO2 to have long-term contracts has been very difficult, as we have found.
Speaker #1: That's why we are allocating no more CapEx into that area due to the market conditions . So that is what had happened . And we have focused on business to business with with hard to abate industry that has postponed the targets .
Bård Glad Pedersen: Thank you. Next, question is from Irene Himona from Bernstein. Irene, please, the line is open.
Bård Glad Pedersen: Thank you. Next, question is from Irene Himona from Bernstein. Irene, please, the line is open.
Speaker #4: Thank you , thank you . Next question is from Irene Germana from Bernstein . Irene , please . The line is open .
Irene Himona: Thank you very much. Good morning. My first question is, one of clarification, really. You, you referred to your objective to build an integrated power portfolio. Typically, when your peers refer to integrated power, they mean essentially adding gas-fired power generation to renewables. So I wanted to ask, what does integrated power mean for you, and how does Ørsted fit in that? My second question, just going back to the share buyback. Previously, in the past, you had guided to a long-term, sustainable through the cycle share buyback of around about $2 billion. Today, you lowered that to $1.5 billion. I'm just trying to understand what has changed between then and now, essentially. Thank you.
Irene Himona: Thank you very much. Good morning. My first question is, one of clarification, really. You, you referred to your objective to build an integrated power portfolio. Typically, when your peers refer to integrated power, they mean essentially adding gas-fired power generation to renewables. So I wanted to ask, what does integrated power mean for you, and how does Ørsted fit in that? My second question, just going back to the share buyback. Previously, in the past, you had guided to a long-term, sustainable through the cycle share buyback of around about $2 billion. Today, you lowered that to $1.5 billion. I'm just trying to understand what has changed between then and now, essentially. Thank you.
Speaker #7: Thank you very much . Good morning . My first question is one of clarification . Really ? You refer to your objective to build an integrated power portfolio .
Speaker #7: Typically when your peers refer integrated to power , they mean essentially adding gas fired power generation to renewables . So I wanted to ask , what does integrated power mean for you and how does Orsted fit in that ?
Speaker #7: My second question , just going back to the share buyback previously in the past , you had guided to a long term sustainable through the cycle share buyback of around about 2 billion .
Speaker #7: Today, you lower that to one and a half. I'm just trying to understand what has changed between then and now, essentially.
Anders Opedal: You can start with that, Torgrim, and I'll do the integrated power.
Anders Opedal: You can start with that, Torgrim, and I'll do the integrated power.
Torgrim Reitan: Okay. Thanks. Thanks, Irene. So, well, we have said at the earlier years, $1.2 billion as sort of the, the sustainable level in a way, so 1.5 is actually above that. We retired at 1.2, a bit back. To give a little bit more context, Irene, you know, it's, it's, it's the, the concept of having a stable share buyback through a cycle, you know, comes a little bit theoretical. We just coming out of a super cycle, and we have returned $54 billion over the last three years based on that, in a way. So, where we are now, we are actually the first year where the balance sheet is normalized, and we aim to manage within our means.
Torgrim Reitan: Okay. Thanks. Thanks, Irene. So, well, we have said at the earlier years, $1.2 billion as sort of the, the sustainable level in a way, so 1.5 is actually above that. We retired at 1.2, a bit back. To give a little bit more context, Irene, you know, it's, it's, it's the, the concept of having a stable share buyback through a cycle, you know, comes a little bit theoretical. We just coming out of a super cycle, and we have returned $54 billion over the last three years based on that, in a way. So, where we are now, we are actually the first year where the balance sheet is normalized, and we aim to manage within our means.
Speaker #7: Thank you
Speaker #7: .
Speaker #1: You can start with that, and I'll do the integrated power.
Speaker #3: Okay . Thanks . Thanks , Irene . So . Well we have said at earlier years , $1.2 billion as sort of the the sustainable level in a way .
Speaker #3: So 11.5 is actually above that . We retired a 1.2 a bit back give a little bit more to context . I . You know , it's it's it's the concept of having a stable share buyback through a cycle , you know , comes a little bit theoretical .
Speaker #3: We are coming out of, have just returned from, a cycle and we spent over $54 billion over the last three years on that. In a Basel way.
Speaker #3: So, where we are now, we are actually in the first year where the balance sheet is normalized. We aim to manage within our means.
Torgrim Reitan: So the number that we put forward today is 1.5. We are leaning on the balance sheet this year, but you have seen the one in 2037. We want to sort of give you an outlook for, you know, over a couple of years here. So the way you should think about share buyback is that it is a natural part of the capital distribution. It is something that is regular and is on top of the cash dividend. And the cash dividend, you should see, consider as bankable. Share buyback, clearly, will be more dependent on macro environment as we move forward.
Torgrim Reitan: So the number that we put forward today is 1.5. We are leaning on the balance sheet this year, but you have seen the one in 2037. We want to sort of give you an outlook for, you know, over a couple of years here. So the way you should think about share buyback is that it is a natural part of the capital distribution. It is something that is regular and is on top of the cash dividend. And the cash dividend, you should see, consider as bankable. Share buyback, clearly, will be more dependent on macro environment as we move forward.
Speaker #3: The number that we put forward today is one and a half. We are leaning on the balance this year, but you have seen the 2027.
Speaker #3: So we want to to sort of give you give you an for , outlook you know , over a couple of years here .
Speaker #3: So, so, so the way you should think about share buyback is that it is a natural part of the capital distribution.
Speaker #3: It is something that is regular and is on top of the dividend and the cash dividend. Cash, you should consider as share buyback.
Speaker #3: Clearly will be more dependent on , on on macro environment . As we as we move forward .
Anders Opedal: When it comes to integrated power, for us, that means both intermittent power, like offshore wind, onshore wind, solar, in addition to flexible power, batteries, and CCGTs. We do have exposure in all of this. We have gas to power in UK. We have battery in Poland, offshore, and onshore, and solar. This was divided in different business area. Now everything is integrated into one business area, power. And then we have Danske Commodities that are able to integrate this totality and add additional value to this. Having said that, the priority with an integrated power over the next year is to deliver on the already sanctioned projects.
Anders Opedal: When it comes to integrated power, for us, that means both intermittent power, like offshore wind, onshore wind, solar, in addition to flexible power, batteries, and CCGTs. We do have exposure in all of this. We have gas to power in UK. We have battery in Poland, offshore, and onshore, and solar. This was divided in different business area. Now everything is integrated into one business area, power. And then we have Danske Commodities that are able to integrate this totality and add additional value to this. Having said that, the priority with an integrated power over the next year is to deliver on the already sanctioned projects.
Speaker #1: When it comes to integrated power for us , that means both intermittent power like offshore wind , onshore wind , solar . In addition to power flexible batteries and ccgt .
Speaker #1: We do have in all exposure of this . We have gas to power in UK . We have battery in in Poland and onshore and offshore and solar .
Speaker #1: This was divided in different business areas . Now everything is integrated into one business area . Power . And then we have Danske Commodities that are able to integrate this totality and add additional value to to this .
Speaker #1: Having said that , the priority within integrated power over the next to year is deliver on the already sanctioned projects and and from that , from from that , we are able to potentially , you know , if we have the right investment opportunity to expand further on the integrated power .
Anders Opedal: And from that, we are able to potentially, you know, if we have the right investment opportunity, to expand further on the integrated power. But of course, with our gas position in Europe and US, we are, of course, well positioned also for gas to power if we see the right opportunities in the future. Ørsted and working together with Ørsted and collaboration with Ørsted, as we have said, you know, fits into this type of integrated power. We can be exposed in offshore wind in different ways, and working together with Ørsted, collaborating with Ørsted, will fit into an integrated power in different types of potential structures.
Anders Opedal: And from that, we are able to potentially, you know, if we have the right investment opportunity, to expand further on the integrated power. But of course, with our gas position in Europe and US, we are, of course, well positioned also for gas to power if we see the right opportunities in the future. Ørsted and working together with Ørsted and collaboration with Ørsted, as we have said, you know, fits into this type of integrated power. We can be exposed in offshore wind in different ways, and working together with Ørsted, collaborating with Ørsted, will fit into an integrated power in different types of potential structures.
Speaker #1: But of course , with our gas position in Europe and us , we course , well positioned for , for for gas to power , if we see the right opportunity opportunities in the future .
Speaker #1: And working together with us in collaboration with our students, we have said, you know, fits into this type of integrated power.
Speaker #1: We are exposed in offshore wind in different ways, and working together with Orsted, collaborating with Orsted will fit into an integrated power in different types of potential structures.
Bård Glad Pedersen: Thank you, Irene. But, I'll take one more on the phone and then return to the room here. The next one is Paul Redman from BNP Paribas. Paul, please, your line is open.
Bård Glad Pedersen: Thank you, Irene. But, I'll take one more on the phone and then return to the room here. The next one is Paul Redman from BNP Paribas. Paul, please, your line is open.
Speaker #4: Thank you, Irene. I'll take one more on the phone and then return to the room here. The next one is Paul Redman from BNP Paribas.
Paul Redman: Great. Thank you very much for your time today, guys. My first question is just: How do you think about growth at Equinor? The reason I ask that question is, at the Capital Markets Day last year, you highlighted a flat to declining production, 2026+. And I'm assuming that included some Gulf of Mexico production as well. You're heavily cutting the renewable portfolio, spend, so just how do we think about growth going forward from here? And then secondly, when I look at MMP, I guess the long term, well, the annual guidance was $1.6 billion, $400 million a quarter. You've generated about $1.25 to 1.3 billion for the quarter, if I take out the long-term gas contract review from this quarter.
Paul Redman: Great. Thank you very much for your time today, guys. My first question is just: How do you think about growth at Equinor? The reason I ask that question is, at the Capital Markets Day last year, you highlighted a flat to declining production, 2026+. And I'm assuming that included some Gulf of Mexico production as well. You're heavily cutting the renewable portfolio, spend, so just how do we think about growth going forward from here? And then secondly, when I look at MMP, I guess the long term, well, the annual guidance was $1.6 billion, $400 million a quarter. You've generated about $1.25 to 1.3 billion for the quarter, if I take out the long-term gas contract review from this quarter.
Speaker #4: Paul, please, your line is open.
Speaker #8: Great. Thank you very much for your time today, guys. My first question is just, how do you think about growth at Equinor?
Speaker #8: The reason I ask that question is, at the Capital Markets Day last year, you highlighted a flat to decline in production—2026 plus.
Speaker #8: And I'm assuming that included some production as well . You're heavily cutting the renewable portfolio spend . So just how do we think about growth going forward from here and then secondly , when I look at MMP , I guess the long term , well , the annual guidance was $1.6 billion , $400 million a quarter .
Paul Redman: Is there any reason the guidance isn't updated, and how should we think about MMP going forward? Thank you.
Paul Redman: Is there any reason the guidance isn't updated, and how should we think about MMP going forward? Thank you.
Speaker #8: You've generated about $1.25 to $1.3 billion for the quarter. If you take out the long-term gas contract review from this quarter, is there any reason the guidance isn't updated?
Anders Opedal: I'll start with the growth, and we divide it, so you can take the MMP. Well, let's start with the renewables. We have said that we don't want to invest more than what we have already sanctioned, but that will create the growth. We had a 45% growth quarter-over-quarter on the renewable business this year, 25% on the annual base in 2025. So still growth in integrated power over the next year. And then, as I said, we will have to think how we can create further profitable and disciplined growth into that area.
Anders Opedal: I'll start with the growth, and we divide it, so you can take the MMP. Well, let's start with the renewables. We have said that we don't want to invest more than what we have already sanctioned, but that will create the growth. We had a 45% growth quarter-over-quarter on the renewable business this year, 25% on the annual base in 2025. So still growth in integrated power over the next year. And then, as I said, we will have to think how we can create further profitable and disciplined growth into that area.
Speaker #8: And how should we think about MMP going forward? Thank you.
Speaker #1: I'll start with the and growth we divide it so you can take the MMP . Well for let's start with the renewables . We have said that we don't want to invest more than what we have already sanctioned , but that will create a growth .
Speaker #1: We had a 45% growth quarter to quarter on the renewable business . This this year , 25% on the on the annual in 2025 .
Speaker #1: So so still growth in in integrated power over of over the the next year . And then as I said , we will have to think how we can create further profitable and disciplined growth into in into that area when it comes to the international business , we we have repositioned that that portfolio and you can expect from today's level towards 2030 , growing this production towards 900 million barrels a day .
Anders Opedal: When it comes to the international business, we have repositioned that portfolio. You can expect, from today's level towards 2030, growing this production towards 900 million barrels a day. So it's clearly a growth in there, growth in production, growth in free cash flow. On the Norwegian Continental Shelf, we will continue to explore. It will be difficult to create further growth in on the Norwegian Continental Shelf, but we have received attractive acreage. We will drill 26 exploration wells on the Norwegian Continental Shelf next year.
Anders Opedal: When it comes to the international business, we have repositioned that portfolio. You can expect, from today's level towards 2030, growing this production towards 900 million barrels a day. So it's clearly a growth in there, growth in production, growth in free cash flow. On the Norwegian Continental Shelf, we will continue to explore. It will be difficult to create further growth in on the Norwegian Continental Shelf, but we have received attractive acreage. We will drill 26 exploration wells on the Norwegian Continental Shelf next year.
Speaker #1: So, it's clearly a growth in their growth in production, growth in free cash flow on the Norwegian continental shelf. We will continue to explore.
Speaker #1: It will be difficult to create further growth on the Norwegian shelf. But we continue to have received attractive acreage. We will drill 26 exploration wells on the Norwegian continental shelf next year.
Anders Opedal: We're working on reducing the time from exploration to production from 5 to 7 years to 2 to 3 years, enabling more efficiency to be able to keep the production at highest possible level on the Norwegian Continental Shelf, and growing free cash flow from that portfolio. That is what we aiming for for Norwegian Continental Shelf, internationally and integrated power.
Anders Opedal: We're working on reducing the time from exploration to production from 5 to 7 years to 2 to 3 years, enabling more efficiency to be able to keep the production at highest possible level on the Norwegian Continental Shelf, and growing free cash flow from that portfolio. That is what we aiming for for Norwegian Continental Shelf, internationally and integrated power.
Speaker #1: We're working on reducing the time from exploration to production from 5 to 7 years to 2 to 3 years, with more efficiency, to be able to keep the production at the highest possible level on the Norwegian continental shelf and growing free cash flow from that portfolio.
Speaker #1: That is what we are aiming for. For the Norwegian Continental Shelf, the internationally and integrated power.
Torgrim Reitan: Thanks, Paul. On MMP, so if you strip away the price review, you get to around $400 million in the fourth quarter, which is very much around sort of what we guide at. So that's sort of, that's what you should, in a way, expect on a quarterly basis. However, there will be fluctuations, as you very well know. What typically drives results are volatility in commodity markets and also, you know, contango versus backwardation. I can give you one example, actually, from January, where there has been a lot of volatility in the gas market. And, you know, in Europe, we have a 70% day ahead exposure and a 30% month ahead exposure.
Torgrim Reitan: Thanks, Paul. On MMP, so if you strip away the price review, you get to around $400 million in the fourth quarter, which is very much around sort of what we guide at. So that's sort of, that's what you should, in a way, expect on a quarterly basis. However, there will be fluctuations, as you very well know. What typically drives results are volatility in commodity markets and also, you know, contango versus backwardation. I can give you one example, actually, from January, where there has been a lot of volatility in the gas market. And, you know, in Europe, we have a 70% day ahead exposure and a 30% month ahead exposure.
Speaker #3: Thanks , Paul . On MMP . So if you strip away the price review , you get to around $400 million in the fourth quarter , which is very much around sort we of what .
Speaker #3: guide that's that So so sort of that's what you should way in a expect on a quarterly basis . However , there will be fluctuations as you very well know , what typically drives results are volatility in commodity markets and also , you know , contango versus backwardation .
Speaker #3: I can give you one , one example actually from January there has been a , where lot of volatility in the gas market .
Speaker #3: And you know , in Europe , we have a 70% day ahead exposure , a 30% month ahead exposure . So you can rest assured that sort of the spikes you have seen in January , it finds its way to our PNL in Europe in , in , in the US we we don't have we don't sort of have a firm exposure that we want , but traders keep certain open .
Torgrim Reitan: So you can rest assured that sort of the spikes you have seen in January, it finds its way to our P&L in Europe. In the US, we don't have a firm exposure that we want, but clearly, the traders keep a certain part open. So when going into January, in the US, our traders left 30% exposed to the prompt or the cash prices as such. So, at the most extreme, for instance, the in-basin price for our Marcellus gas was $60 per MBTU, and we took that. And then we have a transportation capacity into New York, actually coming up at Penn Station, and we achieved more than $100 per MBTU, you know, that weekend as such.
Torgrim Reitan: So you can rest assured that sort of the spikes you have seen in January, it finds its way to our P&L in Europe. In the US, we don't have a firm exposure that we want, but clearly, the traders keep a certain part open. So when going into January, in the US, our traders left 30% exposed to the prompt or the cash prices as such. So, at the most extreme, for instance, the in-basin price for our Marcellus gas was $60 per MBTU, and we took that. And then we have a transportation capacity into New York, actually coming up at Penn Station, and we achieved more than $100 per MBTU, you know, that weekend as such.
Speaker #3: So, when going into January, clearly the part in the US—our traders left to the 30% exposed prompt or cash prices. As such.
Speaker #3: So at the most extreme , for instance , the in-basin price for Marcellus gas was MMBtu $60 per and we took that . And then we have a transportation capacity into New York actually , coming up at Penn Station .
Torgrim Reitan: So, just examples of when you see volatility, you should expect us to be able to get it in a way. So that's why these results typically fluctuates.
Torgrim Reitan: So, just examples of when you see volatility, you should expect us to be able to get it in a way. So that's why these results typically fluctuates.
Speaker #3: we And achieved more than $100 per MMBtu . You know , in that weekend as such . I'm just examples of when you see So volatility , you should expect us to be able to to to get it in a way .
Bård Glad Pedersen: Thank you, Paul. Vidar Lyngvær from Danske Bank, please use the microphone.
Bård Glad Pedersen: Thank you, Paul. Vidar Lyngvær from Danske Bank, please use the microphone.
Speaker #3: So, so that's why these results typically, typically fluctuate.
Vidar Lyngvær: Thank you. First, just another clarification on the renewables spending in 2027. You're reducing CapEx by $4 billion. I get the tax credit part. Could you add some more color on where the, the remaining cut comes from? Second, Johan Sverdrup, you mentioned the decline rates there.
Vidar Lyngvær: Thank you. First, just another clarification on the renewables spending in 2027. You're reducing CapEx by $4 billion. I get the tax credit part. Could you add some more color on where the, the remaining cut comes from? Second, Johan Sverdrup, you mentioned the decline rates there. Are those exit to exit, so exit 25 to exit 26, or is it average, production decline in 26 versus average in 25? Thank you.
Speaker #4: Thank you, Paul Da from Danske Bank. Please use the microphone.
Speaker #2: Thank you. First, just another clarification on the renewable spending in 2027. You're reducing CapEx by $4 billion. I credit part.
Speaker #2: Could you add some more get the tax on whether the remaining cut comes from second ? Johan Sverdrup , you mentioned the decline there rates are those exit to exit .
Martijn Rats: ... Are those exit to exit, so exit 25 to exit 26, or is it average, production decline in 26 versus average in 25? Thank you.
Speaker #2: To exit '25 to exit '26, or is it average production decline in '26 versus average? Thank you.
Torgrim Reitan: You want to start up exit to exit or, you know, let's come back to the specifics on that, but I do think it is, you, when you compare sort of, the last year production with next year production as such, just, yeah, and I see my team is nodding there, so that is the way it works. Yeah.
Torgrim Reitan: You want to start up exit to exit or, you know, let's come back to the specifics on that, but I do think it is, you, when you compare sort of, the last year production with next year production as such, just, yeah, and I see my team is nodding there, so that is the way it works. Yeah.
Speaker #1: You want to exit? Exit or...
Speaker #3: You know , let's come back to the that . But specifics on I do think it is you when you compare sort of an the last year of production with next year production as such , just .
Anders Opedal: Hmm. Yeah. Yeah, a little bit more color to this. As I answered earlier, we had a different market view. So we had, for instance, potential hydrogen project, transportation of CCS project in the CapEx outlook that we showed last year. Those projects are not materializing. In addition, we have reduced our onshore renewable CapEx as well. And in total, this adds up to those $4 billion, and together with also with the, with the ITC, as you have seen.
Anders Opedal: Hmm. Yeah. Yeah, a little bit more color to this. As I answered earlier, we had a different market view. So we had, for instance, potential hydrogen project, transportation of CCS project in the CapEx outlook that we showed last year. Those projects are not materializing. In addition, we have reduced our onshore renewable CapEx as well. And in total, this adds up to those $4 billion, and together with also with the, with the ITC, as you have seen.
Speaker #3: see Yeah . And I team is nodding there . So that that is the is , that is the way it works . Yeah .
Speaker #1: Yeah yeah a little bit more color to this as I , as I answered earlier , we had a different market view . So we had for instance potential hydrogen project transportation of CCS projects in the CapEx outlook that we showed last year .
Speaker #1: Those projects are not materializing . In addition , we have reduced our onshore renewable CapEx as well . in And total , this adds up to those for billion dollars .
Bård Glad Pedersen: Good. Steffen Evjen from DNB Markets.
Bård Glad Pedersen: Good. Steffen Evjen from DNB Markets.
Speaker #1: And together with, also with the ITC, as seen, as you have.
Steffen Evjen: Thanks. Take my question. On the ITC, just could you please remind me on the milestones they're required for, for that payment to come in, in terms of first power and any other things that has to be fulfilled? My second question is just a clarification on Adura. I think you said $1 billion in dividends. Is that your share or is that the total share to both shareholders? Thanks.
Steffen Evjen: Thanks. Take my question. On the ITC, just could you please remind me on the milestones they're required for, for that payment to come in, in terms of first power and any other things that has to be fulfilled? My second question is just a clarification on Adura. I think you said $1 billion in dividends. Is that your share or is that the total share to both shareholders? Thanks.
Speaker #4: Good . Stefan Avian from DMV , Carnegie . Thank you . Speaker . My question .
Speaker #3: On the ITC . Just please remind me on the milestones . They are required for for that payment to come in in terms of first power and any other things that has to , to , to , to be fulfilled .
Speaker #3: My second question is just a clarification on—or do I think you said $1 billion in dividends? Is that your share, or is that the total share to the—?
Anders Opedal: It's, it's our share, and then the ITC.
Anders Opedal: It's, it's our share, and then the ITC.
Torgrim Reitan: ITC, yeah. So the way, the way it works is that you can recognize it, you know, when you start production, and sort of that is on the scale, you know, as you, as you continue to start up the various turbines. So what we have assumed is that we recognize all of this in 2027, because that's all of the plan. There is an upside that, you know, there is some ITCs recognized in 2036. We haven't based our analysis on it. So that is all of the recognition part. And then there is, you know, so what is the cash flow impact of it? And it will take some time from we recognize it to the cash flow is in our account.
Torgrim Reitan: ITC, yeah. So the way, the way it works is that you can recognize it, you know, when you start production, and sort of that is on the scale, you know, as you, as you continue to start up the various turbines. So what we have assumed is that we recognize all of this in 2027, because that's all of the plan. There is an upside that, you know, there is some ITCs recognized in 2036. We haven't based our analysis on it. So that is all of the recognition part. And then there is, you know, so what is the cash flow impact of it? And it will take some time from we recognize it to the cash flow is in our account.
Speaker #3: Yeah, both shareholders. Thanks.
Speaker #1: It's our share. And then the ITC.
Speaker #3: ITC yeah . So so the way the way it works is that you can recognize it . You know when you start production and sort of that sort of scale , you know , as you , as you continue to start up the various turbines .
Speaker #3: So what we have assumed is that we recognize all of this in 2027 , because that's sort of the plan . There is an upside that , you know , there is some ITC's recognized in haven't 2026 .
Speaker #3: We based our analysis on it . So that is sort of the recognition part . And then there is , you know , so what is the cash flow impact of it .
Torgrim Reitan: So what you see on the slide is that we have assumed $2 billion impact of the ITC in 2027, while the total number, the absolute number, is 2.5. So that's all I can give you a little bit of a perspective around this. It is a significant financial operations to manage all of this, as you would know, but there is a large and growing market for ITC and a well-functioning market in the US for this.
Torgrim Reitan: So what you see on the slide is that we have assumed $2 billion impact of the ITC in 2027, while the total number, the absolute number, is 2.5. So that's all I can give you a little bit of a perspective around this. It is a significant financial operations to manage all of this, as you would know, but there is a large and growing market for ITC and a well-functioning market in the US for this.
Speaker #3: And it will take some time from when we recognize it to when the cash flow is in our account. So what you see on the slide is that, assuming we have a $2 billion impact in '27, ITC, while the total number, the absolute number, is two and a half.
Speaker #3: So that often gives you a little bit of a perspective around this. It is significant—it is a significant financial operation to manage all of this.
Speaker #3: You would, as you know. But there is a large and growing market for ITC, and a well-functioning market in the US for this.
Steffen Evjen: Thanks.
Steffen Evjen: Thanks.
Bård Glad Pedersen: Thank you, Steffen. Next one is Martijn Rats from Morgan Stanley. Martijn, please, the line is open.
Bård Glad Pedersen: Thank you, Steffen. Next one is Martijn Rats from Morgan Stanley. Martijn, please, the line is open.
Speaker #3: Thanks .
Speaker #4: Thank you . Stefan . Next one is Martin from Morgan Stanley . Martin , please . The line is open .
Martijn Rats: Yeah, good morning. I've got two FMA. I wanted to ask you again about the CapEx reductions. I know there have been a few questions about it already, but when Equinor took the initial 10% stake in Ørsted very soon thereafter, we also had a reduction in the CapEx outlook for offshore wind renewables in general. And in many ways, that had the character, therefore, when you put these two things together, it's like, well, we do less organically and we do more inorganically. It was sort of a not a total reduction, but it had an element of we're swapping one type of spending for another type of spending. And I was wondering how we should interpret this reduction in CapEx on this occasion.
Martijn Rats: Yeah, good morning. I've got two FMA. I wanted to ask you again about the CapEx reductions. I know there have been a few questions about it already, but when Equinor took the initial 10% stake in Ørsted very soon thereafter, we also had a reduction in the CapEx outlook for offshore wind renewables in general. And in many ways, that had the character, therefore, when you put these two things together, it's like, well, we do less organically and we do more inorganically. It was sort of a not a total reduction, but it had an element of we're swapping one type of spending for another type of spending. And I was wondering how we should interpret this reduction in CapEx on this occasion.
Speaker #9: Yeah . Good morning . I've got two FMA . I wanted to ask you again about the the CapEx reductions . I know there have been a few questions about it already , but when Equinor took the initial 10% stake in Orsted very soon thereafter , we also had a reduction in the CapEx outlook for offshore wind , renewables in general and in many ways .
Speaker #9: That had the character . Therefore , when you put these two things like , well , we organically and together , it's do less more we do inorganically .
Speaker #9: It was sort of a—not a total— but it was a reduction. It had an element of, 'We're swapping one type of spending for another type of spending.'
Martijn Rats: If power and low carbon CapEx goes down, is that... Should we interpret that as well? You know, the company's just gonna do less of that stuff. Or should we anticipate that in the fullness of time, this also turns out to be a swap, less organic, but more inorganic? I was hoping you could say a few things about that. And then the other question I wanted to ask is about the 10% OpEx and SG&A reduction target. Like, 10% in a single year is quite a significant amount, and also because you know, Equinor has already been very focused on that for some time. You know, I was positively surprised that there are still sort of that type of opportunity available.
Biraj Borkhataria: If power and low carbon CapEx goes down, is that... Should we interpret that as well? You know, the company's just gonna do less of that stuff. Or should we anticipate that in the fullness of time, this also turns out to be a swap, less organic, but more inorganic? I was hoping you could say a few things about that. And then the other question I wanted to ask is about the 10% OpEx and SG&A reduction target. Like, 10% in a single year is quite a significant amount, and also because you know, Equinor has already been very focused on that for some time. You know, I was positively surprised that there are still sort of that type of opportunity available.
Speaker #9: And I was wondering how we should interpret this reduction in , CapEx in on this occasion . If power and low carbon CapEx goes down , is that should we interpret that as well ?
Speaker #9: Is the company just going to do less of that stuff, or should we anticipate that, in the fullness of time, this also turns out to be a swap—a less organic but more inorganic one?
Speaker #9: I was hoping you could say a few things about that. And then the other question I wanted to ask is about the opex and 10% reduction targets—like, 10% in a single year is quite a significant amount.
Speaker #9: And also because Ecuador is already in very focused on that for some time . It you know , I was I was positively surprised that there are still sort of that type of opportunity available .
Martijn Rats: Could you talk a little bit about, you know, the key levers, where that spending can be reduced? And also, just for the avoidance of doubt, 10%, how does that translate into, into absolute, sort of, absolute dollar amounts? That would be helpful.
Biraj Borkhataria: Could you talk a little bit about, you know, the key levers, where that spending can be reduced? And also, just for the avoidance of doubt, 10%, how does that translate into, into absolute, sort of, absolute dollar amounts? That would be helpful.
Speaker #9: Could you talk a little bit about , you know , the key spending levers can be that where reduced avoidance of also 10% , how does that translate into into absolute sort of absolute dollar amounts ?
Anders Opedal: Let's start with that question first, and then again.
Anders Opedal: Let's start with that question first, and then again.
Torgrim Reitan: Okay, thanks. Thanks, Martin. So on the 10% reduction. So over the last years, we have been able to maintain OpEx and SG&E flat, even if we have grown our production, and despite the inflation as such. So our people and organization has done a good job. Next year, we expect that number to come down by 10%. That is a very big number. However, it is a significant impact of the investment of Peregrino and the establishment of Adura that will be equity accounted as such. So the reported numbers will be down 10%, but when you adjust for, you know, structural changes, we expect to maintain OpEx and SG&E flat, growing by 3% and still inflation as such. So this comes from many sources.
Torgrim Reitan: Okay, thanks. Thanks, Martin. So on the 10% reduction. So over the last years, we have been able to maintain OpEx and SG&E flat, even if we have grown our production, and despite the inflation as such. So our people and organization has done a good job. Next year, we expect that number to come down by 10%. That is a very big number. However, it is a significant impact of the investment of Peregrino and the establishment of Adura that will be equity accounted as such. So the reported numbers will be down 10%, but when you adjust for, you know, structural changes, we expect to maintain OpEx and SG&E flat, growing by 3% and still inflation as such. So this comes from many sources.
Speaker #9: That would be helpful .
Speaker #1: Let's start with that question first.
Speaker #3: Okay . Thanks . Thanks , Martin . So on the 10% reduction . So over the last years we have been able to maintain opex and SG&A flat , even if we have grown or production and and despite the inflation as such , so , so or people and organizations have done , done a good next job year , we expect that number to come down by 10% .
Speaker #3: That is a very big number. However, it is a significant impact of divestment of Peregrino and the establishment of Adura that will be equity accounted as such.
Speaker #3: So the reported numbers will be down 10%, but when you adjust for structural changes, we expect to maintain opex and SG&A flat, growing by 3%, and still inflation as such.
Anders Opedal: ...First of all, activity levels. Clearly, we have taken down and prioritized that very hard. That has a direct impact on it. We have taken down early phase costs significantly in the portfolio, also a significant contributor. Staffs are, you know, continue to high grade and take out efficiencies. And then the business areas are clearly working on this. So, but on your question, is there more to come? And the answer is yes, we are never satisfied with where we are on this. And I can give you two examples of what to come. One is the work, excuse me, the work on NCS 2035. We do see a significant cost impact of that. So we hope to show more on that in June.
Torgrim Reitan: ...First of all, activity levels. Clearly, we have taken down and prioritized that very hard. That has a direct impact on it. We have taken down early phase costs significantly in the portfolio, also a significant contributor. Staffs are, you know, continue to high grade and take out efficiencies. And then the business areas are clearly working on this. So, but on your question, is there more to come? And the answer is yes, we are never satisfied with where we are on this. And I can give you two examples of what to come. One is the work, excuse me, the work on NCS 2035. We do see a significant cost impact of that. So we hope to show more on that in June.
Speaker #3: So, this comes from many sources. First of all, activity level. Clearly, we have taken down and prioritized that very hard.
Speaker #3: That has a direct impact on it . We have taken down early phase cost significantly in the portfolio . Also , a significant contributor staffs are , you know , continue to to , to , to , to , to high grade and take out , take out efficiencies .
Speaker #3: And then the business areas are clearly working on this. So, but on your question, is there more to come? And the answer is yes, we are never satisfied with where we are on this.
Speaker #3: And I can give you two examples of what to come . One is the work . Excuse me , the work on NRCS 2035 .
Anders Opedal: The other one is actually artificial intelligence. So we have already seen that in our numbers, NOK 1 billion or so, which is good. However, this is early days, and we do believe that with our large operations and our ability to take out effect across assets, that AI can really be a significant contributor to further cost improvements. So we'll continue to fight and work this, and but the 10% is clearly covered by the inorganic moves we have done. Yeah. So, and thank you for the CapEx question, Martin. And, let me elaborate a little bit how I think around this. Because you've probably seen now that several times we have taken down the renewables and low carbon solution CapEx.
Torgrim Reitan: The other one is actually artificial intelligence. So we have already seen that in our numbers, NOK 1 billion or so, which is good. However, this is early days, and we do believe that with our large operations and our ability to take out effect across assets, that AI can really be a significant contributor to further cost improvements. So we'll continue to fight and work this, and but the 10% is clearly covered by the inorganic moves we have done. Yeah. So, and thank you for the CapEx question, Martin. And, let me elaborate a little bit how I think around this. Because you've probably seen now that several times we have taken down the renewables and low carbon solution CapEx.
Speaker #3: We do see a significant cost . Cost that in to on June . hope to of that . show more so so So so The other one is actually artificial intelligence .
Speaker #3: So we have already see that in the numbers . A billion kroner or so , which is good . However , this is early days and we do believe that with a large operations and our ability to take out effect across assets that can AI really be a significant contributor to , to further cost , cost improvements .
Speaker #3: So we'll continue to, to, to fight and work on this, and, and, but the 10% is clearly colored by the inorganic moves.
Speaker #3: We have done .
Speaker #1: Yeah . So thank you for for for that complex question , Martin . And and let me , let me elaborate a little bit how I think around this , because you probably see now that several times we are taken down the , the renewables and low carbon solution CapEx and it's not necessarily because we have done any inorganic moves .
Anders Opedal: It's not necessarily because we have done any inorganic moves. It's also because we have not been successful in some of the bidding because we have raised the bar for winning future CFDs. And a couple of years ago, we had several projects inside our CapEx outlook that is now not inside the CapEx outlook due to deliberately not being successful in those auctions. So a more positive view some years ago, as we said, during the Ørsted acquisition of 10%, we found it more value creating at that point in time to do our inorganic move than to do our organic move.
Torgrim Reitan: It's not necessarily because we have done any inorganic moves. It's also because we have not been successful in some of the bidding because we have raised the bar for winning future CFDs. And a couple of years ago, we had several projects inside our CapEx outlook that is now not inside the CapEx outlook due to deliberately not being successful in those auctions. So a more positive view some years ago, as we said, during the Ørsted acquisition of 10%, we found it more value creating at that point in time to do our inorganic move than to do our organic move.
Speaker #1: It's also because we have not been successful in some some of the bidding because we the bar have raised for for winning future CFDs and of years a couple ago , we had several projects inside our CapEx outlook .
Speaker #1: That is now not inside the CapEx outlook due to deliberately not being successful in those in those auctions . So a more positive view some years ago , as we said during the .
Speaker #1: Acquisition of 10%—we found it more value creating at that point in time. And there are inorganic moves that we can do. Move.
Anders Opedal: This we have further taken down as the CapEx for offshore wind, but also on onshore renewables. A couple of years ago and last year, we had a much more positive market view and direct discussions with customers for CO2 Highway and the hydrogen project in Eemshaven, which are now pushed further out in time. And actually, the hydrogen projects in Eemshaven is stopped before feed, and we will not move forward. And in these areas, I don't think there are many inorganic moves to be done that will create value. So you should not expect us to work at much on this.
Torgrim Reitan: This we have further taken down as the CapEx for offshore wind, but also on onshore renewables. A couple of years ago and last year, we had a much more positive market view and direct discussions with customers for CO2 Highway and the hydrogen project in Eemshaven, which are now pushed further out in time. And actually, the hydrogen projects in Eemshaven is stopped before feed, and we will not move forward. And in these areas, I don't think there are many inorganic moves to be done that will create value. So you should not expect us to work at much on this.
Speaker #1: This . We have further taken down the CapEx for for But also on on shore renewables wind . offshore . Couple of years ago and last year we had a much more positive market view and direct discussions with customers for CO2 highway and the hydrogen project in Emesafene , which are now pushed a further out in time .
Speaker #1: And actually the hydrogen projects in often is is is stopped before feed and we will not move move forward and in in this areas .
Speaker #1: I don't think there are many inorganic moves to be done that will create value . So you should not expect us to to work much on , on , on this .
Anders Opedal: We will continue to work on being a leading company in terms of transportation and storage of CO2, building on Northern Lights 1, 2, and Endurance. But we will not make investments before we see we have long-term contracts, we have seen costs coming down, and we see profitable projects. And that means that there needs to be a better market than we see today.
Torgrim Reitan: We will continue to work on being a leading company in terms of transportation and storage of CO2, building on Northern Lights 1, 2, and Endurance. But we will not make investments before we see we have long-term contracts, we have seen costs coming down, and we see profitable projects. And that means that there needs to be a better market than we see today.
Speaker #1: We will continue to work on being a leading company in terms of transportation and storage of CO2, building on Northern Lights 1, 2, and Durance.
Speaker #1: What we will not make investments before we see . We have long term contracts . We seen cost coming have down and we see profitable projects .
Nash Kiwi: Thank you.
Martijn Rats: Thank you.
Bård Glad Pedersen: Thank you, Martin. Next one is Nash Kiwi from Barclays. Nash, please, go ahead.
Bård Glad Pedersen: Thank you, Martin. Next one is Nash Kiwi from Barclays. Nash, please, go ahead.
Speaker #1: And that means that there needs to be a better market than we see today.
Speaker #4: Thank you , thank you Martin . Next one is Nash from Barclays . Nash , please go ahead .
Nash Kiwi: Hey, good afternoon, everyone. Two questions today. The first one is on your upstream reserve life. I wonder, how do you think about a reasonable level of upstream reserve life in the medium to long run, please? Could better technologies like AI to help extend this? Then my second question is on Ørsted. I think earlier you mentioned that you could collaborate more with Ørsted, in kind of different types of potential structures, and I wonder if you could elaborate what you mean by the potential structures. Thank you.
Naisheng Cui: Hey, good afternoon, everyone. Two questions today. The first one is on your upstream reserve life. I wonder, how do you think about a reasonable level of upstream reserve life in the medium to long run, please? Could better technologies like AI to help extend this? Then my second question is on Ørsted. I think earlier you mentioned that you could collaborate more with Ørsted, in kind of different types of potential structures, and I wonder if you could elaborate what you mean by the potential structures. Thank you.
Speaker #10: Hey good afternoon everyone . Two questions please . The first one is on your upstream reserve life . I wonder how do you think about a reasonable level of upstream reserve life in the medium to long run ?
Speaker #10: Place? Could better technologies like AI help to extend these? Then my second question is on Orlistat. I think earlier you mentioned that you could collaborate more with Orlistat in kind of different types of potential structures, and I—could you elaborate?
Anders Opedal: Well, we have seen what we have done, just an example with Shell in the UK. There's always a way to work together to create value for both shareholders. But there is no discussion at the moment, but we see that a further collaboration with Ørsted could benefit both companies, but nothing new to elaborate today. When it comes to reserve life, I think this will also, the ROP, will be affected in the years to come, that we have many more exploration wells, smaller discoveries, and faster time from discovery to production.
Anders Opedal: Well, we have seen what we have done, just an example with Shell in the UK. There's always a way to work together to create value for both shareholders. But there is no discussion at the moment, but we see that a further collaboration with Ørsted could benefit both companies, but nothing new to elaborate today. When it comes to reserve life, I think this will also, the ROP, will be affected in the years to come, that we have many more exploration wells, smaller discoveries, and faster time from discovery to production.
Speaker #10: Could—what do you wonder if you structure it? Thank you.
Speaker #4: Well .
Speaker #1: You have seen what we have done. Just as an example, with Shell in the UK, there's always a way to work together to create value for both shareholders.
Speaker #1: But there is no discussion at the moment. But we see that a further collaboration with, with Orsted could benefit both companies.
Speaker #1: But nothing new to elaborate. Today, when it comes to reserve life, I think this will also—the rope will be affected in the years to come.
Speaker #1: That we have many more exploration wells , smaller discoveries and faster time from discovery to production , meaning that the r p will be lower than traditionally when we big elephants on the had the continental we are the same Norwegian time , shelf at comfortable with our r p see it today around seven because we have so many exploration wells .
Anders Opedal: Meaning that the ROP will be lower than traditionally when we had the big elephants on the Norwegian Continental Shelf. At the same time, we are comfortable with our ROP, see it today around 7, because we have so many exploration wells, we have discoveries, and last year we had 14 discoveries, adding in total 125 million barrels in new resources. Luffen and Langemann, which is in the Sleipner area, is in an area where we thought there was nothing more to be found. But technology, new seismic, use of AI, you know, has enabled us to make more discoveries. We have seen the same in the Ringway West area.
Anders Opedal: Meaning that the ROP will be lower than traditionally when we had the big elephants on the Norwegian Continental Shelf. At the same time, we are comfortable with our ROP, see it today around 7, because we have so many exploration wells, we have discoveries, and last year we had 14 discoveries, adding in total 125 million barrels in new resources. Luffen and Langemann, which is in the Sleipner area, is in an area where we thought there was nothing more to be found. But technology, new seismic, use of AI, you know, has enabled us to make more discoveries. We have seen the same in the Ringway West area.
Speaker #1: We have and last discoveries year we had 14 discoveries , adding in total 125 million barrels in in new resources , which is in , in , in Sleipner area is in an area where we thought there was nothing more to be found , but technology new seismic use of AI , you know , has enabled us to make more discoveries .
Anders Opedal: So we will continue to implement AI in exploration to ensure that we're able to discover new resources that was overseen in the past, that we now can drill and bring to market in a quicker way. And by using AI, not only on exploration, but also in operations, and so on, we saved $130 million last years. And this is accelerating, so as Torgrim said earlier, we are really focusing on implementing AI to create value in the company. And this is something that you will hear more about in the future.
Anders Opedal: So we will continue to implement AI in exploration to ensure that we're able to discover new resources that was overseen in the past, that we now can drill and bring to market in a quicker way. And by using AI, not only on exploration, but also in operations, and so on, we saved $130 million last years. And this is accelerating, so as Torgrim said earlier, we are really focusing on implementing AI to create value in the company. And this is something that you will hear more about in the future.
Speaker #1: We have seen the same in the Ringway West area, so we will continue to implement AI in exploration to ensure we are able to discover new resources.
Speaker #1: was That overseen in in the past that we know can drill and and bring to market in a in , in a quicker way .
Speaker #1: And by using AI not only on exploration but also in operations and so on, we saved $130 million last year. And this is accelerating.
Speaker #1: So as I said earlier , we are really focusing on implementing AI to create value in the company . And this is something that you will hear more about in , in , in , in future the .
Torgrim Reitan: Thank you.
Naisheng Cui: Thank you.
Bård Glad Pedersen: Thanks, Marsh. Next is Jason Gabelman from TD Cowen. Jason, please.
Bård Glad Pedersen: Thanks, Marsh. Next is Jason Gabelman from TD Cowen. Jason, please.
Speaker #10: Thank you .
Speaker #4: Thanks very much. Next is Jason Gabelman from TD Cowen. Jason, please.
John Olaisen: Yeah. Hey, thanks for taking my questions. I wanted to first go back to the Empire Wind guidance, and I'm wondering if the $600 million of cash flow is what Equinor expects to receive? Or are there gonna be some repayments on the project financing that are gonna minimize that in the earlier years? And I wonder if you have a similar number for the Dogger Bank projects. And then my follow-up is just on kind of broader exploration opportunities beyond what you've discussed. And we've seen companies going back into regions where fiscal terms have improved, like the Middle East and West Africa.
Jason Gabelman: Yeah. Hey, thanks for taking my questions. I wanted to first go back to the Empire Wind guidance, and I'm wondering if the $600 million of cash flow is what Equinor expects to receive? Or are there gonna be some repayments on the project financing that are gonna minimize that in the earlier years? And I wonder if you have a similar number for the Dogger Bank projects. And then my follow-up is just on kind of broader exploration opportunities beyond what you've discussed. And we've seen companies going back into regions where fiscal terms have improved, like the Middle East and West Africa.
Speaker #11: Hey Yeah . thanks for taking my questions . I wanted to first go back to the Wind guidance I'm , and wondering if the $600 million of of of cash flow is that what Ecuador expects to receive , or are there going to be some repayments on the project financing that are going to minimize that in the earlier years ?
Speaker #11: And I wonder if you have a similar number for the Dagger projects. And then my follow-up is just on kind of broader exploration opportunities beyond what you've discussed.
Speaker #11: And we've seen other companies going back into regions where fiscal terms have improved , like the Middle East and West Africa . I wonder if you look at those regions as potential opportunities for the company to exploit or given kind of a lack of footprint in those regions , is it is it not a core focus ?
John Olaisen: I wonder if you look at those regions as potential opportunities, for the company to exploit, or given kind of a lack of footprint in those regions, is it not a core focus? Thanks.
Jason Gabelman: I wonder if you look at those regions as potential opportunities, for the company to exploit, or given kind of a lack of footprint in those regions, is it not a core focus? Thanks.
Anders Opedal: Yeah, I'll start with that question, and you can do the $600 million and the synergy effects there. So, basically what you have seen, what we have done, in the international oil and gas portfolio, is to focus it. We were in 30 to 40 countries, high cost, high exploration cost, and we have concluded that we were not successful with that strategy. Adding too much cost and too little of progress in putting new resources into the inventory. So, we have worked very hard to focus and building an attractive exploration portfolio in those focused areas like in Angola, in Brazil, and in US offshore.
Anders Opedal: Yeah, I'll start with that question, and you can do the $600 million and the synergy effects there. So, basically what you have seen, what we have done, in the international oil and gas portfolio, is to focus it. We were in 30 to 40 countries, high cost, high exploration cost, and we have concluded that we were not successful with that strategy. Adding too much cost and too little of progress in putting new resources into the inventory. So, we have worked very hard to focus and building an attractive exploration portfolio in those focused areas like in Angola, in Brazil, and in US offshore.
Speaker #11: Thanks .
Speaker #4: Yeah .
Speaker #1: I'll start with that question . And you can do the $600 million and the synergy there So effects seen , have what you basically what we have in done the international oil and gas portfolio is to is to focus it .
Speaker #1: We were in 30 to 40 countries, high cost, high exploration cost. And we have concluded that we were not successful with that strategy.
Speaker #1: Adding too much cost and too little of of progress in in putting new resources into the inventory . So we have worked very hard to focus and building and attractive exploration portfolio in those focused areas , like Angola and Brazil and in US offshore .
Anders Opedal: And of course, Bay du Nord, East Canada, we're working on the Bay du Nord field, where this will also have attractive exploration opportunities around it, similar to what we see on Castberg and other new fields. Then, of course, we will, of course, always be open for ideas and value adding exploration activity outside this core. But the bar is high. We will not have a global exploration strategy moving around in all parts of the world. We have areas where we see. Now we have learned the basin, we have experience, and we think we can expand quite a lot on that one. Brazil, for one instance, you know, by Bacalhau, the Raia, we have an attractive exploration opportunities there now.
Anders Opedal: And of course, Bay du Nord, East Canada, we're working on the Bay du Nord field, where this will also have attractive exploration opportunities around it, similar to what we see on Castberg and other new fields. Then, of course, we will, of course, always be open for ideas and value adding exploration activity outside this core. But the bar is high. We will not have a global exploration strategy moving around in all parts of the world. We have areas where we see. Now we have learned the basin, we have experience, and we think we can expand quite a lot on that one. Brazil, for one instance, you know, by Bacalhau, the Raia, we have an attractive exploration opportunities there now.
Speaker #1: And of course , dinner is Canada . We're working on the dinner field where this will also have attractive exploration opportunities it , around similar to what we see on Casper and and other new fields .
Speaker #1: Then of course , we will , of course , always be open for ideas and value exploration activity outside this core . But the bar is high .
Speaker #1: We do not have a global exploration strategy moving around parts of the world. We have areas where we see now. We have.
Speaker #1: We have learned the basin . We have experience and we think we can expand quite a lot on on that one . Brazil , for one instance , by bacalao the Raya , we have an attractive exploration opportunities there .
Anders Opedal: The neighbor block to the Boomerang discoveries for BP. We have a block close to Raia, and we're maturing up, you know, to see what kind of exploration program we can have in that area. And in this year, we will actually also drill exploration wells in Angola. So, we are curious about other areas, but we'll have most of our focus in the focused area.
Anders Opedal: The neighbor block to the Boomerang discoveries for BP. We have a block close to Raia, and we're maturing up, you know, to see what kind of exploration program we can have in that area. And in this year, we will actually also drill exploration wells in Angola. So, we are curious about other areas, but we'll have most of our focus in the focused area.
Speaker #1: Now the neighbor block to the boomerang discoveries for , for for BP . We have a block close to to to Raya to see what kind of program we we're exploration and can maturing up have in that area .
Speaker #1: And next , and in this year , we will actually also drill exploration wells in , in , in , in , in Angola .
Speaker #1: So, we are curious about other areas, but we'll have most of our focus in the focused area.
Torgrim Reitan: Jason, on the $600 million in cash flow related to Empire Wind, that is related to our equity. As such, there's no sort of, you know, money of that that goes to the lenders. A couple of things. There is a portfolio effect in addition to the cash flow within the project, and that is related to the, you know, the depreciation that we have in Empire Wind goes into the IFRS results, and the minimum tax in the US is based on IFRS results. So it sort of reduces the minimum tax payments in the States as such. So there's a portfolio effect coming on top of the direct cash flow in the project as such.
Torgrim Reitan: Jason, on the $600 million in cash flow related to Empire Wind, that is related to our equity. As such, there's no sort of, you know, money of that that goes to the lenders. A couple of things. There is a portfolio effect in addition to the cash flow within the project, and that is related to the, you know, the depreciation that we have in Empire Wind goes into the IFRS results, and the minimum tax in the US is based on IFRS results. So it sort of reduces the minimum tax payments in the States as such. So there's a portfolio effect coming on top of the direct cash flow in the project as such.
Speaker #3: And then Jason , on the $600 million in cash flow related to MP wind that is related to our equity . As such , there's no sort of , you know , money of that that goes to goes to the lenders a couple of things .
Speaker #3: There is a portfolio effect in addition to the cash flow within the project . And that is related to that . You know , the depreciation that we have in MP wind goes into the IFRS results and the minimum tax in the US is based on IFRS results .
Speaker #3: So it sort of reduces the minimum tax payments in the States. So there’s a portfolio effect coming on top of the direct cash flow in the project as such.
Anders Opedal: Just to clarify, in the CFFO, the interest payment is included, but not the payment to the lenders, as you said, Torgrim.
Torgrim Reitan: Just to clarify, in the CFFO, the interest payment is included, but not the payment to the lenders, as you said, Torgrim.
Torgrim Reitan: Mm-hmm. Yeah.
Anders Opedal: Mm-hmm. Yeah.
Speaker #4: Just to clarify, in the CFO, the interest payment is included, but not the payment to the lenders, as you said earlier.
Bård Glad Pedersen: Thank you, Jason. Kim Fustier from HSBC is next on my list. Kim, please go ahead.
Bård Glad Pedersen: Thank you, Jason. Kim Fustier from HSBC is next on my list. Kim, please go ahead.
Speaker #4: Yeah . Thank you . Jason Kim , first year from HSBC is next on the list . Kim , please go ahead .
Kim Fustier: ... Hi, good afternoon. Thanks for taking my questions. I had a couple on the NCS, please. Firstly, I believe that back in November, you announced a reorganization of your NCS business along centralized functional lines, like subsea, drilling, et cetera. Could you give a bit more color on this, and how does that move help to set you up for a future on the NCS with fewer big developments, but more small developments? And then secondly, could you give an update on a couple of pre-FAD projects, Wisting and then Bay du Nord in Canada, where there seems to have been some technical progress lately. Thank you.
Kim Fustier: ... Hi, good afternoon. Thanks for taking my questions. I had a couple on the NCS, please. Firstly, I believe that back in November, you announced a reorganization of your NCS business along centralized functional lines, like subsea, drilling, et cetera. Could you give a bit more color on this, and how does that move help to set you up for a future on the NCS with fewer big developments, but more small developments? And then secondly, could you give an update on a couple of pre-FAD projects, Wisting and then Bay du Nord in Canada, where there seems to have been some technical progress lately. Thank you.
Speaker #12: Hi . Good afternoon . Thanks for taking my questions . I had a couple on the NCS . Please . Firstly , I believe that back in November you announced a reorganization of your NCS business along centralized , functional subsea lines like drilling , etc.
Speaker #12: Could you give a bit more color on this? And how does that help to set you up for a future of ECS with fewer big developments, but more small developments?
Speaker #12: And secondly , then could you give an update on a couple of projects Wisting and then over in Canada , where there seems to have been some technical progress lately , thank you .
Anders Opedal: Yeah, thank you. So the Norwegian Continental Shelf is changing, you know, with after Johan Sverdrup and Bacalhau, we have, as I said, much more smaller discoveries, smaller fields, and most of the developments will be now subsea tie-in projects. We actually have 75 of those in our portfolio over the next 10 years. So it's about, you know, making sure that we're able to execute on these projects faster. We are going that we can drill more exploration well faster, and we can create more value. So then we have actually started with looking into how we work. How is our work processes, you know, all the way from working together with partners, internal approval processes, field development processes for subsea tie-in, and so on.
Anders Opedal: Yeah, thank you. So the Norwegian Continental Shelf is changing, you know, with after Johan Sverdrup and Bacalhau, we have, as I said, much more smaller discoveries, smaller fields, and most of the developments will be now subsea tie-in projects. We actually have 75 of those in our portfolio over the next 10 years. So it's about, you know, making sure that we're able to execute on these projects faster. We are going that we can drill more exploration well faster, and we can create more value. So then we have actually started with looking into how we work. How is our work processes, you know, all the way from working together with partners, internal approval processes, field development processes for subsea tie-in, and so on.
Speaker #4: Yeah .
Speaker #1: Thank you . So the Norwegian Continental Shelf is changing , you know , with after Johan Sverdrup and Bacalao , we have , as I said , much more smaller discoveries , smaller fields .
Speaker #1: Most of the developments will be now subsea tie in projects . We actually have 75 of those in our portfolio over the next ten , ten years .
Speaker #1: So it's about, you know, making sure that we're able to execute on these projects faster. We are going so that we can drill more exploration.
Speaker #1: Well , faster , and we can create more value . So then we have actually started with looking into how we work . How is our work processes , you know , all the way from working together with partners , internal approval processes , field development processes for subsea tion and so on .
Anders Opedal: We have looked at 70 work processes, how to, you know, for drilling to development and so on. We have simplified those work processes, and we have looked at them together, such that, you know, all these processes are streamlined end to end. Just to say, a change that I will do, instead of making 7, 8 individual decisions on these projects, you know, one by one, we will group the decision. Twice a year, I will make a lump decision of several projects, enabling faster decision making processes, and ensure that we're able to move this project faster.
Anders Opedal: We have looked at 70 work processes, how to, you know, for drilling to development and so on. We have simplified those work processes, and we have looked at them together, such that, you know, all these processes are streamlined end to end. Just to say, a change that I will do, instead of making 7, 8 individual decisions on these projects, you know, one by one, we will group the decision. Twice a year, I will make a lump decision of several projects, enabling faster decision making processes, and ensure that we're able to move this project faster.
Speaker #1: We have looked at 70 work processes , how to , you know , for drilling to development and so on . We have simplified those work processes and we have looked at them together such that , you know , all these processes are streamlined and to , to end and just to say a change that I will do instead of making a seven , eight individual decisions on these projects , you know , one by one we will group the decision .
Speaker #1: And twice a year I will make a decision on several projects, enabling faster decision-making processes and ensuring that we're able to move this project faster based on changing the way we work.
Anders Opedal: Based on changing the way we work, we are also reorganizing both the project organization, the drilling organization, and the operation units on the Norwegian Continental Shelf, not offshore, but only onshore, function enabling to work according to the new simplified work processes. So this is actually the one of the largest changes we have done, you know, developing the Norwegian Continental Shelf since we established the Statoil Hydro company, and merged Statoil and Hydro back in 2007, 2008. So it's actually changing the way we work because the geology and the reserves on the Norwegian Continental Shelf changes. And what do we want to achieve?
Anders Opedal: Based on changing the way we work, we are also reorganizing both the project organization, the drilling organization, and the operation units on the Norwegian Continental Shelf, not offshore, but only onshore, function enabling to work according to the new simplified work processes. So this is actually the one of the largest changes we have done, you know, developing the Norwegian Continental Shelf since we established the Statoil Hydro company, and merged Statoil and Hydro back in 2007, 2008. So it's actually changing the way we work because the geology and the reserves on the Norwegian Continental Shelf changes. And what do we want to achieve?
Speaker #1: We are also reorganizing both the project organization , the drilling organization , and the operation units on the Norwegian Continental Shelf , not offshore , but only onshore function , enabling to new to the simplified work processes .
Speaker #1: So this is actually one of the largest changes we have done . You know , developing the Norwegian continental shelf since we established the the start to company and merged octahedral back in 2007 , 2008 .
Speaker #1: It's actually changing the way we work, because the geology and the reserves on the Norwegian continental shelf change. And what do we want to achieve?
Anders Opedal: Well, we want to move time from discovery to production from 5 to 7 years to 2 to 3 years, and we need to increase the volumes that we are able to find during exploration, meaning that we need 200 to 300 efficiency gains on the Norwegian Continental Shelf. When it comes to Wisting, this is far in the north, in the Barents Sea. It's challenging projects. We're working hard to simplify it. We have made a lot of progress in that respect. We will work on concluding on the concept during first half of 2026 or in 2026, and then move towards, hopefully, a DG3 during 2027.
Anders Opedal: Well, we want to move time from discovery to production from 5 to 7 years to 2 to 3 years, and we need to increase the volumes that we are able to find during exploration, meaning that we need 200 to 300 efficiency gains on the Norwegian Continental Shelf. When it comes to Wisting, this is far in the north, in the Barents Sea. It's challenging projects. We're working hard to simplify it. We have made a lot of progress in that respect. We will work on concluding on the concept during first half of 2026 or in 2026, and then move towards, hopefully, a DG3 during 2027.
Speaker #1: Well , we want to move time from discovery to production from 5 to 7 years to 2 to 3 years . And we need to increase the volumes that we are able to , to find during exploration .
Speaker #1: Meaning that we need a 2 to 300 efficiency gains on the Norwegian continental shelf when it comes to to this is wisting , far in the in the north , in the Barents Sea , challenging projects .
Speaker #1: We're working hard to simplify it. We have made a lot of progress in that respect. We will work on concluding on the concept during the first half of 2026 or in 2026, and then move towards, hopefully, DG3 during 2027.
Anders Opedal: But let me underline this, we are not schedule-driven. This is a project where we have to make sure that this is the right project, right financial, right breakeven, NPV, and we have everything in place, because this is a very, very challenging project. On the Bay du Nord, we are approaching also a concept selection at what we call decision gate two. We have a good engagement with local authorities and the government of Canada, so we can work together. This is a very good project. We have worked well together with suppliers for a long time to take down the cost and the breakeven as much as possible.
Anders Opedal: But let me underline this, we are not schedule-driven. This is a project where we have to make sure that this is the right project, right financial, right breakeven, NPV, and we have everything in place, because this is a very, very challenging project. On the Bay du Nord, we are approaching also a concept selection at what we call decision gate two. We have a good engagement with local authorities and the government of Canada, so we can work together. This is a very good project. We have worked well together with suppliers for a long time to take down the cost and the breakeven as much as possible.
Speaker #1: But let me underline this we are not schedule driven . This is a project where we have to make sure that this is the right project , right financial , right break NPV and we have everything in place because this is a very , very challenging project on the beaten or we are approaching also a concept selection , what we call decision gate two .
Speaker #1: We have a good engagement with local authorities and the government of of of Canada to so we can work together . This is a very good We project .
Speaker #1: We have worked well together with suppliers for a long time to take down the cost and the break-even as much as, as, as possible.
Anders Opedal: And if we are successful now over the next months, then we can bring it towards an investment decisions over the next years. And those, these projects, if we are successful, will contribute to high production beyond 2030.
Anders Opedal: And if we are successful now over the next months, then we can bring it towards an investment decisions over the next years. And those, these projects, if we are successful, will contribute to high production beyond 2030.
Speaker #1: And if we are successful now , over the next months , then we can bring it towards an investment . Decisions over the next of over the next years .
Speaker #1: And both these projects, if we are successful, will contribute to high production beyond 2030.
Kim Fustier: Thank you, Kim. I have a few left on my list, and I want to cover as many as possible, so I ask that you limit yourself to one question to give as many as possible the opportunity. Next one is Chris Kuplent from Bank of America. Please, Chris.
Kim Fustier: Thank you, Kim. I have a few left on my list, and I want to cover as many as possible, so I ask that you limit yourself to one question to give as many as possible the opportunity. Next one is Chris Kuplent from Bank of America. Please, Chris.
Speaker #4: Thank you, Kim. I have a few left on my list, and I want to cover as many as possible. So I ask that you limit yourself to one question to give as many as possible.
Chris Kuplent: Yeah, thank you very much. I'll keep it to one question for Torgrim, and please forgive me for some quick mental math, but when you set your $1.5 billion buyback, are you effectively arguing over the course of 2026 and 2027, considering the lumps and bumps in your CFFO as well as CapEx, you're targeting to be free cashflow neutral after dividends and buybacks? Am I putting too many words in your mouth, or is that a fair characterization of what you're trying to do over the next two years?
Chris Kuplent: Yeah, thank you very much. I'll keep it to one question for Torgrim, and please forgive me for some quick mental math, but when you set your $1.5 billion buyback, are you effectively arguing over the course of 2026 and 2027, considering the lumps and bumps in your CFFO as well as CapEx, you're targeting to be free cashflow neutral after dividends and buybacks? Am I putting too many words in your mouth, or is that a fair characterization of what you're trying to do over the next two years?
Speaker #4: The opportunity. Next one is Coupland from Chris, Bank of America. Please, Chris.
Speaker #13: you very Yeah , thank much . I'll keep it to one question for Torgrim and and please . Forgive me for some quick mental maths , but when set you your 1.5 billion buyback , are you effectively arguing over the course of 26 and 27 , considering the lumps and bumps in your CFO , as well as CapEx , you're targeting to be free cash flow neutral after dividends and and buybacks ?
Anders Opedal: ... Well, Chris, I think I need to be very precise here. I mean, you're on to it. So clearly you should look across those two years when you think about sort of our free cash flow generation that we have available to, you know, cash dividends and share buyback. We aim to run with solid balance sheets. However, we are going to lean on the balance sheet in 2026, well aware that next year is a larger free cash flow. So it makes sense to look across those two years. We have done that when we have set the share buyback level for 2026. As such, we have.
Torgrim Reitan: ... Well, Chris, I think I need to be very precise here. I mean, you're on to it. So clearly you should look across those two years when you think about sort of our free cash flow generation that we have available to, you know, cash dividends and share buyback. We aim to run with solid balance sheets. However, we are going to lean on the balance sheet in 2026, well aware that next year is a larger free cash flow. So it makes sense to look across those two years. We have done that when we have set the share buyback level for 2026. As such, we have.
Speaker #13: Am I putting too many words in your mouth, or is that a fair characterization of what you're trying to do over the next two years?
Speaker #3: Well , well , Chris , I think I need to be very precise here . So , so I mean , you're on Twitter , so clearly you should look across those two years when you think about sort of free cash flow generation that we have available to , you know , cash dividend and , and share buyback .
Speaker #3: We run with a solid aim to balance sheet. However, we are going to lean on the balance sheet in '26, well aware that next year is a larger free cash flow.
Speaker #3: So it makes sense to look across those two years. And we have done that when we have set the share buyback level for ’26.
James Carmichael: Appreciate that. Thank you.
Chris Kuplent: Appreciate that. Thank you.
Bård Glad Pedersen: Thank you. Thank you, Chris. Matt Lofting, JP Morgan. Matt, the line is open.
Bård Glad Pedersen: Thank you. Thank you, Chris. Matt Lofting, JP Morgan. Matt, the line is open.
Speaker #3: As such, we have.
Speaker #13: Appreciate that .
Speaker #4: Thank you . Thank you , Chris . Matt Lofting JP Morgan . Matt , the line is open .
Matt Lofting: Thanks for taking the question. Just one on Empire Wind and read-throughs from it. It seems Equinor has done a good job keeping the project execution on track amid the past halt orders. But I just wonder how the company reflects on implications from this and having retained 100% equity stake through it for best assessing risk management and risk-adjusted returns, let's say, on future capital allocations. Are there learnings that are emerging from Empire Wind for optimal sizing, taking into account perhaps above as well as below ground factors? Thanks.
Matt Lofting: Thanks for taking the question. Just one on Empire Wind and read-throughs from it. It seems Equinor has done a good job keeping the project execution on track amid the past halt orders. But I just wonder how the company reflects on implications from this and having retained 100% equity stake through it for best assessing risk management and risk-adjusted returns, let's say, on future capital allocations. Are there learnings that are emerging from Empire Wind for optimal sizing, taking into account perhaps above as well as below ground factors? Thanks.
Speaker #14: Thanks for taking the question. Just one on Empire Wind, and I read through from it. It seems Equinor has done a good job keeping the project execution on track amid the past halt orders.
Speaker #14: But I just wonder how the company reflects on implications from this, and having retained a 100% equity stake through it for best assessing risk management and risk-adjusted returns. In the future, let's say on capital allocations, are there learnings that are emerging, for example from Empire Wind, for optimal sizing—taking into account perhaps both above- as well as below-ground factors?
Anders Opedal: Thank you. That's a really good question, and yes, this is definitely something to reflect on. We normally don't take 100% in any license, not on oil and gas and not in offshore wind. But due to a deal with BP, they took some, and we took, we took this. We de-risked it somewhat with higher strike prices with financing package. And then, as you have seen, the political risk with the new administration was higher than anticipated. This is a trend we see now in several countries, that energy investments are more and more politicized and polarized.
Anders Opedal: Thank you. That's a really good question, and yes, this is definitely something to reflect on. We normally don't take 100% in any license, not on oil and gas and not in offshore wind. But due to a deal with BP, they took some, and we took, we took this. We de-risked it somewhat with higher strike prices with financing package. And then, as you have seen, the political risk with the new administration was higher than anticipated. This is a trend we see now in several countries, that energy investments are more and more politicized and polarized.
Speaker #14: Thanks .
Speaker #1: Thank you . That's it's a really good question . And yes , this is definitely something to reflect on . And we normally don't take 100% in in anti license not on oil and gas and in offshore wind .
Speaker #1: But due to a deal with with BP they took some and took we , we took this . We we de-risked it somewhat with with higher strike prices with a financing package and and then as you as you've seen the political risk with the new administration was higher than we see is a trend now several anticipated .
Speaker #1: in This countries that energy investments are more and more politicized . And polarized and we see it in Norway , we see it in in UK , we see it in in US .
Anders Opedal: And we see it in Norway, we see it in UK, we see it in US. And definitely for us, this brings some reflections about what is the aboveground risk you can take. And for you know, for myself, I reflected quite a lot about you know, to see bipartisan support for future projects. If there is a kind of strong you know, and division for potential projects, you know, then we need to think twice and really understand the political risk. And this is something new. It's not only in US, this is something new that we have seen lately in several countries.
Anders Opedal: And we see it in Norway, we see it in UK, we see it in US. And definitely for us, this brings some reflections about what is the aboveground risk you can take. And for you know, for myself, I reflected quite a lot about you know, to see bipartisan support for future projects. If there is a kind of strong you know, and division for potential projects, you know, then we need to think twice and really understand the political risk. And this is something new. It's not only in US, this is something new that we have seen lately in several countries.
Speaker #1: And definitely for us . This brings some reflections about what is the above ground risk . You can you can , you can take and for for myself I reflected quite a lot about , you know , to see bipartisan support .
Speaker #1: For future projects . If there is a kind of strong , you know , and division for , for potential projects , you know , then we need to think twice and really understand the political risk .
Anders Opedal: And kind of we need to adapt the learning, and we need to bring it into future decision processes. Definitely. Very important question you raised there. And you know, with the political changes we have seen, which were kind of outweighed all the other factors that was reducing the risk, we would have probably have thought differently about Empire Wind in the past.
Speaker #1: And this is something new. It's not only in us. This is something new that we have seen lately in several countries.
Anders Opedal: And kind of we need to adapt the learning, and we need to bring it into future decision processes. Definitely. Very important question you raised there. And you know, with the political changes we have seen, which were kind of outweighed all the other factors that was reducing the risk, we would have probably have thought differently about Empire Wind in the past.
Speaker #1: And kind of, we need to adapt the learning, and we need to bring it further into decision processes. Definitely a very important question you raised there.
Speaker #1: And you know , with with the political changes we have seen , which were kind of outweighted all the other factors , that was reducing the risk , we would have probably have thought differently about Empire with in the past .
Bård Glad Pedersen: Thank you. We are on the hour, but let's take one more and hope it is short, and then we'll round it off. And that is you, James Carmichael from Berenberg. James, please go.
Bård Glad Pedersen: Thank you. We are on the hour, but let's take one more and hope it is short, and then we'll round it off. And that is you, James Carmichael from Berenberg. James, please go.
Speaker #4: Thank you. We are on the hour, but let's take one more and hope it is short, and then we'll round it off.
James Carmichael: Hi. Thanks, Sergio. Just one last, quick one, I think. Just again, on Empire Wind. I'm just wondering if you could, excuse me, if you could clarify your sort of best case estimate on the timing of the underlying court case and, you know, when we might be able to sort of put any uncertainty to bed around sort of future hold orders, et cetera. Thanks.
James Carmichael: Hi. Thanks, Sergio. Just one last, quick one, I think. Just again, on Empire Wind. I'm just wondering if you could, excuse me, if you could clarify your sort of best case estimate on the timing of the underlying court case and, you know, when we might be able to sort of put any uncertainty to bed around sort of future hold orders, et cetera. Thanks.
Speaker #4: And that is you, James Carmichael from Berenberg. James, please go ahead.
Speaker #14: Hi . Thanks .
Speaker #15: Could you clarify your sort of best-case estimate on the timing of the underlying court case, and when we might be able to sort of put any uncertainty to bed around future halt orders, etc.
Anders Opedal: Yeah, this is a little bit early to say, kind of, because it's a judge in US to decide that, the timing, when the merits of the case will come up for the court. There's been indication that will happen fairly quick, you know, with some couple of months, and that gives us opportunity to elaborate on the case in a good way. I just want to also remind you that, you know, all the four other operators were... You know, we're doing exactly the same thing, challenging this in court, and all of them were granted a preliminary injunction.
Anders Opedal: Yeah, this is a little bit early to say, kind of, because it's a judge in US to decide that, the timing, when the merits of the case will come up for the court. There's been indication that will happen fairly quick, you know, with some couple of months, and that gives us opportunity to elaborate on the case in a good way. I just want to also remind you that, you know, all the four other operators were... You know, we're doing exactly the same thing, challenging this in court, and all of them were granted a preliminary injunction.
Speaker #15: Thanks . .
Speaker #1: Yeah . This is a little bit early to Kind say . of because this is a judge in us . To decide that timing when when this this the merits of the case will come for up , for , for for for for for the court .
Speaker #1: There's been indication that will happen fairly quick . You know , with , with some , some couple of months . And that gives us the opportunity to , to elaborate on , on , on , on the case in , in a good way .
Speaker #1: I just want to also remind you that , you know , all the four other operators where , you know , we're doing the exactly same thing , challenging this in , in court and all of all of them were granted a preliminary injunction .
Anders Opedal: We mean that this stock work order was unlawful. And at least with so consistent preliminary injunction, I think, also, we have a strong case moving forward. But I'm an engineer and not a lawyer, so but, yeah, we are moving forward with a strong belief that we will have a good case in the court. Strong case.
Anders Opedal: We mean that this stock work order was unlawful. And at least with so consistent preliminary injunction, I think, also, we have a strong case moving forward. But I'm an engineer and not a lawyer, so but, yeah, we are moving forward with a strong belief that we will have a good case in the court. Strong case.
Speaker #1: We mean that this stop work order was unlawful, and at least with so consistent—think injunction—I also, we have a strong case moving forward.
Speaker #1: But I'm a I'm an engineer and not a lawyer . So but yeah , we we are we are moving forward with a strong belief that we will have a good case in , in the court , strong case .
Bård Glad Pedersen: Thank you. I would like to thank you all for participating and for asking your questions. We didn't manage all the way through the list, but I want to be respectful for everybody's time. And as always, the investor relations team remain available for any follow-up questions during today or later in the week. Have a good afternoon, everybody, and thank you for joining.
Bård Glad Pedersen: Thank you. I would like to thank you all for participating and for asking your questions. We didn't manage all the way through the list, but I want to be respectful for everybody's time. And as always, the investor relations team remain available for any follow-up questions during today or later in the week. Have a good afternoon, everybody, and thank you for joining.
Speaker #4: Thank you. I would like to thank you all for participating and for asking your questions. We didn't manage to get all the way through the list, but I want to be respectful of everybody's time.
Speaker #4: And as always, the Investor Relations team remains available for any follow-up questions during today or later in the week. Have a good afternoon, everybody, and thank you for joining.
Matt Lofting: That concludes today's call. You may now disconnect.
Operator: That concludes today's call. You may now disconnect.
