Equinor ASA (NYSE:EQNR) reported a disappointing second-quarter trading update on Tuesday, revealing adjusted post-tax operating income that came in roughly 5% below consensus estimates. The Norwegian energy group pointed to falling production and softer prices across key business units ahead of its full quarterly results set for July 23.
Analysts had expected adjusted operating income after tax to reach approximately $1.9 billion, but the company failed to meet that target.
Lower Realized Prices and Output Drag Down Norway Segment
In its core Exploration and Production Norway division, Equinor posted realized liquids prices in the range of $64.8–$66.8 per barrel, down from $73.8 in Q1 and slightly trailing the consensus of $65.8. Gas prices also dropped to $10.6 per MMBtu, from $12.6 in the prior quarter—though slightly ahead of the $10.3 market forecast.
Production trends also showed weakness. Liquids fell 0.8%, and gas production slumped 12.6% compared to the previous quarter. Analysts had expected a 5.4% rise in liquids and a 6.5% decrease in gas. This period included two major operational events: the launch of the Johan Castberg field and a planned turnaround at Hammerfest LNG, which started April 24.
International Segment Misses Expectations
The International E&P segment also underperformed, with realized liquids pricing sliding to $58–$62 per barrel, down from $68.3 last quarter and slightly under the $62.1 consensus. Output is expected to come in lower, at 233,000 barrels of oil equivalent per day, versus 244,000 in Q1.
Equinor also classified its Peregrino field in Brazil and UK operations as “held for sale,” exempting them from depreciation. These assets had accounted for $355 million in depreciation during Q1.
U.S. Segment Mixed: Higher Offshore Output, Flat Onshore
In the U.S. E&P division, realized liquid prices ranged from $55 to $57 per barrel, slipping from $61.2 in Q1 and closely matching the consensus of $55.9. Gas prices also saw a decline.
Offshore production rose, while onshore volumes held steady. Overall, total production is estimated at 357,000 boe/day, a dip from 366,000 in the first quarter. The company also expects depreciation to increase to $150 million, driven by revised estimates for decommissioning costs—up from $370 million previously.
Midstream and Trading Gains, But Still Short of Estimates
Equinor’s Marketing, Midstream & Processing unit is expected to post adjusted earnings between $400 million and $800 million, up from $253 million in Q1 but still shy of the $659 million consensus. The company cited underperformance in crude trading and the extended Hammerfest LNG maintenance, which cut into profits by about $80 million.
Tax Payments and Capital Moves
Equinor paid NOK 35.2 billion in Norwegian Continental Shelf taxes during Q2, spread across two installments. Under a revised schedule of 10 installments per year, the company anticipates NOK 19.97 billion payments in each of the next two Q3 installments.
Other notable cash flow items included a $1.75 billion bond issue and $335 million in M&A-related inflows.
As of the latest close, Equinor’s market capitalization stood at NOK 757.8 billion, or roughly $75.3 billion, based on a share price of NOK 259.40, according to analysts at Jefferies. The firm maintained its restricted rating on the stock.