Business context and reporting period
Equinor ASA’s Form 20-F covers the fiscal year ended December 31, 2023; it is an annual filing, not a standalone fourth-quarter report. Equinor is a Norway-based integrated energy company operating across oil and gas, marketing and processing, and renewables. Financial statements are prepared under IFRS and reported in USD unless otherwise noted. The filing incorporates additional annual-report material by reference.
Financial and operating performance
Lower commodity prices drove a substantial year-over-year decline in earnings and revenue, while cash generation remained positive. All figures below are for full years.
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | USD 106.8bn | USD 149.0bn |
| Total revenues and other income | USD 107.2bn | USD 150.8bn |
| Net operating income | USD 35.8bn | USD 78.8bn |
| Net income | USD 11.9bn | USD 28.7bn |
| Basic earnings per share | USD 3.93 | USD 9.06 |
| Cash from operating activities | USD 24.7bn | USD 35.1bn |
| Cash from operations after taxes paid (non-GAAP) | USD 19.7bn | USD 39.8bn |
| Adjusted earnings after tax (non-GAAP) | USD 10.4bn | USD 22.7bn |
| Adjusted ROACE (non-GAAP) | 24.9% | 55.1% |
At year-end, cash and cash equivalents were USD 9.6bn and current financial investments were USD 29.2bn. Gross interest-bearing debt, including leases, was USD 31.8bn. Equinor reported adjusted net cash of USD 8.6bn under its non-GAAP measure, excluding specified restricted or less-available balances. Total equity was USD 48.5bn, down from USD 54.0bn.
Cash used for capital expenditures and investments was USD 10.6bn. Organic capital expenditures were USD 10.2bn and gross capex was USD 14.1bn, both non-GAAP measures with different definitions. Dividends paid were USD 10.9bn and share buybacks were USD 5.6bn. Net cash flow after capital distributions was negative USD 8.3bn, versus positive USD 23.4bn in 2022.
The effective tax rate was 68.6%, compared with 63.4% in 2022; Norwegian petroleum taxation contributes to the high rate. Total impairment losses, net of reversals, were USD 1.3bn, versus net reversals of USD 2.4bn in 2022. Asset retirement obligations were USD 12.4bn.
Material changes versus 2022
- Revenue fell 28% and net income fell 59%, primarily reflecting lower oil and gas prices. Norwegian E&P operating income declined 57%; international E&P declined 28%; and US E&P declined 66%.
- Equinor’s oil and gas production measures were mixed: Norway entitlement liquids production rose 7% while gas fell 7%; international equity production rose 5%, and US equity production rose 12%. Lower realized prices weighed on results across these businesses.
- Marketing, Midstream & Processing operating income increased 10% to USD 4.0bn despite a 28% fall in segment revenue, as purchase costs also declined.
- Renewables reported a USD 757m operating loss, compared with a USD 84m loss in 2022. A USD 300m impairment followed rejection of price-increase petitions for US Northeast wind projects; higher project-development and operating costs also affected performance.
- Cash from operating activities declined to USD 24.7bn. Taxes paid fell to USD 28.3bn from USD 43.9bn, while reported cash and cash equivalents declined USD 5.9bn.
- Equinor changed its non-GAAP adjusted-earnings methodology in 2023, principally for commodity derivatives and commercial storage valuation, and retrospectively restated 2022 comparatives.
Outlook, commentary, risks and unusual items
- Management’s stated priorities include maintaining value from oil and gas, pursuing renewables and low-carbon growth, and retaining investment flexibility. Equinor expects strong oil and gas cash flow through 2035 and says sanctioned projects represent less than half of yearly organic capex from 2025. The filing text provided does not give a clear numerical 2024 organic-capex forecast.
- Management’s climate ambitions include net zero by 2050, a 50% reduction in operated scope 1 and 2 emissions, and net carbon-intensity reductions of 20% by 2030 and 40% by 2035. Achievement depends partly on external policy, technology and market developments.
- For 2024, the board proposed an ordinary and an extraordinary cash dividend of USD 0.35 per share each for the fourth quarter of 2023. The board announced a 2024–2025 buyback plan of USD 10–12bn, including USD 6bn for 2024, subject to market outlook and balance-sheet strength.
- Climate and commodity-price assumptions create estimation uncertainty. Equinor disclosed illustrative potential impairments of about USD 3bn under the IEA Announced Pledges Scenario and USD 10bn under its Net Zero Emissions by 2050 Scenario; a separate simplified sensitivity indicated about USD 11bn of impairment from a 30% decline in commodity-price forecasts. These are scenario analyses, not forecasts.
- Other notable items include the planned divestment of Azerbaijan assets, with a USD 310m impairment; four dry or non-commercial Gulf of Mexico exploration prospects expensed in 2023; and the US offshore-wind impairment. Equinor acquired Suncor Energy UK Limited, BeGreen and Rio Energy during the year.
- Contingencies include the KKD oil-sands tax reassessment in Canada, with maximum exposure estimated at about USD 380m and no provision recorded; other described Brazilian disputes include maximum exposures of about USD 159m and USD 114m, with the latter unprovided. Equinor says it has provided its best estimates for certain other disputed matters and does not expect proceedings overall to materially affect its financial position or results.
- Principal risks include commodity-price and foreign-exchange volatility, cost inflation, tax and regulatory changes, climate-transition impacts, operational and safety events, geopolitical instability, cyber disruption, and liquidity and credit risks. The audit opinion on the financial statements was unqualified; management and the auditor reported effective internal control over financial reporting.
Important facts for investors to verify
- Confirm annual figures are not being mistaken for standalone Q4 results; the supplied filing text does not provide clear standalone fourth-quarter financial metrics.
- Review the full consolidated statements, segment disclosures, and reconciliations for non-GAAP measures, including the retrospective adjusted-earnings restatement.
- Assess liquidity and cash available for distributions, distinguishing cash and investments from restricted collateral and insurance-company balances; review debt maturities and contractual commitments.
- Evaluate impairment assumptions, reserves, carbon-cost scenarios, the USD 12.4bn asset-retirement obligation, and the sensitivity of these estimates to production timing and commodity prices.
- Verify the status and eventual outcomes of announced asset disposals, acquisitions, wind-project economics, and material tax and legal contingencies.
- Check the conditions and subsequent execution of the proposed dividends and buyback programme, including the impact of commodity markets and capital requirements.