Equinor Posts Record Earnings Amid European Energy Crisis

Strategic Insights -

Equinor, a state-owned Norwegian energy company, has posted record second-quarter earnings, driven by sky-high energy prices and tight supply, as it fills the energy needs of Europeans amid panic that Russia will shut off its natural gas supply to the continent. Equinor's stock is closing in on a buy point, with shares surging 12.3% last week after the company reported earnings. The company is the largest operator on the Norwegian continental shelf, with 60% of total production, and has oil and gas fields in several countries, including Australia, Brazil, Canada, China, and the U.S.

Key Takeaways:

  • Equinor's record second-quarter earnings were buoyed by 225% year-over-year growth to $1.56 a share, with revenue ballooning 109% to $36.5 billion.
  • The company's stock is closing in on a buy point, with shares surging 12.3% last week after reporting earnings.
  • Equinor's operations on the Norwegian continental shelf (NCS) have produced 18% more gas in the second quarter compared to the same quarter last year.
  • The company has taken steps to increase gas deliveries to Europe, including the safe return of Hammerfest LNG to production and the bring-back of the Peregrino field in Brazil.
  • Equinor's management has boosted its share buyback program from $5 billion to up to $6 billion for 2022, with a total capital distribution of up to $13 billion.
  • The company's market position is strong, with a Relative Strength Rating of 98 out of 99 and a Smarter Buy rating of 89.

Statistics:

  • Equinor's second-quarter earnings grew by 225% to $1.56 a share.
  • Revenue increased by 109% to $36.5 billion.
  • Gas production on the NCS increased by 18% in the second quarter compared to the same quarter last year.
  • Hammerfest LNG was safely returned to production on June 1, and the Peregrino field was brought back online in Brazil.
  • Equinor's share buyback program will increase from $5 billion to up to $6 billion for 2022.
  • Total capital distribution will increase from $10 billion to up to $13 billion for 2022.

Sources:

  • "Equinor reported on July 27, 2022: CEO Anders Opedal said that Russia's invasion of Ukraine impacted already tight energy markets and has created an energy crisis with high prices affecting people and all sectors of society."
  • "CFO Ulrica Fearn said that the higher summer production has been an important contribution to help fill European storages."
  • "Equinor's stock is closing in on a buy point, with a closing price of 37.76 and a projected buy point of 38.80."