Equinor Regains $108MM Shares in Buyback's Second Tranche

Equinor ASA has redeemed over $108 million (nearly NOK 1.21 billion) worth of own shares under the $550-million second tranche of its 2023 buyback program.

The Norwegian energy company had already spent $1 billion in the first tranche. As Equinor saw a five percent increase in quarterly profit to $4.966 billion in January-March 2023, it decided to cash out a total of $6 billion for shares repurchase this year, as announced in its quarterly earnings report May 4.

The amount is the same as its 2022 program, completed January 2023, according to its 2022 performance release February 8.

Last week Equinor bought almost 2.55 million own shares on the Oslo Stock Exchange for an average price of about $27 (NOK 302.1009) a share, according to Equinor exchange filings Tuesday. Earlier under the second tranche, Equinor, which is also listed on the New York Stock Exchange, bought 1.465 million shares.

Own shares now comprise 2.16 percent of its share capital. The buyback program includes shares to be redeemed by the Norwegian state, aiming to keep state ownership at 67 percent under a deal between the company and the government, Equinor said May 4.

The second tranche is to be concluded by July 25.

The $6-billion full-year buyback is part of Equinor’s projected capital distribution of $17 billion for 2023, according to its first-quarter results report.

It has declared an ordinary cash dividend of $0.3 per share and an extraordinary cash dividend of $0.6 a share for the 2023 opening quarter, the same as the prior quarter’s ordinary and extraordinary dividends.

Equinor’s cash flow from operation after taxes stood at $9.72 billion as of the end of the first quarter of this year, when it saw an equity production of 2.13 million barrels of oil equivalent per day (boed), up 24 million boed from January-March 2022.

It closed 2.5 percent lower at $25.33 on the New York Stock Exchange Wednesday.

Positive Outlook

Equinor posted May 4 a three percent projected rise in production for 2023 against 2022, when it averaged 2.039 million boed in oil and gas equity output, according to its annual report March 23.

In the first quarter of 2023 it made three commercial discoveries out of nine completed offshore exploration wells, with three more progressing at the end of the quarter, according to Equinor’s January-March earnings report. “Two of the discoveries were in the Troll area in the North Sea, where Equinor also agreed to acquire a further equity interest in five discoveries”, it said.

On March 3 Equinor announced it has entered an agreement to acquire Suncor Energy UK Ltd. for $850 million, from which it expects 15,000 boed in equity share this year.

Equinor expects $10-11 billion in organic capital expenditure for 2023, it said May 4.

That is up from 2022’s organic capex of $8.1 billion, as posted in its March 23 annual report, despite a recent fall in commodity prices after a record surge 2022 on the back of backlash against major producer Russia over its invasion of Ukraine.

The Brent Crude benchmark for international spot pricing hit its highest annual average last year at $100.93 a barrel, while the Henry Hub global standard for natural gas averaged $6.45 per million British thermal unit (Btu), the USA distribution center’s greatest since 2008, according to the USA Energy Information Administration (EIA). However in its latest forecast, released May 9, the EIA sees Brent dropping to approximately $79 a barrel and Henry Hub to about $3 per million Btu this year without inflation adjustment.

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