Gas Trading Boosts Equinor Profit

Equinor ASA has reported $3.7 billion, or $1.48 per share, in net income adjusted for nonrecurring items for the first quarter (Q1), more than double that of the same three-month period last year on higher production and higher oil prices.

The Norwegian majority state-owned multinational optimized "piped gas trading in Europe and gas trading in North America" to capture volatility, it said in its quarterly report. Norway has overtaken Russia as the European Union's biggest gas supplier since 2022, when Russia's invasion of Ukraine upended energy flows, according to European Commission data.

Equinor's entitlement production in the Norwegian continental shelf rose 10 percent year-on-year to 1.53 million barrels of oil equivalent a day (MMboed). International equity and entitlement production climbed 10 percent and 18 percent to 339,000 boed and 287,000 boed respectively.

Liquids sales fell 10 percent year-on-year to 260.8 million barrels due to a decrease in third-party volumes.

Equinor's own gas sales increased 8 percent year-on-year to 17.7 billion cubic meters (625.97 billion cubic feet), while entitlement gas sales increased 12 percent to 15.4 Bcm.

Equinor's averaged realized liquids price in Norway increased 14 percent year-over-year to $84.1 per barrel. In the United States, its realized liquids prices averaged $60.9 per barrel, down 1 percent. International realized liquids prices averaged $73 per barrel, up 7 percent.

Equinor's realized gas prices in Norway fell 15 percent year-on-year to $11.19 per million British thermal units (MMBtu).

In the U.S., realized gas prices increased 42 percent to $4.69 per MMBtu "due to higher demand from power generation, new LNG export capacity and lower winter temperatures", the company said. Equinor's realized piped gas prices in the U.S. increased 46 percent to $5.94 per MMBtu, driven by winter demand.

Realized piped gas prices in Europe dropped 13 percent to $12.95 per MMBtu due to an increase in LNG supply. However, Equinor saw a quarter-on-quarter increase in realized prices for piped gas in Europe, "in line with higher market prices caused by LNG supply disruption due to closure of the Strait of Hormuz and low temperatures early in the winter".

In the "marketing, midstream and processing" segment, gas and LNG delivered an 85 percent increase to $485 million in adjusted operating profit. Crude, products and liquids contributed $352 million in adjusted operating profit, up 97 percent year-on-year. Segment adjusted operating profit totaled $787 million, up 214 percent year-on-year.

"In the first quarter of 2026, Gas and LNG was the main contributor to adjusted operating income. This result was driven by optimization of piped gas sales in Europe and gas trading in North America", Equinor said.

"Crude, Products and Liquids also contributed positively, driven by strong results from trading within Products and LPG. Current quarter was impacted by high shipping rates.

"Additionally, the results were impacted by a negative result in methanol.

"The increase in adjusted operating income compared to the prior quarter was mainly driven by stronger margins for products and LPG trading, followed by higher results from gas optimization in both Europe and North America, while the prior quarter included a favorable price review result.

"Adjusted operating income for the first quarter of 2026 was higher compared to the same quarter last year across all subsegments, primarily reflecting higher products and LPG trading results, stronger optimization gains in European and North American gas trading and lower costs related to the development of low-carbon projects".

Upstream adjusted operating income from Norway increased 3 percent year-on-year to $7.7 billion, while the international figure rose 16 percent to $616 million.

Revenue across segments fell year-on-year but rose quarter-on-quarter to $27.84 billion. "Revenues were lower in the quarter, reflecting reduced liquids sales due to lower third-party sales and lower realized gas prices in Europe", Equinor said.

"Operating and administrative expenses increased in the quarter, primarily due to higher transportation costs from increased freight rates and the weakening of the USD against the NOK.

"These cost increases were partially offset by portfolio changes in E&P International, as well as the reduction in business development and early-phase projects within the power and low-carbon solutions businesses".

Cash flows from operating activities fell year-on-year but increased quarter-on-quarter to $5.21 billon. "Higher production volumes and stronger liquid prices were offset by collateral outflows on commodity derivatives, reflecting price volatility in the period", Equinor said.

Net profit before adjustment rose both sequentially and by prior-year comparison to $3.12 billion.

Equinor declared a dividend of $0.39 per share for Q1 2026, maintaining its previous rate. The board approved a $375-million second tranche toward Equinor's 2026 share buyback program of up to $1.5 billion. It completed the $375-million first tranche last month.

Equinor ended Q1 2026 with a net debt to capital employed adjusted ratio of 15.3 percent, compared to 17.8 percent at the end of Q4 2025.

Cash and cash equivalents stood at $5.88 billion, while current assets totaled $43.75 billion. Current liabilities totaled $35.6 billion including $5.5 billion in finance debt.

For 2026 Equinor expects to grow oil and gas production 3 percent year-on-year, despite an expected reduction of 35,000 boed in equity production due to scheduled maintenance.

"Equinor's ambition is to keep the unit of production cost in the top quartile of its peer group", it said.

To contact the author, email jov.onsat@rigzone.com