Equinor expects Q3 marketing profit to beat guidance on strong refining, LNG trading

Equinor anticipates its marketing division to surpass its $400 million profit forecast for Q3, driven by robust refining margins in Europe and thriving LNG trading. The group's marketing, midstream, and processing segment is projected to gain from sharpened equity and external LNG trading. On average, the Brent price stood at $97 a barrel during the quarter.

In Norway, Equinor's main power system experienced repairs from July 1st to 12th, causing a production slowdown. Additionally, output from a third-party-operated field and a field operated by another entity decreased, leading to a quarterly production drop of approximately 10,000 barrels of oil equivalent daily. A shortfall of around 20,000 boed is anticipated to impact revenue and expenses.

Equinor projected its realized liquids price in Norway at $97 to $99 a barrel and an estimated internal gas transfer price of $18.07 per million British thermal units, incorporating 70% day-ahead hub pricing and 30% month-ahead hub pricing, with September volumes lower than expected. International production declined slightly from the previous quarter, excluding Adura, due to portfolio adjustments, maintenance, and natural depletion.

The group anticipated a 45,000 boed underlift, also affecting revenue and expenses. The realized liquids price is now expected to range between $81 to $85 a barrel, contingent on the timing of production. Depreciation is projected to rise as Equinor ramps up Bacalhau production. The company also classified its remaining 20% stake in Peregrino as available for sale.

U.S. offshore production fell by about 25,000 boed due to maintenance, with realized liquids pricing estimated at $72 to $74 a barrel, in line with market lows. Operating costs rose due to a $80 million increase in the asset retirement obligation for a decommissioned asset. Adjusted operating income in the power segment is expected to match previous quarters of the year, while power generation is anticipated to rise as production increases.

Equinor is set to acquire a stake in Lackawanna Energy Center, though the deal's outcome is pending finalization and will be settled next quarter at $940 million. The company indicated effective tax rates of 77%-78% for Norway's E&P segment, 35%-50% for International, 22%-30% for the U.S., and 40%-60% for MMP. Third-quarter cash flow accounted for two Norwegian petroleum tax installments totaling $6.1 billion, higher due to rising commodity prices, alongside $2.8 billion for the state's share in a share buyback.

Dividends of $0.9 billion and $225 million were distributed to Adura shareholders. Equinor provided conditional estimates for the upcoming quarter, projecting tax installments of about 93 billion Norwegian crowns, a $0.9 billion dividend, and a $150 million dividend from Adura.