Equinor ASA (NYSE:EQNR) Q2 2020 Earnings Conference Call - Final Transcript

Jul 24, 2020 • 05:00 am ET


Equinor ASA (NYSE:EQNR) Q2 2020 Earnings Conference Call - Final Transcript


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Peter Hutton

Ladies and gentlemen, good morning and apologies for the slight delay to the start of this call. I'm delighted to welcome you all to our Second Quarter 2020 Analyst Call. With me on the line in Oslo, we have Lars Christian Bacher, the CFO; and Svein Skeie, who is the Head of Performance Manager. Also joining the call is Orjan Kvelvane, he's Head of Accounting. He's calling in from Stavanger, and I'm here in London.

With that, I'm delighted to pass straight over to Lars Christian to start the call. And we will have, after this, questions for the rest of the hour that we have on this call. Thank you very much.

Lars Christian Bacher

Thank you, Peter and good morning, everybody. We really appreciate you joining us today. I hope that you, your families and your colleagues are all doing well. Let me start by saying that this has been a second quarter and a first half year like no other. Our most experienced traders call it the most dramatic quarter in oil market history. In April-dated Brent, the reference price for most of our liquid product sales, reached a low point of $13.20 per barrel. And at one point, the WTI plunged into negative territory for the first time in history.

In addition, European gas prices were at the lowest in more than a decade. Prices have since partly recovered, especially for oil. But Equinor remains well prepared for continued volatility going forward. Many countries are now gradually opening up. But the path toward recovery from the global pandemic remains tentative and uncertain. At all our locations, offices, fields and facilities, the safety and well-being of our people are top priorities.

This year, we have really seen the value of having solid contingency plans for low price scenarios. We took rapid and forceful actions to protect our financial position in an extraordinary situation and we now see the effects. Costs and capex are down. And through suspension of share buybacks, cutting dividend and bond issuance at attractive rates, we secured our liquidity and financial flexibility. And thanks to a quick and effective action, we have had less than 1,000 barrels per day in production loss due to COVID-19.

Our results are, as expected, impacted by the prices in the quarter. However, Equinor was able to not only capture significant value, but also provide the flow assurance needed for stable and reliable operations. We delivered record high results from our MMP segment with very strong trading results within crude and liquids. As CFO, I'm happy to see the organization continue to deliver cost reductions and solid operations. We are also progressing our quality portfolio of projects under development within oil, gas and renewables despite delays on a small number of projects due to COVID-19. The very low prices increased our net debt ratio to 29.3% from 25.8% at the end of Q1. Going forward, we will work diligently and systematically to continue to strengthen our competitiveness.

Let me spend a few minutes