Norway's Equinor wrote off $2.93 billion from the value of its assets after cutting its long-term oil and gas price forecasts on Thursday, betting the pandemic and a shift away from fossil fuels will have a lasting impact on markets.
The biggest hit came from a $1.38 billion write-off in the United States, most of it from the company's loss-making onshore shale oil and gas business, pushing Equinor to a net loss of $2.12 billion in the third quarter.
The energy major's adjusted profit before interest and tax (EBIT) fell by 70% year on year to $780 million, lagging the $1.03 billion predicted in a poll of 24 analysts compiled by Equinor.
"Our financial results are impacted by weak prices as regions across the world are still severely affected by the pandemic," outgoing Chief Executive Eldar Saetre said in a statement.
The company, which is majority owned by the state, raised its dividend to $0.11 per share from $0.09 per share, still well below the $0.27 paid for the fourth quarter of 2019.
The asset write-offs follow similar decisions by BP, Royal Dutch Shell and other oil companies that have wiped tens of billions of dollars off their book values this year.
OIL PRICE OUTLOOK
Equinor said it expects the price of the Brent crude benchmark to average $64 a barrel for the 2021-2050 period, higher than the $55 predicted by BP in June and also above Shell's long-term price forecast of $60 from 2023.
Equinor's expectation for Brent was set to $65 a barrel for 2025, down from $78 previously.
It also lowered its gas price outlook, forecasting British gas prices at $6.50 per million British thermal units (mmBtu), or 50.26 pence per therm in 2030, down from $7.7 per mmBtu previously.
"Significant uncertainty remains around the future commodity price development underlining the importance of increased competitiveness and financial resilience," said Saetre, who said in August said he would retire at the end of October.
Brent crude was trading at $39.10 a barrel on Thursday, while the British day-ahead gas price last traded at 38.30 pence per therm ($4.95 mmbtu)
Separately, the company also announced two oil discoveries off the coast of Canada, though it was too early to provide estimates for the size of potential reserves.
Equinor's shares are down 31% this year, outperforming an average 47% drop in European oil and gas stocks.
(Editing by Terje Solsvik, Stephen Coates and David Goodman)