Eldar Sætre, the boss of Equinor, describes a "hot spot" in the United States

Group CEO Eldar Sætre and Chief Financial Officer Lars Christian Bacher entered the Equinor press room on Wednesday morning with a big glow. They were pleased with the company's profit of almost $ 2 billion after tax in the third quarter. Not since the first quarter of 2014, the company has earned more money after tax. The rise in oil and gas prices, combined with costs significantly lower than in 2014, is the cause.

For Eldar Sætre, the situation is upset. While analysts worried about the burden of debt during the oil crisis, the big question now is why Equinor will spend all its money. Only in the first nine months of the year did the company generate $ 20.4 billion in cash flow from operations, or close to NOK 170 billion. It is 100 billion NOK more than the budget allocated to the municipality of Oslo for next year.

Even diversified international trade brings in a lot of money. Lower taxes at the international level, and particularly in the United States, mean that society earns almost as much money abroad as on the Norwegian continental shelf. $ 774 million out of $ 930 million for the house.

Points to "hotspot" in the United States

Eldar Sætre, President and CEO, acknowledges that the situation is reversed.

"We have gone through a period when money is not coming in. We now have a satisfactory financial situation, and in the future we want to strengthen the balance and bring the debt ratio back to its current level. The most important thing is to create value for our shareholders, we work on exploration activities, we look at new projects through different types of transactions, while optimizing the portfolio through sales, Sætre explains.

The debt ratio is now 25.7%. The company has previously indicated a debt ratio between 15 and 30%.

It's the former vice president of international affairs, Lars Christian Bacher, who recently took the responsibility for Equinor's finances. It is clear that the company is currently pursuing good acquisitions around the world.

"We will never be interested in exchanging money.When we add a cash amount on the table, we have to see that we can create added value.We always believe that it is possible to do Good deals in some parts of the world.There are "hotspots" in the world.Norway is one of them and the Permian another, he says.

– Are you planning to go to the Permian?

"With today's prices, we find it demanding.

– But you saw it?

"We watch almost everything at any time.The fact is we are watching where we can get a good deal," said Bacher.

The Permian region of Texas is the most attractive region in the United States for onshore oil production. Equinor has no assets in the region, but instead focused on oilseed oil projects in Eagle Ford, Texas and Bakken, North Dakota. The company also produces a large amount of shale gas in the Marcellus area. It's the former CEO, Helge Lund, who has taken the plunge in national operations in the United States. For a long time, the investment was estimated and the total depreciation of these investments still amounted to 60 billion NOK.

Waiting for an increased dividend

Teodor Sveen-Nilsen, a stock market analyst at Sparebank 1 Markets, is pleased that he heard Wednesday from Equinor's management.

"They say good things," he says.

– What do you think they're going to use the big winnings?

"That's the big question: I'm expecting a slight increase in dividends, debt repayment and an increase in investment in any case from 2020," Sveen-Nilsen says.

The third quarter results were close to analysts' estimates and the Equinor share price ended Thursday.

Reject simple solutions

While billions will go to Equinor, scientists and politicians will close the oil cranes. AUF decided at the annual meeting last weekend of the dismantling of the oil industry by 2035. The leader of the group, Eldar Sætre, is not surprisingly deeply disagree.

– The energy system must go hand in hand. It is a transformation that takes place. I often encounter simple solutions to solve this problem. The end of oil and gas production in Norway should also contribute to this. But we may have contributed to the contrary. There is enough oil and gas in the world. There is a demand for oil and the options it needs to focus on. We need the most efficient trays, "says Sætre.(Conditions)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our business using a link directly to our pages. The copy or any other form of use of all or part of the content may only be done by written authorization or as permitted by law. For other terms please see here.