UPDATE 5-Equinor Q4 operating profit beats forecast, trims payout
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Adjusted operating profit $8.68 bln vs forecast $8.46 bln
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Shareholder payments in 2024 $14 bln vs $17 bln in 2023
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Oil and gas output grew 2.1% in 2023 vs Oct forecast 1.5%
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By Nerijus Adomaitis and Nora Buli
LONDON, Feb 7 (Reuters) - Equinor on Wednesday posted a slightly higher-than-expected operating profit for the final quarter of 2023 as output rose, but said it would cut its overall payments to shareholders in 2024 to $14 billion from $17 billion last year.
The Norwegian oil and gas producer's adjusted earnings before tax for October-December fell to $8.68 billion from $17.0 billion a year earlier, but beat the $8.46 billion seen in a poll of 26 analysts compiled by Equinor.
"We expect to grow our cash flow and sustain competitive returns. We are extending the outlook for stable contribution from oil and gas to 2035," CEO Anders Opedal said in a statement.
The group's combined oil and gas output grew by 2.1% in 2023 thanks to a strong finish to the year, and exceeded the company's October guidance of 1.5% growth.
The increase was mainly driven by strong production at the Johan Sverdrup field, the largest in the North Sea, and new wells in production, Equinor said.
"The production increase was also driven by contributions from the international portfolio with (Brazil's) Peregrino field reaching plateau production and strong performance from U.S. offshore assets," it added.
Equinor said its production would be unchanged in 2024 before rising by 5% by 2026. It would then decline somewhat towards 2030 to around 2 million barrels of oil equivalent per day, down from about 2.2 million in the fourth quarter of 2023.
In addition, the group's domestic Norwegian unit set a target of pumping 1.2 million barrels of oil equivalent per day in 2035, down from 1.37 million in 2023.
The company raised its ordinary quarterly dividend payment to $0.35 per share from $0.30 but said its extraordinary cash dividend would be cut to $0.35 per quarter from $0.60.
Equinor said it plans to spend $6 billion on share buybacks in 2024, equal to 2023. In 2025 it plans buybacks of between $4 billion and $6 billion.
The company plans to increase the regular part of its quarterly dividend payments by $0.02 each year going forward, while the extraordinary dividends would come to an end after 2024.
Equinor warned last month that earnings in its Marketing, Midstream & Processing (MMP) unit, which includes refining, were expected to be at the low end of its guided range of $400 million to $800 million, hit by weak margins.
The MMP division on Wednesday reported a profit of $424 million, while analysts on average had expected $461 million.
Rival BP on Tuesday posted forecast-beating earnings for the fourth quarter, as have Exxon Mobil, Chevron and Shell, supported by a mix of strong trading results and higher oil and gas production.
Equinor in 2022 overtook Russia's Gazprom as Europe's biggest supplier of natural gas as Moscow's invasion of Ukraine upended decades-long energy ties.
The Norwegian group's full-year adjusted earnings totalled $36.2 billion, down from a record $76.9 billion in 2022 as the price of gas declined sharply.
Equinor's share price has risen 4.8% in the last 12 months, slightly ahead of a 3.7% rise in the European oil and gas sector .
(Reporting by Nerijus Adomaitis in London and Nora Buli in Oslo, editing by Terje Solsvik and Kim Coghill)
