Equinor’s strong Q4 2024 results signal robust free cash flow and ambitious growth plans for 2025

Equinor ASA concluded 2024 with a robust financial performance, marked by strong operational resilience, strategic capital allocation, and a significant focus on strengthening its free cash flow. The Norwegian energy giant reported an adjusted operating income of USD 7.9 billion for the fourth quarter, with net income reaching USD 2 billion, reflecting its ability to thrive amid fluctuating energy markets. The company’s full-year performance was equally impressive, achieving net operating income of USD 8.74 billion and generating USD 17.9 billion in cash flow from operations after taxes paid. This financial strength is the foundation for Equinor’s ambitious plans to return up to USD 9 billion to shareholders in 2025, underscoring its commitment to delivering competitive shareholder returns while driving strategic growth across its portfolio.

Equinor’s President and CEO, Anders Opedal, highlighted the company’s strategic focus, stating that the company expects to deliver an industry-leading return on average capital employed above 15% all the way to 2030. He emphasised that the increased free cash flow outlook reflects disciplined portfolio management, cost efficiency, and a strong operational base. This consistent growth trajectory positions Equinor as a key player in the global energy sector, effectively balancing its traditional oil and gas operations with emerging opportunities in renewables and low-carbon solutions.

What is driving Equinor’s strong free cash flow and capital distribution strategy?

A cornerstone of Equinor’s financial resilience is its ability to generate substantial free cash flow, which supports its aggressive capital distribution strategy. The company expects to deliver USD 23 billion in free cash flow between 2025 and 2027, a significant increase from prior projections. This growth is attributed to a combination of strong operational performance, reduced capital expenditures, and strategic cost management. The company’s capital distribution strategy for 2025 includes a proposed cash dividend of USD 0.37 per share for Q4 2024, representing a USD 0.02 increase from the previous quarter. This reflects Equinor’s commitment to enhancing shareholder value through consistent dividend growth, even amid fluctuating market conditions.

In addition to dividends, Equinor has announced a new share buy-back programme of up to USD 5 billion for 2025, with the first tranche of USD 1.2 billion scheduled to commence on 6 February 2025 and conclude by 2 April 2025. This initiative follows the successful completion of the 2024 share buy-back programme, which totalled USD 6 billion, including a fourth tranche valued at USD 1.6 billion. The disciplined approach to capital distribution ensures that Equinor can maintain a strong financial position while returning significant value to shareholders, supported by its robust free cash flow generation.

How is Equinor balancing oil and gas growth with energy transition commitments?

Despite its commitments to the energy transition, Equinor remains firmly anchored in its core oil and gas production business. The company expects more than 10% growth in oil and gas production from 2024 to 2027, driven by a diversified portfolio of high-return projects both in Norway and internationally. Equinor’s production strategy focuses on optimising output from key assets, with the Johan Sverdrup field, a flagship project on the Norwegian Continental Shelf (NCS), continuing to perform strongly. Production levels are expected to remain close to 2023 and 2024 figures in 2025, with the recovery rate ambition increased from 65% to 75%, supported by Phase 3 developments. The Troll field, another cornerstone asset, achieved record-high production in 2024, contributing to Equinor’s strong operational performance and reinforcing its strategic importance within the company’s portfolio.

Internationally, Equinor’s strategy includes expanding its presence in key markets. The company has strengthened its position in the U.S. by increasing its stake in the Northern Marcellus asset, enhancing its exposure to one of the most productive shale gas regions. In the UK, Equinor is set to play a pivotal role in the formation of the largest independent oil and gas company in partnership with Shell, with expected production exceeding 140,000 barrels of oil equivalent per day (boe/d) in 2025. Equinor’s global equity production for Q4 2024 was 2,072 mboe per day, slightly down from 2,197 mboe per day in Q4 2023. This decline was largely due to natural field declines, planned maintenance, and the divestment of upstream assets in Azerbaijan and Nigeria. However, these impacts were partially offset by the ramp-up of new wells, particularly in the UK’s Buzzard field, showcasing Equinor’s ability to manage production effectively despite external challenges.

How is Equinor adjusting its renewable energy ambitions for greater value creation?

While Equinor remains committed to the energy transition, the company has recalibrated its renewable energy strategy to focus on value creation and capital efficiency. The revised ambition is to achieve 10-12 gigawatts (GW) of renewable capacity by 2030, down from the previous target, reflecting a more disciplined investment approach amid evolving market conditions. This adjustment aligns with Equinor’s broader strategy to optimise returns while maintaining a balanced energy portfolio that supports long-term sustainability goals.

The company has reduced investments for renewables and low-carbon solutions to around USD 5 billion for 2025–2027 after project financing adjustments. This strategic shift ensures that capital is allocated to projects with the highest potential for value creation. In 2024, Equinor’s renewable power generation increased by 51% compared to 2023, driven by contributions from onshore power plants in Brazil and Poland, as well as the start-up of the Mendubim solar project. Equinor’s acquisition of a 10% stake in Ørsted further strengthens its renewable portfolio, providing exposure to premium offshore wind assets and a robust project pipeline. Additionally, the company maintains its leadership in carbon capture and storage (CCS), targeting the storage of 30-50 million tonnes of CO₂ annually by 2035. These initiatives highlight Equinor’s commitment to supporting the global energy transition while ensuring financial sustainability.

What are Equinor’s key financial highlights for Q4 2024 and the full year?

Equinor’s Q4 2024 financial results highlight the company’s strong operational performance and disciplined financial management. The company reported an adjusted operating income of USD 7.9 billion and net income of USD 2 billion for the quarter, with adjusted earnings per share reaching USD 0.63. For the full year, Equinor achieved net operating income of USD 8.74 billion and generated USD 17.9 billion in cash flow from operations after taxes paid. This robust financial performance underscores the effectiveness of Equinor’s operational strategies and cost management initiatives.

The company’s net debt-to-capital employed ratio stood at 11.9% at the end of Q4 2024, reflecting the impact of acquisitions, including the Ørsted stake, and working capital adjustments. Organic capital expenditure (capex) was USD 3.37 billion for Q4 2024 and USD 12.1 billion for the full year. Total capex reached USD 16.7 billion for 2024, in line with Equinor’s focus on capital discipline. Equinor also paid USD 5.78 billion in Norwegian Continental Shelf taxes during the quarter, underscoring its role as a key contributor to Norway’s economy. These figures highlight Equinor’s strong financial foundation, which supports its ambitious growth and capital distribution plans.

How is Equinor addressing sustainability and emissions reduction targets?

Equinor’s sustainability strategy remains integral to its long-term growth plans. The company achieved a reduction in absolute scope 1 and 2 greenhouse gas (GHG) emissions, with total emissions from operated production decreasing to 11 million tonnes of CO₂ equivalent in 2024—a reduction of 0.6 million tonnes compared to 2023. This progress reflects Equinor’s ongoing efforts to reduce its environmental footprint and support the global transition to a low-carbon economy.

Key sustainability goals include a 50% reduction in operated scope 1 and 2 CO₂ emissions by 2030 and achieving net-zero emissions across its operations by 2050. Equinor also aims to maintain a CO₂ intensity of around 6 kg per boe by 2030, showcasing its commitment to low-carbon energy production. Equinor’s focus on operational safety also delivered strong results, with the company reporting its lowest-ever serious incident frequency (SIF) of 0.3 in 2024, highlighting ongoing improvements in workplace safety. These achievements demonstrate Equinor’s leadership in sustainability, reinforcing its role as a responsible energy producer.

What is Equinor’s outlook for 2025 and beyond?

Looking ahead, Equinor remains confident in its growth trajectory, supported by a resilient portfolio, disciplined capital management, and strong free cash flow generation. The company projects organic capex of USD 13 billion for 2025, with oil and gas production expected to grow by 4% compared to 2024. Free cash flow is projected at USD 23 billion between 2025 and 2027, driven by continued operational efficiency and cost optimisation. Equinor’s return on average capital employed (RoACE) is expected to remain above 15% through 2030, reflecting the company’s commitment to delivering strong financial returns.

Equinor’s financial resilience ensures that the company can remain cash flow neutral even with oil prices around USD 50 per barrel, positioning it well to navigate potential market volatility. This strategic outlook reflects Equinor’s focus on long-term value creation, supported by a balanced approach to growth, sustainability, and capital efficiency. As Equinor continues to balance its traditional oil and gas business with its renewable energy ambitions, its ability to adapt to market dynamics while delivering shareholder value will be key to its sustained success in the years ahead.