Equinor ASA

Ladies and gentlemen, thank you for standing by. Hello, and welcome to F&R Analyst Call Q1 Conference Call. All lines have been placed on mute to prevent any background noise. Thank you. I would now like to turn the conference over to Board Blog Patterson, Senior Vice President and Head of Investor Relations. Please go ahead, sir.

Thank you, Operator, and good morning to all. Welcome to the presentation of Equinor's first quarter result. As usual, I'm here with our CFO who will take us through the results and then take your questions. We plan to complete the session within one hour. So with that, Torbjörn, I hand it to you. Thank you very much, Board.

Good morning and good afternoon to all of you. So thank you for joining us today. This quarter, war and conflict, first and foremost, are impacting people in a severe way. Energy markets are also fundamentally shifting, and we have a particular role in providing reliable energy. Against this backdrop, I'm glad to report excellent operational performance with high regularity, new fields on stream, and in this quarter, we delivered our highest production ever. This is important for energy security and for our investors. The war in the Middle East is creating high volatility and imbalances in the markets. It is not clear when this conflict will be resolved or how long it will take to restore infrastructure in the region or what the lasting impact to the markets will look like. We will focus on what we can control and influence. Maintaining cost control and capital discipline and being a reliable supplier of energy delivering all of this in a very safe manner. A good example of this is the Guldfax field right now. where oil is flowing into shuttle tankers bound for European customers, just as it has gone for steadily 40 years. When we started the Guldfax field in 1986, we expected to produce 1.3 billion barrels. We have now passed 2.5 billion, and we are still counting. The world needs energy it can trust. And the Norwegian continental shelf is a stable oil and gas province that continues to deliver above and beyond expectations. So, over to the results. This quarter, we delivered record high production, 9% up from the same quarter last year. High regularity and new fields on the NCS, combined with record high production in the US, contributes to this growth. With this, we capture value from higher prices, and the trading business captures value uplift from increased volatility. This quarter, the adjusted operating income was $9.8 billion, and our net income was $3.1 billion. Year-to-date, our cash flow from operations after tax is $6 billion. An increase in collaterals supports strong trading results during volatility, but reduces our cash flow in the quarter. I will revert to this later. Our adjusted earnings per share was $1.48, positively impacted by strong results on financial items. On the NTS, we made seven commercial discoveries, and in January, we were also awarded 35 new licenses. With this new acreage and strong exploration results, we will continue to be a reliable energy supplier. In Brazil, we started drilling at the Rayar gas field, which we expect to be on stream in 2028. Portfolio optimization continues to deliver value, and this quarter we received the first quarterly dividend of $150 million from Adura. Then to capital distribution. For the quarter, the board approved a cash dividend of 39 cents per share and a second charge of the share buyback of up to $375 million. This is in line with what we indicated at our 4Q presentations. At that time, we expected to lean on the balance sheet in 2026 to maintain stable investments and competitive capital distribution. Higher prices will strengthen our cash flow, but there is still significant uncertainty. Competitive capital distribution remains a key priority for us. As always, safety is our top priority, and our safety performance has steadily improved over time. This quarter, we have, however, seen an increase in the number of incidents. And we must continue our work to improve safety and ensure everyone working with Equinor returns home safely every day. In the quarter, we produced more than 2.3 million barrels per day. This is an all-time high, up 9% compared to the same quarter last year. We are on track to deliver on our guidance of a 3% production growth for the year. Production on the NCS was up 10%, mainly driven by high regularity across the portfolio, and ramp-up of Johan Casper, Halton East, and Berlande. In the US, we had record high production driven by Cesar Tonga offshore, and our US gas position onshore. Outside of the US, all international production also increased. driven by Adura and Bacalao, but it was partly offset by our reduced ownership in Peregrino. Power production was stable at 1.4 TWh. Then to the finances. EMP Norway's adjusted operating income totaled $7.7 billion pre-tax and $1.7 billion post-tax. This reflects the high production and strong price realisation. Crude qualities that can be used for jet fuel and diesel have seen stronger differentials, and we have benefited from this at Guldfax and Johan Sverdrup. Normally, crude from Johan Sverdrup trades at a slight discount to Brent, but we are now seeing a premium of $5. And in March, we sold cargoes at a $13 premium from Johannes Fertig. Our EMP international results reflect increased production and some overlist in the quarter, and they're impacted also by high depreciation in Adura. Results for the U.S. are driven by record high production and strong realized gas prices, particularly during the cold spell at the start of the quarter. M&P delivered close to double our quarterly guidance, $787 million before tax, mostly due to strong products and U.S. gas trading. The M&P results demonstrate how we continue to capture value from a volatile market. This is the first quarter where we report power as a separate segment, or as a segment, combining renewables, flexible power, and power trading. The result came in close to zero, with strong contribution from the power trading business. Adjusted operational cost and SG&A was up 9% compared to the same quarter last year. Underlying OPEX and SG&A, including portfolio changes, was down 6%. And adjusted for currency, it was down more than 10%. which was the ambition we set in February, and we deliver cost reductions even if we have more fields on stream and we are growing production. This quarter, cash flow from operations after tax was $6 billion. In addition, I want to highlight two points. First, we have a cash inflow of around $800 million from a positive price review settlement This is cash in, but it is not included in the cash flow from operation for the quarter. Second, we have put in cash collaterals of almost $900 million. This is to be expected during times of volatility, and it supports strong trading results. But, however, it do reduces the cash flow from operations in the quarter. Also, there is a net increase in working capital of $800 million in the first quarter. We paid two tax installments on the NCS this quarter, totaling $4.2 billion. Next quarter, we will pay three installments of 20 billion kroner each. In June, we will determine tax payments for the second half of this year and the first half of 2027. Organic CapEx for the quarter was $3 billion, in line with our CapEx guidance for the year. And we have a strong cash position of $20 billion. Our net debt ratio decreased to 15%. Higher prices will impact our outlook for cash flow and net debt towards the end of the year. In February, we expected a cash flow from operations of $16 billion after tax in 2026. This was based on a scenario with $65 Brent and $9 per MBTU for European gas. We see large movements in forward prices on a daily basis, and there is significant uncertainty, making it hard to predict our cash flow for the year. However, if we assume that Brent averages $85 per barrel this year and European gas prices of $13 per MB2, we expect the cash flow from operations to be around $8 billion higher for 2036. At the same time, our future tax liabilities will increase with around $4 billion due to the tax lag in Norway. This is when we measure it compared to what we expected in February. With higher prices, we no longer expect to lean on the balance sheet this year. With the scenario of $85 oil, we expect our net debt ratio to remain fairly stable through the second quarter when we will recognize the state's share of buybacks for 2025 as net debt. Then we expect it to reduce to somewhat below 15% during the second half of the year. So, our guidance presented in February remains stable. There are no changes to that. For 2036, we expect $13 billion in organic complex, and around 3% growth in oil and gas production. So by that, I would like to say thank you very much for your attention, and I give the word back to you, board, for the Q&A.

Thank you, Torgrim, and we will then start the Q&A. Let me remind you that if you want to sign up to ask a question, you can press star 1 on your phone. We have a good list already, and we'll start with Alejandro Rigel from Santander. So please, Alejandro, your line should be open.

for the year. You have reiterated the $1.5 billion sale buyback today.

Alex, sorry. Yes? Sorry, can you hear me? We missed the start of your question because the line wasn't open in time. So can you start over, please?

Okay, yeah. Yeah, no problem. It's in terms of the sale buybacks for the year, the guidance of $1.5 This is already fixed or depending on the commodity environment, if in the second half of the year we have these higher energy prices, you will be in a position to update, to increase these buybacks. That would be the first one. And the second one is about your views about the European natural gas market. We have seen, you know, relatively, I would say, relaxed energy market in Europe with forward also relatively low versus the expectations of the situation in the Middle East. If you can share with us your view about the situation and the outlook for the second half of the year. Thank you.

Thank you very much, Alejandro. So personal capital distribution. So we communicated at the fourth quarter, you know, at 39 cents per share, and the share buyback of $1.5 billion for the years. There's no change to that guiding. When we set that, sort of, we wept. planning to lean on the balance sheet for this year, as I have said, to remain competitive. So clearly there's still a lot of uncertainty around this. So it is way too early to have a discussion on that. But what I can say is that we expect not to lean on the balance sheet for the rest of the year with the current price outlook. Normally, we do announce the dividend and share buyback, you know, at the fourth quarter presentation, and, you know, that should be the starting point for any discussions around this. But, you know, from the AGM, we have the mandate to change during the year, but that is not the normal approach as such. So with all this uncertainty around us, you know, important for me to say that any share buyback beyond sort of the base will have to be based on money that we have already earned in a way. And so this is, you know, clearly too early to have a discussion on that topic. What is important for me to say is that being competitive in our capital distribution will have priority in the capital allocation going forward. Yeah, so that was the first question. Let me see. The second one was on the natural gas market. Yeah, it's a very, very, very important question. So at the outset, when we started this year, clearly we expected a softer gas market for 26 and 27, sort of based on sort of more energy coming to the markets, you know, with the closing of the strait. 20% of that global LNG is shut in. So the situation is very different. I think there is a little bit of – the main attention has been on the oil market, but I think equally important is actually the natural gas market, because when the strait opens, we do believe that it will take maybe half a year for oil to get back to normal. For gas, it will take much longer. Qatar Energy has said that 70% of the export capacity from the Gulf is damaged and will take three to five years to repair as such. So currently, we don't see that glut of LNG through this decade as sort of we were expecting just half a year ago. So this is a little bit of a, a topic that, you know, clearly we are very occupied with. And I do think the world will see this more clearly in a bit. When it comes to the European situation in itself, I mean, the storage levels are at 30% currently. That is 6% below season normal. And in the sort of the curves or also the market, doesn't give incentive to inject for the time being. So we believe that, you know, gas storages will likely not reach the 80% target that is set. Meaning that going forward, the European gas market will be vulnerable, you know, for weather events, for operational issues. And then you in addition add that sort of there is 32 BCM of Russian gas that will leave the market over these two years. it's clear there is quite a lot of additional LNG that needs to come to Europe to satisfy the necessary demand. So clearly an area to watch. We take the role as a reliable energy supplier extremely important, and for us it's important to produce that maximum and deliver natural gas to Europe in a situation like this.

Thank you, Alondro, for your question.

Thank you. Dag?

Thank you. The next one is Biraj Borkataria from RBC. Biraj, please go ahead with your question.

Hi there. I hope you can hear me. Just had one question, and it's about your Allstate holding. You're obviously now kind of in the black or close to the black on the investment, but you've moved from not wanting a board seat to then – suggesting you want a board seat and then not nominating a board member. So I just want to understand, do you still see this as a long-term strategic holding, as you previously said, or has something changed here? And then related to that, are you in discussions around a potential JV with them, and should we expect an update with the CMD?

Thank you. Thanks, Girard. So there is no change in the way that the view – sort of ownership position in Ørsted. We see ourselves as a long-term industrial owner, and we do believe, as we have said earlier, that this industry is now coming out of its first crisis, and there is consolidation needed. And we do believe that collaboration is between the two companies has the potential to create the shareholder value, both for Ørsted's shareholders and Equinor's shareholders. So this remains firm. Ørsted is a great company. What I would like to say is that when it comes to board position, you know clearly the timing for that needs to be right. Be informed. that we would not nominate a board member this year. But, you know, our, you know, approach to this ownership is the same, a long-term industrial owner.

Thank you, Biraj. Next one is Alistair Syme from Citi. Alistair, please, your line is open.

Thanks, Paul. Can you talk a little bit about activity levels in the U.S. onshore? I appreciate this is a non-operated position, but how many rigs running in Eaglefoot and Marcellus and any thoughts and ambitions to increase? And then as a follow-up, I think later on this year, Germany's looking to move forward with its tenders on 9 gigawatts of gas-fired power. Is this a tender that might fit with Equinor's strategy in this area? Thank you.

Okay, thanks Alistair. So our onshore position in the US is now fully concentrated in the Marcellus pay and we are not operating any longer. So we are together with expand in Marcellus. So that produces very well. production area increased by 17 000 barrels per day and you know at 320 barrels per day so that is that that is is is good and expand is is a good good operator um this is as you know um the area in the u.s with the lowest break even around a dollar for for that production well situated in sort of future demand to data centers and gas to power and all of that. So it remains a very strategic asset for us. When it comes to offshore wind and auctions in Europe, I would say that Europe in general is an area where clearly there is quite a bit of support for this, driven by energy security now, much more than decarbonization. I just want to repeat what we said at the fourth quarter, that our priority within the renewable space is to finalize and conclude the projects that we have under development in the US, in UK and Poland. And the bar for further capital commitments into the offshore wind space is very high, and that also goes for the Ørsted position.

So, Token, my second question is actually on the gas-fired power in Germany.

Oh, maybe I misheard you, Alistair. So, yeah, and also, I mean, we have nothing particular to mention in that regard, but clearly we do see that Europe and Germany in particular needs to sort of – invest into the sort of the electricity, you know, system and grid. So we follow that situation clearly. Okay, thanks very much.

Okay, thank you, Alistair. Next one on my list is Theodor Sven Nilsen from Sparbanken Markets. Theodor, please go ahead.

Good morning, Torbjörn. Thanks for taking my questions. I have two questions for me. First on price credentials, we know that that was a pretty good retail price in Iran. In Q2, we are, of course, seeing even higher data than prices. Just wonder if you can share what you've seen on the realized prices for specific cargo so far in Q2. Second question, that is on the potential postponing maintenance upcoming summer season, upcoming maintenance season, given the high energy prices we currently have seen.

Thanks, Theodor. So strong price realizations in the quarter. So first of all, you know, we do not hedge our production either on the gas side or on the oil side. We want to be exposed to the volatility as such. And that is what we benefit from in this price environment. When it comes to the oil market, On the NCS, we achieved close to a $3 premium to Brent in the first quarter. Normally, we trade at a discount to Brent in general. So this is driven by a few things. One is that the demand for certain qualities have really increased because many of them replace well sort of the Middle Eastern's quality. And as an example, Johan Sverdrup now traded a $5 premium to Brent. Normally it is a discount, and they actually sold cargoes at $13 premium to that. Johan Kasper, the new one, is also another one. So we had premiums above $20, actually, So, clearly, we are able to take out quite a bit from the differentials. Then, you know, there has been quite a bit of difference between sort of the physical delivery, you know, the dated, versus the front month. And that has moved up and down, and the differential was very high in March. we delivered or we sold or lifted a lot of volumes in March as such. So it's an example that sort of through trading and through marketing, we are able to take out value through sort of dislocations in the market. Going into April and all of that is too early to be specific. But clearly, the demand for sort of our oil is still very high. What we have seen is sort of that the curve has come up somewhat. So the differentials between, you know, the physical delivery and transplant is less than it was, you know, in March as well. So we'll have to wait and see, Theodor, on where it ends. We will be specific on price realizations in the consensus invite to the quarter. The second quarter on... Yeah, thanks, Bård. Yeah, the answer to that is no, Theodor. You know, maintenance programs on our installations are major industrial projects that take a massive amount of planning, involvement of suppliers, and clearly we do not want to disturb any of that. The most important is to do that effectively and safely.

Thank you.

Thank you, Theodor. We go to the next question, and that is Henry Patricot from UBS. Henry, please go ahead.

Yes, thank you, Bernard. Hello, everyone. So, yeah, two questions from my side. The first one, just on the production, you had very strong performance in the first quarter, but you've kept the guidance and changed up plus 3% for the year. I'm just wondering to what extent the raising upside to UBS to the rest of the year because it's noted with a slightly higher production on average in 25, as is Q1-25, but still the guidance for 26 implied a drop, but then the rest of the year is just trying to understand what's driving that. And secondly, you mentioned the cost reduction, so I think you could elaborate on what's what's working for you in terms of thriving, cost reduction, exactly which part of the business. Thank you. Thanks, André.

So first, on the production guidance, so 3% production growth we expect for the year. In the first quarter, you know, clearly we are very proud of what the organization has done on the quality of the operations, very high production efficiency and regularity, and the new fields coming in are performing well and ramping up as they should. So in the first quarter, we have produced more than we had in our plans. But it is way too early to make any changes to the guidance. We are moving into the second and third quarter where we will have turnarounds. And in the second quarter, it's 75,000 battles per day, you know, program. And in the third quarter, 40,000 battles per day. And we all know that that contains some uncertainty as well. So, but I can leave with you that the production has gone very well in the first quarter. On costs, yeah, so... There is a 9% sort of growth in reported cost that is driven by, you know, record production and more fields in production. So that is natural. However, you know, we have the transportation costs have increased, you know, driven by shipping rates and also energy costs. And also currency, the strengthening of the Norwegian kroner has a certain impact on that. And if you sort of take away those type of elements that is not related to underlying performance, and also we have royalties in there, underlying there is a cost reduction of 6%. And that is without currency changes actually. So meaning that we are putting more fields in production. We are growing our production while we are reducing the cost. And this is just a result of a systematic work over many years. Associated comment is that the unit production cost, we expect that to be reduced from $6.6 per barrel to $6 during the year. you know, just improving the quality and underlying profits of our earnings.

Thank you, Henry. Next one in the line is Matt Lofting from JP Morgan. Matt, please go ahead.

Hi. Thanks for taking the questions. Torbjorn, given your earlier comments on gas and hopefully now a better balance sheet out for 2026, you were very clear earlier around needing to maintain the baseline on maintenance, et cetera, which makes full sense. But I just wondered whether you see the merit yet in higher capex to fund an acceleration in Norwegian or non-Middle East, as it were, located production, or is it simply too early to be able to take that view and warrant any capital allocation revisions at this point? And then secondly, I just wanted to ask you about production. I mean, Q1 looked very strong in terms of the operational performance. I think you termed it earlier as putting the company on track for 3% full-year growth rather than ahead. Do you see any upside emerging to the 3% growth for this year? Thank you.

Thanks, Matt. So, you know, in February, we guided on a significant improvement in the free cash flow driven by both lower cost and a high-rated investment program as such. And there is no changes to that. We have a program that is very consistent with our production growth ambitions. and so on. So there are no news into that. What is very important for us when we consider the investment program is to see to that it is high-rated, that it has the maximum profitability that we can get out of the program, and that will remain the case. even if sort of prices goes up. I mean, we are living in seldom times with a lot of uncertainty and we need to be prepared for that things can be very different again. So we will remain disciplined. On production, it was a strong first quarter production. better than assumed in sort of the 3% guiding, but it's too early to do anything with it due to sort of uncertainty going forward, and particularly related to the turnaround programs.

Thanks, Matt. Next question is Jon Olarsson from ABG. Jon, please, your line is open.

Yes, thank you so much for taking my question. Many of your competitors are talking a lot about international exploration going forward. You seem to be standing out as one of the companies that have reduced international exploration. If I'm right, you're only standing for two exploration worlds in 2016 and two ILX worlds in Angola. I just wonder if you could talk a little bit about your ambitions when it comes to international exploration and Maybe a little bit of details about Drilling Transfer 26, please.

Thanks, Jon. I think I'll start with a little bit of highlights on how we think about international business. And over the last few years, we have streamlined that significantly into fewer countries. and focusing on sort of where we see that we can create the most values. And then clearly we have done some divestments and acquisitions to support that. So currently we are looking at higher international production growth, you know, reaching 950,000 barrels per day in 2030. and a growing cash flow, lower unit production costs, and lower CO2 emissions. So over the years, we have actually been able to make this into something better than a few years back. Exploration is an integrated part of how we think about developing the international business. You know, the exploration will be first and foremost focused on areas where we currently are, you know, Brazil, Angola, U.S., you know, to mention a few. So this year, it is a rather, you know, limited program focusing on Angola and ILX opportunities, you know, great opportunities, though. Going forward, clearly, you know, focus will be more on Brazil, where, you know, you might be aware that we hold the neighboring lease to BP's boomerang asset in Brazil, and also a couple of interesting prospects close to the Raya development further north as interesting. So those are concrete opportunities that we are developing, and then I think there are more opportunities as well. So exploration will have priority. Doing significant step outs on frontier exploration beyond the countries where we are, we will be careful with.

Well, thank you. My second question, is regarding Dogger Bank. I noticed that Dogger Bank B has started production. I just wonder, when do you expect Dogger Bank C to start production? And also, what is the status of potential Dogger Bank D, E, etc.? It's a fine question.

Thank you. Thanks, John. Yes. So, you know, there has been delays on Dogger Bank A, as you would know. So that is now, you know, more and more getting back to where it should be. Dogger Bank B installation is on track and that is moving forward as planned. When it comes to Dogger Bank C, the transition pieces, you know, those things are ongoing and we actually – well, no, let me see. Those were actually completed. Those were actually done half a year ago. And, you know, we do expect OpenIC to be completed, you know, in around two years' time as such.

Thank you, Joon. Next one on my list is Nash Kiwi from Barclays. Nash, your mic is open. Thank you.

Thanks, Barlin. Good morning, Cogram. Two questions from me, please. First, congratulations on record high production number, but could I ask about safety, please? I wonder if you could provide some color why the safety data in slide three of the presentation deteriorated during Q1. It's not really a pushback from me, but I just want to hear APRINOR's plan to produce at a very high level in a safe and unsustainable manner, please. And then the second question is on your new power segment. This is the first quarter that you officially have had this new power segment. I wonder what has surprised you both positively and negatively. Thank you.

Thank you. Thank you, Nash. So safety is your first priority. And if you look at sort of the development over the last years, it has been a very, very positive development for this. What we see recently is that things are flattening out statistically, and then we have seen some more incidents as such. But clearly, we are seen as a very safe operator, and I would say that sort of I see no risk sort of this having an impact on production efficiency. You know, an associated point is sort of the technical integrity of an aging fleet of platforms is something that we follow very, very closely. And that technical integrity is actually higher than sort of, you know, than it has been for many, many, many years. So the underlying quality in operations is very high. But this is something that we follow very, very closely. The new power segment reported, you know, close to zero this quarter. So what we do see is positive development on underlying costs. and business development activities and all of that. And then, you know, clearly a strong contribution from the power trading, you know, in the quarter. So this is going in the right direction, and we are all looking forward to positive results in the future.

Thank you. Thank you, Nash. Then it's Redburn, Fergus Neve. Fergus, please take your question.

Brilliant. Thank you very much for taking my questions. Just one question from me today, please. I saw some press reports recently about awards being granted for the feed studies at Bayden Ord, which is obviously an exciting project. I was just hoping you might be able to give us some colour on where you are kind of on the project, what current timelines you're working to, and when we might kind of expect an SID if the feed projects go to plan.

Thank you very much. So is, you know, a very important development. So this is a project that we have worked for quite a while, and it is now getting closer to a concept select, and that is what we plan for this year. Large developments. We own 60% in the assets. And sort of altogether, investment levels of $9 to $10 billion on a 100% basis. And, you know, production plateau a little bit below 200,000 barrels per day. Very importantly, with a low tax rate as such. So this will have a significant contribution to... cash flow from operations in the 2030s. Technology-wise, this is ready. It is 500 kilometers offshore. It is dark and it is cold, but I would argue that as a company, we do have certain experience in those waters.

Thank you, Fergus. Thank you. Thank you. Next is Paul Redman from BNP Paribas. Paul, please, your line is open.

Hi, thank you very much. First question is just on cash flow this quarter. You had two big cash impacts. You had the collaterals and you had the price review. Can you just talk to us about how you expect these collaterals to play out through the year, whether you expect a reversal? And on the price review, do we expect anything else later on the year? Secondly, on Orsted, you talk about collaboration of the two companies. Is that collaboration with a 10% equity stake or do you need a greater equity stake? And then, sorry, one last one with a clarification. You said $8 billion of CFO upside, I think, at higher prices of $85 a baron. I think that's $13 TTF. Can you just walk me through? Because I don't know whether my maths is wrong. I'm not sure that works with your sensitivities, but happy to be proved wrong.

Okay. No, thanks. All right. So, there were at least three questions in here. So, let me take the cash flow first and the collaterals. So, you know, collateral is a function of volatility in the market, and it's a function of that we really would like to take advantage of that volatility and trade it, and we don't hedge and so on. So as volatility increase, we need to put collaterals behind the trades that we make. So in this quarter, collaterals increased by, you know, 800, no, $900 million. which is just natural business. So when volatility comes down again, collateral will be reduced, and that will sort of improve cash flow again. So this is normal business. Just want to give you a data point, and that is, you know, during the energy crisis, you know, with the war on Ukraine, at the maximum, we had collaterals of $10 billion, you know, in our balance sheet. enabling us to trade in an environment where very few could trade. We made huge returns on that, and we didn't lose a single dollar in sort of that. So this is what we do, and this is for us to be able to benefit from volatility, both on the gas and the oil side. Then on Ørsted, the collaboration, I don't want to... I don't want to be too specific on this, but clearly the 10% ownership share that we have, we are satisfied with that, and there's a high bar to commit more capital into offshore wind, and that also goes with the position in Ørsted. When that is said, we do believe that this industry will need consolidation to be, you know... to improve profitability and risk management as such. The last question was on the price sensitivity. So what I gave you was sort of specifics for 26, which is the $8 billion in improved cash flow corporations, if you assume $85 oil and $13 gas. However, you know, there is a tax leg related to repay taxes with a six-month delay in Norway. So there is $4 billion that sort of, you know, it builds sort of tax liability for the future beyond 2026. We have in our material, you know, price sensitivities which we issue, and we say that with a $10 change in the oil price, that will change cash flow for operations with 1.2, and a $2 gas would lead to a $0.8 billion improvement in the cash flow for operations. Those are sort of adjusted for the tax leg, and I think that is maybe the difference in your calculations, because those numbers are off the tax, and adjusted for any tax leg impact. I know this is complicated, but it is important to understand, and Investor Relations will be more than ready to discuss this further with you later on.

Thank you, Paul. I can confirm the latter point. Then, next one on my list is Jason Gabelman from TD Cowen. Jason, please go ahead.

Yeah, hey, thanks for taking my question. Just one for me. As you think about the cash windfall you're likely to receive this year and kind of declining production growth as you look out to the 2030s, is there any appetite to, you know, execute M&A in order to increase the potential production growth opportunities you have into next decade? Thanks.

Thanks, Jason. Yeah. So, you know, the investment program that we have put in place and that we are guiding on enables us to actually build this business, you know, step by step, you know, beyond this decade. We are aiming for a production on the Norwegian continental shelf. in 2035 on the same level as in 2020. Internationally, we are growing our production towards 950,000 barrels per day in 2030. and our power business is also growing based on sort of, you know, the guided investments that we have. So, I mean, we are not dependent on M&A to deliver, you know, high-quality growth through the next decade. When that is said, M&A is an active tool that we use to high-grade our portfolio growth. And I can give you a couple of examples. We have exited Nigeria and Azerbaijan, two countries clearly declining, and we received a good price for that. We have made two acquisitions into Marcellus in the U.S., creating longevity and a robust portfolio for the long term in the U.S. And third, we have created, you know, Adura, you know, the company in the UK where we have sort of combined with Shell, our upstream assets, significantly improving our cash flow and actually growth outlook as well. My point being that going forward, you should expect us to continue to use M&A actively, to continue to high-grade the portfolio. create value, and also provide longevity into the business.

Thank you, Jason, for your question. This time we actually managed to get through all questions within the hour, so I'm sure that's welcome on a busy day. Thank you all for your questions, for calling in, and as always, the IR team remains available if there are any topics that you would like to follow up during the day or later in the week. So have a good day, everybody, and thank you for calling.