Thank you operator. Good morning all.

Thank you for joining the analyst call for Equinor's second quarter results. Our CFO, Torgrim Reitan, will as usual, present the results before we open for a Q&A.

You can already now sign up for questions by pressing star one on your phone. We plan to complete the session within one hour in total.

With that, I hand it to you, Torgrim, to take us through the results.

Well, thank you Bård. Good morning.

Thank you for joining us. I hope you are all enjoying your summer.

Today, it is five weeks since our Capital Markets Day, where we shared with you our updated plans to deliver more energy, growing cash flow, and superior returns. We showed you an improved portfolio delivering production growth of 150,000 bpd to 2030, a growth in cash flow from operations of 30%, and an industry-leading 15% return on capital employed.

With this, we expect to deliver over $40 billion in free cash flow towards 2030. Not to forget, we presented a break even after dividend of $50 per bbl.

This is a reduction of this break-even price of $10 per bbl. In the second quarter, we took several concrete steps to deliver on this.

On the Norwegian continental shelf, we awarded the contracts for the first wave of tieback projects. This is an important first within our new NCS 2035 operating model, aiming to double the speed of developments and reduce costs by half.

The contracts awarded for the first wave supports these improvements. We continued to use business development as a tool to harmonize ownership across licenses.

We have done this through a series of swaps with DNO, Aker BP, and Vår Energi, supporting progress on the Ringvei Vest project. Internationally, we took the final investment decision for the Greater PAJ project in Angola, where we expect to generate more than $50 per bbl in cash flow from operations.

Greater PAJ is an important step in building longevity within the international E&P business and growing cash flow from operations by 80% towards 2030. We also delivered strong results in the quarter.

Production grew by 3% with well executed turnarounds and new fields like Eirin and Symra coming on stream during the quarter. With this, we capture value from higher prices and our trading business captures value uplift from increased volatility, delivering strong contribution to our results this quarter.

We report adjusted operating income of $11.5 billion before tax, and an IFRS net income of $4.8 billion. Year to date, our cash flow from operations after tax has been strong at $13.7 billion.

This quarter our adjusted earnings per share were $1.33. While energy markets remain impacted by geopolitical unrest, we continue to focus on what we control, our operations, how we remain robust through price cycles, and our commitment to cost and capital discipline.

To capital distribution. At our Capital Markets Day, we announced a doubling of the share buyback program for 2026 from $1.5 billion to $3 billion.

We follow up this now, for the quarter, the board approved an ordinary cash dividend of $0.39 per share, and a third tranche of share buyback of up to $1.125 billion, including the state's share. Let's dive into our results.

First, let me start with safety, our top priority. Our serious incident frequency and personal injury rate remained relatively stable in the second quarter.

We have seen a slight increase in both metrics this year when compared to 2025. We are working very hard to learn from incidents to improve safety and performance further.

In the second quarter, we produced 2,165,000 bpd, up 3% from the same quarter last year. On the NCS, our production is up 4%, mainly driven by new fields like Johan Castberg, Halten East, and Verdande.

We are adding also Eirin and Symra, which came on stream this quarter. Let me also highlight that we saw another quarter of strong performance from Johan Sverdrup.

We have previously indicated a decline of 10%-20% this year from that asset. Based on the strong performance so far, we now expect it to be at the low end of this range.

NCS production was impacted by plant turnarounds and maintenance, and also Johan Castberg coming offline for a period towards the end of the quarter and into July. Johan Castberg is now back at plateau after production resumed last week, implying that the impact will be larger in the third quarter than in the second quarter.

Internationally, the increase was driven by Adura in the U.K. and Bacalhau in Brazil.

The growth more than offsets the decrease from our reduced ownership in Peregrino and the divestment of the onshore Argentina assets. During the first half of 2026, we have delivered in total a very strong production growth of 6%.

Therefore, our guidance of a 3% growth for the full year is now more robust than when we started the year. Even taking into account the issues at Johan Castberg and the planned turnarounds also in the third quarter.

Within power, we produced 1.2 TWh this quarter. The growth is from Dogger Bank in the U.K.

and new onshore assets. Now to our financial results.

Liquids and European gas prices were higher than the same quarter last year, while U.S. gas prices were lower.

This has impacted our results across the segments. Adjusted operating income in E&P Norway totaled $9.2 billion before tax and $2.1 billion after tax.

In our international E&P business, prices increased around 50%, but operating income almost doubled based on production growth of 4% and increased quality in the portfolio. Our E&P U.S.

results were driven by high offshore production with higher prices, partly offset by lower gas prices in the U.S. MMP delivered $777 million pre-tax, well above the guiding of $400 million per quarter.

This was driven by crude trading and strong performance at our refinery, Mongstad, capturing value from higher margins. Our power results reflect a strong contribution from power trading for the second quarter in a row.

In total, we have nearly doubled our adjusted operating income after tax compared to last year, demonstrating the improvements in the portfolio and our ability to capture value in higher price environments. This quarter, cash flow from operations was $14.8 billion before tax.

We paid $7.1 billion in taxes, including three NCS installments, summing up to around $6.4 billion. Next quarter, there will be two payments of NOK 23.3 billion each.

Also in the second quarter, we received a quarterly cash distribution from Adura of $150 million. The sale of the Argentina onshore assets resulted in cash proceeds of $558 million in the quarter, in addition to $88 million in proceeds received in the first quarter.

We also recorded a gain of $467 million during the second quarter. Our financial position in Scatec was partially divested for $171 million during the quarter.

Here we have an accumulated recorded gain of $61 million. Organic CapEx was $3.4 billion, and our net cash flow before distribution was +$5.5 billion.

This quarter, we distributed $1.1 billion to our shareholders. We strengthened our balance sheet and have a solid financial position with around $24 billion in cash and cash equivalents.

Working capital, which is not included in our cash flow from operations, decreased by $1.8 billion to $3.6 billion. This is a lower level than what we usually have.

Our net debt ratio decreased to 10.4% this quarter, despite three tax installments paid and the state's share of the buyback from last year booked as a finance debt. This state's share of share buyback was paid in early July, and the cash flow impact will be as such in the third quarter.

At current forward prices, we expect the net debt ratio to be somewhat below 10% at the end of the year. Now, to our guidance, where there are no changes.

Our progress is in line with our communicated outlook, both in terms of production, CapEx, and capital distribution. Finally, to conclude, I will refer you back to a slide from our Capital Markets Day five weeks ago.

The second quarter results demonstrate execution in line with the plans we presented to deliver. More energy, 150,000 bpd production growth to 2030.

A growing cash flow, a 30% growth in cash flow from operations, and superior returns. We will continue to lead the industry on return on capital employed, and we aim for 15% through this decade.

Now, thank you very much, and I look forward to your questions. Back to you, Bård.

Thank you, Torgrim, we are ready to start the Q&A. We have a good list already, but let me remind you that you can sign up for asking a question by pressing star one on your phone.

We ask that you limit yourself to two questions each. First, we have Teodor Sveen-Nilsen from SpareBank 1 Markets.

Please, Teodor, go ahead. Your line is open.

Thank you. Good morning, Torgrim and Bård.

Two questions from me. First, on the Johan Castberg production, as far as I understand, there's been some trouble going into Q3.

Just wonder specifically if you can indicate what you expect as net production to Equinor from Johan Castberg in Q3. The second question, that is on downstream and MMP.

We definitely observe the strongest refinery margins going into the third quarter. Could you comment on the profitability of Mongstad this far in third quarter, and what you expect during the second half of this year?

Thanks.

Okay. Thanks, Teodor.

As far as I got, the first question was about Johan Castberg, right? We have had some issues related to the turbines, heat waste.

That took three weeks or 18 days to get in order. We had it back in production from the 13th of July, meaning that the impact of that stop is around 14,000 bpd for next quarter.

That is up and running again. It is a field that is producing very well, clearly.

It is still in a run-in period, so there might always be some operational issues when you have a new field getting there. That is the situation on Johan Castberg.

Could I ask if the 14,000 bpd is that net to Equinor or gross?

Yeah, that is Equinor impact.

Okay.

On the MMP results, a strong result where Mongstad is contributing well with very high regularity. This is part of the other group in the MMP reporting.

It clearly creates significant value at the current refinery margins. To say a little bit about the refinery situation and the margin in Europe, clearly the oil market is tight, but the product market is even tighter.

If you look at the FCC margin for the second quarter, it was actually at some $25 per bbl, which is very significant. We don't give a specific margin for Mongstad, but clearly it is significantly above what it costs to run it at a break even.

So far into this quarter, it continues to deliver strong results. I encourage you to follow the general refinery margins going forward, and that will directly impact the Mongstad delivery.

Thank you. Thank you, Teodor.

Next one on my list is Biraj Borkhataria from RBC. Biraj, please go ahead.

Hi there. Just one question from me.

Your partner, Bay du Nord, gave up their stake, and you were targeting FID in 2027. Are you comfortable to push that project forward at 100%, or would you look to farm it down before progressing it?

Maybe you could just talk a little bit about the Canadian support for that project, because it looks like there's quite a lot of movement and sentiment change on the politics side in Canada recently. Thank you.

Yeah. Okay.

Thank you. Thank you very much, Biraj.

BP is handing over the ownership in that asset to ourselves. There will be ultimately a minimum payment for us for this year, subject to a final investment decision, but a minimum one compared to the size of the opportunity here.

The timeline, there is no change to that. We aim to sanction it in 2027.

Then we are working on bringing in another partner with us in this project. It is an attractive one, fully supported by the Canadian government.

As you would understand, in the current environment, energy security for all countries are very high on the agenda, and the same goes for Canada. This is an attractive investment opportunities that we look forward to realizing together with the Canadian government and potentially additional partners.

Thank you, Biraj.

Thank you.

Thank you. The next one is Santander, Alejandro Vigil.

Alejandro, please go ahead with your question.

Yes, thank you for taking my questions. I missed the beginning because I had some problems, so I don't know if someone asked about the European natural gas market, your expectation for the second half of the year, in general, how you see the balance of demand supply in the market.

The second question is related to that. We are seeing a very strong energy commodity environment, very strong cash flow.

Your leverage now probably would be just below 10%, according to your comments. Is there any room for additional buybacks this year above the $3 billion that you are guiding now?

Thank you.

Thank you very much, Alejandro. Two very important and large questions.

Let me take the first one first on the European gas situation. It is a vulnerable situation, and we might enter the autumn and winter with large uncertainties.

Clearly, the fact that the Strait of Hormuz is where it is, sort of shuts in around 20% of sort of the global LNG, and restricts the global flows of LNG. That directly impacts Europe because currently around 30% of the supply will have to come from LNG, and Europe will compete particularly with Asia for that.

When we combine that with a storage situation in Europe, where the storage filling is at 53%, which is more than 15 percentage point below a normal situation or the average, it leaves ourself that sort of, it is a fairly tight situation. We do assume or expect, I mean, say that the situation around Hormuz is normalizing, and we are back to sort of regular flows of LNG.

Still, we do not believe that Europe will get to 80% storage filling before the winter and will be below that. That is the situation.

Also worth mentioning is that Russian gas will leave Europe. I mean, this year, LNG is going to be stopped, and next year, the remaining piped gas.

There will be even more LNG that needs to come to Europe. First of all, we do hope the situation settles and that we can get back to normal, but we just need to be prepared for volatility and uncertainty in the European gas market.

You would know that sort of we are very well-placed to provide reliable energy into a situation like that, which we take very seriously. We have a cost of gas of $2 per MMBtu.

We're currently selling into a close to $20 market. Just illustrating how important the Norwegian gas is for Europe.

We are the largest energy provider to Europe, and we will continue to take that very seriously. Your second question, strong cash flow leverage and the potential for additional share buyback.

We aim to run with a very solid balance sheet. We have currently a net debt ratio of 10.4%.

Based on the forward curve as they look a couple of days ago, we expect it to be somewhat lower than 10% by year-end, and with a strong cash flow naturally. We intend to run with a very solid balance sheet and particularly in high price environment to build balance sheet to be able to manage low price environments well as such.

The question related with the sort of is there potential for more share buyback this year? The answer to that is no.

When we entered this year, we expected, of course, a much lower oil and gas prices than what we have seen. The way we have distributed or used that additional cash is, first and foremost, we have increased our investment into oil and gas with $1 billion into more in Norway, more internationally, actually adding to the production outlook in 2030.

Secondly, we are strengthening the balance sheet. As we entered 2026, the plan was to lean on the balance sheet.

We will no longer need to do that. We are actually strengthening the balance sheet.

The third priority is actually to double the share buyback for the year. We think this is the best way to create shareholder value and allocate capital in this environment.

From next year, there is a new framework in place, and we look forward to discuss that with you at our fourth quarter results in February next year.

Thank you, Alejandro.

Thank you.

Next question is Henri Patricot from UBS. Henri, please, your line is open.

Yes. Thank you, Bård.

Two questions from me, please. The first one, coming back to the question on European gas and maybe more specifically for Equinor, given the much higher prices that we're seeing at the moment.

I was wondering if there's any flexibility on your side to increased natural gas production in the second half of the year and exports to the European market. Secondly, thank you for the update on Johan Sverdrup production for the year.

Good to see the good performance continues in the second quarter. I was hoping you could elaborate on what is driving the outperformance and the new guidance seems to imply that it should be still quite a large drop in the second half of the year versus the first half.

Could we still see even further outperformance in the second half of the year from Johan Sverdrup? Thank you.

Thank you very much, Henri. When it comes to the overproduction of gas to Europe, we are already producing at maximum, in the short term, there are no additional sort of overall volumes that can be made available.

When that is said, we have flexibility in our production system, and we have flexibility in our transportation system. We will be able to get the natural gas to where it is needed the most and where the price is highest.

Typically, what we have seen over the last year is that German prices have been higher than British prices, more gas has actually gone to Germany in those periods. We will continue to optimize around the volumes that we have to provide Europe with gas where it is needed the most.

Second point on this one is that you are all well aware of that we keep all our exposure to natural gas prices floating, and we also keep it very exposed to the prompt. We have a 70% exposure to day ahead prices and 30% to month ahead.

Meaning volatility in prices will happen. We will be able to steer our gas to where that volatility is and capture the values from that as such.

We will expect, and we do expect more volatility during the next year within that market. On Johan Sverdrup.

Clearly we are using a lot of effort and all our competence to make the most out of Johan Sverdrup, and it continues to deliver better than we had planned. At the point of sanctioning, we expected a recovery rate of 65%.

Now it's actually 75% that we look at, and we increased the plateau level, and we have been able to reduce decline more than we have expected. If I should point to two sort of activities or technologies that are really making a big difference here, the first one is our ability to manage water, because as a field matures, you start to produce more and more water, and then you need efficiently to manage that.

That has gone very well. As we manage water very efficiently, we make room for more oil production.

That is a very important activity. The second one is well placement.

We have now started to retrofit wells with multilaterals, wells that already have been produced and skilled and then splitting into several wells from one well bore. That has also continued to deliver very well, and we will continue with more of those during the year.

First half of the year has gone very well. We will continue to do our very best with Johan Sverdrup, and we'll see how that goes in the second quarter.

Thank you, Henri, for those questions. Michele Della Vigna from Goldman Sachs is up next.

Michele, please go ahead.

Thank you very much. Good to see the contribution of the Adura joint venture this quarter.

I was wondering if you could elaborate a bit there. The company certainly has a lot of space to gear up and finance itself.

What should we expect in terms of dividend from it in the next 12 months? Secondly, you are ramping up more frontier high impact exploration.

I was just wondering if you could lay out by the end of the year what should be the high impact wells we should be looking forward to. Thank you.

Okay, thanks, Michele. First on Adura.

We are very satisfied with having set up that company together with Shell, clearly transforming our cash flow out of the U.K. from actually a negative cash flow due to investments to a positive contribution.

We have received $150 million in capital distribution in the first quarter, and we have also received that now in the second quarter. Over 2026 and 2027, we expect more than $1 billion in capital distribution altogether from Adura.

You asked a question about there is potential to gear up the company. Adura has raised around GBP 3 billion in debt.

It is already fairly levered to an appropriate level as such, giving them even more capacity to make business. On the exploration activities.

Clearly, exploration activity is very important to us. We are drilling 120 wells per year.

Many of these wells are wells close to infrastructure on the Norwegian continental shelf, but actually 20% of the wells in Norway are towards standalone opportunities. There is a continued flow of opportunities with higher impact and a higher upside, but of course, higher risk as well.

Internationally, the program this year is mainly within ILX opportunities in Angola. Similar type of opportunities that we see in Norway.

We have lined up several high impact opportunities internationally. If I should mention a few, it is actually Brazil where we intend to drill a few high impact opportunities through 2027 and 2028.

Among others, the neighboring block to Boomerang in the southern part. So excited, and we'll see where this brings us.

Thank you.

Thank you.

Thank you, Michele. Next one is Martijn Rats from Morgan Stanley.

Martijn, your line is open.

Good morning. Two questions from me, if I may.

I briefly wanted to ask you about the production guidance, because I don't think I've fully understood what you said. As in, you said that with the result achieved in the first half, the full year production guidance is now better underpinned.

I just want to make sure I've got that correct. Also, given the result of the first half, doesn't the full year production guidance now imply a deceleration or a sequential decline into the second half, suggesting perhaps that there may be some upside?

I was hoping you could clarify that. The other point I wanted to pick you up on is the gas price realizations in the United States.

They'd fallen more, at least than we modeled, and I was hoping you could say a few things about it. There seems to be a lot of basis risk and a lot of very local circumstances going on.

Last quarter, you called that position very strategic, and look, it's only one quarter, so that's probably the case. I was wondering if you could say a few things about whether that position is still developing as you initially expected.

Okay. Thank you, Martijn.

First on production guidance. Very strong operations in the first half of the year and better than we planned for when we started the year.

Clearly coming out of good regularity across our operations. Super delivery from operational organizations and also the ramp up of new fields have gone well, and we talked about Johan Sverdrup as one example.

So far this year, 6% growth in a way. I just want to say that it was actually planned for being the growth for the year was planned to be tilted towards the first half of the year based on the ramp-ups of Bacalhau, Johan Castberg, and new startups as such.

That was always the plan. We also say that the expectation for the full year is more robust.

We have decided not to increase the production guidance, in a way. Clearly, we will follow this very closely, and we will revert in the third quarter on production naturally.

We'll see. We'll keep it as it is, but it is a more robust guidance.

The second-

Yeah, the second, the gas price realization. If you look at the quarter as such, Henry Hub came in at $2.9 per bbl.

Our average gas price in the north was NOK 2.3, so a discount of NOK 0.6, which is actually lower than it normally is. It's a little bit higher than that normally.

In general, we are located in the most attractive acreage and basin with very low unit production cost. This continued to be a very strong contributor to our results as such.

Prices were down compared to last quarter, last year by 16%, but still making significant value out of it.

Thank you, Martijn. Next one is Fergus Neve from Rothschild.

Fergus, please, your line is open.

Yep. Morning, everyone.

Thanks for taking my question. Just the one from me.

Looking at MMP, which delivered another strong quarter, given the volatility we saw I was just wondering if you were able to comment on the drivers of the relative mix within the results between gas, oil, and refining, and the movements in those quarter-on-quarter. Whether you could also comment at all on what you've seen in terms of volatility in gas and oil markets in the current quarter, noting that you've already commented a little on the refining side of things.

Thanks a lot.

Thanks, Fergus. Another strong quarter from the marketing and trading organization.

We talked about refinery and Mongstad as a key contributor. The other one that sticks out this quarter is the crude trading, with significant contributions to the results, and larger than what you should expect.

LNG is also doing better than expected. While sort of the normal gas trading is on par with what you should expect as such.

That doesn't stick out as something special. Typical drivers for the results in MMP going forward is clearly volatility, means a lot.

Geographical dislocations, meaning that there are arbitrage opportunities geographically, both on the oil side and on the gas side are key drivers. Of course, if there are things on the curve that gives us opportunities with time arbitrage, as well.

We have guided on a normal quarter of around $400 million per quarter. That remains intact.

We have also said that over time, we expect to increase our guiding to around $500 million as such. This is a special quarter, clearly driven by events in the world, geopolitical events, and we just need to be prepared that the results within this segment will fluctuate as such.

Thank you, Fergus. Next up is Naisheng Cui from Barclays.

Naish, please go ahead.

Hey, good morning, everyone. Thanks for taking my questions.

I have two left please. The first one is on Bay du Nord.

It's a very big, over $10 billion CapEx project. I wonder how sensitive the project economics to the current service cost inflation, and could you remind us what return threshold are you requiring before sanctioning it next year?

My second question is on NCS. One of your Norwegian peers reported about 6%-7% CapEx inflation for its two large growth projects.

I wonder if the NCS CapEx cost is a concern for Equinor as well, and if you can comment on how you have been managing the cost, please. Thank you.

Okay. Thank you, Naish.

The first question was related to Bay du Nord. It is a very significant project and large project, with a large CapEx, $9 billion-$10 billion.

We have worked over time to significantly improve that over the last three years to now be a very robust and a good project. Cost, we have been able to limit cost increases, and we have actually scaled down the scope of the development, and maintain a very attractive returns as such.

This is returns well above what we set as a threshold for investments. On the Norwegian continental shelves, and your question was more in general how we manage cost and all of that.

You know as well, you know that we have a very diligent way of continue to improve our business and improve our project and taking on scale and synergies and all of that. There is one key number that we often use, and that is the break-even related to new developments.

That is now below $40 per bbl. That has actually remained at that level over many years, even if we have, say, 5% inflation one year, 10% the next year, and 5%.

There is an underlying drive to improve and take out cost in the system. We have been able to maintain that even if we have seen inflation.

Second point is that clearly we are a very large developer, particularly in Norway. We have been able to get contracts on frame contracts, long-term contracts, and developing things on a portfolio level.

Last point I would like to make is everything that we now do around NCS 2035, where we do a massive standardization and massive simplification of the new developments. We expect that to lead to reduced CapEx, not increased, but reduced CapEx by 50% through this portfolio.

Even with inflation, we will be able to reduce our investment levels on the Norwegian continental shelf. This is a key part of what we discussed with you on the Capital Markets Day, and we will continue to come back to this topic as we progress.

Thank you, Naish. Next is Matt Lofting from JPMorgan.

Matt, please go ahead with your questions.

Thanks for taking the questions and the update. Two quick ones from me.

First, just on gas, I wondered, Torgrim, if you could just add any perspectives on the demand baseline that you're seeing in Europe currently, perhaps particularly the industry segment, which has tended over the last few years to be a bit more sensitive to price and supply uncertainty. Then second, just within the moving parts on gearing, I wondered if you could just expand on the working cap baseline and ex price effects, perhaps what you're expecting there for the second half of the year.

If I heard right earlier, I think you said that the inventory baseline was a bit lower at this point in the year than would normally be the case. Thanks.

Okay. Thank you very much, Matt.

When it comes to the industrial demand for natural gas in Europe, that has come down after the war in Ukraine. We actually see some 25% down on the industrial demand.

Lately, fairly stable, actually, but there is a reduction in demand. When that is said, the European gas market, if you look at what is needed of new gas to the market, that is actually growing.

There's a growing need for gas in Europe, even if demand industrially has come down. We do expect that the LNG share of the market will have to grow from around 30% today to actually 50% by 2030.

Even with that, we see a rather tight situation over the next few years. Second question on gearing and working capital as such.

We saw a reduction in working capital for the second quarter of $1.8 billion, and working capital level is now at $3.6 billion. That is lower than normal.

It comes from reduction in inventories and also a reduction in account receivables as such. We have also actually fewer cargoes in transit at the end of the quarter due to that shorting sailing distances, the recurrent trading that we are doing.

Going forward, we don't provide a guiding on the working capital, but the absolute price level is clearly an important determinator of the working capital. In general, you could say that if prices are low, working capital should be low.

If prices increase significantly, working capital is expected to be higher, but actually net debt then will go down. Those things hang together.

Working capital clearly will also fluctuate somewhat. It will.

Thanks, Matt. Next up is Chris Kuplent from Bank of America.

Chris, your line is open.

Yeah, thank you very much. Torgrim, two quick questions I've got left.

Firstly, could you update us on the proceeds still to come from the Peregrino disposal, and any update you can give us on timing? A second question, remembering 2022 and 2023, how much flex is there or how much appetite is there to use flex for pulling forward tax payments into the year?

What's your current thinking there around the flexibility that you do have in the Norwegian system? Thank you.

Thank you very much, Chris. Peregrino, we have divested that in two tranches.

We own 60%, so it is a 40% part and there is a 20% part. The 40%, we have received the funds.

The total headline consideration is NOK 3.5 billion as such. The first transaction, the 40%, that is all settled, and we have received the money for that.

The second transaction is the remaining 20%. This is currently classified as held for sale in our books.

There are still some ongoing things related to that part. We do expect that transaction to close maybe towards the end of this year, early next year.

Of course, we are not in full control of everything around that process, so that is what we do expect. Yes.

On the tax-

Just to check on the number, Torgrim. Is most of that item held for sale backed up by Peregrino?

Yes, that is right. It means that sort of revenue, cost, and production is reported as normal, but sort of we do not report depreciation for it as it is held for sale.

Your second question about the tax payment for this going forward, I guess you think about Norway. In the first half of the year, each installment was around NOK 20 billion, we have now indicated to the state that we will pay NOK 23 billion per installment.

There are two installments in the third quarter and three installments in the fourth quarter. It is an increase of some 16% or something like that.

When we set that, we have to inform the tax man that what we are going to pay, we made that judgment of sort of increase and higher prices, as such. There are no plans to make adjustments to that.

However, there is an opportunity to increase it at a point in August, but we have no concrete plans for that currently.

Thank you, Chris. Next one is Sadnan Ali from HSBC.

Sadnan, please go ahead.

Hi there. Thanks for taking my questions.

Just a couple on unit production cost, please. Firstly, in February with the full year results, you had a target to reduce your unit production cost to $6 per bbl for 2026 specifically.

It looks like that was removed with your first quarter results in May. I just wanted to ask what led to that target being removed quietly, if it was?

Secondly, and related, at the June CMD, you introduced a $6 per bbl unit production cost target, but averaging over 2026 to 2030. For your international portfolio specifically, you're expecting a 30% reduction to under $5.50 per bbl.

What about for NCS specifically? Can you share what your current unit production costs are for the NCS and how you think about that trajectory out to 2030, please?

All right. Thanks, Sadnan.

Clearly, unit production cost is a very important metrics for us, and we follow that very closely. We had a slide actually in the Capital Markets Day presentation deck, showing that we are at around six while our peers are around eight.

We continue to operate on a very competitive cost level. The $6 UPC for 2026, that is sort of a combined number across the portfolio, and it's approximately what we do expect for 2026.

EPI and EPN is broadly on the same level as such. Then, in our Capital Markets Day, we said $6 per bbl towards 2030, and $5.50 per bbl for international.

Clearly, broadly the same level in Norway and then international towards 2030. While we're at it, this is clearly a key metrics to measure when it comes to cost.

We have also set a target for the year that we are going to reduce our operating costs and administrative costs, SG&A, by 10% compared to last year. If you study your numbers, you actually see that there is an increase of 11% year-to-date or in the second quarter.

I just want to provide you with some color to that, because that is very much driven by increased transportation costs, related to higher production and also higher operating and maintenance costs due to more assets under operations. If we strip out transportation costs and royalty, we actually have a reduction of 6% compared to last year.

If you then strip out currency impact that we don't have an impact over is actually -10%. We are on track to deliver on this is clearly something that we follow very diligently as such.

Thank you, Sadnan. I have a few left on my list.

Let's try to cover as many as possible before we close at half past as planned. John Olaisen, you are next from ABG Sundal Collier.

John, please go ahead.

Thank you, thanks for taking my question. Two questions.

First, the Roncador field has experienced technical issues that has hampered production over the last three quarters. Can you tell us what is the issue and when do you expect that to be solved?

That was question number one. Number two is related to Adura.

The result jumped from -$90 in Q1 to +$90 in Q2. In Q2, you said that the higher depreciation due to change of principles had lowered the results.

Just wonder now, have the depreciation charges or principles been changed again? Just wonder.

Two questions.

Okay. If we take the Adura question first.

You're right, it goes from -$91 to +$94. I think first of all, that is driven by higher realized prices in the second quarter.

That is an important parameter. Also in the first quarter, there were some one-offs related to establishment of the new company, and there are no sort of changes in depreciation principles through all of this.

When that is said, we have received a dividend of $150 million, both in first quarter and second quarter, which is higher than the reported earnings or net profit in a way. That leads to that the dividend or the capital distribution received is not part of the cash flow from operations that we have reported.

It is a subtraction to the investment cash flow as such. That's the way it's treated accounting-wise.

Actually, the cash flow from operations is a tad stronger than what you should read through the first glimpse of this number. When it comes to Roncador, there have been some operational issues.

We are not operating here, and I think it's better for Petrobras to respond to that. Clearly, we are supporting them, are working very closely with them.

Thanks, John.

Thank you, John. Next one is Jason Gabelman from TD Cowen.

Jason, please go ahead.

Hey, thanks for taking my question. Just one quick one from me.

I'm wondering if the kind of lower gas prices in the U.S. have impacted or have opened up the acquisition window a bit more.

I know you've been focused on expanding your non-Appalachia footprint. Just any thoughts there would be great.

Thanks.

Thanks, Jason. We do believe that natural gas is an attractive commodity to be part of going forward, both in Europe but also in the U.S.

You have seen us doing some significant transactions and acquisition in this space over the last couple of years, bringing the position up to a very significant one. Going forward, we will first and foremost be interested in sort of creating the maximum value out of it.

If there are opportunities, we will always consider that, but nothing to say around that. In general, when it comes to M&A, we have been very active over the last few years, both selling and divesting.

In the international portfolio it's been massively hydrated while actually bringing back $4 billion in net proceeds over the last years as such. We will continue to look for ways to hydrate our international activities.

Thank you, Jason. Let's try to squeeze in one more.

Ahmed Ben Salem from ODDO. Please go ahead.

Hi. Thanks for taking my question.

It's on production growth. Following the startup of Bacalhau and Johan Castberg, which project do you see as a key driver of production growth over the next three to five years?

What do you see as the main risk to delivering this project on time and on budget? Thank you.

Thanks, Ahmed. It's such a large portfolio, there are so many projects coming on stream.

Of course, ramp up of Johan Castberg is on plateau, but ramp up of Bacalhau is important. I'm very glad to report that the wells are working very well on Bacalhau.

We now have three producers on Bacalhau, and we have two gas injectors in place, and we are about to finish the fourth producer also. We do expect Bacalhau to come on plateau by the end of the year, actually.

A very significant contributor in the short term. If you sort of stretch a little bit further out, we have Raia in Brazil coming on stream in 2028.

We have also Sparta in 2028 in the Gulf of Mexico, Rosebank and Jekta in the U.K., typically in 2027. We have PAJ development in Angola that we recently sanctioned, also towards 2028, as far as I remember.

Those are sort of the large contributors. On the Norwegian continental shelf, there are 65 projects underway on ILX opportunities in various waves.

That will be a continued feed in of new tie-in opportunities on the NCS, maintaining the production level towards 2030. As you might remember, we increased the production outlook in 2030 by 100,000 bpd in Norway as such.

It's a very large portfolio, and we're working very hard to realize this and create value.

Thank you, Ahmed, and thank you all for calling in and for your questions. We are a couple of minutes on overtime, I apologize for that.

As usual, the investor relations team remain available, feel free to reach out to any of us during the day or later in the week if there are other topics that you want to discuss further. Thank you all for joining, and have a good rest of the day.