UPDATE 4-Equinor sells U.S. Bakken shale property, posts report reduction for 2020

* Sells Bakken assets for $900 mln to private fairness buyer

* Posts file yearly internet loss of $5.5 bln

* Revises down 2021-2022 investment decision strategies

* Q4 altered earnings in line with anticipations

* Shares tumble 2.1% (Provides CEO job interview, context on Bakken, updates share)

OSLO, Feb 10 (Reuters) – Norway’s Equinor has agreed to sell its assets in the U.S. Bakken shale oil province following a ten years of multibillion-dollar losses and criticism for poor financial investment choices.

Equinor will promote the belongings in the states of North Dakota and Montana to Grayson Mill Power, a enterprise backed by private fairness agency EnCap Investments, for all around $900 million.

The Bakken region was created for the duration of previous decade’s U.S. shale boom, and at this time provides much more than a million barrels of oil a day, about 50 % the peak achieved in late 2019.

The location has a substantial for each-barrel price of manufacturing and investor requires for cash discipline have induced producers to throttle again output given that the coronavirus pandemic erupted.

“Equinor is optimising its oil and gas portfolio to bolster profitability and make it a lot more sturdy for the long run,” CEO Anders Opedal claimed in a assertion.

“We are realising proceeds that can be deployed in direction of much more aggressive property in our portfolio,” he included.

Opedal declined to say no matter if Equinor planned to provide far more foreign assets, but included it was happy with its remaining U.S. operations.

“We even now have a very good place in the Marcellus and also in the U.S. Gulf of Mexico,” he advised Reuters. “We will also concentration on our operations in Brazil and Britain, and look for to enhance our international small business as operators or associates.”

An exit from the Bakken, which the Norwegian enterprise entered in 2011 by acquiring Brigham Exploration Company for $4.7 billion, follows the sale of its operated property in the Eagle Ford for $325 million to Repsol in November 2019.

In between 2007 and 2019, Equinor recorded an accounting loss of $21.5 billion on its general U.S. actions, like $9.2 billion because of to impairments of onshore shale and other assets, a firm-commissioned report by accountants PwC has demonstrated.

Norwegian lawmakers have urged the authorities, as Equinor’s largest shareholder, to consider a extra lively position, and Electricity Minister Tina Bru has demanded much more transparency from Equinor.

Equinor individually reported a file once-a-year web decline of $5.5 billion for 2020, as the pandemic weighed on oil and gasoline price ranges and led to big writedowns.

It also reduce its prepared funds expenditure for 2021-2022.

The firm programs to make investments $9 billion to $10 billion in each individual of the two many years, when compared with its earlier steering of $10 billion in 2021 and $12 billion in 2022, partly affected by a increase in the Norwegian currency from the greenback, it claimed.

Equinor documented modified fourth-quarter functioning revenue of $756 million, mostly in line with analysts’ forecasts, and will spend a quarterly dividend of $.12 for each share, a single cent up from the third quarter, but down from $.27 a year previously.

The dividend was modest, Citi analysts claimed in a be aware to shoppers, leaving Opedal with economical firepower to speed up the company’s growth into renewable power.

Equinor’s shares had been down 2.1% at 1245 GMT, underperforming a flat Oslo benchmark stock index.

UNDERESTIMATED COMPLEXITY

Equinor developed 48,000 barrels of oil equivalent per day from its 242,000 acres in the Bakken in the fourth quarter, about 15% of its U.S. output.

Most of the losses gathered onshore in the United States around the very last 10 years were being brought about by reduce-than-expected oil and gas charges, the corporation has mentioned.

That is not exclusive to Equinor, and numerous other oil companies that invested in shale took a hit when oil price ranges crashed in 2014, the PwC report revealed past October claimed.

On the other hand, Equinor underestimated the complexity of operating U.S. onshore property and management did not deal with challenges in a timely method, it included.

Since 2013, the business has improved its technique to target on worth alternatively than expansion, and claims it has mounted most of the concerns similar to its onshore U.S. operations.

Editing by Terje Solsvik, Barbara Lewis and Mark Potter