Norway's energy company Equinor is suspending its share buy-back program until further notice due to the current market conditions, the company announced on Tuesday.
"With the spread of Covid-19 and low commodity prices, we are suspending buy-back under the share buy-back program until further notice," Eldar Saetre, president and CEO of Equinor said.
The Norwegian company additionally started to implement measures to reduce operating costs, capex, and exploration expenditure.
The presentation of an updated outlook to the market is expected by the end of March 2020.
"As a result of significant improvements in recent years, Equinor has a strong balance sheet and is in a good position to deal with the current circumstances, as well as uncertainties in front of us. We are now taking actions to remain resilient in a period of low prices, volatility and market uncertainty, in line with our contingency plans," said Eldar Saetre, president and CEO of Equinor.
The share buy-back program of up to $5 billion, which was expected to run until 2022, was announced on Sept. 5, 2019 together with the launch of the first tranche that was executed in the market in the period up to Feb. 4, 2020.
"A proportionate share of the Norwegian State holding will as planned be redeemed and canceled following approval from the Annual General Meeting," the statement read.
Equinor announced on Feb. 6 its intention to launch a second tranche of around $675 million, including the Norwegian State share, between around May 18 May and Oct. 28, 2020.
However, under the current market conditions, which are subject to commodity price conditions, balance sheet strength and renewal of authorization to execute share buy-back at the annual general meeting, the second tranche will not go ahead as previously planned until further notice.
By Murat Temizer