OKEA ASA

Annual Report • Apr 8, 2024

Untitled document Annual report OKEA ASA 2023 Table of contentsPage 2 Table of contents Letter from the CEO............................................................................................3 Board of director’s report.....................................................................................6 Corporate governance report.............................................................................. 34 Reporting on payments to governments............................................................... 51 Financial statements.......................................................................................... 55 Independent auditor’s report.............................................................................113 Letter from the CEO Annual report 2023 Letter from the CEOPage 4 Letter from the CEO 2023 was an eventful year for OKEA. Solid performance delivered by our operated assets, Draugen and Brage, were key contributors towards a record high EBITDA of NOK 5.8 billion for the year and a cash generation from operations equivalent to NOK 50 per share. Following thorough assessments, closing of the Statfjord transaction were completed in December. The reduction in volume estimates from RNB 2023 to RNB 2024 of 10-15% from the Statfjord area, a majority of which in the near term, was the main driver for the significant goodwill impairment in the fourth quarter. Despite the adverse volume update just before closing, we still believe in the potential at Statfjord. I have confidence that, as a licence partner, our team will be able to contribute to realise further value from the area. Unlocking the potential of Statfjord, in close collaboration with operator, will be a key priority in 2024. The Draugen asset has continued to perform well in 2023 under OKEA’s operatorship. This is a result of an efficient organisation that knows the asset well combined with assigning responsibilities at the right level in the organisation. The Hasselmus gas tie- back project commenced production on 1 October, three months ahead of schedule and within budgeted cost. Hasselmus was OKEA’s first field development project as operator and demonstrates the organisation’s ability to also deliver on organic growth. In December, the Ministry of Energy approved the plan for development and operation and the plan for construction and operation to electrify the Draugen and Njord assets. Electrification of Draugen is an important enabler in extending the field lifetime beyond 2040 and will result in a reduction of CO2 emissions from the Draugen field alone of 200,000 tonnes per year. OKEA took over operatorship of the Brage asset in November 2022 with a focus on revitalising the asset through drilling of development and infill wells, reducing production expense per boe, and increasing production efficiency. In 2023, the first full year as operator, OKEA delivered a production efficiency of 93% and a production increase from Q4 2022 to Q4 2023 of 350% which represents an increase of 6,000 boepd net to OKEA. Safeguarding the well-being of all personnel and the safety of OKEA’s assets will always be a key priority for the organisation. Our objective is to ensure that all our activities are carriedoutwithzeroharmto peopleand environment. Theadverse trend noted onsafety performance in 2023 is taken very seriously, and we are committed to continuously improving HSE performance. TherecordhighEBITDAin2023resultedinstrongcashflowsfromoperationswhichwere partly used for acquisition of assets, organic investments, and dividends to our shareholders. Letter from the CEOPage 5 Inthefallof 2021, OKEA announcedarevisedstrategywithanambitiontobetheleading mid- to late-life operator on the Norwegian continental shelf. Within two years, two significant transactions have been completed that will increase production to 35,000 - 40,000 boepd in 2024, which is more than a doubling from the time of launching the strategy. I consider the company well positioned to continue to execute on our growth strategy and deliver value to our shareholders going forward. I want tothankour employees, shareholders,bondholdersand banks,suppliers,partners and board of directors for all their efforts and for believing in and supporting our strategy and ambitions. Signed Annual report 2023 Board of directors’ report Board of directors’ reportPage 7 The board of directors Chaiwat Kovavisarach – chairman of the board Non-executive Chaiwat Kovavisarach (born 1966) has been the president and group CEO of Bangchak Corporation Public Company Limited since 2015. He also serves on the board of several listed and non-listed companies and is chairman of the Thai-Europe Business Council, vice chairman of the Federation of Thai industries, executive chairman of the Board of Trustees of the Asian Institute of Technology, director of the Government Pension Fund, director of Bank of Thailand’s Credit Information Protection Committee and board of trusteeof KMITL. HeholdsaMasterof EngineeringfromtheAsianInstituteofTechnology (AIT), an MBA from Thammasat University and a Bachelor of Engineering from King Mongkut’s Institute of Technology Ladkrabang (KMITL). Rune Olav Pedersen – board member Independent, non-executive Chair of the audit committee Rune Olav Pedersen (born 1970) has been president and CEO of PGS ASA (“PGS”) since 2017.Priorto 2017,MrPedersenheldthepositionofexecutivevicepresidentandgeneral counsel at PGS. Prior to joining PGS, he was partner in the oil and gas department of the law firm Arntzen de Besche. Mr Pedersen has a law degree from the University of Oslo, a post-graduate diploma in European competition law from Kings College London, and an Executive MBA from London Business School. Finn Haugan – board member Independent, non-executive Chair of people and organisation committee and member of audit committee Finn Haugan (born 1953) was the CEO of SpareBank 1 SMN from 1991 to 2019. He was deputy CEO of Fokus Bank (Danske Bank) from 1989 to 1991. Mr Haugan currently holds various director roles including for listed companies Norbit ASA and SpareBank 1 Sørøst- Norge as well as for Sinkaberg Hansen AS, Elekt AS, Folkeinvest AS, Borg Forvaltning AS and Solon Eiendom AS. Mr Haugan holds a master’s degree in business administration (MBA). Board of directors’ reportPage 8 Nicola Gordon – board member Independent, non-executive Chair of the sustainability and technical risk committee Nicola Gordon (born 1957) has many years of experience from the energy industry. Her 35+ years of experience from the Royal Dutch Shell Group includes vice president for Shell International, asset manager and board director at A/S Norske Shell and managing director at Shell Denmark. Ms Gordon currently holds several board positions, among others as chair of the audit & risk committee at the Scottish Environment Protection Agency and trustee at the Scottish Ensemble and the Royal High School Preservation Trust. She is a Chartered Engineer and Fellow of the Energy Institute and holds an MSc in Petroleum Engineering from Heriot-Watt University and a BSc in Chemical Engineering from University of Newcastle upon Tyne. Mike Fischer – board member Non-executive Vice chair, member of the people and organisation committee and member of sustainability and technical risk committee Mike Fischer (born 1958) has nearly 40 years’ experience from various roles within the oiland gasindustry.DrFischerhaspreviouslyheldseniormanagementpositionsatOphir Energy, OMV, Woodside Energy and BP and is currently an executive advisor to the Natural Resources business unit of Bangchak Corporation Public Company Limited. He holds a PhD from the University of Wales and a BSc from the University of Leeds. Jon Arnt Jacobsen – board member Independent, non-executive Member of the audit committee and member of the people and organisation committee Jon Arnt Jacobsen (born 1957) has extensive experience from the energy industry. He has 24 years of executive management experience from Equinor ASA within corporate finance, refining marketing and trading, procurement as well as internal audit and corporate security. He also has 12 years experience from various management positions from DnB ASA within corporate banking both for the oil & gas industry and Norwegian corporates. Mr Jacobsen was also General manager for DnB´s Singapore branch from 1995 to 1998, and has previous experience as board member in Mesta AS, Storebrand ASA andStatoil Fuel &Retail ASA.He hasa BusinessdegreesfromAgderRegionalCollege (DH kandidat), Norwegian Business School (Bedriftsøkonomisk Inst., Dip.Øk.) and University of Wisconsin (MBA). Board of directors’ reportPage 9 Phatpuree Chinkulkitnivat – board member Non-executive Member of the audit committee Phatpuree Chinkulkitnivat (born 1974) is currently Group CFO at Bangchak Corporation Public Company Limited, a leading energy company in Thailand. She had more than 20 years’ experience from the banking industry prior to joining Bangchak and held the position of CFO at BCPG Public Company Limited, a flagship in the power generation business of Bangchak Group. Phatpuree holds a Master of Business Administration (High Distinction) from the University of Michigan, USA, and a Bachelor of Economics (First Class Honors) from Chulalongkorn University. Elizabeth (Liz) Williamson – board member Independent, Non-executive Member of the sustainability and technical risk committee Liz Williamson (born 1984) is the Head of Energy for Rand Merchant Bank and is responsible for M&A transactions in the renewable and oil & gas space across Africa. She has led the growth of the bank’s international energy strategy since 2018 and is based in London. Originally from Texas, Ms Williamson started her career in private equity, focused on US upstream transactions. Thereafter she joined GMP Securities and Canaccord where she advised international E&P companies on capital markets and M&A. Ms Williamson holds an Honours degree from Davidson (North Carolina, USA) and a Masters in Energy Finance from the City University London, Bayes Business School. Sverre Nes – board member Employee elected Member of the sustainability and technical risk committee Sverre Nes (born 1971) was employed in Hydro from 1991 to 2012. He is trained as process technician and worked in various departments including a stationing in Qatar as supervisor in 2009-2010. Mr Nes joined Wintershall DEA in 2013 and currently works offshore at the Brage platform as discipline responsible for process. Ragnhild Aas – board member Employee elected Member of the audit committee Ragnhild Aas (born 1973) holds the position of VP technology & development in OKEA. She has worked in OKEA since 2016 and previously held the position as VP operations. Prior to joining OKEA she worked in Altera Infrastructure for 16 years where her last position wasFPSOOperationsManager.MsAasholdsan MScin ProcessEngineering from Norwegian University of Science and Technology (NTNU). Board of directors’ reportPage 10 Per Magne Bjellvåg – board member Employee elected Member of the people and organisation committee Per Magne Bjellvåg (born 1969) has nearly 30 years of experience in the oil and gas industry from various positions within operations and maintenance of onshore and offshore processplantsaswellasunderwaterinstallations.He currentlyholdsthe position of lead process engineer in OKEA and has worked for OKEA since 2018. He has previous experience from Norske Shell and FieldTalk Solutions. Mr Bjellvåg holds a BSc in Process Engineering from Høgskolen Stord Haugesund. Board of directors’ reportPage 11 Board of directors’ report 2023 (Amounts in parentheses refer to previous year) Description of the company OKEA is a leading mid- to late-life operator on the Norwegian continental shelf (NCS). The company has a strong asset portfolio including the Draugen and Brage fields, which are operated by OKEA, as well as partner shares in the Gjøa, Ivar Aasen, Nova, Yme and Statfjord fields. In 2023, the portfolio produced 35,385 boepd including 10,799 boepd from the Statfjord area which was acquired from Equinor in 2023. In addition to the inorganicgrowthfocus,OKEA also hasactivitiesin projectsunderdevelopment,including Draugen power from shore and drilling of new infill targets. In addition, discoveries, including Hamlet, Calypso and Brasse are under evaluation for development, and the company’s portfolio further includes exploration licences with planned and possible wells in the future. OKEA is head quartered in Trondheim, with major operations centres in Kristiansund and Bergen, and offices in Stavanger and Oslo. As an operator on the NCS, OKEA carries out various activities related to production of hydrocarbons from existing assets, as well as development of new oil and gas fields. These activities take place at multiple locations both offshore and onshore. Each of the business functions within OKEA contributes to this work in a highly collaborative team effort, working closely with our third-party contractors and licence partners. Environmental, social and governance (ESG) matters are of significant importance to the board of directors. Continuous focus on securing safe and secure operations and efficient use of existing infrastructure to reduce emissions is essential for the company’s licence to operate as well as enabling long-term value creation for shareholders. Completion of the Statfjord transaction The transaction with Equinor for 28% working interest (WI) in PL037 (Statfjord area) with effective date on 1 January 2023 was completed on 29 December. All transactions and activities prior to completion were accounted for in the purchase price allocation (PPA) and not included in the statement of comprehensive income and key figures. All identifiable assets and liabilities were recognised in the financial statements at fair value on completion date. The excess of consideration above the fair value of assets less liabilities was recognised as ordinary goodwill which was impaired at date of completion. The goodwill impairment was mainly a result of a reduction in estimated production and Board of directors’ reportPage 12 reserves from input to Revised National Budget (RNB) 2023 to RNB 2024. RNB 2024 indicated a 10-15% reduction in volumes over the lifetime of the acquired assets in addition to an increase in costs. The decrease in volumes was most significant in the near-term. The agreement contains a contingent consideration structure based on profit sharing on crude oil volumes sold at a realised price of 75–96 USD/bbl in 2023, 64–85 USD/bbl in 2024, and 53–72 USD/bbl in 2025, as well as on dry gas volumes sold at a realised price of 170-341 p/th in 2023, 125–248 p/th in 2024, and 37–75 p/th in 2025. The profit sharing within these limits is 90% after tax to Equinor and 10% to OKEA. For realised prices on crude oil above 96 USD/bbl in 2023 and 85 USD/bbl in 2024 and realised prices on dry gas above 341 p/th in 2023 and 248 p/th in 2024 the profit sharing is on 50/50 after tax basis. OKEA keeps 100% of realised oil prices above 72 USD/bbl and gas prices above 75 p/th in 2025. All numbers are stated in real 2023 and realised prices are based on annual averages. There is no contingent payment structure for NGL. The Purchase Price Allocation (PPA) includes estimated fair value of the contingent consideration which will be revalued at each balance sheet date. Any changes in valuation will be recognised as other operating income / loss(-). For asset removal, an obligation estimated for the full working interest of OKEA was recognised. As the sales and purchase agreement stipulates that Equinor shall cover all costs for removal of Statfjord A, the fair value of the removal of Statfjord A was recognised as an asset retirement reimbursement right. Technical goodwill was recognised as an offset to deferred tax on oil and gas properties and will be tested for impairment at each balance sheet date as part of the cash generating unit. Any impairment of technical goodwill will not be reversed. In the PPA, NOK 1,003 million was recognised as technical goodwill . Technical goodwill will be impaired over the lifetime of the asset as the remaining recoverable amount from the assets gradually reduces below the book value of the fixed asset recognised as an oil & gas property. Reference is made to note 16 to the financial statements for further details on the PPA. Operational review In 2023, OKEA participated in production from six fields: Draugen (44.56% and operator),Brage(35.2%and operator),Gjøa(12%),IvarAasen(9.2385%),Yme (15%), and Nova (6%). Net production for the year averaged 24,586 (21,037) boepd, split between liquids and gas by 75% and 25% respectively. In 2023, activities from the 28% WI in Statfjord acquired from Equinor were not included in the statement of comprehensive income and key figures prior to closing on 29 December 2023. If volumes from Statfjord had been included in those figures from effective date on 1 January 2023, production for OKEA would have been 10,799 boepd higher and totalling 35,385 boepd. Net sold volumes for the year averaged 28,224 (16,252) boepd. Board of directors’ reportPage 13 Draugen (Operator, 44.56%) The Draugen field is located in the southern part of the Norwegian sea at a water depth of 250 metres. Draugen was discovered by Shell in 1984, the plan for development and operation (PDO) was approved in 1988, and production started in 1993. The field was developed using a fixed concrete facility with integrated topside and production comes from both platform and subsea wells. Oil is extracted from two formations. The main reservoir is in sandstone of Late Jurassic age (the Rogn Formation) while the western part of the field also produces from sandstone of Middle Jurassic age (the Garn Formation). The reservoirs lie at a depth of 1,600 metres, are of excellent quality and are relatively homogeneous across the field. Stabilised oil is stored in tanks at the base of the facility and two pipelines connect the facility to a floating loading-buoy from where it is offloaded and exported by tankers. Production of gas from the Hasselmus tie-back commencedon1OctoberwhichallowedDraugentouseitsowngasforpowergeneration at the platform as well as export gas via Åsgard Transport. Hasselmus is expected to add a total of gross 10.4 mmboe of natural gas and has also enabled restart of export NGL from Draugen. Hasselmus was OKEA’s first development project as operator. The Draugen field produced 6,487 (6,767) boepd net to OKEA in 2023. Production efficiency 1 was83% (94%).Thelowerproduction wasmainly due to generalfield decline, threeweeksplannedmaintenanceturnaroundinthesecondquarter,and a planned shut- in of subsea wells to instal new subsea pumps in July. A licence extension programwaslaunched in 2019 with the aimofextending the Draugen licence and lifetime from 2024 to 2040. The comprehensive program involved several disciplines across the organisation and included development of a new application to document safe production and resource management towards 2040. Third-party analysis and evaluations were used where relevant to document the conclusions and modification requirements. The application was sent to the Norwegian Ocean Industry Authority and the Norwegian Offshore Directorate in March 2023, which is one year prior to expiry of the existing consent. The application was approved by the Norwegian Ocean Industry Authority and the Norwegian Offshore Directorate on 8 March 2024. The drilling campaign of the two observation wells in Springmus East and Garn West South was completed in July from the Transocean Endurance rig. The well in Springmus East proved an 8 meter hydrocarbon column present in the structure and Garn West South proved an 11.5 meter hydrocarbon column. Post well evaluations are now completed. The base case volumes look attractive and the volumes uncertainties are 1 Production efficiency = actual production / (actual production + unscheduled deferment+ unscheduled deferment) Deferment is the reduction in production caused by a reduction in available production capacity due to an activity, an unscheduled event, poor equipment performance or sub-optimum settings. Board of directors’ reportPage 14 currently being assessed along with planning of further maturation towards potential development. An investment decision for the Power from shore project was made and a revised PDO was submitted to the Ministry of Energy in the fourth quarter of 2022. The revised PDO was approved in December 2023. The project is expected to result in average annual reductions of CO2 emissions of 200,000 tonnes from Draugen and 130,000 tonnes from Njord as well as average annual reductions of NOX emissions of 1,250 tonnes from Draugen and 520 tonnes from Njord. The project will result in reduced production expense and extend the economic lifetime of the Draugen field. Brage (Operator, 35.2%) Brage is an oil and gas field located in the northern North Sea, 125 kilometres west of Bergen. The water depth is 137 metres. Brage was discovered in 1980, and the PDO was approved in 1990. Production started in 1993. Brage has been developed as a fixed integrated production, drilling and accommodation facility with a steel jacket. Brage produces oil from sandstone of the Early Jurassic age in the Statfjord Group, and sandstone of the Middle Jurassic age in the Brent Group and the Fensfjord Formation. The reservoirs lie at a depth of 2,000-2,300 metres. The main drainage strategy is water injection, with gas lift utilised in most wells. Brage oil is exported via the Oseberg Transport System (OTS) to the Sture terminal. The gas is exported via pipeline to Kårstø for processing and further export into the dry gas area of Gassled and the NGL are lifted by vessels from Kårstø. The Brage field produced 4,856 (2,568) boepd net to OKEA in 2023. Production efficiency was 93%. Production drilling on the Brage platform is expected to continue in the coming years, targetinginfillwellsanddevelopment of newresources. Production fromthe TaliskerEast well commenced in May. A Sognefjord gas producer commenced production in the third quarter. The Cook and Fensfjord wells commenced production in the fourth quarter. Drilling of the Talisker East water injector started in December and start-up commenced in February 2024. The next planned well is an oil producer from the Brent formation in the southern part of Talisker East. This development well is followed by an infill oil producer in the northern part of the Fensfjord formation. The newly established Sognefjord East project is being matured to target a producer in the already proven resources (Kim-area) and further map the full area potential. Gjøa (Partner, 12%) The Gjøa field, operated by Neptune Energy Norge AS, was discovered in 1989, and the PDOwasapprovedbytheNorwegianauthoritiesin2007.Productionstartedin2010.The field was developed using a semi-submersible production facility with five subsea templates tied back to the facility for processing and export. Oil is exported by pipeline to Mongstad, and gas is exported by pipeline to St. Fergus in the UK. The semi- submersible Gjøa production unit is partly electrified by power from shore. Board of directors’ reportPage 15 The Gjøa P1 segment, located in the northern part of the field, was developed as a tie- back to the main subsea facility via a 5 km oil pipeline and a 2 km gas pipeline at a water depth of 340 metres. Production from the P1 well started in February 2021. The Gjøa field, produced 5,812 (6,932) boepd net to OKEA in 2023. Production efficiency was 94% (90%). The reduced production was mainly driven by general field decline. The Gjøa partners started receiving compensation for the deferred production related to the Duva tie-in scope in 2021 and related to the Nova tie-in scope from July 2022. Compensation volumes received amounted to 567 (596) boepd in 2023. During 2023, 83% of the produced volumes was replaced by maturing of resources and improved reservoir performance. Contingent resources have also increased significantly during the year. IOR (Increased Oil Recovery) targets are under evaluation utilising new reprocessed seismic data. Ivar Aasen (Partner, 9.2385%) The Ivar Aasen field, operated by Aker BP ASA, was discovered in 2008 and is located at Utsira High in the North Sea. First oil from the field was produced on 24 December 2016, four years after the PDO was submitted. The field is a coordinated development with the Edvard Grieg field, which is located ten kilometres southeast of Ivar Aasen. Oil and gas are transported to the Edvard Greig platform for final processing. From there, oil is exported to the Grane oil pipeline and on to the Sture terminal. The Ivar Aasen field produced 3,009 (2,998) boepd net to OKEA in 2023. Production efficiency was 92% (82%). A well intervention campaign was successfully completed in thefourthquarter. Additionalcampaignsare planned in 2024 aiming to reduce production decline. Recompletion of the D-8 well to a water injection was completed in the fourth quarter. Preparations for the IOR 2026 campaign started during the fourth quarter with potential new wells being considered. Yme (Partner, 15%) The Yme field is an oil field located in the southeastern part of the Norwegian sector of the North Sea at a water depth of 77-93 metres. The field was discovered by Statoil in 1987 and started production in 1996. Low oil prices led to abandonment of the field in 2001. OKEA acquired a 15% ownership interest in Yme in 2016 and started preparing a new PDO. Yme started producing again on 25 October 2021 with Repsol Norge AS as operator. The field comprises two separate main structures, Gamma and Beta, which are 12 kilometres apart. The Gamma and Beta structures comprise six deposits. The reservoirs are in sandstone of Middle Jurassic age in the Sandnes Formation, at a depth of 3,150 metres. They are heterogeneous and have variable reservoir properties. The fieldisproducing froma leased jack-up rig equipped withdrilling and production facilities. Board of directors’ reportPage 16 Oil is transported with tankers and associated gas is used for power consumption or reinjected in the reservoir. The Yme field produced 2,809 (1,429) boepd net to OKEA in 2023. Production efficiency was 73% (21%). The Beta North drilling campaign, employing the Valaris Viking drilling rig, was finalized inJanuary. Beta Northisasubseatie-back to Yme and includestwo newproduction wells and one injector well. In the Yme Gamma campaign two producer wells were drilled and came on stream during the third quarter. A new injector was drilled in the beginning of October and the last producer is currently scheduled to come on stream in the first half of 2024. The license is assessing a multilateral well solution for the planned C-3 sidetrack. An investment decision is expected in the first quarter of 2024. Nova (Partner, 6%) The Nova field, operated by Wintershall Dea Norge AS, was discovered in 2012 and is located 120 kilometres northwest of Bergen and 17 kilometres southwest of Gjøa at a water depth around 370 metres. The PDO was approved in 2018, and the field started production in July 2022. The field consists of two subsea templates, one with three oil producers and one with three water injectors, tied back to the Gjøa platform. The host platform provides gas lift and water injection to the field and receives the Nova hydrocarbons. The Nova field produced 1,612 (345) boepd net to OKEA in 2023. Production efficiency was 98% (81%). A side-track drilling operation to improve location of one of the injector wells was successfully completed in the second quarter which resulted in improved water injection and increased production. Production at Nova remains somewhat limited by reduced effectiveness of the water injectors. A rig has been secured to drill a fourth water injector well in the second half of 2024 which will enable the operator to target the best location for the fourth water injector and further improve the water injection at the field. Development of a new well for production is currently being evaluated by the licence. Statfjord area (Partner, 28%) On 29 December 2023, OKEA announced completion of the Statfjord transaction with Equinor Energy AS, acquiring 28% WI in PL037 (Statfjord area) with effective date 1 January 2023. The acquired portfolio comprises 23.93123% WI in Statfjord Unit, 28% WI in Statfjord Nord, 14% WI in Statfjord Øst Unit and 15.4% WI in Sygna Unit. The Statfjord assets provide a significant increase in total production and reserves to OKEA and enhances Board of directors’ reportPage 17 diversification and portfolio robustness. Net production to OKEA from Statfjord area was 10,799 boepd in 2023. A new power solution will be implemented on Statfjord C which will reduce emissions. A steam turbine will produce electricity based on surplus heat from two gas compressors with scheduled start-up in 2026. The project is expected to reduce annual CO2 emissions by 95,000 tonnes, and will also reduce production expense which will be an important contribution to extend the fields life to 2040. Production start for the Statfjord Øst project was in August 2023. A pipeline from Statfjord C to Statfjord Øst was installed and four new wells drilled from existing subsea templates in 2023. The final well will be finalized in 2024. The Statfjord Øst project contributes with 26 million boe reserves (gross) and also contributes to extending the life of Statfjord C to 2040. OKEA’s main focus as a licence partner will be to enhance operational deliveries from the Statfjord area. A strong and productive collaboration with Equinor’s FLX organisation and the broader partnership has already commenced and OKEA will actively pursue opportunities for improvement. Nevertheless, it is imperative for the company to fulfil its duty to its owners and other stakeholders by thoroughly examining the circumstances surrounding the transaction. Considering this responsibility, OKEA has decided to initiate legal actions against Equinor Energy AS as a time-barring action in accordance with the SPA regulations. This step is essential to safeguard the company’s legal position and to investigate the basis for any potentialbreachesofthe SPA.Atthisstage,no concrete ordefined claimhasbeen made, as further investigations are necessary to determine the facts. Development projects Draugen power from shore (Operator, 44.56%) OKEA and Equinor in collaboration with the licence partners have established a joint project to electrify the Draugen and Njord A platforms. OKEA is responsible for developing the power infrastructure from shore to Draugen including modifications on Draugen. Equinor is responsible for the cable from Draugen to Njord including modifications on Njord A. Draugen and Njord will be connected to the power grid at Tensio’s transformer station at Straum in Åfjord municipality, where Statnettassessestheconnectionasoperationallysoundwithoutaneedforreinforcement of the power grid. The PDO and PIO were approved by the Ministry of Energy in December 2023. The Ministry of Energy also awarded OKEA and Tensio TS concession to build, own and operate facilities to provide the Draugen and Njord installations with power from shore. Board of directors’ reportPage 18 The project will result in average annual reductions of CO2 emissions of 200,000 tonnes from Draugen and 130,000 tonnes from Njord as well as average annual reductions of NOX emissions of 1,250 tonnes from Draugen and 520 tonnes from Njord. The project will result in reduced production expense and extend the economic lifetime of the Draugen field and is expected completed in 2027. Brasse (Operator, 39.2788%) In December 2022, OKEA entered into an SPA with DNO Norge AS for 50% WI in the Brasselicence(PL740)witheffectivedate1January2023.Thetransactionwasconcluded at zero cost to OKEA. To reduce cost and maximise the synergies with Brage, the operatorship of Brasse was transferred from DNO to OKEA on 1 September 2023. Commercial terms for the tie-in of Brasse to Brage are being negotiated with the Brage licence where OKEA is the operator and holds a 35.2% WI. In order to improve alignment of ownership in the Brage and Brasse licences, OKEA entered into an SPA with M Vest Energy AS to divest 4.4424%WI in Brasse with effective date 1 January 2023. OKEA also entered into an SPA with Lime Petroleum AS to divest 6.2792 %WIin Brasse with effective date 1 July 2023. Bothtransactionswerecompleted in the fourth quarter. The target for the new partnership is to undertake a fast-track, low-cost review to assess whether a value accretive development concept can be established for the estimated 27.64 mmboe gross recoverable Brasse volumes. The project is currently being matured as a tie-in to Brage concept with a plan to submit a PDO in the second quarter of 2024. Exploration licences In November 2022, the Neptune Energy-operated Calypso exploration well (6407/8-8 S) inPL938wasdrilledandadiscovery wasmade.The wellislocatedinthegreaterDraugen area and was drilled to a vertical depth of 3,496 metre. An estimated 8 metres thick gas column and 33 metres thick oil column in a 132 metres thick Garn Formation sandstone reservoir of good to very good quality was encountered. Estimated recoverable volume range are of 11-19 mmboe. OKEA is working with the operator Neptune Energy and partners in the PL938 Calypso license to mature the discovery further towards a feasible development option. In the third quarter 2022, OKEA entered into a licence swap agreement with Equinor Energy AS (Equinor) to acquire a 20% WI in the Equinor-operated PL1014 exploration licence, containing the Arkenstone project, in exchange for a 10% working interest in the OKEA-operated PL1119 licence, including the Mistral prospect. The agreement included transfer of operatorship of the licence from OKEA to Equinor. The agreement was approved by the authorities in November 2022. The PL1014 Arkenstone and PL1119 Board of directors’ reportPage 19 Mistral exploration wells are currently in the planning phase. Both licenses are operated by Equinor, and drilling is planned for both wells in the third quarter of 2024. Located 23 kilometres north of Gjøa, in a neighbouring licence which OKEA is not part of, Ofelia will be considered for development as a tie-back to Gjøa. OKEA, together with the other license owners will also evaluate if the oil and gas discovery Gjøa Nord (Hamlet) can be developed jointly with Ofelia to optimise cost synergies. InJanuary2024, OKEAwasawardedthreenewlicencesinthe2023AwardsinPredefined Areas (APA). PL1223 in the Norwegian Sea is OKEA operated and holds the Galtvort discovery which will be considered developed towards the Draugen hub. The other two licences are located east of Statfjord East (PL1214) and south of Njord and Draugen hubs (PL1222). Reserves and resources 2P reserves increased by 38% from 60.2 million boe to 83.2 million boe during 2023. The reduction of production in 2023 was 8.9 million boe. The main increased of reserves are driven by the acquisition of interests in the Statfjord area from Equinor, which contributed with 32 million boe. The positive contributions of 4.4 million boe fromorganic maturation (Gjøa, Brage and Draugen) were offset by downward revision of 4.6 million boe mainly driven on Yme. Contingent resources (2C) increased by 50% from 43.2 million boe to 64.6 million boe during 2023, mainly due to the acquisition of working interests in the Statfjord area and Brasse. Strategy The board annually evaluates the company’s financial status, strategy and goals. In the fall of 2021, OKEA launched a refreshed strategy based on the vision of being the leading mid-to-late-life operator on the NCS which the company still is committed to. OKEA has a clear ambition to deliver competitive shareholder returns driven by solid growth, value creation and capital discipline and the strategy is centred around three growth levers: · actively pursue further value creation in current portfolio, · pursuing mergers and acquisitions to add new legs to the portfolio, and · considering organic projects either adjacent to existing hubs or pursuing new hubs, dependent on financial headroom and attractive risk-reward. Board of directors’ reportPage 20 The strategy also includes a clear capital allocation prioritisation with an overall aim to maximise shareholder return and a target to maintain a clear and credible ESG position. OKEA shall maintain a competent organisation fit for growth with direct management engagement and involvement in key projects and use risk-cost-benefit evaluations in all phases of the company’s business activities. The financial statements OKEA prepares its financial statements in accordance with IFRS ® accounting standards (IFRS) as adopted by the European Union (EU) and additional requirements following the Norwegian Accounting Act. New standards and amendments to standards and interpretations effective from 1 January 2023 did not have any significant impact on the company’s financial statements and hence the accounting principles are in all material respects the same as in the financial statements for 2022. Statement of comprehensive income The financial results for 2023 were significantly influenced by increased volumes of sold petroleum products during the year. This increase was due to solid operational performance on key assets and full year contribution from the assets purchased from Wintershall Dea completed in the fourth quarter of 2022. Sold volumes of liquids (oil and natural gas liquids) amounted to 7.9 (3.8) million boe, while sold volumes of gas amounted to 2.4 (2.0) million boe. The average realised price for liquids was USD 80.1 (98.4) per boe, while average realised gas price was USD 82.2 (138.5) per boe. Total operating income amounted to NOK 8,885 (6,653) million. Sold volumes were 10.3 (5.9) million of barrels of oil equivalents (boe). Other operating income amounted to NOK 146 (254) million consisting of tariff income at Gjøa of NOK 127 (132) million, loss on commodity hedging of NOK 6 (gain of 72) million, income from joint utilisation of logistics resources of NOK 22 (38) million and loss on change in fair value of contingent consideration of NOK -11 (gain of 12) million. Producedvolumewas8.97(6.11)millionboe and productionexpensesamountedtoNOK 2,084 (1,616) million. The increase in production and production expense compared to previous year was mainly due to 2023 being the first full year with production and expensesfromBrageandNovabeing recognised in profitand loss, aswellasanincreased working interest in Ivar Aasen following the transaction with Wintershall Dea. Production expenses amounted to NOK 215 (237) per boe. The decrease in unit cost was mainly due to the increased production. Reference is made to note 6 to the financial statements for further details. Board of directors’ reportPage 21 Exploration and evaluation expenses amounted to NOK 203 (328) million and mainly related to seismic purchases of NOK 78 (87) million and costs for geological and geophysical studies of NOK 30 (25) million. Other exploration and evaluation expenses relatedtoactivitiesinexploration licences, mainlyfordrillingoftheKimprospectinPL055 Brage. Reference is made to note 7 to the financial statements for further details. Depreciation amounted to NOK 1,695 (769) million. The increase was due to higher produced volumes as well as the first full year with depreciation on assets acquired from Wintershall Dea in 2022. Impairments amounted to NOK 2,745 (498) million. NOK 1,382 (498) million related to the Yme asset with an offsetting change in deferred tax of NOK 1,078 (388) million. The impairments were mainly a result of revision of reserves and lower forward prices for oil. Previous year’s impairment related to revision of reserves and revised phasing of production. NOK 1,363 (0) million related to a goodwill impairment in relation to acquisition of Statfjord area assets from Equinor, with no associated tax income The goodwill impairment was mainly a result of a reduction in estimated production and reserves. Reference is made to note 9 to the financial statements for further details. General and administrative expenses amounted to NOK 157 (213) million and represent OKEA’s shareof costs after allocationtolicenceactivities. The lower expense in 2023was mainly due to transition activities related to the transfer of operatorship of the Brage asset in addition to corporate expenses related to the acquisition of assets from Wintershall Dea in 2022. Net financial income/expenses (-) amounted to NOK -217 (-311) million and mainly comprise expensed interest of NOK -163 (-178) million and NOK -151 (-103) million in net exchange rate loss largely relating to USD denominated bond loans. In addition, call premium on early voluntary redemption of the OKEA03 (OKEA02) bond loan amounted to NOK -28 (-24) million. Other financial expenses amounted to NOK -21 (-17) million. These effects were partly offset by interest income on bank deposits of NOK 91 (22) million. Reference is made to note 12 to the financial statements for further details. Profit/loss (-) before income tax amounted to NOK 1,099 (3,215) million. Tax expense amounted to NOK 2,034 (2,545) million, whereof tax payable amounted to NOK 2,815 (2,109) million and decrease in deferred tax liability were NOK 781 (increase of 436) million.Theeffectivetaxrateof 185% (79%)deviatesfrom thestandardtaxrateof 78% mainly due to impairment of goodwill not being tax deductible. Net profit/loss (-) was NOK -935 (670) million and total comprehensive income/loss (-) was NOK -937 (670) million. Board of directors’ reportPage 22 Statement of financial position Total assets as per 31 December 2023 amounted to NOK 18,499 (15,621) million. The increase mainly related to the PPA following the completion of the Statfjord transaction on 29 December 2023. The transaction was recognised in the financial statements on fair value basis from this date. As the effective date of the transaction was 1 January 2023, all transactions and activities in the period until completion were reflected as part of the PPA in the statement of financial position. Reference is made to note 16 in the financial statements for further details on the PPA. Goodwill amounted to NOK 2,295 (1,297) million whereof ordinary goodwill amounted to NOK 163 (163) million and technical goodwill amounted to NOK 2,132 (1,133) million. The increase in technical goodwill of NOK 999 million is mainly related to the Statfjord transaction. Reference is made to note 16 and 17 to the financial statements for further details. Oil & gas properties amounted to NOK 7,199 (6,556) million. The increase from previous year related to asset additions through business combinations of NOK 1,619 (1,958) million and investments in fields in production and under development of NOK 1,996 (1,080) million. The increase was partly offset by asset impairment at Yme of NOK 1,382 (498) million and unit of production depreciation of NOK 1,650 (742) million. Right-of-use assets amounted to NOK 200 (233) million and mainly related to logistical resources on operated assets and lease of offices. Addition of new office leases in Bergen and Stavanger was offset by depreciation of lease contracts during the year. Total asset retirement reimbursement right amounted to NOK 4,163 (3,662) million and relates to Shell, Wintershall Dea and Equinor’s obligations to cover decommissioning costs for Draugen/Gjøa, Brage and Statfjord respectively. The increase mainly relates to the Statfjord transaction with Equinor. NOK 4,079 (3,662) million was classified as non- current assets and NOK 83 (0) million as current assets. Reference is made to note 19 to the financial statements for further details. Trade and other receivables amounted to NOK 1,211 (1,744) million, mainly comprising ofaccrued revenue,working capitalfromjointventure licencesand underliftofpetroleum products. Cash and cash equivalentsamounted to NOK 2,301(1,104) million. Cash generation from operations was NOK 5,188 (3,344) million for the year after accounting for tax payments of NOK 1,253 (2,289) million. Spare parts, equipment and inventory was NOK 864 (800) million. The increase mainly related to spare parts and equipment at Statfjord. Board of directors’ reportPage 23 Total provisions for asset retirement obligations amounted to NOK 9,535 (5,915), whereof the non-current portion amounted to NOK 9,431 (5,915) million and the current portion amounted to NOK 104 (0) million. There is a corresponding receivable to the obligation, as described above in asset retirement reimbursement right. Reference is made to note 24 to the financial statements for further details. Deferred tax liabilities amounted to NOK 888 (2,835) million. The decrease was mainly due to effects from the PPA as the difference between the accounting and tax value represent a significant deferred tax asset. The main driver for the deferred tax asset is the asset retirement obligation for Statfjord. Reference is made to note 13 and 16 to the financial statements for further details. Interest-bearing bond loans amounted to NOK 1,246 (1,179) million consisting of the OKEA04 (OKEA03) bond. In the third quarter a successful refinancing was completed, calling the USD 120 million OKEA03 bond in full at a premium of 3.2% while issuing a USD125millionseniorsecuredbond(OKEA04). Aspartoftherefinancing,asupersenior revolving credit facility (RCF) of USD 25 million was established, which provides an additional liquidity source for the company at relatively low cost. As per balance sheet date, no drawdowns were made under the RCF. Total other interest-bearing liabilities amounted to NOK 477 (508) million, whereof the non-current share was NOK 427 (462) million and the current share was NOK 50 (46) million. The amount represents OKEA’s share of the net present value of the future obligations under the bareboat charter (BBC) agreement for the Inspirer rig. Trade and other payables amounted to NOK 2,997 (2,220) million mainly relating to working capital from joint venture licences of NOK 1,311 (1,061) million, accrued net consideration payable from acquisitions of NOK 545 (0) million, payment quantity agreements of NOK 276 (507) million and other accrued expenses of NOK 170 (295) million. In addition, the current portion of provision for contingent consideration payable to Equinor and Wintershall Dea amounted to NOK 128 (30) million. Income tax payable amounted to NOK 2,141 (477) million and mainly comprise accrued tax payable for 2023. At balance sheet date, OKEA had issued a total of 103,910,350 (103,910,350) ordinary shares. Each ordinary share has one vote at general meetings. There is 0 (0) warrants outstanding. Share capital amounted to NOK 10 (10) million and total equity amounted to NOK 726 (2,078) million, corresponding to an equity ratio of 4% (13%). Total liabilities amounted to NOK 17,774 (13,543) million. Board of directors’ reportPage 24 Statement of cash flows NetcashflowsfromoperatingactivitiesamountedtoNOK 5,188(3,344) million, including net taxes paid of NOK 1,253 (2,289) million. The increase in cash flow from operations was mainly a result of strong performance at key assets resulting in high sold volumes during the year. Net cash flows used in investing activities amounted to NOK 3,206 (2,434) million. NOK 1,217 (1,240) million related to cash paid for the acquisition of 28% working interest in the Statfjord area (acquisition of working interests in Brage, Ivar Aasen and Nova). In addition, NOK 1,919 (1,052) million was invested in oil and gas properties and NOK 32 (316) million was used for exploration and evaluation assets. Net cash flows used in financing activities amounted to NOK 649 (1,969) million and related to interest paid of NOK 131 (194) million, dividend payments of NOK 416 (301) million and payments of lease arrangements of NOK 33 (31) million. Net cash flow from the refinancing amounted to NOK 20 (1,401) million. The high refinancing cost previous year relates to deleveraging through buy-back of the OKEA02 bond. Net increase/decrease (-) in cash and cash equivalents, including exchange rate effects on cash held, amounted to NOK 1,197 (-935) million. Going concern and liquidity Pursuant to §3-3 of the Norwegian Accounting Act, the board confirms that conditions for continued operation as a going concern are present and the annual financial statements for 2023 have been prepared under this assumption. OKEA’s current financial position and liquidity is considered adequate, and the company is positioned to continue to execute on its growth strategy. Cash flows, available liquidity and financial flexibility, are expected to be sufficient to finance the company’s commitments in 2024. In the board’s view, the annual accounts give a true and fair view of OKEA’s assets and liabilities, financial position and results. The board is not aware of any factors that materially affect the assessment of OKEA’s financial position as of 31 December 2023, or the result for 2023, other than those presented in the board of directors’ report or that otherwise follow from the financial statements. Board of directors’ reportPage 25 Allocation of loss for the year Total comprehensive loss for 2023 amounted to NOK 937 million. The board proposes the following allocation: Loss amounting to NOK 937 million for the year is transferred from retained earnings/loss. Retained earnings/ loss (-) as of 31 December 2023 amounted to NOK -723 million. Risks related to OKEA’s business and industry Comprehensive, transparent, and dynamic risk management, supported by necessary framework, tools, and practice, is of great importance for OKEA’s ability to deliver on its strategy and stated goals. The overall purpose of risk management in OKEA is to ensure the balance between creating value and avoiding accidents, damages and losses. As a result, the company is continuously undertaking risk management activities, embedded in the company’s management system and operational practices, at all levels of the organisation. Both senior management and the board of directors regularly review major risks and mitigating actions. The company’s business, results of operations, value of assets, reserves, cash flows, financial condition, and access to capital may be adversely affected by, strategic, operationalaswellasfinancialrisk factors. Measuresand actionsto manage and mitigate risks are identified, implemented and reported on a continuous basis. Assurance and verification of the company’s management practice and structures are governed by risk- based and dynamic audit and verification plans. OKEA currently has production from seven assets: Draugen, Brage, Gjøa, Nova, Yme, Ivar Aasen and Statfjord. The addition of a 28% WI in the four fields in the Statfjord area (acquired from Equinor) during 2023 improved asset diversification. Operational issues affecting availability and reliability of production from any of the fields in the portfolio may still have a material impact on the company. In addition, risks related to estimated reserves and reservoir potential is inherent in all oil and gas properties in the current portfolio as well as in potential future acquired properties . Organic and inorganic growth and diversification in the company’s production portfolio will seek to further mitigate this risk, in combination with robust due diligence processes, operational follow-up and management of both operated and partner-operated assets. Creating value through near-field exploration, production optimisation and extension of field life is a key factor in OKEA’s strategy. Maturing well targets and development projects, utilising new technology and innovation, and sanctioning profitable volumes is therefore of significant importance. The company’s exploration and project portfolios Board of directors’ reportPage 26 (operated and partner-operated) carry technical, geological and operational uncertainty. The company, together withlicence partners, continuously strives to mitigate exploration and project risks and ensure progress to meet defined targets and milestones. However, the inherent complexity of projects may result in delays, cancellations and/or cost increases. Changes in national and/or international framework conditions, (e.g. changes in regulationsrelatedtoESG,QHSSE ortaxation)canlead to increased costs,reduced value of the company’s asset base, and can potentially impact feasibility of new development projects. Unfavourable changes to governmental regulations for the petroleum industry, such as potential lack of new exploration areas granted, reduced production permits or failuretoextendproductionpermitsmayhaveconsiderableimpactstoOKEA’sbusiness. Activities throughout the company value chain (exploration, development, production, and decommissioning) within the oil and gas industry have considerable inherent environmental and safety risks. In case of incidents, these risks can result in significant losses and cost increases. OKEA is continuously working to assess such risks and to implementmeasuresbothtoeliminatetheprobabilityof occurrenceas wellas tomitigate any adverse consequences. This includes ensuring the robustness of the company emergency preparedness framework and organisation. Identifying, managing and controlling all material issues related to ESG is important to OKEA and ESG is therefore embedded in the business and all operational activities This includes assessing financial risk exposure imposed by climate related risk as further outlined in the ESG report for 2023. Sufficient organisational capabilities, high employee engagement and a good working environment are essential factors for realising the corporate growth strategy as well as improvement initiatives and synergies. Evaluating organisational robustness, competenceandcapacity considering expected scenarios is therefore important toOKEA. Not being able to hire, retain or replace key members of the organisation, or lack of short- or long-term access to competent staff, may result in an inability to realise the company’s strategy and further expand the business. In addition, OKEA has several key partners and suppliers and relies on these for successful execution of the company’s strategy and roadmap. OKEA foresees a high activity level in the industry in the coming years, with potential capacity and competence constraints as well as cost inflation. Any adverse events or conditions impacting our key suppliers’ ability to deliver as agreed may impact the company’s performance, lead to increased cost, operational disruptions and/or project delays. In addition, the company is dependent on alignment with, and endorsement from, licence partners for operated assets. For partner-operated assets, OKEA exercises it’s “see-to-duty” diligently through regular partner meetings and other means as required. However, the company is dependent on the various operators’ management and performance and the voting arrangements in each joint venture. Board of directors’ reportPage 27 Information security events (e.g. cyber-attacks) may threaten the confidentiality, integrity and availability of company data and information which, in turn, couldadversely impact the company’s business activities. The invasion of Ukraine in late February 2022 and other geopolitical risks have the potential to significantly impact global stability, national security and business continuity. In response, OKEA has enforced control mechanisms to manage the elevated security threats imposed to the industry and maintain a close dialogue with Offshore Norway and relevant authorities. OKEA is monitoring international sanctions and trade control legislation to mitigate the potential impact on the company’s operation particularly in respect of potential interruptions of supply chains and third-party services. Financial risk factors OKEA isexposedtoavarietyoffinancialriskfactors.Oilandgaspricesarehighlyvolatile, and the company regularly enters into derivative contracts in order to hedge portions of itsoil andgasproductiontomanagemarketpricerisk.Reservesandcontingentresources are by their nature uncertain with respect to inferred volumes which are also sensitive to oil and gas prices. OKEA will continue to manage these risks in accordance with a defined risk management policy. OKEA is exposed to foreign exchange rate risk as revenues are denominated in USD for oil sales and in GBP and EUR for gas sales, whilst operational and development costs are mainly denominated in NOK, and all income taxes are denominated in NOK. OKEA manages currency risk by making frequent currency exchanges and utilising hedging instruments when deemed appropriate. However, fluctuations in exchange rates may adversely affect the financial performance of the company. The outstanding bond debt was issued in USD, the same currency as the major revenue streams, which limits currency risk. A successful refinancing was completed in September 2023. The USD 120 million OKEA03 bond was called in full, and a new USD 125 million senior secured bond OKEA04 was issued at a fixed coupon of 9.125% and maturity in September 2026. Cash and cash equivalents exceed interest bearing debt, which limits refinancing risk. OKEA also has an interest-bearing liability in USD which represents OKEA’s share of the net present value of future obligations under the bareboat charter (BBC) agreement between the Yme licence and Havila Sirius AS for the Inspirer rig. This liability will be repaid quarterly until October 2031. OKEAcurrentlyhasno majorexposure to interestrate risk.The company hasno interest- bearing debtwith floating interestrate,asthe OKEA04bond loan and the Inspirerliability both carry fixed interest rates. However, any new debt financing will be subject to the prevailing market environment. Board of directors’ reportPage 28 The OKEA04 bond agreement may limit OKEA’s ability to enter into new financing arrangements. The key financial covenants comprise Leverage Ratio (net debt divided by 12-month EBITDA) and Liquidity of USD 25 million. Operating in a capital-intensive industry, OKEA is exposed to liquidity risk and has taken mitigating actions to ensure that sufficient liquidity is secured under normal as well as extraordinary circumstances. The company conducts detailed cash flow forecasting, including sensitivity analysis on key variables, to assure it can meet financial liabilities as they fall due without incurring unacceptable losses or risking damage to the company’s reputation. The company has USD 25 million in a revolving credit facility (“RCF”) available. No amounts were drawn under the RCF at balance sheet date. OKEA’s exposure to credit risk for counterparties to default on their payment obligations is considered limited, as sales agreements and derivative contracts are only entered into with reputable counterparties. Financial risk is managed by the finance department under policies approved by the board.OKEAmanagementcontinuously monitorsthe risk picture and reportsto the board regularly.Theoverallriskmanagementpolicyseekstominimisepotentialadverseeffects on financial performance from unpredictable fluctuations in financial and commodity markets. The fiscal regime for the Norwegian petroleum sector has generally been stable and supportive of the industry. Changes in the petroleum tax regulation were implemented by the Norwegian Parliament in 2022, introducing immediate expensing of investments in the special tax regime (cash flow tax) with effect from 1 January 2022. The change in tax regime results in a lower tax shield with an earlier utilization. The changes made in 2022 has not significantly impacted the financial position and solidity of OKEA. OKEA is listed on Oslo Stock Exchange (ticker “OKEA”) and the market valuation of, and active trading in, OKEA’s shares and bonds may impact the company’s ability to obtain funding at favourable terms. Environmental, social and governance (ESG) topics ESG is about how OKEA handles risk related to climate change and environmental challenges, how the company deals with people and social conditions, and how corporate governance is practised. The effect of OKEA’s operations on people, society and the environment is presented in a separate ESG report, which has been approved by the board of directors. The report is Board of directors’ reportPage 29 available at www.okea.no/investor/reports/ . The report includes information regarding OKEA’s due diligence assessment, as required in the Transparency act. OKEA aims to be an attractive employer and a preferred business partner, as well as a respected corporate citizen. OKEA’s most important contribution to society is to create value and develop a future-oriented company that operates in a sustainable, ethical and socially responsible manner. Profitability is a prerequisite for achieving these goals. OKEA continuously works towards more efficient exploitation of petroleum reserves, including implementation of new and innovative technology. OKEA participated in 10 Research & Development project in 2023, whereof all have the target to enhance performance at the NCS.   OKEA’s analysis of the EU Taxonomy Regulations shows that no revenue or expenditure is eligible under the regulations. Quality, health, safety, security and environment (QHSSE) Safe production with adherence to the highest standards within health, safety and environmental (HSE) performance and continuous focus on reducing emissions are essential factors for the company’s licence to operate as well as enablers of long-term value creation for the company’s shareholders. OKEA considers its employees and contractors as its key assets and is focused on motivating employee participation, innovation, and experience transfer to create and sustain a company culture which fosters efficient and cost-effective collaboration and solutions and best practice QHSSE, operational and financial performance. OKEA had one serious incident in its activities in 2023. Actual and potential serious incidents frequency (SIF) and total recordable injuries frequency (TRIF) increased from 1.47 to 2.39 and from 5.13 to 8.98 respectively. Improving safety performance remain a top priority for OKEA and targeted measures will be implemented going forward. A more detailed reporting on QHSSE matters is included in the ESG report for 2023. Organisation and equal opportunities OKEA promotes a healthy working environment for all employees, vendors and contractors involved in its activities. OKEA has established a working environment committee covering all locations, offshore and onshore. Absence due to sickness in the year was 4.6% (2.1%). The company strives to maintain a working environment with equal opportunities for all based on qualifications, irrespective of race, gender, age, disability, sexual orientation, religion, political views, national or ethnic origin ethnicity or any other characteristic that may compromise the principle of equality. The company’s code of conduct contains Board of directors’ reportPage 30 principles and standards for promoting equality and preventing discrimination and harassment, including sexual harassment. There is no tolerance for unlawful unequal treatment, exclusion or discrimination of colleagues or others working for OKEA. A large part of our workforce work within engineering and technology, including offshore work, which are disciplines that have traditionally attracted most male applicants. This is reflected in the workforce demographics, which as of end of the year consisted of 26% female and 74% male employees. At the end of 2023, the senior management team consisted of four females (40%) and six males (60%). The board of directors consisted of eleven members, four of whom are female, with three deputy members, of whom two are female. The working environment in OKEA during 2023 was considered “very good” by the employees as demonstrated by the yearly employee satisfaction survey which was conductedduringtheautumnof2023.The employee engagementindex wasabove 85%, which places OKEA amongst the leading companies across a range of industries. The response rate was also excellent with a total of 95% and 89% participation amongst onshore and offshore employees respectively. Pursuant to section 3-3a and 3-3c of the Norwegian Accounting Act and section 26a of the Norwegian Act on Gender Equality and Prohibition of Discrimination, the board of directors has provided a more detailed reporting on organisation and equal opportunities matters in the ESG Report for 2023. Corporate governance The company is committed to create sustained shareholder value and respecting the company’s various stakeholders. To achieve this, the company remains committed to maintaining a high standard of corporate governance. The company has established policies and guidelines that lay out how business shall be conducted, including clearly defining the roles and responsibilities of the board and the senior management, as well as the relationship between them. Corporate governance principles, as well as the implementation of those principles, are subject to annual reviews by the board of directors. Pursuant to section 3-3b of the Norwegian Accounting Act the 2023 statement on corporategovernanceis providedinaseparatesectionoftheannualreport.Thecompany complies withrelevantrules andregulations forcorporategovernance,includingthemost recent version of the Norwegian Code of Practice for Corporate Governance, published on 14 October 2021. Board of directors’ reportPage 31 Reporting of payments to governments OKEA has prepared a report of government payments in accordance with the Norwegian Accounting Act §3-3d and the Norwegian Securities Trading Act §5-5a. These regulations state that companies engaged in activities within the extractive industries shall on an annual basis prepare and publish a report containing information about their payments to governments at country and project level. The report is provided in a separate section of the annual report. Insurance for board members and chief executive officer The company has an insurance policy for the board members and the chief executive officer for potential liability to the company and third parties. The board considers the coverage to be reasonable. Subsequent events APA 2023 licence awards In January 2024, OKEA was offered interests in three new production licences on the Norwegian continental shelf, through the Awards in Pre-Defined Areas (APA) for 2023. Draugen license extension granted On 11 March 2024, the Ministry of Energy granted a license extension on Draugen from 2024 to 2040. Outlook OKEA launched a dividend plan in the second quarter of 2022 and has since paid a total of NOK 7.90 per share through quarterly distributions. Following the significant goodwill impairment related to the Statfjord area in the fourth quarter of 2023, and due to dividend restrictions in the OKEA04 bond tied to net profit after tax, the board has not proposed any dividend for distribution in 2024. OKEA’s capital allocation principles comprise maintaining financial flexibility, ensuring a robust portfolio, and having a healthy balance between growth and dividends. Following the closing of the Statfjord transaction, the asset is a top priority for OKEA and close collaboration with the operator is ongoing with a target to unlock the asset’s potential. The improvement plan focuses on increasing production efficiency, maturing Board of directors’ reportPage 32 well targets and drilling performance and revisiting drainage strategy to increase liquid offtake and maximize recoverable resources. The company’s strategy is centred around three growth levers: ·actively pursue further value creation in current portfolio, ·pursue mergers and acquisitions to add new legs to the portfolio, and · consider organic projects either adjacent to existing hubs or pursue new hubs, dependent on financial headroom and attractive risk-reward. The board of directors considers that the company is well positioned to continue to execute on the strategy and deliver value to shareholders going forward. Board of directors’ report Page 33 Board of directors, Trondheim, 4 April 2024 Chaiwat Kovavisarach Chairman of the board Phatpuree Chinkulkitnivat Board member Mike Fischer Vice chair of the board Elizabeth Anne Williamson-Holland Board member Nicola Carol Gordon Board member Rune Olav Pedersen Board member Finn Haugan Board member Per Magne Bjellvåg Board member Sverre Nes Board member Ragnhild Aas Board member Jon-Arnt Jacobsen Board member Svein J. Liknes CEO Annual report 2023 Corporate governance report Corporate governance reportPage 35 Statement on corporate governance 2023 1.0.Governance principles and objectives OKEA ASA (“OKEA” or “the company”) seeks to create sustained shareholder value and topayduerespect tothecompany’svariousstakeholders. Theseincludeitsshareholders, employees, business partners, authorities, and society in general. OKEA is committed to maintain a high standard of corporate governance. OKEA is a public limited liability company incorporated and registered in Norway and subjecttoNorwegianlaw.Thecompany’s shares arelistedonOsloStockExchangeunder the ticker OKEA. As of the date of this statement, the company also has one bond on issue, OKEA04, which is listed on Oslo Stock Exchange. Asapubliclimitedliabilitycompanywithlistedsharesandbonds,thecompanyisrequired to report on its corporate governance in accordance with the Norwegian Accounting Act section 3-3b, 3rd subsection as well as Oslo Rule Book II - Issuer Rules2, section 4 “Continuing obligations for Issuers of Shares” and section 6 “Continuing obligations for Issuers of Bonds”, both available on www.oslobors.no. Further, the Oslo Stock Exchange requires listed companies to report annually on the company’s corporate governance policy in accordance with the Norwegian Code of Practice for Corporate Governance (the “Code”). The Code is available on www.nues.no. OKEA has an established a corporate governance policy, a code of conduct and various corporate governance instructions and guidelines that address the framework of guidelines and principles regulating the interaction between the company’s shareholders, the board of directors (the “board”), the chief executive officer (the “CEO”) and the company’s senior management team. The corporate governance policy and relevant instructions and guidelines are available at www.okea.no. The board is responsible for adherence to sound corporate governance standards, to plan and strategize goals and objectives for the short- and long-term interest of the company, and to put mechanisms in place to monitor progress against the objectives. The principlesand implementationofcorporate governance are subjectto annualreviews by the board of directors. This report discusses OKEA’s main corporate governance policies and practices and how the company has complied with the code in the preceding year. Corporate governance reportPage 36 Unless otherwise specifically stated, OKEA complies with the current edition of the code. The following statement on corporate governance 2023 is organised in line with the structure of the Norwegian Code of Practice for Corporate Governance as most recently revised on 14 October 2021. Deviations from the code: None 2.0.Business The company’s operations comply with the business objective set forth in its articles of association: “The objective of the company is petroleum-related activities on the Norwegian continental shelf, including the development and production of oil and gas, and all other business activities as are associated with the above objectives, and share subscription or participation by other means in such operations alone or in cooperation with others.” OKEA is a leading mid-to late-life operator on the NCS. The company has a strong asset portfolio including the Draugen and Brage fields, which are operated by OKEA, as well as partner shares in the Gjøa, Nova, Ivar Aasen, Yme and Statfjord fields. In 2023, the portfolio produced 35,385 boepd including 10,799 boepd from the Statfjord area which was acquired from Equinor in 2023. In addition to the inorganic growth focus, OKEA also has activities in projects under development, including Draugen power from shore and drilling ofnewinfilltargets. Inaddition, discoveries, includingHamlet,Calypsoand Brasse are under evaluation for development, and the company’s portfolio further includes exploration licences with planned and possible wells in the future. OKEA has a clear ambition to deliver competitive shareholder returns driven by solid growth, value creation and capital discipline and the strategy is centred around three growth levers: ·actively pursue further value creation in current portfolio, ·pursuing mergers and acquisitions to add new legs to the portfolio, and ·considering organic projects either adjacent to existing hubs or pursuing new hubs, dependent on financial headroom and attractive risk-reward. The strategy also includes a clear capital allocation prioritisation with an overall aim to maximise shareholder return and a target to maintain a clear and credible ESG position. OKEA shall maintain a competent organisation fit for growth with direct management engagement and involvement in key projects and use risk-cost-benefit evaluations in all phases of the company’s business activities. Corporate governance reportPage 37 Pursuant to section 3-3a and 3-3c of the Norwegian accounting act and requirements from Oslo Stock Exchange, OKEA has prepared an ESG Report for 2023, which describes how the company addresses ESG matters. The report is available at www.okea.no/investor/reports/. Deviations from the code: None 3.0.Equity and dividends 3.1.Capital adequacy As of 31 December 2023, OKEA’s total equity was NOK 726 million (equity ratio 4%). The board aims to maintain a satisfactory equity ratio in support of the company’s goals, strategy and risk profile, to ensure an appropriate balance between equity and other sources of financing. As per the date of this report, the board considers the capital structure to be adequate. The board continuously monitors the company’s capital situation to be prepared to take necessary steps if the company’s equity and/or liquidity position is considered less than adequate including in order to pursue value accretive investment opportunities. 3.2.Dividends and dividend policy OKEA is growing its business and a major part of surplus cash is anticipated to be used to fund ongoing and future projects and to manage its debt obligations. In 2022, the company initiated a dividend policy as a commitment to its shareholders. Dividends shall be maintained and determined on annual basis, while following OKEA’s capital allocation principles which include: 1) maintaining financial flexibility, 2) ensuring a robust portfolio and 3) having a healthy balance between growth and dividends. An ordinary quarterly dividend of NOK 1.00 per share was paid out for the 2023 financial year, making the total dividend for 2023 NOK 4 per share. Based on the current outlook, and due to dividend restrictions in the OKEA04 bond, the board has not proposed any dividend plan for distribution in 2024. Dividend payments are subject to an authorisation from the general meeting and may be revised due to changes in the market environment, company situation and/or value accretive opportunities available. 3.3.Board authorisations Attheordinarygeneral meetingon11May2023, theboardwasgrantedanauthorisation to increase the share capital by a maximum amount of NOK 1,560,000 in one or more share capital increases through issuance of new shares and an authorisation to increase the share capital for the company’s incentive program by a maximum amount of NOK Corporate governance reportPage 38 10,000inoneormoresharecapitalincreasesthroughissuanceof newshares. The board was further granted an authorisation to approve the distribution of dividends based on the company’s annual accounts for 2022. The board was also granted an authorisation to acquire shares in the company corresponding to up to 10% of the share capital, i.e. shares with a nominal value of NOK 1,039,103. The authorisations are valid from the dates of registration with the Register of Business Enterprises until the annual general meeting in 2024, however no longer than until 30 June 2024. For supplementary information, reference is made to the minutes of the ordinary general meeting held on 11 May 2023, available from https://www.okea.no/investor/general- meetings/ and www.newsweb.no . Deviations from the code: None 4.0.Equal treatment of shareholders and transactions with close associates 4.1.Basic principles The company has one class of shares with equal rights for all shareholders. As of 31 December 2023, BCPR PTE. LTD. (BCPR) owned 45.44% of OKEA. BPCR is a wholly owned subsidiary within Bangchak Corporation Plc. Group (BCP). OKEA is committed to equal treatment of all shareholders. The board is of the view that it is positive for OKEA that BCP assumes an active ownership role and is actively involved in matters of major importance to OKEA and all shareholders. The cooperation with BCP offers OKEA access to expertise and resources within upstream business activities, technology, strategy, transactions and funding. It may be necessary to offer BCP special access to commercial information in connection with such cooperation. Any information disclosed to BCP’s representatives in such a context will be disclosed in compliance with the laws and regulations governing the stock exchange and the securities market. Since the second half of 2021, BCP has been consolidating OKEA as a subsidiary in its financial statements. To enable BCP to execute such consolidation, OKEA discloses information as required for this purpose in line with the regulations in the Securities Trading Act. OKEA publishes its financial statements prior to publication of BCP’s financial statements. Corporate governance reportPage 39 4.2.Approval of agreements with shareholders and close associates Any agreement between the company and any shareholder or other close associate shall be made in writing and entered into on arm’s length terms. If applicable, the agreements will be presented for approval by the general meeting in accordance with the Norwegian Public Limited Liability Companies Act section 3-8. Related party transactions are disclosed in the company’s financial statements. Waiver of pre-emptive rights of existing shareholders were decided in share capital increases for long-term incentive shares to employees, in accordance with the mandate given to the board by the general meeting on 11 May 2023. Deviations from the code: None 5.0.Shares and negotiability OKEA’s shares are freely negotiable securities and the company’s articles of association do not impose any form of restriction on their negotiability. The company’s shares are listed on the Oslo Stock Exchange and the company works actively to attract the interest of Norwegian and foreign shareholders. There is only one class of shares in the Company and all shares carry equal rights. Deviations from the code: None 6.0.General meetings The general meeting is the company’s highest decision-making body. The general meetingisaneffectiveforum forcommunicationbetweentheshareholdersandtheboard encourage shareholders to participate in the general meetings. Shareholders who cannot attend a general meeting in person will be given the opportunity to vote via advance electronical voting and/or proxies, both including options to vote on each individual matter. The ordinary general meeting is normally held no later than end of June, which is the latest date permitted by the Public Limited Liability Companies Act. The date of the next ordinary general meeting is included in the company’s financial calendar, which is available at https://www.okea.no/investor/financial-calendar/ . Extraordinary general meetings can be called by the board of directors at any time, or by shareholders representing at least 1/10 of share capital. Corporate governance reportPage 40 The board of directors decides whether to hold a general meeting as a physical or electronic meeting, in accordance with the Norwegian Public Limited Liability Companies Act section 5-8. According to the company’s articles of association section 7, the documents pertaining matters to be handled at a general meeting shall be made available to shareholders at the company’s webpage. This rule also applies for documents which according to statutory law shall be included in or attached to the notice of the general meeting. Further, pursuant to the Norwegian Public Limited Liability Companies Act, the right to participate and vote atgeneral meetingsofthe company can only be exercised forshares whichhavebeenacquiredandregisteredintheshareholdersregisteronthefifthbusiness day prior to the general meeting. The board may decide that shareholders shall be able to cast their votes in writing, including through the use of electronic communications, for a period priorto the generalmeeting.Forsuch voting,a reassuringmethodmustbeused to authenticate the voter. In 2023, the board allowed for advance voting through the use of electronic communications, with an option to vote on individual matters including elections. Resolutionsofthe generalmeeting shallbe by simple majority,unlessa qualified majority is required by law. The board proposesthe agendaforthe ordinary generalmeeting.The mainagendaitems are determined in compliance with the requirements of the Norwegian Public Limited Liability Companies Act. The chairmanofthe board ofdirectorsshallattend the generalmeeting and the meetings are normally chaired by the chairman ofthe board,ora person appointed by the chairman of the board. If the chairman of the board is conflicted in respect of any matters on the agenda, another person will be appointed to chair the meeting. Minutes from the general meetings, including voting results, are published on www.okea.no . Deviationsfromthecode: The chairman of the board of directors was unable to attend the 2023 general meeting, and thus issued an authorisation to a board member who attended on his behalf and acted in the capacity as chairman. 7.0.Nomination committee In accordance with the articles of association, the company’s general meeting shall elect a nomination committee, including its chair. The general meeting has approved a set of guidelines for the nomination committee’s work. The nomination committee and procedures around the organisation of the nomination committee is further laid down in Corporate governance reportPage 41 the company’s articles of association. The articles of association states that the committee shall consist of three members. The nomination committee’s main purpose is to propose candidates for election to the board and propose the remuneration of the board members. Deviations from the code: The chair of the committee withdrew from the committee due to other commitments in June 2023, and the committee decided it was adequate to wait until the ordinary general meeting in 2024 to elect a new chair of the committee. 8.0.The board of directors; composition and independence In accordance with the company’s articles of association, the board of directors shall consist of three to eleven board members. Board members and the chairman are elected by the general meeting for a term of two years. Members of the board of directors may be re- elected. In addition to the board members elected by the general meeting, and pursuant to the Norwegian Public Limited Liability Companies Act section 6-4, employees of the company have elected three board members and three deputy board members. The employee elected members are elected for terms of two years. OKEA has an agreement with the employees of OKEA not to have a corporate assembly, in accordance with the Norwegian Public Limited Liability Companies Act section 6-35 (2) and has expanded employee representation in the board of directors as detailed above. At 31 December 2023, the board of directors consisted of eleven board members. 3 of 8 shareholder-elected board members were women. 1 of 3 employee-elected board members were women and 2 of 3 deputies were women. The composition of the shareholder-elected board members aims to ensure that the board can attend to the common interests of all shareholders. The board shall have the necessary capacity and adequate competency to independently evaluate the cases presented by the senior management team as well as the company’s operations. It is also considered importantthatthe board can function wellasa collegiate body.The board shall comply with all applicable requirements as set out in the Norwegian Public Limited Liability Companies Act, the Oslo Rule Book II – Issuer Rules and the recommendations set out in the Norwegian Code of Practice for Corporate Governance. The composition of the board of directors is in compliance with the independence requirements of the Code, meaning that (i) the majority of the members of the board of directorselected by the company’sshareholdersare independentofthe company’ssenior managementandmaterialbusinesscontacts,(ii)atleasttwoboardmemberselectedare Corporate governance reportPage 42 independent of the company’s main shareholders (shareholders holding more than 10% ofthe sharesin the company),and (iii)no memberofthe company’sseniormanagement team serves on the board of directors. Members of the board of directors are encouraged to own shares in the company. The individual shareholdings for each board member are specified in note 10 to the financial statements. In 2023, the board held a total of 15 board meetings. Attendance was 97% (including attendance of a deputy member for employee elected board members). The table below shows attendance on meetings in the period the person was part of and available for the board in 2023. Deviations from the code: None 9.0.The work of the board of directors The board of directors is responsible for the overall management of the company and shall supervise the company’s management and company’s activities in general. ** Deputy Member (ee) until general meeting on 11 May 2023 # BoD Positionmeetings # meetings attended Attendance in % Chairman Vice chair Member Member Member Member Member Member Member Member Member Member (ee) Member (ee) Member (ee) Member (ee) Member (ee) Member (ee) Deputy member (ee) Deputy member (ee) Deputy member (ee) Deputy member (ee) Deputy member (ee) Deputy member (ee) Chaiwat Kovavisarach Mike Fischer Rune Olav Pedersen Nicola Gordon Finn Haugan Jon Arnt Jacobsen Phatpuree Chinkulkitnivat Elizabeth Williamson Paul Murray Saowapap Sumeksri Grethe Moen Sverre Nes Ragnhild Aas** Per Magne Bjellvåg Anne Lene Rømuld* Jan Atle Johansen* John Kristian Larsen* Harmonie Wiesenberg Jan Atle Johansen* Gry Anette Haga Ragnhild Aas** Jens Arne Megaard** Gro Anita Markussen** Average 14 14 100 % 14 14 100 % 14 13 93 % 14 14 100 % 14 14 100 % 11 11 100 % 11 10 91 % 11 11 100 % 3 2 67 % 3 3 100 % 3 3 100 % 11 11 100 % 11 11 100 % 11 11 100 % 3 3 100 % 3 3 100 % 3 3 100 % 00 00 00 00 00 00 97 % Employee elected (ee). * Member (ee) until general meeting on 11 May 2023 Corporate governance reportPage 43 The board has prepared instructions to allocate duties and responsibilities between the CEO and the board. The instructions are based on applicable laws and well-established practices. The board of directors is responsible for determining the company’s overall goals and strategic direction, principles, risk management, and financial reporting. The board of directors is also responsible for ensuring the company has competent management with clear allocation of responsibilities, as well as ongoing performance evaluation of the work of the CEO. Guidelines for the CEO, including clarification of duties, authorities and responsibilities, have been adopted. In accordance with the company’s guidelines, members of the board and senior management are expected to notify the board if they have any material direct or indirect interest in any transaction entered into by the company. The board has routines for handling of conflict of interest and disclosure. If a conflict occurs, the relevant member ofthe board willabstain fromparticipating in the board’sdiscussion and decision making. The board held an annual training session on governance and stock exchange related topics, as per requirements from Oslo Stock Exchange also in 2023. In the board meetings, senior management contributes with developing the board’s collective knowledge on topics and issues relevant to the company’s business. Evaluation of the board The board evaluates its performance, capacity and expertise at least annually. Identified areas of improvement are implemented immediately if required or incorporated in the plan for the following year. 9.1.Board committees The board establishes its own sub-committees based on legal requirements and the board’s needs. The board will assess competence and interest when selecting members for its committees. As of the date of this report, the board has established the sub- committees of the board as listed below. In addition to the below-mentioned committees, the board may in the future decide to establish various sub-committees with limited duration and mandate as deemed necessary. Audit committee The company has established an audit committee in accordance with the rules of the Public Limited Liability Companies Act chapter 6 V. The function of the audit committee is to prepare matters to be considered by the board and to support the board in the exercise of its management and supervisory Corporate governance reportPage 44 responsibilities relating to financial reporting, statutory audit, internal control and collaboration with the Financial Supervisory Authorities. Furthermore, the audit committee shall perform a separate financial review of contract commitments exceeding NOK 100 million (gross amount for operated licences and not for non-operated licences) as part of the internal control of major commitments. The audit committee currently consists of Rune Olav Pedersen (chair), Finn Haugan, Jon Arnt Jacobsen, Phatpuree Chinkulkitnivat and Ragnhild Aas. The board hasestablished acharterforthe auditcommittee,stating itstasksand duties. Sustainability and technical risk committee (“STR committee”) The company has established an STR committee as a sub-committee to the board. The STR committee shall follow up the company’s management of ESG related matters, review key risks for exploration, reserves and resources, projects and investments, and monitor overall risk management and internal control. The STR committee shall further contribute to the board’s review of the company’s most important areas of exposure to risk and its internal control arrangements. Furthermore, the STR committee reviews opportunities related to business development and M&A and has some authorisations related to approval of relinquishment, sale and purchase of exploration licenses and assets. The STR committee currently consists of Nicola Gordon (chair), Mike Fischer, Elizabeth Williamson and Sverre Nes. The board hasestablished acharterforthe STRcommittee,stating itstasksand duties. People and organisation committee (P&O committee) The company has established a P&O committee as a sub-committee to the board. The P&O committee shall evaluate and propose the compensation of the company’s CEO, administer the company’s incentive programmes and advice the board on general compensation and organisation related matters as well as on the annual report on the compensation of the senior management team and other leading persons, pursuant to applicable rulesand regulations.The P&Ocommittee shallalso advise the CEOon matters relating to other material employment issues in respect of the senior management. The P&O committee shall endorse the overall limits for the annual salary adjustments for employees, within the budget set by the board. The P&O committee currently consists of Finn Haugan (chair), Mike Fischer, Jon Arnt Jacobsen and Per Magne Bjellvåg. The board hasestablished acharterfortheP&Ocommittee,statingits tasks andduties. Corporate governance reportPage 45 Deviations from the code: None 10.0.Risk management and internal control The board shall ensure that the company has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the company’s activities. The internal control and the systems shall encompass the company’s corporate values and ethical guidelines as well as material aspects and risks related to ESG. OKEA applies a risk-based approach in planning, execution and monitoring activities as described in OKEA’s management system. Comprehensive, transparent, and dynamic risk management, supported by necessary framework, tools, and practice, is of great importance for OKEA’s ability to deliver on strategy and stated goals. The following governing principles apply for risk management in OKEA: ·Uncertainty is handled through continuous risk management processes in top management, as well as in departments and projects ·Risk management processes shall be incorporated in the company management system framework ·Risk management shall be an important foundation for all major decisions ·Risk management shall address both threats and opportunities ·Risk management in OKEA shall be comprehensive, transparent, and dynamic OKEA’s overall governing principles for risk management are incorporated in the management system manual. Risk management activities are further integrated in processes and documents in the management system as well as in operational practices, at all levels of the organisation. The company’s operational activities are limited to Norway and are subject to Norwegian regulations. All activities taking place in a production license are subject to supervision and audits from governmental bodies (e.g. the Norwegian Ocean Industry Authority and the Norwegian Environment Agency), and license partners. OKEA’s risk management shall be in accordance with the Norwegian regulations relating to health, safety and environment in all petroleum activities in addition to certain onshore facilities (the Framework Regulations section 11). The CEO is the overall responsible for risk management in OKEA. Responsibility for managing risk on department or project/activity level belongs to respective appointed managers. The senior vice president for business performance is responsible for coordinatingenterpriseriskmanagementacross thecompanyandprovidetheboardwith a status of the internal control, key risks and mitigation measures on a monthly basis. The board and the STR committee regularly review major risks. Corporate governance reportPage 46 The internal control of the financial reporting system shall ensure reliable and timely financial information and reporting. The company has implemented a framework for risk managementandinternalcontroloffinancialreportingbasedontheframeworkpublished by the committee ofSponsoring Organisationsofthe Treadway Commission (COSO).The framework has the following five components: 1. Control environment 2. Risk assessment and objective setting 3. Control activities 4. Information and communication 5. Monitoring activities The established framework and processes are integrated in the company’s management system with a target to enable: ·Appropriate and effective identification of risks and events  ·Establishment of relevant controls ·Information and communication of risks ·Monitoring of process compliance ·Provision of relevant, timely and reliable financial reporting that provides a fair view of the company’s business ·Prevention of manipulation/fraud of reported figures ·Compliance with relevant requirements of IFRS OKEA makes use of third-party professional accounting expertise to support its internal and external financial reporting. Meetings are held regularly to ensure alignment and proper assessment of new events, risks and issues, to provide updates of status of operations and projects, and to provide additional capacity if required.  The company’s internal control environment is characterised by clearly defined responsibilities and roles between the board of directors, audit committee, senior management, the finance department and the accounting service providers. OKEA hasformalisedandimplementedprocessesinthemanagementsystemforallareas deemed to have high risk of errors in the financial reporting or otherwise deemed important for internal control purposes. The formalised processes comprise: ·Assess impairment of goodwill and tangible and intangible assets ·Estimates for asset retirement obligations ·Tax assessment and tax calculation ·The financial statement closing process ·Revenue recognition ·Financial modelling and forecasting The company has implemented a combination of manual and automatic controls, both preventive and detective. OKEAhas formalised documentation and monitoring of internal Corporate governance reportPage 47 controls in several areas. The processes established and the controls implemented are consideredappropriate fora company ofOKEA’ssize and complexity.The internalcontrol of financial reporting is continuously considered and adapted.  Deviations from the code: None 11.0.Remuneration of the board of directors The ordinary general meeting in 2023 approved the following remuneration: Of the board of directors: ·For the chairman: NOK 47,000/month with an additional NOK 11,000/meeting ·For other shareholder-elected members of the board: NOK 31,000/month with an additional NOK 8,000/meeting ·For the employee-elected members of the board: NOK 18,000/month with an additional NOK 4,500/meeting Additional fees for board sub-committees: ·For the committee chair: NOK 19,500/meeting ·For the shareholder-elected members of the committee: NOK 14,000/meeting ·For the employee-elected members of the committee: NOK 8,000/meeting Committee fees are capped at 12 meetings per year. Additional cash compensation to the board with an obligation to purchase shares in the company for a minimum of 50 % of the amount: ·For the chairman of the board: NOK 252,000 ·For the shareholder-elected members of the board: NOK 168,000 4 ·For the employee-elected members of the board: NOK 97,200 Purchased shares are subject to a 12-month lock-up from the date of purchase. The board shall approve any consultancy work by a member of the board, including the remuneration of such work. Total remuneration of the board of directors for 2023 was NOK 7.9 million. The individual remuneration of the board members is specified in a separate report “Remuneration of leading persons” and in note 10 to the annual financial statements. Nomination committee fees: ·For the committee chair: NOK 15,000/meeting ·For members of the committee: NOK 12,000/meeting Corporate governance reportPage 48 The nomination committee fees are capped at NOK 60,000 per year and NOK 48,000 per year for the nomination committee chair and members respectively, (based on a maximum of 4 committee meetings). Total remuneration of the nomination committee for 2023 was NOK 26 000. Deviations from the code: None 12.0.Remuneration of the senior management Combined remuneration of senior management was NOK 49 million for 2023. The individual remuneration of senior management is specified in a separate report “Remuneration of leading persons” and in note 10 to the financial statements. Guidelines for salaries and other benefits to leading persons are available on www.okea.no . Deviations from the code: None 13.0.Information and communication The board places great emphasis on open, honest and timely dialogue with shareholders and other participants of the capital markets to build trust and credibility, and to support access to capital and a fair valuation of the company’s listed shares and debt. The board seeks to present the information factually, transparently, and accurately. All information is published in English, which is OKEA’s corporate language. OKEA’s investor relations (IR) team comprises the CEO, CFO, and vice president for investor relations. The main responsibility for the company’s IR work rests with the vice president for communication and investor relations. The primary channels for investor communication are www.okea.no and www.newsweb.no . OKEA provides interim and annual financial statements and issues other notices when appropriate, in accordance with Oslo Rule Book II - Issuer Rules2, section 4. “Continuing obligations for Issuers of Shares” and section 6 “Continuing obligations for Issuers of Bonds”, and quarterly financial statements as required under the company’s bond agreements. The information is made available on the company’s website and at www.newsweb.no . Corporate governance reportPage 49 Deviations from the code: None 14.0.Takeovers The board has established procedures for how to act should a take-over bid be made. In a take-over process, the board and the senior management team each have an individual responsibility to ensure that the company’s shareholders are treated equally and thatthere are no unnecessary interruptionsto the company’sbusinessactivities.The board has a particular responsibility to ensure that the shareholders have sufficient information and time to assess the offer. In the event of a take-over process, the board shall ensure that: 1. the board will not seek to hinder or obstruct any takeover bid for the company’s operations or shares unless there are particular reasons for doing so; 2. the board shall not undertake any actions intended to give shareholders or others an unreasonable advantage at the expense of other shareholders or the company; 3. the board shall not institute measures with the intention of protecting the personal interests of its members at the expense of the interests of the shareholders; and 4. the board must be aware of the particular duty it has for ensuring that the values and interests of the shareholders are protected. In the event of a take-over bid, the board will, in addition to complying with relevant legislation and regulations, comply with the recommendations in the Norwegian Code of Practice for Corporate Governance. This includes obtaining a valuation from an independent expert. On this basis, the board will make a recommendation as to whether or not the shareholders should accept the bid. Any transaction that is in effect a disposal of the company’s activities should be decided by a general meeting. Deviations from the code: None 15.0.Auditor The company’s external auditor is PwC. The board of directors requires the company’s auditor to annually present a review of the company’s internal control procedures, including identified weaknesses and proposals for improvement, as well as the main features of the plan for the audit of the company. Corporate governance reportPage 50 Furthermore, the board of directors requires the auditor to participate in meetings of the board of directors that deal with the annual financial statements. At these meetings the auditor reports on any material changes in the company’s accounting principles and key aspects of the audit, comments on estimated accounting figures and reports all material matters on which there has been disagreement between the auditor and the senior management of the company. The board of directors will meet with the auditor annually without representatives of company management being present. The auditor normally participates in all meetings with the audit committee, except those parts discussing possible changes of auditor. The auditor meets the audit committee without the company’s management being present at least once a year. The auditor’s independence in relation to the company is evaluated at least annually. The auditor submits a written confirmation that the auditor satisfies established requirements as to independence and objectivity. The auditor may carry out certain audit related or non-audit services for the company, providing these are not in conflict with its duties as auditor. The company has established an audit and non-audit service policy, including approval limits for the management and the audit committee. The remuneration of the auditor is approved by the ordinary general meeting. The board of directors will report to the general meeting details of fees for audit work and any fees for other specific assignments. The auditor attends the general meeting if the business which is to be transacted is of such a nature that attendance is considered necessary. Deviations from the code: None Reporting on payments to governments Annual report 2023 Reporting on payments to governmentsPage 52 Reporting on payments to governments This report is prepared in accordance with the Norwegian Accounting Act Section § 3-3 d and the Securities Trading Act § 5-5a which stipulates that companies engaged in activities within the extractive industries shall annually prepare and publish a report containinginformationabouttheirpayments togovernments atcountryandprojectlevel. The Ministry of Finance has issued a regulation (F20.12.2013 no. 1682) stipulating that the reporting obligation only applies to reporting entities above a certain size and to payments above certain threshold amounts. In addition, the regulation stipulates that the report shall include other information than payments to governments, as included in section 6 of this report, and it provides more detailed rules applicable to definitions, publication, and group reporting. The reportable payments are defined in the regulation (F20.12.2013 nr 1682) §3. Management has applied judgment in the interpretation of the regulation regarding the type of payments to be included in the reporting and on what level it should be reported. When payments are required to be reported on a project-by-project basis, OKEA reports by field. Management interprets the regulations as such that only gross amounts on operated licences are reportable, and only for the period when OKEA formally has been acting as operator. This is due to payments in each licence generally being cash calls transferred to the operator. Tax is reported on a corporate basis. All activities in OKEA within the extractive industries are located on the Norwegian continental shelf and all the reported payments below have been made to the Norwegian government. 1.0.Area fee OKEA, as operator, has paid area fees for the following licences in 2023: License Draugen Aurora Brage Brasse Total area fee paid Area fee paid in 2023 (MNOK) 1.1 8.1 8.7 1.0 19.0 Reporting on payments to governmentsPage 53 2.0.Income tax Income taxes are calculated for OKEA ASA. Net tax paid in 2023 amounted to NOK 1,252,742,890 and relate to last three tax instalments for the income year 2022 and the three first tax instalments for the income year 2023, partly offset by a tax refund for 2022. 3.0.CO 2 tax The CO 2 tax paid in 2023 amounted to NOK 244,305,064, whereof NOK 112,981,850 relates to the Draugen field and NOK 131,323,214 relates to the Brage field. 4.0.NOx OKEA is a member of the NOx fund and all NOx payments are made to this fund rather than to the government. The total amount paid to the NOx fund in 2023 amounted to NOK 30,358,638, whereof NOK 16,907,021 relates to the Draugen field and NOK 13,451,618 relates to the Brage field. 5.0. Norwegian Ocean Industry Authority (Havtil) In 2023, the company paid NOK 6,059,655 to Havtil mainly in relation to sector fees and supervisory activities on operated licenses. Reporting on payments to governmentsPage 54 6.0.Other information OKEA is also required to report on investments, operating income, production volumes and purchases of goods and services. All reported information relates to OKEAs activities within the extractive industries on the Norwegian continental shelf: · Total net investments amounted to NOK 3,206 million as specified in the statement of cash flows, of this NOK 1,919 million was related to investments in oil and gas properties. ·Revenues from crude oil and gas sales amounted to NOK 8,739 million as reported in the statement of comprehensive income. · OKEA’s net production was 8.97 million barrels of oil equivalents as reported in note 6 to the financial statements. Reference is made to the statement of comprehensive income and related disclosures notes for information about purchases of goods and services. Financial statements Annual report 2023 Financial statements with notes Overview of the financial statements with notes Statement of comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Note 1Corporate information Note 2Accounting policies Note 3Critical accounting judgements and estimates Note 4Segment reporting Note 5Operating income Note 22Spare parts, equipment and inventory Note 23Cash and cash equivalents Note 24Share capital and shareholder information Note 25Asset retirement obligations Note 26Other provisions Note 27Interest bearing bond loans Note 28Other interest bearing liabilities Note 29Trade and other payables Note 30Financial risk management Note 31Asset acqusitions, sales and swaps Note 32Climate change impact and risks Note 33Commitments and contingencies Note 34Related party transactions Note 35Reserves (unaudited) Note 36Events after the balance date Confirmation from the board of directors and CEO Alternative performance measures Note 6Production expenses and changes in over/underlift position and production inventory Note 7Exploration and evaluation expenses Note 8Oil and gas properties, buildings, furniture, fixtures and office machines, right-of-use assets Note 9Impairment / reversal of impairment Note 10Employee benefit expenses Note 11Other operating expenses Note 12Financial items Note 13Taxes Note 14Pensions Note 15Earnings per share Note 16Business combinations Note 17Goodwill, exploration and evaluation assets Note 18Lease liability Note 19Asset retirement reimbursement right Note 20Trade and other receivables Note 21Financial investments Financial statements Page 56 Statement of comprehensive income Revenues f rom crudeoil andgas sales 4 , 58 738 903 6 398 654 Produc t ionexpenses -1616020 Changes inover / underli ft posi t ions andproduc t ioninven t ory 296 523 Explora t ionandevalua t ionexpenses 6-2083788 6-684204 7-203398 -327506 Deprecia t ion , deple t ionandamor t iza t ion 8-1695088 -769359 I mpairmen t (-) / reversal o f impairmen t 9-2744808 -497584 Financeincome 12264 295 126 041 Financecos t s 12-330006 -334055 Other comprehens i ve i ncome (OC I ) , net of tax: It ems t ha t will no t bereclassi f ied t opro f i t or loss insubsequen t periods : Earn i ngsper share(NOK per share) - Basic - Dilu t ed 15-9 , 006 , 45 15-9 , 006 , 44 Amoun t s inNOK000 No t e2023 2022 O t her opera t ingincome / loss (-) 5145 631 253 975 Tota l operat i ng i ncome 8 884 534 6 652 629 General andadminis t ra t iveexpenses 10 , 11-157066 -212602 Tota l operat i ng expenses -7568352 -3126549 Prof i t / l oss(-) from operat i ng act i v i t i es1 316 1823 526 080 Ne t exchangera t egain / loss (-) 12-151494 -103101 Net f i nanc i a l i tems -217205 -311115 Prof i t / l oss(-) before i ncometax1 098 9773 214 965 Taxes (-) / t ax income(+) 13-2034335 -2545357 Net prof i t / l oss(-) -935358 669 608 Remeasuremen t s pensions , ac t uarial gain / loss (-) 14-1389 110 Tota l other comprehens i ve i ncome , net of tax -1389 110 Tota l comprehens i ve i ncome / l oss(-)-936747669 718 Financial statements Page 57 Statement of financial position ASSETS Non-current assets Goodwill 1 296 591 Explora t ionandevalua t ionasse t s 16 , 172 295 470 17210 481 184 317 Oil andgas proper t ies 87 198 586 6 556 314 Furni t ure , f ix t ures ando ff iceequipmen t 856 667 40 622 18 , 8199 652 232 901 Current assets Tradeando t her receivables 20 , 291 210 790 1 743 901 Sparepar t s , equipmen t andinven t ory 21864 248 800 333 Asse t re t iremen t reimbursemen t righ t, curren t 1983 229 0 Amoun t s inNOK 000 No t e31 / 12 / 2023 31 / 12 / 2022 Righ t -o f -useasse t s Asse t re t iremen t reimbursemen t righ t 194 079 318 3 662 122 Tota l non-current assets 14 040 173 11 972 868 Cashandcashequivalen t s 22 , 292 301 181 1 104 026 Tota l current assets 4 459 448 3 648 261 TOTAL ASSETS 18 499 621 15 621 128 Financial statements Page 58 EQU I TY AND L I AB I L I T I ES Equ i ty Sharecapi t al 2310 391 10 391 Sharepremium 1 419 486 1 627 307 O t her paidincapi t al 19 140 19 140 5 915 084 Pensionliabili t ies 43 255 Leaseliabili t y De f erred t ax liabili t ies O t her provisions I n t eres t bearingbondloans Current li ab ili t i es Tradeando t her payables 28 , 292 997 001 2 219 658 O t her in t eres t bearingliabili t ies , curren t 27 , 2949 995 45 874 I ncome t ax payable 476 850 Leaseliabili t y , curren t 49 643 Asse t re t iremen t obliga t ions , curren t 132 141 182 1850 190 24104 036 0 Chaiwa t Kovavisarach Chairmano f t heBoard Pha t pureeChinkulki t niva t Boardmember MikeFischer Vicechair o f t heboard Elizabe t hAnneWilliamson-Holland Boardmember NicolaCarol Gordon Boardmember RuneOlav Pedersen Boardmember FinnHaugan Boardmember Per MagneBjellvåg Boardmember SverreNes Boardmember RagnhildAas Boardmember JonArn t Jacobsen Boardmember SveinJakobLiknes CEO Trondheim , 4April 2024 Statement of financial position Amoun t s inNOK000 No t e31 / 12 / 2023 31 / 12 / 2022 Re t ainedearnings / loss (-) -723376 421 191 Tota l equ i ty 725 642 2 078 030 Non-current li ab ili t i es Asse t re t iremen t obliga t ions 249 431 431 1460 570 18178 537 212 409 13888 183 2 835 089 25102 115 39 107 26 , 291 245 860 1 178 610 O t her in t eres t bearingliabili t ies 27 , 29427 128 462 078 Tota l non-current li ab ili t i es 12 333 823 10 685 633 Public dues payable 97 753 65 440 Tota l current li ab ili t i es 5 440 156 2 857 465 Tota l li ab ili t i es 17 773 980 13 543 099 TOTAL EQU I TY AND L I AB I L I T I ES 18 499 621 15 621 128 Financial statements Page 59 Statement of changes in equity Share Other pa i d i n Reta i ned Equi t y a t 1January 2022 10 3871 927 85919 064 -248527 1 708 783 Ne t pro f i t/ loss (-) f or t heyear 000 669 608 669 608 000 110 110 Dividendpaid 0-3012640 0 -301264 Shareissues , cash23 47120 0 716 Equi t y a t 1January 2023 10 3911 627 30719 140 421 191 2 078 030 Ne t pro f i t/ loss (-) f or t heyear 000 -935358 -935358 000 -1389 -1389 Dividendpaid23 0-2078210 -207821 -415641 Shareissues , cash23 000 0 0 To t al o t her comprehensiveincome / loss (-) f or t heyear To t al o t her comprehensiveincome / loss (-) f or t heyear Amoun t s inNOK 000No t e Sharecap i ta l prem i um cap i ta l earn i ngs /l oss (-) Tota l equ i ty Sharebasedpaymen t 10 0076 0 76 Equ i tyat 31December 2022 10 3911 627 30719 140 421 191 2 078 030 Sharebasedpaymen t 10 000 0 0 Equ i tyat 31December 2023 10 3911 419 48619 140 -723376 725 642 Financial statements Page 60 Statement of cash flows Amoun t s inNOK000 No t e2023 2022 Cash f l ow from operat i ng act i v i t i es Pro f i t / loss (-) be f oreincome t ax 1 098 977 3 214 965 Ne t income t ax paid / received 13-1252743 -2289373 Deprecia t ion , deple t ionandamor t iza t ion 81 695 088 769 359 I mpairmen t / reversal o f impairmen t 92 744 808 497 584 Expensedexplora t ionexpendi t ures t emporary capi t alised 7 , 174 703 141 892 Accre t ionasse t re t iremen t obliga t ions / reimbursemen t righ t 19 , 2421 905 11 768 Asse t re t iremen t cos t s f rom billing(ne t a ft er reimbursemen t ) 19 , 24-25455 -22525 I n t eres t expense 1286 161 172 369 Loss on f inancial inves t men t s 120 64 Changein f air valuecon t ingen t considera t ion 2510 934 -12376 Changein t radeando t her receivables , andinven t ory 467 963 -799208 Changein t radeando t her payables 71 084 1 425 986 Unrealised f x andnon-cashchanges ino t her non-curren t i t ems Net cash f l ow from / used i n (-) operat i ng act i v i t i es Cash f l ow from i nvest i ng act i v i t i es I nves t men t inexplora t ionandevalua t ionasse t s 17-31939 -315833 Business combina t ion , cashpaid 16-1217107 -1239721 I nves t men t inoil andgas proper t ies 8 , 12-1918704 -1052354 I nves t men t in f urni t ure , f ix t ures ando ff icemachines 8-37826 -36422 Cashusedon(-) / received f rom f inancial inves t men t s Net cash f l ow from / used i n (-) i nvest i ng act i v i t i es Cash f l ow from f i nanc i ng act i v i t i es Ne t proceeds f rom issueo f bondloans 261 308 025 0 Repaymen t/ buy-back o f bondloans 26-1328211 -1401531 Repaymen t o f o t her in t eres t bearingliabili t ies 27-48793 -42730 -131435 -193729 18-33325 -30544 I n t eres t paid Repaymen t s o f leasedeb t Dividendpaymen t s 23-415641 -301264 Ne t proceeds f rom shareissues Net cash f l ow from / used i n (-) f i nanc i ng act i v i t i es Net i ncrease / decrease(-) i n cash and cash equ i va l ents Cashandcashequivalen t s a t t hebeginningo f t heperiod 1 104 026 2 038 745 E ff ec t o f exchangera t e f luc t ua t iononcashheld Cash and cash equ i va l entsat theend of theper i od 264 662 233 567 5 188 087 3 344 073 0 209 896 -3205575 -2434433 230 716 -649381 -1969082 1 333 131 -1059442 -135976 124 723 222 301 181 1 104 026 Financial statements Page 61 Note 1. Corporate information Note 2. Accounting policies OKEA ASA (“OKEA” or “the company”) is a public limited liability company incorporated and domiciled in Norway. The company’s registered business address is Kongens gate 8, 7011 Trondheim, Norway. OKEA’s shares are listed on the Oslo Stock Exchange under the ticker “OKEA”. OKEA is a leading mid to late-life operator on the Norwegian continental shelf (NCS). OKEA finds value where others divest and has an ambitious growth strategy built on accretive M&A activities, value creation and capital discipline. The company has a strong asset portfolio including the Draugen and Brage fields, which are operated by OKEA, as well as partner shares in Gjøa, Ivar Aasen, Yme, Nova and Statfjord. Furthermore, OKEA has activities in projects under development, as well as discoveries being evaluated for development and exploration licences with planned and possible wells. The financial statements of OKEA for the year ended 31 December 2023 were authorised for issue in accordance with a resolution of the board of directors on 4 April 2024. Bas i sof preparat i on OKEA ASA ’ s f inancial s t a t emen t s havebeenpreparedinaccordancewi t h I FRS ® Accoun t ingS t andards ( I FRS) as adop t edby t heEuropeanUnion(EU) andinaccordancewi t h t headdi t ional requiremen t s f ollowing t heNorwegianAccoun t ingAc t. The f inancial s t a t emen t s havebeenpreparedunder t heassump t iono f goingconcernandonhis t orical cos t basis , wi t hsome excep t ions where f air valuemeasuremen t is applied . Theseexcep t ions arespeci f ically disclosedin t heaccoun t ingpolicies sec t ions inrelevan t no t es . C l ass i f i cat i on i n statement of f i nanc i a l pos i t i on Curren t asse t s andcurren t liabili t ies includei t ems dueless t hanayear f rom t heda t eo f t hes t a t emen t o f f inancial posi t ion , andi t ems rela t ed t o t heopera t ingcycle , i f longer . O t her asse t s andliabili t ies areclassi f iedas non-curren t. I nterest i n o il and gas li cences Thecompany accoun t s f or i t s in t eres t inoil andgas licenses basedoni t s ownershipin t eres t in t helicence . Thecompany recognises i t s shareo f eachlicence’s income , expenses , asse t s , liabili t ies andcash f lows , onaline-by-linebasis in t he company’s f inancial s t a t emen t s . Fore i gn currencytrans l at i on and transact i ons The f unc t ional currency and t herepor t ingcurrency o f t hecompany is NOK . Foreigncurrency t ransac t ions are t ransla t edin t oNOK using t heexchangera t es prevailinga t t ransac t ionda t e . Mone t ary asse t s andliabili t ies in f oreigncurrencies are t ransla t eda t prevailingexchangera t es oneachbalanceshee t da t e . Non-mone t ary i t ems in f oreigncurrencies are t ransla t eda t t hehis t orical exchangera t eon t he t ransac t ionda t e . Non-mone t ary i t ems t ha t aremeasureda t f air valueare t ransla t eda t t heexchangera t eon t heda t ewhen t he f air valuewas de t ermined . Foreignexchangegains andlosses resul t ing f rom se tt lemen t o f f oreigncurrency t ransac t ions and t ransla t iono f mone t ary asse t s andliabili t ies denomina t edin f oreigncurrencies arerecognisedin t heincomes t a t emen t. Cost of equity transactions Transaction costs directly attributable to an equity transaction are recognised directly in equity, net of taxes. Cash f l ow statement Thecash f low s t a t emen t is preparedusing t heindirec t me t hod . I n t eres t paidis presen t edunder f inancingac t ivi t ies . Other material accounting policies O t her ma t erial accoun t ingpolicies appliedin t heprepara t iono f t he f inancial s t a t emen t s aredescribedin t herespec t ive no t edisclosures . New and amended standards and interpretations adopted by the company New s t andards andamendmen t s t os t andards andin t erpre t a t ions e ff ec t ive f rom 1January 2023didno t haveany signi f ican t impac t on t he f inancial s t a t emen t s . New and amended standardsand i nterpretat i ons i ssued , but not adopted A number of new standards and amendments to standards and interpretations are effective for annual periods beginning on or after 1January 2024andhaveno t beenappliedinpreparing t hese f inancial s t a t emen t s . Noneo f t hesenew s t andards and amendmen t s t os t andards andin t erpre t a t ions areexpec t ed t ohaveany signi f ican t impac t on t hecompany’s f inancial s t a t emen t s . Financial statements Page 62 Note 3. Critical accounting judgements and estimates Theprepara t iono f f inancial s t a t emen t s requires managemen t t omakejudgemen t s , usees t ima t es andassump t ions t ha t a ff ec t t heapplica t iono f policies andrepor t edamoun t s o f asse t s , liabili t ies , revenues andexpenses . Al t hough t hesees t ima t es arebasedonmanagemen t ’s bes t knowledge o f his t orical experienceandcurren t even t s , ac t ual f u t ureresul t s may di ff er f rom t hesees t ima t es . Thees t ima t es and t heunderlyingassump t ions arereviewedonanongoingbasis . Curren t ly , t hecompany’s mos t impor t an t accoun t inges t ima t es rela t e t o t he f ollowingi t ems : I mpa i rment Thecompany reviews whe t her i t s non- f inancial asse t s havesu ff eredany impairmen t whenever even t s or changes incircums t ances indica t e t ha t t hecarryingamoun t may no t berecoverable . Anasse t is wri tt endown t oi t s recoverableamoun t when t herecoverableamoun t is lower t han t he carryingvalueo f t heasse t. Therecoverableamoun t is t hehigher o f f air valueless expec t edcos t t osell andvalueinuse(presen t valuebasedon t he f u t ureuseo f t heasse t ) . All impairmen t assessmen t s requireahighdegreeo f es t ima t ion , includingassessmen t s o f expec t ed f u t urecash f lows f rom t hecashgenera t ing uni t and t hees t ima t iono f applicablediscoun t ra t es . I mpairmen t t es t ingrequires long- t erm assump t ions t obemadeconcerninganumber o f economic f ac t ors suchas f u t ureproduc t ionlevels , marke t condi t ions , produc t ionexpense , discoun t ra t es andpoli t ical risk amongo t hers , inorder t oes t ablishrelevan t f u t urecash f low es t ima t es . Thereis ahighdegreeo f reasonedjudgemen t involvedines t ablishing t heseassump t ions andin de t erminingo t her relevan t f ac t ors . Goodwill is t es t ed f or impairmen t a t eachbalanceshee t da t e . The t erm “ t echnical goodwill” is used t odescribeaca t egory o f goodwill arisingas an o ff se tt ingaccoun t t ode f erred t ax recognisedinbusiness combina t ions . Therearenospeci f ic I FRS guidelines per t aining t healloca t iono f t echnical goodwill , andmanagemen t has t here f oreapplied t hegeneral guidelines f or alloca t inggoodwill f or t hepurposeo f impairmen t t es t ing . The appropria t ealloca t iono f goodwill requires managemen t’ s judgmen t andmay impac t t hesubsequen t impairmen t chargesigni f ican t ly . I ngeneral , t echnical goodwill is alloca t ed t oCGU level f or impairmen t t es t ingpurposes , whileresidual goodwill may bealloca t edacross all CGUs basedon f ac t s andcircums t ances in t hebusiness combina t ion . Whenper f orming t heimpairmen t t es t f or t echnical goodwill , de f erred t ax recognisedin rela t ion t o t heacquiredlicences reduces t hene t carryingvalueprior t o t heimpairmen t charges inorder t oavoidanimmedia t eimpairmen t o f all t echnical goodwill . Whende f erred t ax f rom t heini t ial recogni t iondecreases , moregoodwill is as suchexposed f or impairmen t. Going f orward , deprecia t iono f values calcula t edin t hepurchasepricealloca t ionwill resul t indecreasedde f erred t ax liabili t y . Fa i r va l uemeasurement A t balanceshee t da t e t he f air values o f non- f inancial asse t s andliabili t ies arerequired t obede t ermined . This may includesi t ua t ions when t heen t i t y acquires abusiness , de t ermines alloca t iono f purchasepriceinanasse t deal or whereanen t i t y measures t herecoverableamoun t o f anasse t or CGU a t f air valueless cos t t osell . Fair valueis t heprice t ha t wouldbereceived t osell anasse t or paid t o t rans f er aliabili t y inanorderly t ransac t ionbe t weenmarke t par t icipan t s a t t hemeasuremen t da t e . The f air valueo f anasse t or aliabili t y is measuredusing t heassump t ions t ha t marke t par t icipan t s wouldusewhenpricing t heasse t or liabili t y . A f air valuemeasuremen t o f anon- f inancial asse t t akes in t oaccoun t amarke t par t icipan t’ s abili t y t ogenera t eeconomic bene f i t s by using t heasse t ini t s highes t andbes t useor by sellingi t t oano t her marke t par t icipan t t ha t woulduse t heasse t ini t s highes t andbes t use . Thecompany uses valua t ion t echniques t ha t areappropria t ein t hecircums t ances . Su ff icien t da t ais available t omeasure f air valueinorder t omaximise t heuseo f relevan t observableinpu t s , andminimise t heuseo f unobservableinpu t s . The f air valueo f oil f ields inproduc t ionanddevelopmen t phaseis normally basedondiscoun t edcash f low models , where t hede t ermina t iono f t hedi ff eren t inpu t in t hemodel requires signi f ican t judgmen t f rom managemen t (ref. chapter regarding impairment above). Asset retirement obligations Produc t iono f oil andgas is subjec t t os t a t u t ory requiremen t s rela t ing t odecommissioningandremoval . Provisions t ocover such f u t ureasse t re t iremen t obliga t ions is recogniseda t t he t ime t hes t a t u t ory requiremen t arises , whichis de f inedas when t heequipmen t has been installed or a well has beendrilled . Thees t ima t es areuncer t ainandmay vary inresponse t omany f ac t ors includingchanges t orelevan t legal requiremen t s , t he emergenceo f new res t ora t ion t echniques or experiencea t o t her produc t ionsi t es . Theexpec t ed t imingandamoun t o f expenditure can also change, for exampleinresponse t hechanges inreserves or changes inlaws andregula t ions or t heir in t erpre t a t ion . A premisein t hees t ima t ion f or t he f u t ureobliga t ions is curren t t echnology andmarke t condi t ions . As such , t hereis alsoinheren t risk rela t ed t o f u t uredevelopmen t s in t echnology and market prices. Furthermore, future price levels, market conditions and development in technology can impact the timing of the closing of production and thus the timing of abandonment. The company is reviewing the estimates and assumptions related to asset retirement obligations to ensure the f inancial s t a t emen t s re f lec t t hecompany’s bes t es t ima t ea t any repor t ingda t e . Proven and probable oil and gas reserves Oil andgas reserves arees t ima t edby t hecompany inaccordancewi t hindus t ry s t andards . Thees t ima t es arebasedonOKEA ’ s ownassessmen t o f in t ernal in f orma t ionandin f orma t ion f rom opera t ors . I naddi t ion , provenandprobablereserves arecer t i f iedby anex t ernal par t y . Provenand probablereserves andproduc t ionvolumes areused t ocalcula t e t hedeprecia t iono f oil andgas proper t ies by applying t heuni t -o f -produc t ion me t hod . Reservees t ima t es arealsousedas basis f or impairmen t t es t ingo f oil andgas proper t ies andgoodwill . Changes inpe t roleum prices and cos t es t ima t es may changereservees t ima t es andaccordingly economic cu t -o ff, whichmay impac t t he t imingo f assumeddecommissioningand removal ac t ivi t ies . Changes t oreservees t ima t es canalsoresul t f rom upda t edproduc t ionandreservoir in f orma t ion . Fu t urechanges t oprovenand probable reserves can have a material impact on depreciation, life of field, impairment, and operating results. Financial statements Page 63 Note 4. Segment reporting Note 5. Operating income Revenues from crude oil and gas sales 2023 2022 6 672 215 3 621 472 2023 2022 7 920 985 3 841 817 2023 2022 6 755 146 4 241 579 Other operat i ng i ncome / l oss (-) 2023 2022 -11476 0 5 648 72 492 2 386 0 -10934 12 376 130 656 131 596 7 566 0 Thecompany has iden t i f iedi t s repor t ablesegmen t basedon t hena t ureo f t herisk andre t urnwi t hini t s business . Thecompany’s only business segmen t is developmen t andproduc t iono f oil andgas on t heNorwegiancon t inen t al shel f. *** Rela t es t ojoin t u t ilisa t iono f t heo ff shoresupply ship"Siem Pride" andsupply base"Ves t base" . ** Seeno t e25 . Accounting policies Revenuerecogn i t i on Revenue f rom t hesaleo f pe t roleum produc t s is recognisedwhen t hecompany’s con t rac t ual per f ormanceobliga t ionhas been f ul f illedand con t rol is t rans f erred t o t hecus t omer , whichwill ordinarily bea t t hepoin t o f delivery when t he t i t lepasses (sales me t hod) . Theli ft ingschedule andalloca t iono f li ft s t oOKEA will vary wi t h t heproduc t ionpro f iles andcommercial arrangemen t s f or t hevarious pe t roleum produc t s and asse t s . Saleo f pe t roleum produc t s is mos t ly made t olargein t erna t ional oil companies wi t hinves t men t gradecredi t ra t ing . Thepricingo f t he sales o f pe t roleum produc t s is de t erminedbasedonmarke t pricing f or eachproduc t. Thereis nosigni f ican t judgemen t rela t ed t oapplying I FRS 15 t o t hecompany’s con t rac t s . Amounts in NOK 000 Saleo f liquids Saleo f gas 2 066 688 2 777 182 Total revenues from crude oil and gas sales 8 738 903 6 398 654 Sa l esvo l umes i n boe* Saleo f liquids Saleo f gas 2 380 613 2 090 128 Total sale of petroleum 10 301 598 5 931 945 Product i on vo l umes i n boe* Produc t iono f liquids Produc t iono f gas 2 218 581 1 867 218 Total production 8 973 727 6 108 797 * Barrels o f oil equivalen t s Amounts in NOK000 Gain / loss (-) f rom pu t/ call op t ions , oil Gain / loss (-) f rom f orwardcon t rac t s , gas Gain / loss (-) f rom f orwardcon t rac t s , CO2quo t as Changein f air valuecon t ingen t considera t ion Tari ff incomeGjøaandNOx re f undBrage Saleo f licenses Join t u t ilisa t iono f logis t ics resources a t Draugen 21 783 37 512 Total other operating income / loss (-) 145 631 253 975 Financial statements Page 64 Product i on expenses 2023 2022 1 780 685 272 067 0 0 179 295 2023 2022 -483505 2023 2022 Accounting policies Overlift and underlift of petroleum products Over / underli ft balances aremeasureda t t helower o f produc t ioncos t includingdeprecia t ionandne t realisablevalue . Changes inover / underli ft balances arepresen t edas anadjus t men t t ocos t onasepara t elinei t em in t hes t a t emen t o f comprehensiveincome . Overli ft andunderli ft is calcula t edas t hedi ff erencebe t ween t hecompany’s shareo f produc t ionandi t s ac t ual sales andareclassi f iedas curren t asse t s andcurren t liabili t ies respec t ively . If accumula t edproduc t ionexceeds accumula t edsales , t hereis anunderli ft (asse t ) andi f accumula t ed sales exceeds accumula t edproduc t ion t hereis anoverli ft (liabili t y) . Note 6. Production expenses and changes in over/underlift position and production inventory Amounts in NOK 000 From licencebillings - producingasse t s 1 420 803 From licencebillings - asse t s under developmen t - various prepara t ions f or opera t ion O t her produc t ionexpenses (insurance , t ranspor t ) G&A expenses alloca t ed t oproduc t ionexpenses 31 036 15 922 Product i on expenses 2 083 788 1 616 020 Product i on expenses 2 083 788 1 616 020 Less : processing t ari ff income -130656 -131596 Less : join t u t ilisa t iono f logis t ics resources -21783 -37512 Less : prepara t ion f or opera t ionasse t under developmen t 0 0 Ne t produc t ionexpenses 1 931 349 1 446 912 Producedvolumes (boe) 8 973 727 6 108 797 Product i on expenseNOK per boe* 215 237 * Barrels o f oil equivalen t s Changes i n over / under li ft pos i t i onsand product i on i nventory Amounts in NOK000 Changes inover / underli ft posi t ions 196 372 Changes inproduc t ioninven t ory -200699 100 151 Tota l changes i ncome /l oss(-) -684204 296 523 Vo l umes i n boe Producedvolumes 8 973 727 6 108 797 Third-par t y volumes available f or sale -207071 -217542 Soldownproducedvolumes -10094527 -5714403 Tota l changes i n boe -1327871 176 852 * Compensa t ionvolumes received f rom Duva( t ie-in t oGjøa) Financial statements Page 65 20232022 * Thedrillingo f explora t ionwell Ginny inlicencePL1060was comple t edin2022and t hewell was concludeddry . Thediscovery in t heHamle t explora t ionwell inlicencePL153was concludednon-commercial in2022 , andexpensed t hesameyear . Note 7. Exploration and evaluation expenses Spec i f i cat i on of exp l orat i on and eva l uat i on expenses Amounts in NOK 000 91 18375 304 Share of exploration expenses from participation in licences, dry well write off, from billing* 4 703141 892 Seismic ando t her explora t ionandevalua t ionexpenses , ou t sidebilling 102 441108 525 G&A expenses alloca t ed t oexplora t ionexpenses 5 0701 786 Tota l exp l orat i on and eva l uat i on expenses 203 398327 506 Share of exploration and evaluation expenses from participation in licences excluding dry well impairment, f rom billing Financial statements Page 66 Note 8. Oil and gas properties, furniture, fixtures and office machines, right- of-use assets Accounting policies Property , p l ant and equ i pment , i nc l ud i ng o il and gaspropert i es Proper t y , plan t andequipmen t acquiredby t hecompany ares t a t eda t his t orical cos t, less accumula t eddeprecia t ionandimpairmen t charges . Deprecia t iono f o t her asse t s t hanoil andgas proper t ies arecalcula t edonas t raigh t -linebasis andadjus t ed f or residual values andimpairmen t charges . Ordinary repairs andmain t enancecos t s , de f inedas day- t o-day servicingcos t s , arecharged t o t heincomes t a t emen t during t he f inancial periodin which t hey areincurred . Thecos t o f major overhauls is includedin t heasse t ’s carryingamoun t wheni t is probable t ha t t hecompany will derive f u t ure economic bene f i t s inexcess o f t heoriginally assesseds t andardo f per f ormanceo f t heexis t ingasse t. Gains andlosses ondisposals arede t erminedby comparing t hedisposal proceeds wi t h t hecarryingamoun t andareincludedinopera t ingpro f i t. Righ t -o f -useasse t s represen t t herigh t t ouse t heunderlyingleasedasse t during t helease t erm according t o I FRS 16 . Deprec i at i on of o il and gaspropert i es Capi t alisedcos t s f or oil andgas f ields inproduc t ionaredeprecia t edindividually f or each f ieldusing t heuni t -o f -produc t ionme t hod . Thedeprecia t ionis calcula t edbasedonprovedandprobablereserves . Thera t eo f deprecia t ionis equal t o t hera t ioo f oil andgas produc t ion f or t heperiodover t he es t ima t edremainingprovedandprobablereserves expec t ed t oberecovereda t t hebeginningo f t heperiod . Thera t eo f deprecia t ionis mul t ipliedwi t h t hecarryingvalueplus es t ima t ed f u t urecapi t al expendi t urenecessary t odevelopany undevelopedreserves includedin t hereservebasis . Any changes in t hereserves es t ima t e t ha t a ff ec t uni t -o f -produc t ioncalcula t ions , areaccoun t ed f or prospec t ively over t herevisedremainingreserves . Deve l opment costsfor o il and gaspropert i es For accoun t ingpurposes , aprojec t is considered t oen t er t hedevelopmen t phasewhen t he t echnical f easibili t y andcommercial viabili t y o f ex t rac t ing hydrocarbons f rom t he f ieldaredemons t rable , normally a t t he t imeo f concep t selec t ion(Decisionga t e2) . Cos t s o f developingcommercial oil and / or gas f ields arecapi t alised t oge t her wi t hborrowingcos t s incurredin t heperiodo f developmen t. Capi t aliseddevelopmen t cos t s andacquisi t ioncos t o f f ields indevelopmen t areclassi f iedas t angibleasse t s (oil andgas proper t ies) . Pre-opera t ional cos t s areexpensedwhenincurred . Borrow i ng costs Borrowingcos t s t ha t aredirec t ly a tt ribu t able t o t heacquisi t ion , cons t ruc t ionor produc t iono f aquali f yingasse t arecapi t alisedduring t heperiodo f t ime t ha t is required t ocomple t eandprepare t heasse t f or i t s in t endeduseor sale . Quali f yingasse t s areasse t s t ha t t akeasubs t an t ial periodo f t ime t oge t ready f or t heir in t endeduseor sale . Any inves t men t incomeearnedon t he t emporary inves t men t o f speci f ic borrowings , pending t heir expendi t ureon quali f yingasse t s , is deduc t ed f rom t heborrowingcos t s eligible f or capi t alisa t ion . O t her borrowingcos t s areexpensedin t heperiodinwhich t hey incur . Financial statements Page 67 -6751926 -31345 -159050 -6942321 Deprecia t ionplan Es t ima t eduse f ul li f e(years) Uni t o f Produc t ion N / A Linear 3 - 5 Linear 2 - 20 3 050 000 2 015 000 1 441 000823 000 Accumu l ated deprec i at i on and i mpa i rment at 31 December 2023 budge t ) * Deprecia t iono f I FRS 16righ t -o f -useasse t s arepresen t edne t in t heincomes t a t emen t rela t ed t oleasingcon t rac t s en t eredin t oas licenceopera t or . 10 276 046 1 996 217 1 619 488 4 787 53 974 0 52 650 37 826 0 0 0 -2464 358 702 0 0 0 0 0 10 687 398 2 034 042 1 619 488 4 787 53 974 -2464 Amounts i n NOK000 2023 Cos t a t 1January 2023 Addi t ions Addi t ions t hroughbusiness combina t ions (seeno t e16) Reclassi f ica t ion f rom inven t ory Removal anddecommissioningasse t Disposals O il and gas propert i es Furn i ture , f i xtures and off i ce mach i nes R i ght-of-use assets Tota l Cost at 31 December 2023 13 950 512 88 011 358 702 14 397 226 Accumula t eddeprecia t ionandimpairmen t a t 1January 2023 Deprecia t ion Addi t ional deprecia t iono f I FRS 16Righ t -o f -useasse t s I mpairmen t (-) / reversal o f impairmen t Disposals -3719732 -1650061 0 -1382133 0 -12027 -21781 0 0 2 464 -125802 -23246 -10003 0 0 -3857561 -1695088 -10003 -1382133 2 464 7 198 586 56 667 199 652 7 454 905 2022 Cos t a t 1January 2022 Addi t ions Addi t ions t hroughbusiness combina t ions (seeno t e16) Reclassi f ica t ion f rom inven t ory Removal anddecommissioningasse t Disposals 7 165 077 1 080 413 1 957 730 2 969 69 858 0 20 512 36 422 0 0 0 -4284 329 404 11 983 17 315 0 0 0 7 514 993 1 128 817 1 975 045 2 969 69 858 -4284 Carrying amount at 31 December 2023 Cost at 31 December 2022 10 276 046 52 650 358 702 10 687 398 Accumula t eddeprecia t ionandimpairmen t a t 1January 2022 Deprecia t ion Addi t ional deprecia t iono f I FRS 16Righ t -o f -useasse t s I mpairmen t (-) / reversal o f impairmen t Disposals -2480324 -741824 0 -497584 0 -9370 -6942 0 0 4 284 -95205 -20594 -10003 0 0 -2584899 -769359 -10003 -497584 4 284 -3719732 -12027 -125802 -3857561 Accumu l ated deprec i at i on and i mpa i rment at 31 December 2022 Carrying amount at 31 December 2022 6 556 314 40 622 232 901 6 829 837 Amounts i n NOK 000 2024 2025 20262027 Plannedcapi t al expendi t ure f or exis t inglicences (work program and Financial statements Page 68 Note 9. Impairment / reversal of impairment Overv i ew of the key assumpt i ons app li ed i n the i mpa i rment test as of 31 December 2023 Key assump t ions appliedin t heimpairmen t t es t as o f 31December 2022 : Accounting policies I mpa i rment of assets Proper t y , plan t andequipmen t ando t her non-curren t asse t s aresubjec t t oimpairmen t t es t ingwhen t hereis anindica t ion t ha t t heasse t s may be impairedanda t leas t onanannual basis . Thecompany makes suchassessmen t oneachrepor t ingda t e . If anindica t ionexis t s , animpairmen t t es t where t hecompany es t ima t es t herecoverableamoun t o f t heasse t is per f ormed . Therecoverableamoun t is t hehigher o f f air valueless expec t edcos t t osell andvalueinuse . If t hecarryingamoun t o f anasse t or cashgenera t ing uni t is higher t han t herecoverableamoun t, animpairmen t loss is recognisedin t heincomes t a t emen t. Theimpairmen t loss is t heamoun t by which t hecarryingamoun t o f t heasse t exceeds t herecoverableamoun t. Thevalueinuseis de t erminedas t hediscoun t ed f u t urene t cash f lows expec t ed t obegenera t edby t heasse t. Theexpec t ed f u t urecash f lows are discoun t ed t one t presen t valueby applyingadiscoun t ra t ea ft er t ax t ha t re f lec t s t heweigh t edaveragecos t o f capi t al (WACC). For t hepurposes o f assessingimpairmen t, asse t s aregroupeda t t helowes t levels f or which t herearesepara t ely iden t i f iablecashin f lows . For oil andgas proper t ies , t he field or license is typically considered as one cash generating unit. All other assets are assessed separately. Animpairmen t loss onasse t s , excep t f or goodwill , will bereversedwhen t herecoverableamoun t exceeds t hecarryingamoun t. I mpairmen t o f goodwill will not impac t t ax incomeandas such t heimpac t t oNe t Pro f i t a ft er t ax will be t hesameas t heimpairment o f goodwill . Technical goodwill arises as ano ff se tt ingaccoun t t o t hede f erred t ax recognisedinbusiness combina t ions andis alloca t ed t oeachCashGenera t ing Uni t (CGU) andis t es t ed f or impairmen t as par t o f t herelevan t CGU . Whende f erred t ax f rom t heini t ial recogni t iondecreases , more t echnical goodwill is as suchexposed f or impairments. Fair valueassessmen t o f t hecompany ’ s righ t -o f -use(ROU) asse t s por tf olioareincludedin t heimpairment t es t. O il Gas Currencyrates Year USD / boe* GBP / therm* NOK / USD 2024 2025 2026 From 2027 73 . 6 69 . 1 69 . 7 72 . 1 0 . 81 0 . 85 0 . 82 0 . 8 10 . 1 10 . 0 9 . 8 9 . 5 O il Gas Currencyrates Year USD / boe* GBP / therm* NOK / USD 2023 2024 2025 From 2026 83 . 0 76 . 6 70 . 8 67 . 6 1 . 99 1 . 91 1 . 31 0 . 70 9 . 8 9 . 6 9 . 3 9 . 0 * Prices per 31 . 12 . 2023inreal 2023 t erms andper 31 . 12 . 2022inreal 2022 t erms Financial statements Page 69 Other assumpt i ons For oil andgas reserves f u t urecash f lows arecalcula t edon t hebasis o f expec t edproduc t ionpro f iles andes t ima t edprovenandprobableremaining reserves . Fu t urecapex , opex andabandonmen t cos t arecalcula t edbasedon t heexpec t edproduc t ionpro f iles and t hebes t es t ima t eo f t herela t edcos t. For f air value t es t ing t hediscoun t ra t eappliedis 10 . 0% nominal pos t t ax (2022 : 10 . 0% nominal pos t t ax) . Thelong- t erm in f la t ionra t eis assumed t obe2% (2022 : 2%) . Thevalua t iono f oil andgas proper t ies andgoodwill areinheren t ly uncer t aindue t o t hejudgemen t al na t ureo f t heunderlyinges t ima t es . This risk has increaseddue t o t hecurren t marke t condi t ions wi t hrapid f luc t ua t ioninsupply anddemando f oil andgas causingmorevola t ili t y inprices . To t al cos t f or CO2comprises NorwegianCO2 t ax andcos t o f t heEU EmissionTradingSys t em andis es t ima t ed t ogradually increase f rom NOK 1 , 715per t onnein2023 t owards along t erm priceo f NOK 2 , 000(real 2020) per t onne f rom 2030inlinewi t hpricees t ima t es presen t edby t he Norwegianau t hori t ies inla t e2021 . NOx prices arees t ima t ed t oincrease f rom approxima t ely NOK 17per kgin2023 t oalevel o f approxima t ely 28 NOK per kg f rom 2030 . A f u t urechangeinhow t heworldwill reac t inligh t o f t hegoals se t in t heParis Agreemen t couldhaveadversee ff ec t s on t he valueo f OKEA ’ s oil andgas asse t s . Sensi t ivi t ies onchanges t oenvironmen t al cos t is re f lec t edin t he t ablebelow . I mpa i rment test i ng of techn i ca l goodw ill, ord i nary goodw ill, f i xed assets and r i ght-of-use assets as of 31 December 2023 Basedonimpairmen t t es t ing , NOK 1 , 382millioninimpairmen t o f t heYmeasse t was recognisedin2023wi t hano ff se t t ochanges inde f erred t axes o f NOK 1 , 078million . Thekey drivers f or t heimpairmen t was reserves revisionandreduced f orwardprices f or oil . I naddi t ion t o t his , angoodwill impairmen t o f NOK 1 , 363millionwas recognisedinrela t ion t o t heacqusi t iono f S t a tf jordAreaasse t s , as t hegoodwill couldno t besubs t an t ia t ed . Therewas noimpairmen t or reversal o f impairmen t f or any o f t heo t her f ixedasse t s or righ t -o f -useasse t s in2023 , f ur t her noimpairmen t o f t echnical goodwill in 2023 . I mpa i rment test i ng of techn i ca l goodw ill, ord i nary goodw ill, f i xed assets and r i ght-of-use assets as of 31 December 2022 Basedonimpairmen t t es t ing , NOK 498millioninimpairmen t o f t heYmeasse t was recognisedin2022wi t hano ff se t t ochanges inde f erred t axes o f NOK 388million . Thekey drivers f or t heimpairmen t was reserves revisionandrevisedphasingo f produc t ion . Therewas noimpairmen t or reversal o f impairmen t f or any o f t heo t her f ixedasse t s or righ t -o f -useasse t s in2022 , f ur t her noimpairmen t o f ordinary or t echnical goodwill in2022 . Financial statements Page 70 Environmen t al opex 28 192 I EA scenar i o Only t heNe t zeroscenarioresul t s ingrea t er impairmen t t han t hecurren t basecase f or OKEA ’ s por tf olio . Theimpairmen t f igurein t heNe t zerocaseis mainly rela t ed t o f ixedasse t valuea t YmeCGU , par t ly o ff se t by changes inde f erred t ax . As well as impairmen t o f t echnical goodwill a t Draugen , I var Aasen , NovaandS t a tf jord . Theanalysis per f ormedindica t es t herisk o f any s t randedasse t s inOKEA ’ s por tf oliois limi t edunder t hecurren t I EA scenarios . I naddi t ion , scenarios f rom t he I n t erna t ional Energy Agency ( I EA) havebeen t es t ed f or impairmen t. Descrip t ions o f t hese t hreescenarios canbe f ound inOKEA ’ s ESG repor t f or 2022 . Theprices in t hesescenarios areprovidedinreal 2023 t erms f or 2030and2050 . Forwardprices areapplied f or 2024 andlinearly in t erpola t ed f rom average2024 f orwardprice t o I EA scenarioprice2030andlinearly in t erpola t ed f rom I EA scenarioprice2030 t o I EA scenarioprices 2050 . Thenumbers t o t hele ft areal t erna t ivecalcula t ions o f impairmen t or impairmen t reversal (-) and t henumbers t o t herigh t are changes f rom wha t is re f lec t edin t heincomes t a t emen t o f aimpairmen t o f NOK 2744808 t housand . A l ternat i ve ca l cu l at i ons of pre- I ncrease / decrease Sens i t i v i tyana l ys i s2023 The t ablebelow shows wha t t heimpairmen t (pre- t ax) wouldhavebeenin2023under various al t erna t iveassump t ions f or key variables in t he calcula t ion(all elseequal) . Theamoun t s represen t t hecombinedimpairmen t f or CGUs Gjøa , Draugen , I var Aasen , Yme , Brage , Nova , S t a tf jord , and ordinary goodwill . A l ternat i veca l cu l at i onsof pre-tax i mpa i rment / reversa l (-) i n 2023(NOK ’ 000) I ncrease / decrease (-) of pre-tax i mpa i rment 2023 (NOK ’ 000) Assumpt i ons Oil andgas price Currency ra t eNOK / USD Discoun t ra t e I n f la t ion ra t e Change + / - 10% + / - 1 . 0 NOK + / - 1% poin t + / - 1% poin t + / - 20% poin t Decrease i n assumpt i on 3 511 601 3 492 271 2 733 201 2 828 544 2 719 229 I ncrease i n assumpt i on -242997 -245027 29 534 -32371 Decrease i n assumpt i on 766 793 747 463 -11607 83 736 -25579 I ncrease i n assumpt i on 2 501 811 2 499 781 2 774 342 2 712 437 2 773 000 Ne t zeroemissions by 2050 Announcedpledges S t a t edpolicies Oil 44- 27$ / bbl , Gas 36- 34pence /t herm Oil 78- 64$ / bbl , Gas 54- 45pence /t herm Oil 90- 88$ / bbl , Gas 58- 59pence /t herm tax i mpa i rment / reversa l (-) i n 2023 (NOK ’ 000) 3 470 442 2 323 832 2 128 681 (-) of pre-tax i mpa i rment 2023 (NOK ’ 000) 725 634 -420976 -616127 Pr i ces2030& 2050 Financial statements Page 71 I naddi t ion , scenarios f rom t he I n t erna t ional Energy Agency ( I EA) havebeen t es t ed f or impairmen t. Descrip t ions o f t hese t hreescenarios canbe f ound inOKEA ’ s ESG repor t f or 2022 . Theprices in t hesescenarios areprovidedinreal 2021 t erms f or 2030and2050 . Forwardprices areapplied f or 2023 andlinearly in t erpola t ed f rom average2023 f orwardprice t o I EA scenarioprice2030andlinearly in t erpola t ed f rom I EA scenarioprice2030 t o I EA scenarioprices 2050 . Thenumbers t o t hele ft areal t erna t ivecalcula t ions o f impairmen t or impairmen t reversal (-) and t henumbers t o t herigh t are changes f rom wha t is re f lec t edin t heincomes t a t emen t o f aimpairmen t o f NOK 497584 t housand . I ncrease / decrease (-) of pre-tax Sens i t i v i tyana l ys i s2022 Assumpt i ons Oil andgas price Currency ra t eNOK / USD Discoun t ra t e I n f la t ion ra t e Environmen t al opex Change + / - 10% + / - 1 . 0 NOK + / - 1% poin t + / - 1% poin t + / - 20% poin t 70 190 The t ablebelow shows wha t t heimpairmen t (pre- t ax) wouldhavebeenin2022under various al t erna t iveassump t ions f or key variables in t he calcula t ion(all elseequal) . Theamoun t s represen t t hecombinedimpairmen t f or CGUs Gjøa , Draugen , I var AasenandYme , Brage , Nova , and ordinary goodwill . i mpa i rment 2022 (NOK ’ 000) I ncrease i n assumpt i on -7119 -40269 544 758 393 562 567 774 Decrease i n assumpt i on 1 002 288 1 035 438 448 948 598 712 427 395 I ncrease i n assumpt i on -504703 -537853 47 174 -104023 Decrease i n assumpt i on 504 703 537 853 -48637 101 127 -70190 A l ternat i veca l cu l at i onsof pre-tax i mpa i rment / reversa l (-) i n 2022(NOK ’ 000) I EA scenar i o A l ternat i ve ca l cu l at i ons of pre- I ncrease / decrease Ne t zeroemissions by 2050 Announcedpledges S t a t edpolicies Oil 35- 24$ / bbl , Gas 38- 32pence /t herm Oil 64- 60$ / bbl , Gas 66- 52pence /t herm Oil 82- 95$ / bbl , Gas 71- 77pence /t herm tax i mpa i rment / reversa l (-) i n 2022 (NOK ’ 000) 641 468 -99030 -366632 (-) of pre-tax i mpa i rment 2022 (NOK ’ 000) 143 884 -596615 -864217 Only t heNe t zeroscenarioresul t s ingrea t er impairmen t t han t hecurren t basecase f or OKEA ’ s por tf olio . Theimpairmen t f igurein t heNe t zerocaseis mainly rela t ed t o f ixedasse t valuea t YmeCGU , par t ly o ff se t by changes inde f erred t ax . Thereversal indica t edin t heS t a t edpolicies is cappeda t previous impaired f ixedasse t valueo f t heYmeCGU . Theanalysis per f ormedindica t es t herisk o f any s t randedasse t s inOKEA ’ s por tf oliois limi t ed under t hecurren t I EA scenarios . Pr i ces2030& 2050 Financial statements Page 72 Note 10. Employee benefit expenses Spec i f i cat i on of emp l oyeebenef i tsexpenses i nc l uded i n genera l and adm i n i strat i veexpenses 2023 2022 Number o f man-years during t heyear 433 249 Alloca t ed t oopera t edlicences -1405049 -725343 Alloca t ed t oexplora t ionandproduc t ionexpenses Pens i ons Thecompany has ade f inedcon t ribu t ionpensionscheme f or all employees whichsa t is f ies t hes t a t u t ory requiremen t s in t heNorwegianlaw on requiredoccupa t ional pension(“lov om obliga t orisk t jenes t epensjon”) . I naddi t ion , t hecompany has ade f inedbene f i t pensionplan t ocover f or t heage 65-67 f or o ff shoreemployees . Re f erenceis made t ono t e14 f or f ur t her de t ails . Thecompany is par t o f t heAFP ("av t ale f es t e t pensjon") schemeandcon t ribu t es t o t heAFP pension f or all eligibleemployees inaccordancewi t h t he AFP regula t ions . Amounts i n NOK000 Salary expenses Employer ’ s payroll t ax expenses Pensions Sharebasedpaymen t O t her personnel expenses 773 718 144 913 83 568 0 16 311 481 781 73 966 48 045 76 16 204 1 018 511 620 072 Gross emp l oyee benef i ts expenses Gross o t her general andadminis t ra t iveexpenses , seeno t e11 579 711 336 209 1 598 222 956 281 Gross genera l and adm i n i strat i ve expenses -36107 -18336 157 066 212 602 Tota l genera l and adm i n i strat i veexpenses Financial statements Page 73 Compensat i on to management i n 2023 SveinJ . Liknes (CEO) 1 Bir t eNorheim (CFO) Tor Bjerkes t rand(SVP opera t ions) 5 6082 523 3 5661 438 3 5441 383 201 201 201 342 18 18 DagEggan(SVP special projec t s) 3 1151 142 201 18 EspenMyhra(SVP s t ra t egy , BD & commercial) Knu t Gjer t sen(SVP projec t s & t echnology) Mari t MoenVik-Langlie(VP legal) Kjers t i Hovdal (SVP business per f ormance) Tota l compensat i on to management 1) SveinJ . Liknes is en t i t led t o6–18mon t hs severancepay , dependingon t hecircums t ances . 2) I da I anssenLundhwas appoin t edin t erim SVP subsur f aceandpar t o f senior managemen t f rom 1Sep t ember 2023 3) Andrew McCannwas par t o f senior managemen t un t il 1Sep t ember 2023 * Compensa t ionin f orm o f salaries is includedin t heyear paid . Variableando t her compensa t ions areincludedinyear earned . ** Variableremunera t ionincludes remunera t ionrela t ed t oemployeeshareincen t iveprogram andlong- t erm incen t ivescheme . *** O t her bene f i t s include f ringebene f i t s , valueo f warran t s t riggeredando t her bene f i t s . OKEA has asharebonus scheme f or all employees , alsoincluding t hesenior managemen t. Thecri t eria f or t hesharebonus arede t erminedby t he boardo f direc t ors onayearly basis . Theboardconduc t s anannual assessmen t o f t hearrangemen t, de t ermines t heachievemen t o f t hecri t eriaand se t s bonus cri t eria f or t hecomingyear . TheCEO andsenior managemen t areeligible t opar t icipa t ein t hecompany’s long- t erm incen t iveprogram (LT I P) . Thepurposeo f t heLT I P is t o f ur t her align t hein t eres t s o f t hecompany andi t s shareholders by providingalong- t erm program t oincen t iviseandre t ainkey employees . Each par t icipan t is eligible t obealloca t edandawardedanumber o f syn t he t ic res t ric t eds t ock uni t s (RSUs) , eacho f whichwill en t i t le t hepar t icipan t t o receive t hevalueequivalen t t oonesharein t hecompany . Eligibili t y f or t heLT I P will beassessedby t heCEO a t t he t imeo f alloca t ionandaward . Noloans havebeengran t edandnoguaran t ees havebeenissued t o t hemanagemen t or any member o f t heboardo f direc t ors . Amounts i n NOK 000 Var i ab l e Sa l aryremunerat i on** Pens i on Other benef i ts*** BørgeNerland(SVP drilling& wells) I da I anssenLundh(SVP subsur f ace) 2 Andrew McCann(SVP subsur f ace) 3 3 094 1 141 3 518 1 188 2 024 763 2 902 1 078 2 811 1 398 619 585 2 058 694 201 201 201 201 201 67 134 18 596 27 81 18 4 13 32 85913 333 2 007 1 153 Compensat i on to management i n 2022* Amounts i n NOK000 SveinJ . Liknes (CEO) 1) Bir t eNorheim (CFO) Tor Bjerkes t rand(SVP opera t ions) Andrew McCann(SVP subsur f ace& wells) DagEggan(SVP special projec t s) EspenMyhra(SVP business developmen t ) Knu t Gjer t sen(SVP projec t s & t echnology) Mari t MoenVik-Langlie(VP legal) Kjers t i Hovdal (SVP business per f ormance) BørgeNerland(SVP drilling& wells) ØrjanJohanessen , (VP drilling& wells) Tota l compensat i on to management 27 95423 753 1 738 1 115 Var i ab l e Sa l aryremunerat i on 4 560 4 349 3 281 2 560 3 298 2 846 2 865 2 305 2 870 1 902 2 791 2 434 3 336 2 945 1 851 1 888 1 673 1 523 492 738 937 262 Other benef i ts 337 113 13 13 13 14 577 21 7 2 5 * Compensa t ionin f orm o f salaries is includedin t heyear paid . From 2021variableando t her compensa t ions areincludedinyear earned . ** Variableremunera t ionincludes remunera t ionrela t ed t oemployeeshareinsen t iveprogram andlong- t erm incen t ivescheme . *** O t her bene f i t s include f ringebene f i t s , valueo f warran t s t riggeredando t her bene f i t s . 1) SveinJ . Liknes is en t i t led t o6–18mon t hs severancepay , dependingon t hecircums t ances . Pens i on 190 190 190 190 190 190 190 190 111 32 79 Financial statements Page 74 Compensation to Board of Directors in 2023 ** Total compensation to board of directors 435 435 435 435 435 435 435 250 250 239 0 0 81 139 106 216 120 148 115 62 63 48 0 0 168 168 168 168 168 168 168 97 97 97 0 0 684 741 709 819 723 751 718 409 410 384 0 0 Amounts in NOK 000 Chaiwa t Kovavisarach(chairman) MikeFischer (vicechair) RuneOlav Pedersen(boardmember) NicolaGordon(boardmember) FinnHaugan(boardmember) JonArn t Jacobsen(boardmember) Pha t pureeChinkulki t niva t (boardmember) Elizabe t hWilliamson(boardmember) Paul Murray (boardmember) SaowapapSumeksri (boardmember) Gre t he Moen (board member) SverreNes (boardmember) RagnhildAas (boardmember) Per MagneBjellvåg(boardmember) AnneLeneRømuld(boardmember) JohnKris t ianLarsen(boardmember) JanA t leJohansen(depu t y member) Board fees 696 468 460 468 468 326 318 326 135 142 142 183 188 188 81 81 81 Other var i ab l e 2 252 168 168 168 168 168 168 168 0 0 0 97 97 97 0 0 0 Tota l fees 948 860 784 812 885 606 542 578 177 254 184 337 317 317 105 113 97 Sub-comm i tteefees 0 224 156 176 249 112 56 84 42 112 42 56 32 32 24 32 16 4 751 1 444 1 719 7 915 ** The t ableshows t hecompensa t ionearnedby t heboardo f direc t ors in2023 . Compensation to Board of Directors in 2022 *** Amounts in NOK000 Tota l fees Chaiwa t Kovavisarach(chairman) Board fees 650 916 Paul Murray (boardmember) MikeFischer (boardmember) SaowapapSumeksri (boardmember) FinnHaugan(boardmember) Gre t he Moen (board member) RuneOlav Pedersen(boardmember) NicolaGordon(boardmember) JohnKris t ianLarsen(boardmember) AnneLeneRømuld(boardmember) JanA t leJohansen(boardmember) RagnhildAas (depu t y boardmember) Jens ArneMegaard(depu t y boardmember) GroAni t aMarkussen(depu t y boardmember) 11 0 0 11 Total compensation to board of directors 4 4451 1111 7207 275 *** The t ableshows t hecompensa t ionearnedby boardo f direc t ors in2022 . 3) rela t es t oanaddi t ional compensa t ionwi t hanobliga t ion t opurchaseOKEA shares . Theshares aresubjec t t oa12-mon t hlock-upperiod f rom t he da t eo f purchase . inaccordancewi t h t hecompany’s general mee t ingon12May 2022 Other var i ab l e 3 252 Sub-comm i tteefees 14 2) rela t es t oanaddi t ional compensa t ionwi t hanobliga t ion t opurchaseOKEA shares . Theshares aresubjec t t oa12-mon t hlock-upperiod f rom t he da t eo f purchase . inaccordancewi t h t hecompany’s general mee t ingon11May 2023 . Financial statements Page 75 Sharebased payment Warrantsgranted i n connect i on w i th sharebased payment owned bymanagement 40 000 0 38 Tor Bjerkes t rand(SVP opera t ions) Overv i ew of outstand i ng warrants i n connect i on w i th share based payment 20232022 Ou t s t andingwarran t s a t 1January Warran t s exercised Warran t s expired A guidelineonremunera t ion f or leadingpersons was endorsedby t heannual general mee t ingon11May 2023 . A revisiono f t heseguidelines f or leadingpersons in2024will bepresen t eda t t heannual general mee t ingscheduled f or 14May 2024 , as well as asepara t erepor t onremunera t ion f or leadingpersons publisheda t t hesame t imeas t heannual repor t. Warrantsto emp l oyees I nFebruary 2018 , OKEA gran t ed1250000equi t y-se tt ledwarran t s t oemployees , eachwarran t wi t hanexercisepriceo f NOK 17 . 9 . Amounts in NOK 000 20232022 Warran t s t oemployees 0 76 Tota l sharebased payment expense 0 76 Amounts in NOK000 DagEggan(SVP special projec t s) Number of warrants 1) Expenserecogn i sed 2023 Expenserecogn i sed 2022 O t her employees and f ormer managemen t 40 000 1 170 000 1 250 000 0 0 0 38 0 76 Tota l 1) Warran t s owneddirec t ly or indirec t ly by employee . Outstand i ng warrants at 31 December Of wh i ch exerc i sab l e 080 000 0 -40000 0 -40000 0 0 00 Gu i de li ne and report on remunerat i on for l ead i ng persons Financial statements Page 76 Note 11. Other operating expenses Spec i f i cat i on of other operat i ng expenses i nc l uded i n genera l and adm i n i strat i veexpenses Gross genera l and adm i n i strat i ve expenses Note 12. Financial items 2023 2022 Amounts in NOK 000 Technical and I T consul t an t s Adminis t ra t iveconsul t an t s Travel expenses O ff iceren t als ando t her o ff iceexpenses I T so ft wareandhardware O t her expenses 2023 300 802 25 764 33 404 27 193 167 827 24 721 2022 171 244 14 087 15 936 14 867 99 254 20 821 Gross other genera l and adm i n i strat i ve expenses 579 711 336 209 Gross employeebene f i t s expenses , seeno t e10 1 018 511 620 072 1 598 222 956 281 Alloca t ed t oopera t edlicences Alloca t ed t oexplora t ionandproduc t ionexpenses Total genera l and adm i n i strat i veexpenses -1405049 -36107 157 066 -725343 -18336 212 602 Aud i tor ’ sfees(ex . VAT) Amounts in NOK000 20232022 Audi t or ’ s f ee O t her a tt es t a t ionservices O t her services ou t sideaudi t Total aud i tor ’ sfees 1 4961 739 658 101 3890 2 5431 840 Amounts in NOK 000 I n t eres t income Unwindingo f discoun t asse t re t iremen t reimbursemen t righ t (indemni f ica t ionasse t ) Total f i nance i ncome 91 380 172 915 264 295 22 165 103 876 126 041 I n t eres t expenseand f ees f rom loans andborrowings Capi t alisedborrowingcos t ondevelopmen t projec t s I n t eres t expenseshareholder loan O t her in t eres t expense Unwindingo f discoun t asse t re t iremen t obliga t ions Loss onbuy-back / early redemp t ionbondloan Loss on f inancial inves t men t s O t her f inancial expense Total f i nancecosts -163617 77 513 -57 -283 -194820 -28315 0 -20428 -330006 -200371 28 059 -57 -5268 -115645 -23535 -64 -17174 -334055 Exchangera t egain / loss (-) , in t eres t -bearingloans andborrowings Ne t exchangera t egain / loss (-) , o t her Net exchangeratega i n /l oss(-) -54555 -96939 -151494 -296881 193 780 -103101 Net f i nanc i a l i tems -217205 -311115 Financial statements Page 77 Note 13. Taxes Accounting policies I ncome taxes The t axes /t ax incomeconsis t s o f curren t income t ax ( t axes payable / receivable) andchanges inde f erredincome t axes . Current i ncometaxes Curren t income t ax asse t s andliabili t ies f or t hecurren t andprior periods aremeasureda t t heamoun t expec t ed t oberecovered f rom or paid t o t he t ax au t hori t ies . The t ax ra t es and t ax laws used t ocompu t e t heamoun t are t hose t ha t areenac t edor subs t an t ially enac t edby t hebalance shee t da t e . Curren t income t ax rela t ing t oi t ems recogniseddirec t ly inequi t y is recogniseddirec t ly inequi t y . Deferred i ncometaxes De f erred t ax /t ax bene f i t s arecalcula t edon t hebasis o f t hedi ff erences be t weenbook valueand t ax basis values o f asse t s andliabili t ies . De f erredincome t ax asse t s arerecognised f or all deduc t ible t emporary di ff erences (wi t h t heexcep t iono f t emporary di ff erences onacquisi t iono f licences t ha t is de f inedas anasse t purchase) . Carry f orwardo f unused t ax credi t s andunused t ax losses , t o t heex t en t t ha t i t is probable t ha t t he t axablepro f i t will beavailableagains t deduc t ible t emporary di ff erences , and t hecarry f orwardo f unused t ax credi t s andunused t ax losses can beu t ilised . Thecarryingamoun t o f de f erredincome t ax asse t s arerevieweda t eachbalanceshee t da t e , andreduced t o t heex t en t t ha t i t is no longer probable t ha t su ff icien t t axablepro f i t will beavailable t oallow all or par t o f t hede f erredincome t ax asse t t obeu t ilised . Unrecognised de f erredincome t ax asse t s arereassesseda t eachbalanceshee t da t e , andarerecognised t o t heex t en t t ha t i t has becomeprobable t ha t f u t ure t axablepro f i t will allow t hede f erred t ax asse t t oberecovered(onshoreac t ivi t y) . De f erredincome t ax asse t s andliabili t ies aremeasureda t t he t ax ra t es t ha t areexpec t ed t oapply t o t heyear when t heasse t is realisedor t he liabili t y is se tt led , basedon t ax ra t es (and t ax laws) t ha t havebeenenac t edor subs t an t ively enac t eda t t hebalanceshee t da t e . De f erredincome t ax asse t s andde f erredincome t ax liabili t ies areo ff se t i f alegally en f orceablerigh t exis t s t ose t o ff curren t t ax asse t s agains t income t ax liabili t ies and t hede f erredincome t axes rela t e t o t hesame t axableen t i t y and t hesame t axa t ionau t hori t y /t ax regime . Timing di ff erences areconsidered . De f erred t ax asse t s andliabili t ies arerecognised f or t he f u t ure t ax consequences a tt ribu t able t odi ff erences be t ween t hecarryingamoun t s o f exis t ingasse t s andliabili t ies and t heir respec t ive t ax bases , subjec t t o t heini t ial recogni t ionexemp t ion f or acquisi t iono f asse t s . De f erred income t ax rela t ing t oi t ems recogniseddirec t ly inequi t y is recognisedinequi t y andno t in t heincomes t a t emen t. Cash f l ow based petro l eum tax l eg i s l at i on The t ax calcula t ionis f rom 2022basedon t hecash f low basedpe t roleum t ax legisla t ionenac t edby t he t heNorwegianParliamen t inJune2022 . Themain f ea t ureo f t helegisla t iona ff ec t ing t hecompany is t ha t inves t men t s in f ield f acili t ies , produc t ionwells andpipelines incurred f rom 1 January 2022canbeexpensedwhenincurred f or Special pe t roleum t ax (SPT) purposes . Suchexpensingreplaced t heprevious 6years deprecia t ion f or SPT andupli ft. For projec t s whereaplan f or developmen t andopera t ion(PDO) was f iledby t heendo f 2022andapprovedprior t o t heendo f 2023 , anupli ft o f 12 . 4% (2022 : 17 . 69%) o f t heinves t men t canbededuc t edin t heinves t men t year f or SPT purposes . The t ax e ff ec t on upli ft is recognisedwhen t hededuc t ionis includedin t hecurren t year t ax re t urnandimpac t s t axes payable . De f erred t ax is calcula t edbasedon t ax ra t es applicableon t hebalanceshee t da t e . Ordinary income t ax is 22% , t owhichis addedaspecial t ax f or oil andgas companies a t t hera t eo f 56 . 004% , providinga t o t al t ax ra t eo f 78 . 004% . Financial statements Page 78 I ncome taxes recogn i sed i n the i ncome statement 2023 2022 2023 2022 2023 2022 Amounts i n NOK000 Changeinde f erred t axes curren t year Taxes payablecurren t year Tax payableadjus t men t previous year 780 489 -2853024 38 201 -436027 -2105157 -4173 Tota l taxes(-) / tax i ncome(+) recogn i sed i n the i ncomestatement -2034335 -2545357 Reconc ili at i on of i ncometaxes Amounts i n NOK 000 Prof i t / l oss(-) before i ncometaxes Expec t edincome t ax ra t e , 78 . 004%* Permanen t di ff erences , includingimpairmen t o f goodwill E ff ec t o f upli ft Financial andonshorei t ems E ff ec t o f new t ax ra t es Adjus t men t s previous year ando t her 1 098 977 -857246 -1155423 83 158 -150077 0 45 253 3 214 965 -2507802 -25612 102 044 -105620 -104 -8264 Tota l i ncometaxesrecogn i sed i n the i ncomestatement -2034335 -2545357 Effect i ve i ncometaxrate 185% 79% Spec i f i cat i on of taxeffectson temporaryd i fferences , tax l ossesand up li ft carr i ed forward *From 1January 2022 t hecorpora t e t ax ra t eis unchangeda t 22% and t hespecial pe t roleum t ax ra t ewas increased f rom 56% t o71 . 8% wi t ha deduc t ionin t hespecial t ax basis o f acalcula t edcorpora t e t ax . Wi t h t his deduc t ion t he t o t al e ff ec t ive t ax ra t eis 78 . 004% . Amounts i n NOK000 Tangibleandin t angiblenon-curren t asse t s Provisions (ne t ARO) , leaseliabili t y , pensions andgain / loss accoun t I n t eres t bearingloans Curren t i t ems (sparepar t s andinven t ory) Tax losses carried f orward , onshore22% To t al de f erred t ax asse t s / liabili t ies (-) Valua t ion allowance f or de f erred t ax asse t s 31 / 12 / 2023 -4907112 4 524 553 -6434 -499191 4 887 -883296 -4887 31 / 12 / 2022 -4372336 2 102 801 -1466 -564088 4 887 -2830202 -4887 Tota l deferred taxassets / li ab ili t i es(-) recogn i sed -888183 -2835089 Change i n deferred taxes Amounts i n NOK 000 De f erred t ax income / expense(-) De f erred t axes charged t oequi t y De f erred t axes f rom business combina t ions 780 489 4 925 1 161 492 -436027 -390 -662952 Tota l change i n deferred taxassets 1 946 906 -1099369 Financial statements Page 79 Spec i f i cat i on of i ncometaxpayab l e 2023 Tax payable(-) / credi t recognisedin t heincomes t a t emen t Tota l i ncometaxpayab l e(-) 2023 2022 Amounts i n NOK000 Tax payable f rom business combina t ions Tax payablerecognisedonacquisi t ion , saleandswapo f licences Tax payable f rom previous years no t se tt led Advance t ax paid -103324 -2853024 1 072 -14207 828 300 2022 115 745 -2105157 382 -14207 1 526 387 -2141182 -476850 Amounts i n NOK 000 Tax payableyears 2016-2019 Tax payableyear 2022 Tax payableyear 2023 Advance t ax paid f or year 2022 Advance t ax paid f or year 2022 -14207 0 -2955275 0 828 300 -14207 -1989030 0 1 526 387 0 Tota l i ncometaxpayab l e(-) -2141182 -476850 Financial statements Page 80 Note 14. Pensions Accounting policies According t oNorwegianlaw , all employees aremembers o f t hecompany’s manda t ory pensionscheme(“obliga t orisk t jenes t epensjon”) . The company’s pensionschemeis ade f inedcon t ribu t ionplanwherecon t ribu t ions arepaid t o t hepensioninsurer andcharged t o t heincome s t a t emen t in t heperiod t owhich t hecon t ribu t ions rela t e . Once t hecon t ribu t ions havebeenpaid , t hereareno f ur t her obliga t ions t o f und t he scheme(as t hecasemay beunder ade f inedbene f i t plan) . Toaccommoda t e f or employees workingo ff shorea t DraugenandBragere t iringa t t heageo f 65as requiredby Norwegianlaw f or o ff shore personnel , t hecompany has es t ablishedanun f undedde f inedbene f i t scheme t ocover pension f or t he2years be t ween65and67whichis recognisedas pensionliabili t y in t hes t a t emen t o f f inancial posi t ion . De f inedbene f i t plans arevalueda t t hepresen t valueo f accrued f u t urepensionbene f i t s a t eachbalanceshee t da t e . Thecurren t servicecos t andin t eres t cos t s arerecognisedimmedia t ely andis presen t edas par t o f t hesalary andpersonnel cos t in t heincome s t a t emen t. I n t eres t cos t is calcula t edby using t hediscoun t ra t eo f t heliabili t y a t t hebeginningo f t heperiodon t hene t liabili t y . Changes inne t pensionliabili t y as aresul t o f pensionpaymen t s havebeen t akenin t oconsidera t ion . Thepensioncos t s arerecognisedas par t o f chargeable cos t s t oopera t edjoin t ven t ures andre f lec t edin t heincomes t a t emen t across several linei t ems suchas produc t ionexpenses , explora t ion expenses , general andadminis t ra t iveexpenses andas oil andgas proper t ies in t hes t a t emen t o f f inancial posi t ion . Ac t uarial gains andlosses arerecognised t hrougho t her comprehensiveincomeandareno t reclassi f iedover pro f i t andloss . Thecompany has ade f inedcon t ribu t ionandade f inedbene f i t pensionplan f or i t s employees whichsa t is f ies t hes t a t u t ory requiremen t s in t he Norwegianlaw onrequiredoccupa t ional pension("lov om obliga t orisk t jenes t epensjon") . Thede f inedcon t ribu t ionplancovers all employees . Thede f inedbene f i t plancovers o ff shoreemployees andhas 203ac t ivemembers a t year end 2023 . Thede f inedbene f i t planis t ocover f or t heage65-67 f or o ff shoreemployees , as t hey arerequiredby Norwegianlaw t ore t irea t t heageo f 65o ff shore . Therearenode f ined f unds t omee t t heliabili t y rela t ed t o t hede f inedbene f i t plan . Thede t ails in t he t ables below per t ain t o t hede f inedbene f i t plan . Financial statements Page 81 Pens i on cost 20232022 Servicecos t - employeebene f i t 10 5124 655 Servicecos t - in t eres t expense 1 233703 Remeasurementspens i ons , actuar i a l l oss / ga i n (-) , net after taxto OC I Movement i n pens i on ob li gat i onsdur i ng theyear 31 / 12 / 2023 31 / 12 / 2022 Pensionobliga t ions January 1 41 564 37 311 Servicecos t - employeebene f i t 10 512 4 655 Servicecos t - in t eres t expense 1 233 703 Remeasuremen t s pensions , ac t uarial loss / gain(-) 6 314 -500 31 / 12 / 2023 31 / 12 / 2022 Discoun t in t eres t ra t e 3 , 10% 3 , 00% Annual projec t edincreaseinsalary Annual projec t edG- regula t ion 3 , 50% 3 , 25% 3 , 50% 3 , 25% Annual projec t edregula t iono f pension Number o f employees includedin t hede f inedbene f i t scheme 203 3 , 25% 3 , 25% 193 Amounts in NOK000 Tota l pens i on re l ated costs 11 7455 358 Remeasuremen t s pensions , ac t uarial loss / gain(-) recorded t oOC I Taxes , 78 . 004% 6 314 -500 -4925 390 1 389-110 Amounts in NOK 000 Pensions paid -922 -606 Pens i on ob li gat i ons31December 58 700 41 564 Pensionliabili t y individual plan 1 869 1 692 Tota l pens i on li ab ili t i es31December 60 570 43 255 Assumpt i ons Financial statements Page 82 Note 15. Earnings per share Ne t pro f i t / loss (-) a tt ribu t able t oordinary shares , inNOK000 -935358 Weigh t edaveragenumber o f ordinary shares ou t s t andingbasic Weigh t edaveragenumber o f ordinary shares ou t s t andingdilu t ed 103 910 350 103 910 350 103 873 090 103 947 610 Earnings per share(NOK per share) - Basic - Dilu t ed -9 , 00 6 , 45 -9 , 00 6 , 44 2023 2022 669 608 Financial statements Page 83 Note 16. Business combinations Accounting policies Acqu i s i t i onsof i nterests i n o il and gas li cences: Acquisi t ions o f in t eres t s inoil andgas licences or similar join t opera t ions where t hejoin t opera t ioncons t i t u t es abusiness , areaccoun t ed f or in accordancewi t h t heprinciples in I FRS 3Business Combina t ions (acquisi t ionme t hod) . I den t i f iableasse t s acquiredandliabili t ies andcon t ingen t liabili t ies assumedaremeasuredini t ially a t t heir f air values a t t heacquisi t ionda t e . Acquisi t ion-rela t edcos t s areexpensedas incurred . Theexcess o f t heconsidera t ion t rans f erredover t he f air valueo f t hene t iden t i f iableasse t s acquiredis recordedas goodwill . Technical goodwill arises as ano ff se tt ingaccoun t t ode f erred t ax recognisedinbusiness combina t ions . If, f ollowingcare f ul considera t ion , t heconsidera t ion t rans f erredis less t han t he f air valueo f t hene t iden t i f iableasse t s o f t hejoin t opera t ionacquired , suchdi ff erenceis recogniseddirec t ly inpro f i t or loss . Any provision f or con t ingen t considera t ionis a ft er t heacquisi t ionda t emeasureda t f air value , andchanges in f air valuea ft er t heacquisi t ionda t e t ha t areno t measuremen t periodadjus t men t s arerecognisedin t heincomes t a t emen t. Acquisi t ions o f in t eres t s inoil andgas licences or similar join t opera t ions where t hejoin t opera t ionis no t considered t obeabusiness , areaccoun t ed f or as acquisi t ions o f asse t s . Theconsidera t ion f or t hein t eres t is alloca t ed t oindividual asse t s andliabili t ies acquired . Financial statements Page 84 Assets Oil andgas proper t ies L i ab ili t i es Ne t workingcapi t al Acqu i s i t i on of a28% i nterest i n PL037(Statf j ord Area) On19March2023OKEA en t eredin t oanagreemen t t oacquirea28% workingin t eres t inPL037(S t a tf jordArea) f rom Equinor Energy AS , comprisinga 23 . 9% workingin t eres t inS t a tf jordUni t, a28% workingin t eres t inS t a tf jordNord , a14% workingin t eres t inS t a tf jordØs t Uni t anda15 . 4% working in t eres t inSygnaUni t. The t ransac t ionwas comple t edon29December 2023 . The t ransac t ionhas beende t ermined t ocons t i t u t eabusiness combina t ionandhas beenaccoun t ed f or using t heacquisi t ionme t hodo f accoun t ingas requiredby I FRS 3 . Theeconomic da t eo f t he t ransac t ion , whichwill beused f or t ax purposes , is 1January 2023 . Theacquisi t ionda t e f or accoun t ing purposes ( t rans f er o f con t rol) has beende t ermined t obe29December 2023 . A preliminary purchasepricealloca t ion(PPA) has beenper f ormedandall iden t i f iedasse t s andliabili t ies havebeenmeasureda t t heir acquisi t ionda t e f air values inaccordancewi t h t herequiremen t s o f I FRS 3 . Theagreedpurchasepriceis USD 220million , equivalen t wi t hNOK 2 , 237 . 9million . Adjus t ed f or in t erim periodadjus t men t s andworkingcapi t al , t he t o t al cashconsidera t ionis es t ima t ed t oNOK 1 , 726 . 7million . A t t his s t age , t hepurchasepricealloca t ionis preliminary . As aresul t, t he f inal PPA and t heimpac t on t he f inancial s t a t emen t s f rom t he t ransac t ionmay di ff er . The f inal PPA will becomple t edwi t hin12mon t hs o f t heacquisi t iona t t hela t es t. The f air values o f t heiden t i f iableasse t s andliabili t ies in t he t ransac t ionas a t t heda t eo f t heacquisi t ionhavebeenes t ima t edas f ollows : * Thepar t ies haveagreed t ha t Equinor will re t ainresponsibili t y f or 100% o f OKEA’s shareo f t o t al decommissioningcos t s rela t ed t oS t a tf jordA . ** Ne t workingcapi t al consis t o f t radeando t her payables NOK 341 . 1million , sparepar t s , equipmen t andinven t ory NOK 242 . 4million , and t radeand o t her receivables NOK 33 . 5million . *** I naddi t ion t o t he f ixedconsidera t ion , OKEA shall pay t oEquinor anaddi t ional con t ingen t considera t ionwi t hcon t ingen t paymen t t erms applicable f or 2023-2025 f or cer t ain t hresholds o f realisedoil andgas prices . Seeno t e25 . Theordinary goodwill is mainly causedby t hereduc t ionines t ima t edreserves combinedwi t hanincreaseines t ima t edcos t in t heperiodbe t ween t he agreement date and the acquisition date. The ordinary goodwill has been impaired at 31 December 2023 (see note 9 and 17). The technical goodwill arises as a consequence of the requirement to recognise deferred tax for the differences between the assigned fair values (which have been based on a post-tax market for such transactions) and the tax basis of assets acquired. None of the goodwill recognised will be deductible for income tax purposes. A preliminary estimation of the impact from the transaction indicates that if the acquisition had taken place at the beginning of the year, total revenues for the year would have been approximately NOK 3,200 million higher and profit before tax would have been approximately NOK 1,400 million higher. Amounts in NOK 000 De f erred t ax asse t s (reducedde f erred t ax liabili t ies) Receivables onseller* Total assets 1 619 488 1 161 492 908 214 3 689 195 Asse t re t iremen t obliga t ions I ncome t ax payable Total liabilities 65 277 3 969 801 119 898 4 154 976 To t al iden t i f iablene t asse t s a t f air value Con t ingen t considera t ion*** To t al cashconsidera t ion Goodwill -465781 173 467 1 726 691 2 365 939 Goodwill consis t o f: Ordinary goodwill Technical goodwill Total goodwill 1 362 675 1 003 264 2 365 939 Financial statements Page 85 Assets 16 574 * Thepar t ies haveagreed t ha t Win t ershall Deawill re t ainresponsibili t y f or 80% o f OKEA’s shareo f t o t al decommissioningcos t s rela t ed t o t heBrage Uni t, limi t ed t oanagreedcapo f NOK 1520 . 6millionsubjec t t oindex regula t ion . ** I naddi t ion t o t he f ixedconsidera t ion , OKEA shall pay t oWin t ershall Deaanaddi t ional con t ingen t considera t ionbasedonanupsidesharing arrangemen t subjec t t ooil pricelevel during t heperiod2022-2024 . Seeno t e25 . Thenega t iveordinary goodwill is mainly causedby t heincreasein t heoil pricein t heperiodbe t ween t heagreemen t da t eand t heacquisi t ionda t e . The t echnical goodwill arises as aconsequenceo f t herequiremen t t orecognisede f erred t ax f or t hedi ff erences be t ween t heassigned f air values (whichhave beenbasedonapos t - t ax marke t f or such t ransac t ions) and t he t ax basis o f asse t s acquired . Thenega t iveordinary goodwill and t he t echnical goodwill is recognisedne t as t echnical goodwill . Noneo f t hegoodwill recognisedwill bededuc t ible f or income t ax purposes . A preliminary es t ima t iono f t heimpac t f rom t he t ransac t ionindica t es t ha t i f t heacquisi t ionhad t akenplacea t t hebeginningo f t heyear 2022 , t o t al revenues f or t heyear wouldhavebeenapproxima t ely NOK 1 , 441 . 1millionhigher andpro f i t be f ore t ax wouldhavebeenapproxima t ely NOK 631 . 9million higher . Acqu i s i t i on of a35 . 2% i nterest i n Brage , 6 . 4615% i nterest i n I var Aasen and 6% i nterest i n Nova(comp l eted i n Q42022) On1November 2022OKEA comple t ed t heacquisi t iono f a35 . 2% workingin t eres t in t heBrage f ield , a6 . 4615% workingin t eres t in t he I var Aasen f ield anda6% workingin t eres t in t heNova f ield f rom Win t ershall DeaNorgeAS . OKEA alsoassumed t heopera t orshipo f t heBrage f ielde ff ec t ive f rom 1 November 2022 . As par t o f t he t ransac t ion , more t han140employees were t rans f erred f rom Win t ershall DeaNorgeAS t oOKEA . The t ransac t ionhas beende t ermined t ocons t i t u t eabusiness combina t ionandhas beenaccoun t ed f or using t heacquisi t ionme t hodo f accoun t ingas requiredby I FRS 3 . Theeconomic da t eo f t he t ransac t ion , whichwill beused f or t ax purposes , is 1January 2022 . Theacquisi t ionda t e f or accoun t ing purposes ( t rans f er o f con t rol) has beende t ermined t obe1November 2022 . A preliminary purchasepricealloca t ion(PPA) was per f ormedin2022andall iden t i f iedasse t s andliabili t ies havebeenmeasureda t t heir acquisi t ionda t e f air values inaccordancewi t h t herequiremen t s o f I FRS 3 . Theagreedpurchasepriceis USD 117 . 5million , equivalen t wi t hNOK 1 , 221 . 1million . Adjus t ed f or in t erim periodadjus t men t s andworkingcapi t al , t he t o t al cashconsidera t ionis es t ima t ed t oNOK 1 , 165 . 4million . Thepurchasepricealloca t ion(PPA) presen t edbelow is a f inal PPA basedonaupda t edcomple t ions t a t emen t f rom Q12023compared t o t hePPA presen t edinQ42022 . The f air values o f t heiden t i f iableasse t s andliabili t ies in t he t ransac t ionas a t t heda t eo f t heacquisi t ionhavebeenes t ima t edas f ollows : Amounts i n NOK000 PPA Q4 2022 Changes Q1 2023 Updated f i na l PPA Oil andgas proper t ies Receivables onseller Ne t workingcapi t al I ncome t ax receivable(reduced t ax payable) Righ t -o f -useasse t s To t al asse t s 1 791 614 947 255 441 429 165 808 17 315 3 363 421 0 0 0 16 574 0 16 574 1 791 614 947 255 441 429 182 382 17 315 3 379 996 L i ab ili t i es De f erred t ax liabili t ies Asse t re t iremen t obliga t ions Leaseliabili t y To t al liabili t ies 633 483 1 926 780 17 315 2 577 577 0 0 0 0 633 483 1 926 780 17 315 2 577 577 To t al iden t i f iablene t asse t s a t f air value Con t ingen t considera t ion To t al cashconsidera t ion Goodwill 785 844 116 041 1 165 383 495 580 12 189 -4385 802 418 116 041 1 177 572 491 194 Goodwill consis t o f: Nega t iveordinary goodwill Technical goodwill To t al goodwill -500811 996 390 495 580 0 -4385 -4385 -500811 992 005 491 194 Financial statements Page 86 Assets L i ab ili t i es Goodwill consis t o f: A preliminary es t ima t iono f t heimpac t f rom t he t ransac t ionindica t es t ha t i f t heacquisi t ionhad t akenplacea t t hebeginningo f t heyear 2022 , t o t al revenues f or t heyear wouldhavebeenapproxima t ely NOK 85millionhigher andpro f i t be f ore t ax wouldhavebeenapproxima t ely NOK 66 . 3million higher . Acqu i s i t i on of a2 . 223% i nterest i n I var Aasen (comp l eted i n 2022) On31March2022OKEA comple t ed t heacquisi t iono f a2 . 223% workingin t eres t in t he I var Aasen f ield f rom Nep t uneEnergy NorgeAS . Theacquisi t ion increased t heownershipsharein I var Aasen t o2 . 777% . The t ransac t ionhas beende t ermined t ocons t i t u t eabusiness combina t ionandhas beenaccoun t ed f or using t heacquisi t ionme t hodo f accoun t ingas requiredby I FRS 3 . Theeconomic da t eo f t he t ransac t ion , whichwill beused f or t ax purposes , is 1January 2022 . Theacquisi t ionda t e f or accoun t ing purposes ( t rans f er o f con t rol) has beende t ermined t obe31March2022 . A purchasepricealloca t ion(PPA) was per f ormedin2022andall iden t i f iedasse t s andliabili t ies havebeenmeasureda t t heir acquisi t ionda t e f air values inaccordancewi t h t herequiremen t s o f I FRS 3 . Theagreedpurchasepriceis USD 12million , equivalen t wi t hNOK 105 . 2million . Adjus t ed f or in t erim periodadjus t men t s andworkingcapi t al , t he t o t al cashconsidera t ionis es t ima t ed t oNOK 39 . 6million . The f air values o f t heiden t i f iableasse t s andliabili t ies in t he t ransac t ionas a t t heda t eo f t heacquisi t ionhavebeenes t ima t edas f ollows : Thenega t iveordinary goodwill is mainly causedby t heincreasein t heoil pricein t heperiodbe t ween t heagreemen t da t eand t heacquisi t ionda t e . The t echnical goodwill arises as aconsequenceo f t herequiremen t t orecognisede f erred t ax f or t hedi ff erences be t ween t heassigned f air values (whichhave beenbasedonapos t - t ax marke t f or such t ransac t ions) and t he t ax basis o f asse t s acquired . Thenega t iveordinary goodwill and t he t echnical goodwill is recognisedne t as t echnical goodwill wi t hNOK 32 . 1million . Noneo f t hegoodwill recognisedwill bededuc t ible f or income t ax purposes . Amounts i n NOK 000 Oil andgas proper t ies166 116 Ne t workingcapi t al -89 Total assets166 027 De f erred t ax liabili t ies29 469 Asse t re t iremen t obliga t ions78 968 I ncome t ax payable50 063 To t al liabili t ies 158 501 To t al iden t i f iablene t asse t s a t f air value7 525 To t al cashconsidera t ion 39 590 Goodwill32 065 Nega t iveordinary goodwill-63 556 Technical goodwill95 621 Total goodwill32 065 Financial statements Page 87 Note 17. Goodwill, exploration and evaluation assets Accounting principles Goodw ill Goodwill arising f rom acquisi t ions o f in t eres t s inoil andgas licences accoun t ed f or inaccordancewi t h t heprinciples in I FRS 3Business Combina t ions is classi f iedas in t angibleasse t s . Goodwill is no t amor t ised , bu t i t is t es t ed f or impairmen t a t eachbalanceda t e , or more f requen t ly i f animpairmen t indica t or exis t s , f or exampleby even t s or changes incircums t ances . Goodwill is carrieda t cos t less accumula t edimpairmen t losses . Goodwill is alloca t ed t o t heCashGenera t ingUni t s (CGU) t ha t areexpec t ed t obene f i t f rom synergy e ff ec t s o f t heacquisi t ion . Thealloca t iono f goodwill may vary dependingon t hebasis f or i t s ini t ial recogni t ion . Themainpar t o f t hecompany ’ s goodwill rela t es t o t herequiremen t t orecognise de f erred t ax f or t hedi ff erencebe t ween t heassigned f air values and t herela t ed t ax base(" t echnical goodwill") . The f air valueo f t hecompany’s licences , all o f whichareloca t edon t heNorwegiancon t inen t al shel f, arebasedoncash f lows a ft er t ax . This is because t heselicences areonly sold inana ft er- t ax marke t as s t ipula t edin t hePe t roleum Taxa t ionAc t Sec t ion10 . Thepurchaser is t here f oreno t en t i t led t oa t ax deduc t ion f or t he considera t ionpaidover andabove t heseller’s t ax values . I naccordancewi t h I AS 12paragraphs 15and24 , aprovisionis made f or de f erred t ax corresponding t o t hedi ff erencebe t ween t heacquisi t ioncos t and t he t rans f erred t ax deprecia t ionbasis . Theo ff se tt ingen t ry is goodwill . Hence , goodwill arises as a t echnical e ff ec t o f de f erred t ax . Technical goodwill is t es t ed f or impairmen t separa t ely f or eachCGU whichgiverise t o t he t echnical goodwill . A CGU may beindividual oil f ields , or agroupo f oil f ields t ha t areconnec t ed t o t hesamein f ras t ruc t ure / produc t ion f acili t ies . Exp l orat i on costsfor o il and gaspropert i es Thecompany uses t he‘success f ul e ff or t s’ me t hod t oaccoun t f or explora t ioncos t s . All explora t ioncos t s wi t h t heexcep t iono f acquisi t ioncos t s o f licences anddrillingcos t s o f explora t ionwells areexpensedas incurred . Drillingcos t s o f explora t ionwells are t emporarily capi t alisedpending t he de t ermina t iono f oil andgas reserves . If reserves areno t f ound , or i f discoveries areassessedno t t obe t echnically andcommercially recoverable , t hedrillingcos t s o f explora t ionwells areexpensed . Cos t s o f acquiringlicences arecapi t alisedandassessed f or impairmen t a t eachrepor t ingda t e . Licenceacquisi t ioncos t s andcapi t alisedexplora t ioncos t s areclassi f iedas in t angibleasse t s (Explora t ionandevalua t ionasse t s) during t he explora t ionphase . Exp l orat i on and eva l uat i on assets Explora t ionandevalua t ionasse t s areassessed f or impairmen t whencircums t ances sugges t t ha t t hecarryingamoun t o f anexplora t ionand evalua t ionasse t may exceedi t s recoverableamoun t, andbe f orereclassi f ica t ionas describedbelow . I n t angibleasse t s rela t ing t oexpendi t ureon t heexplora t ion f or , andevalua t iono f, oil andgas resources arereclassi f ied f rom in t angibleasse t s (Explora t ionandevalua t ionasse t s) t o t angibleasse t s (Oil andgas proper t ies under developmen t ) when t echnical f easibili t y andcommercial viabili t y o f t heasse t s aredemons t rable , and t hedecision t odevelopapar t icular areais made . Theasse t s areassessed f or impairmen t, andany impairmen t loss recognised , be f oresuchreclassi f ica t ion . Explora t ionandevalua t ionasse t s aresubjec t t ouni t -o f -produc t iondeprecia t ions i f andwhenproduc t ion f rom t he f ieldcommences . Financial statements Page 88 Techn i ca l Ord i nary Exp l orat i on and eva l uat i on Amounts i n NOK000assets goodw ill goodw ill Tota l goodw ill 2023 184 317 1 642 191 30 867 0 0 998 879 -47030 416 415 0 1 362 675 0 2 058 607 0 2 361 554 0 Cos t a t 1January 2023 Addi t ions Addi t ions t hroughbusiness combina t ion(seeno t e16) Expensedexplora t ionexpendi t ures previously capi t alised Cost at 31December 2023 210 4812 641 070 1 779 090 4 420 161 0 -508818 0 0 -253198 -1362675 -762016 -1362675 Accumula t edamor t isa t ionandimpairmen t a t 1January 2023 I mpairmen t Accumu l ated amort i sat i on and i mpa i rment at 31 December 2023 0-508818 -1615873 -2124691 Carry i ng amount at 31December 2023 210 4812 132 253 163 217 2 295 470 2022 10 759 315 450 0 -141892 1 114 547 0 527 645 0 416 415 0 0 0 1 530 962 0 527 645 0 Cos t a t 1January 2022 Addi t ions Addi t ions t hroughbusiness combina t ion(seeno t e16) Expensedexplora t ionexpendi t ures previously capi t alised Cost at 31December 2022 184 317 1 642 191 416 415 2 058 607 0 -508818 -253198 -762016 Accumula t edamor t isa t ionandimpairmen t a t 1January 2022 Accumu l ated amort i sat i on and i mpa i rment at 31 December 2022 0 -508818 -253198 -762016 Carry i ng amount at 31December 2022 184 317 1 133 374 163 217 1 296 591 Financial statements Page 89 Note 18. Lease liability 20232022 Leasedeb t 1January Addi t ions leasecon t rac t s Addi t ions t hroughbusiness combina t ion(seeno t e16) Accre t ionleaseliabili t y Paymen t s o f leasedeb t andin t eres t Tota l l easedebt at 31December Tota l l easedebt Und i scounted l ease li ab ili t i esand matur i tyof cash outf l ows 31 / 12 / 2023 31 / 12 / 2022 Tota l Fu t ureleasepaymen t s rela t ing t oleasingcon t rac t s en t eredin t oas anopera t or o f t heDraugen f ieldarepresen t edonagross basis . Accounting policies Leases(as l essee) I FRS 16de f ines aleaseas acon t rac t t ha t conveys t herigh t t ocon t rol t heuseo f aniden t i f iedasse t f or aperiodo f t imeinexchange f or a considera t ion . For eachcon t rac t t ha t mee t s t his de f ini t ion , excep t f or shor t - t erm leases andleases o f low valueasse t s , I FRS 16requires lessees t orecognisearigh t -o f -useasse t andaleaseliabili t y in t hes t a t emen t o f f inancial posi t ionwi t hcer t ainexemp t ions f or shor t t erm andlow valueleases . Leasepaymen t s arerecognisedas in t eres t expenseandareduc t iono f leaseliabili t ies , while t herigh t -o f -useasse t s are deprecia t edover t heshor t er o f t helease t erm and t heasse t s’ use f ul li f e . Leaseliabili t ies aremeasureda t t hepresen t valueo f remaininglease paymen t s , discoun t edusing t hein t eres t ra t eimplici t in t heleasecon t rac t, or i f t his is no t available , t hecompany’s calcula t edborrowingra t eper leaseobjec t. Righ t -o f -useasse t s aremeasureda t anamoun t equal t o t heleaseliabili t y a t ini t ial recogni t ion . Leasingcon t rac t s en t eredin t oas an opera t or o f alicencearepresen t edonagross basis when t hecon t rac t is signedby t hecompany onbehal f o f t helicence . Thecompany has en t eredin t oopera t ingleases f or o ff ice f acili t ies . I naddi t ion , as opera t or o f t heDraugen f ield , t hecompany has onbehal f o f t he licenceen t eredin t oopera t ingleases f or logis t ic resources suchas supply vessel wi t hassocia t edremo t eopera t edvehicle(ROV) , baseand warehouse f or sparepar t s andhencegross basis o f t heseleasedeb t s arerecognised . Amounts i n NOK 000 262 052263 298 011 983 017 315 16 86515 527 -50190 -46071 228 727262 052 Breakdown of l easedebt Shor t - t erm (wi t hin1year) Long- t erm 50 190 49 643 178 537 212 409 228 727262 052 Amounts i n NOK000 Wi t hin1year 1 t o5years A ft er 5years 50 190 150 367 134 062 49 643 166 268 158 499 334 619 374 410 Financial statements Page 90 Note 19. Asset retirement reimbursement right 31 / 12 / 2023 31 / 12 / 2022 E ff ec t o f changein t hediscoun t ra t e O f t his : Asse t re t iremen t reimbursemen t righ t, non-curren t 4 079 318 3 662 122 Asse t re t iremen t reimbursemen t righ t consis t s o f areceivable f rom t heseller Shell f rom OKEA ’ s acquisi t iono f DraugenandGjøaasse t s in2018 , areceivable f rom t heseller Win t ershall Dea f rom OKEA ’ s acquisi t iono f t heBrageasse t in2022 , andareceivable f rom t heseller Equinor f rom OKEA ’ s acquisi t iono f t heS t a tf jordasse t in2023 . Receivable f rom t heseller Shell f rom OKEA ’ s acquisi t iono f DraugenandGjøaasse t s in2018 : Thepar t ies agreed t ha t t heseller Shell will cover 80% o f OKEA ’ s shareo f t o t al decommissioningcos t s f or t heDraugenandGjøa f ields up t oa prede f ineda ft er- t ax capamoun t o f NOK 757million(2022value) subjec t t oConsumer Price I ndex (CP I ) adjus t men t. Thepresen t valueo f t he expec t edpaymen t s is recognisedas apre- t ax receivable f rom t heseller . I naddi t ion , t heseller has agreed t opay OKEA anamoun t o f NOK 441million(2022value) subjec t t oaCP I adjus t men t according t oaschedule basedon t hepercen t ageo f comple t iono f t hedecommissioningo f t heDraugenandGjøa f ields . Thene t presen t valueo f t hereceivableis calcula t edusingadiscoun t ra t eo f 4 . 4% (year end2022 : 3 . 9%) . Receivable f rom t heseller Win t ershall Dea f rom OKEA ’ s acquisi t iono f t heBrageasse t in2022 : Thepar t ies haveagreed t ha t Win t ershall Deawill re t ainresponsibili t y f or 80% o f OKEA’s shareo f t o t al decommissioningcos t s rela t ed t o t he BrageUni t, limi t ed t oanagreedpre- t ax capo f NOK 1520 . 6millionsubjec t t oindex regula t ion . Thene t presen t valueo f t hereceivableis calcula t edusingadiscoun t ra t eo f 5 . 2% (year end2022 : 6 . 4%) . Receivable f rom t heseller Equinor f rom OKEA ’ s acquisi t iono f t heS t a tf jordasse t in2023 : Thepar t ies haveagreed t ha t Equinor will re t ainresponsibili t y f or 100% o f OKEA’s shareo f t o t al decommissioningcos t s rela t ed t oS t a tf jordA . Thene t presen t valueo f t hereceivableis calcula t edusingadiscoun t ra t eo f 4 . 2% . Amounts i n NOK 000 Asse t re t iremen t reimbursemen t righ t a t 1January (indemni f ica t ionasse t ) Addi t ions t hroughbusiness combina t ion(seeno t e16) Changes ines t ima t es Asse t re t iremen t cos t s f rom billing , reimbursemen t f rom Shell Unwindingo f discoun t 3 662 122 908 214 -396312 -80303 -104089 172 915 3 107 974 947 255 122 483 -529368 -90099 103 876 Asset ret i rement re i mbursement r i ght at 31December ( i ndemn i f i cat i on asset) 4 162 547 3 662 122 Asse t re t iremen t reimbursemen t righ t, curren t 83 229 0 Asset ret i rement re i mbursement r i ght at 31December ( i ndemn i f i cat i on asset) 4 162 547 3 662 122 Financial statements Page 91 Note 20. Trade and other receivables Accoun t s receivableandreceivables f rom opera t edlicences* Accruedrevenue Prepaymen t s Workingcapi t al andovercall , join t opera t ions / licences Underli ft o f pe t roleum produc t s** VAT receivable O t her receivables 265 711 340 848 100 901 306 891 141 269 16 582 3 354 0 234 811 422 885 79 009 386 637 588 934 21 049 0 10 578 Note 21. Spare parts, equipment and inventory 31 / 12 / 2023 31 / 12 / 2022 Tota l spareparts , equ i pment and i nventory * Thebalancea t 31 . 12 . 2023consis t s o f DraugenMNOK 86(218) , YmeMNOK 12(15) , BrageMNOK 195(230) , I var AasenMNOK 18(49) and S t a tf jordMNOK 94(0) . Accounting policies Spareparts , equ i pment and i nventory: I nven t ories o f pe t roleum produc t s ares t a t eda t t helower o f cos t andne t realisablevalue . Cos t is de t erminedby t he f irs t -in f irs t -ou t me t hodand comprises direc t purchasecos t s , cos t o f produc t ion , t ranspor t a t ionandprocessingexpenses . I nven t ories o f sparepar t s andconsumables are valueda t t helower o f cos t price(basedonweigh t edaveragecos t ) andne t realisablevalue . Capi t al sparepar t s areaccoun t ed f or under t he sameprinciples as proper t y , plan t andequipmen t. Accounting policies Der i vat i vef i nanc i a l i nstruments Thecompany uses deriva t ive f inancial ins t rumen t s t omanagecer t ainexposures t o f luc t ua t ions inoil andgas prices , f oreigncurrency exchange ra t es andCO2quo t as prices . Suchderiva t ive f inancial ins t rumen t s areini t ially recogniseda t f air valueon t heda t eo f whichaderiva t ivecon t rac t is en t eredin t oandaresubsequen t ly re-measureda t f air value t hroughpro f i t andloss . Hedgeaccoun t ingis no t applied . For deriva t ive f inancial ins t rumen t s where t heunderlyingis acommodi t y , changes in f air valuearerecognisedas par t o f opera t ingac t ivi t ies . Changes in f air values f or o t her deriva t ive f inancial ins t rumen t s areclassi f iedas par t o f f inancial ac t ivi t ies . * Thereis noprovision f or baddeb t onreceivables . Thereceivables ma t urewi t hin12mon t hs . Approxima t ely 75% o f t hecompany’s sales revenue recognisedin2023is f rom sale t ooil companies whicharesubsidiaries o f anin t erna t ional oil company wi t hS t andard& Poor ’ s long- t erm credi t ra t ingA+ . I naddi t ion , approxima t ely 22% o f t hecompany’s sales revenuerecognisedin2023is f rom sale t ooil companies whicharesubsidiaries o f anin t erna t ional oil company wi t hS t andard& Poor ’ s long- t erm credi t ra t ingA-2 . ** Thebalancea t 31 . 12 . 2023consis t s o f DraugenMNOK 0(171) , GjøaMNOK 0(8) , I var AasenMNOK 53(108) , YmeMNOK 11(45) , Brage MNOK 70(241) andNovaMNOK 7(17) . *** Re f erenceis made t ono t e30 f or morein f orma t ionabou t t hecompany ’ s f orwardcon t rac t s gas andpu t/ call op t ions oil . **** Ou t s t andingcon t rac t s a t 31December 2023 : Thecompany has en t eredin t ocurrency swaps wi t ha t o t al valueo f GBP 50millionagains t NOK . Theswaps weredonea t GBPNOK ra t es o f 13 . 49wi t hexpiry da t es early Q12024 Amounts i n NOK000 31 / 12 / 2023 31 / 12 / 2022 Fair value f orwardcon t rac t s , gas Fair valuepu t/ call op t ions , oil Fair value f orwardcon t rac t s , f oreignexchange* Fair value f orwardcon t rac t s , CO2quo t as 3 748 29 101 2 386 0 0 0 Tota l tradeand other rece i vab l es 1 210 790 1 743 901 Amounts i n NOK 000 I nven t ory o f pe t roleum produc t s* Sparepar t s andequipmen t 404 495 459 753 511 509 288 824 864 248 800 333 Financial statements Page 92 Note 22. Cash and cash equivalents Accounting policies Cash and cash equ i va l ents Cashandcashequivalen t s compriseo f cashonhand , deposi t s helda t call wi t hbanks ando t her shor t - t erm highly liquidinves t men t s wi t h original ma t uri t ies o f t hreemon t hs or less . Timedeposi t s availableondemandareclassi f iedas cashandcashequivalen t s . Amounts i n NOK000 Bank deposi t s , unres t ric t ed Bank deposi t, res t ric t ed , employee t axes Bank deposi t, res t ric t ed , deposi t o ff iceleases Bank deposi t, res t ric t ed , o t her 31 / 12 / 2023 2 191 256 40 691 14 930 54 304 31 / 12 / 2022 1 010 492 31 224 14 824 47 486 Tota l cash and cash equ i va l ents 2 301 181 1 104 026 Financial statements Page 93 Note 23. Share capital and shareholder information Ou t s t andingshares a t 1 . 1 . 2022 Nominal valueNOK per sharea t 31December 2023 Sharecapi t al NOK a t 31December 2023 0 , 10 10 391 035 2023: Dividendpaidin2023is NOK 415 . 6million . 2022: I n2022OKEA issued40000shares inconnec t ionwi t hexerciseo f warran t s in2022 . A t 31December 2022 t herearenoequi t y-se tt ledwarran t s ou t s t anding . 40000o f t heprevious 80000ou t s t andingwarran t s wereexercisedin2022and t heremaining40000expiredin2022 . Re f erenceis made t o no t e10 f or f ur t her de t ails . Dividendpaidin2022is NOK 301 . 3million . Number of shares Ord i nary shares New shares issuedinexchange f or cash 103 870 350 40 000 103 910 350 Number of outstand i ng sharesat 31December 2022 New shares issuedinexchange f or cash 0 103 910 350 Number of outstand i ng sharesat 31December 2023 Shareho l dersat 31December 2023: Shareho l der BCPR PTE . LTD . SALT VALUE AS CLEARSTREAM BANK I NG S . A . S t a t eS t ree t Bank andTrus t Comp MorganS t anley & Co . LLC SJÆKERHATTEN AS SKAND I NAV I SKA ENSK I LDA BANKEN AB KØRVEN AS SKJEFSTAD VESTRE AS S I LVERCO I N I NDUSTR I ES AS NORDNET L I VSFORS I KR I NG AS WAATV I KA AS I n t erac t iveBrokers LLC TheBank o f New York Mellon TheBank o f New York Mellon N I MA I NVEST AS TheBank o f New York MellonSA / NV TheBank o f New York Mellon TheBank o f New York MellonSA / NV ESPEDAL& CO AS OTHER SHAREHOLDERS Ord i nary shares 47 218 098 2 559 710 2 395 111 1 530 794 1 209 798 1 093 000 1 043 262 789 285 780 617 733 395 729 746 562 489 525 964 514 697 508 133 464 517 453 659 438 041 432 743 425 908 39 501 383 % Share 45 , 44% 2 , 46% 2 , 30% 1 , 47% 1 , 16% 1 , 05% 1 , 00% 0 , 76% 0 , 75% 0 , 71% 0 , 70% 0 , 54% 0 , 51% 0 , 50% 0 , 49% 0 , 45% 0 , 44% 0 , 42% 0 , 42% 0 , 41% 38 , 01% Tota l 103 910 350 100 , 00% Financial statements Page 94 Sharesowned d i rect l yor i nd i rect l ybysen i or management and board of d i rectors: 1) No t par t o f senior managemen t in2022 2) No t par t o f boardo f direc t ors 2022 3) No t par t o f senior managemen t a t repor t ingda t e 4) No t par t o f boardo f direc t ors 2023 Warrants: Overview o f ou t s t andingwarran t s Re f erenceis made t ono t e10 f or in f orma t ionabou t warran t s gran t ed t oemployees inconnec t ionwi t hsharebasedpaymen t. EspenMyhra(SVP business developmen t ) DagEggan(SVP special projec t s) SveinLiknes (CEO) Knu t Gjer t sen(SVP projec t s & t echnology) Kjers t i Hovdal (SVP business per f ormance) Bir t eNorheim (CFO) Mari t MoenVik-Langlie(VP legal) RagnhildAas (boardmember) Tor Bjerkes t rand(SVP opera t ions) I da I anssenLundh(SVP subsur f ace) 1 FinnHaugan(boardmember) JanA t leJohansen(depu t y boardmember) Chaiwa t Kovavisarach(chairmano f t heboard) Per MagneBjellvåg(boardmember) 2 Michael William Fischer (vicechair o f t heboard) NicholaCarol Gordon(boardmember) RuneOlav Pedersen(boardmember) Harmonie Wiesenberg(depu t y boardmember) 2 SverreNes (boardmember) 2 BørgeNerland(SVP drilling& wells) JonArn t Jacobsen(boardmember) 2 Elizabe t hWilliamson(boardmember) 2 Pha t pureeChinkulki t niva t (boardmember) 2 Gry Anne tt eHaga(depu t y boardmember) 2 Andrew McCann(SVP subsur f ace& wells) 3 Paul Murray (boardmember) 4 SaowapapSumeksri (boardmember) 4 Gre t he Moen (board member) 4 Johnkris t ianLarsen(boardmember) 4 AnneLeneRømuld(boardmember) 4 Jens ArneMegaard(depu t y boardmember) 4 GroAni t aMarkussen(depu t y boardmember) 4 Tota l 243 763 195 710 185 240 174 046 168 304 156 203 118 335 103 554 99 625 74 992 47 973 47 487 38 610 27 306 24 438 24 438 24 438 14 425 10 200 7 525 4 809 2 159 2 159 760 0 0 0 0 0 0 0 0 1 796 499 0 , 23%224 9360 , 22% 0 , 19%186 0430 , 18% 0 , 18%140 3450 , 14% 0 , 17%163 5870 , 16% 0 , 16%159 2000 , 15% 0 , 15%144 1450 , 14% 0 , 11%111 8340 , 11% 0 , 10% 98 3740 , 09% 0 , 10%187 8040 , 18% 0 , 07% 00 , 00% 0 , 05% 45 8140 , 04% 0 , 05% 45 6050 , 04% 0 , 04% 35 3710 , 03% 0 , 03% 00 , 00% 0 , 02% 22 2790 , 02% 0 , 02% 22 2790 , 02% 0 , 02% 22 2790 , 02% 0 , 01% 00 , 00% 0 , 01% 00 , 00% 0 , 01% 00 , 00% 0 , 00% 00 , 00% 0 , 00% 00 , 00% 0 , 00% 00 , 00% 0 , 00% 00 , 00% 0 , 00%176 0000 , 17% 0 , 00%182 3030 , 18% 0 , 00% 2 2790 , 00% 0 , 00% 2 2790 , 00% 0 , 00% 77 0310 , 07% 0 , 00% 53 4420 , 05% 0 , 00% 19 6380 , 02% 0 , 00% 13 8700 , 01% 1 , 73%2 136 7372 , 06% A t 31December 2023A t 31December 2022 Shareho l derOrd i nary shares% Share Ord i nary shares% Share Amounts i n NOK 00020232022 Ou t s t andingwarran t s a t 1January Warran t s f or f ei t ed(re f. no t e10) Warran t s exercised(re f. no t e10) Warran t s expired(re f. no t e10) Outstand i ng warrants at 31 December 080 000 0 0 0 -40000 0 -40000 00 Financial statements Page 95 Note 24. Asset retirement obligations Accounting policies Asset ret i rement ob li gat i ons Thecompany recognises anasse t re t iremen t obliga t ionwhen t heoil andgas ins t alla t ions areins t alledor a t t hela t er da t ewhen t heobliga t ionis incurred . Theobliga t ionis measureda t t hepresen t valueo f t hees t ima t ed f u t ureexpendi t ures de t erminedinaccordancewi t hcurren t t echnology , local condi t ions andrequiremen t s f or t hedisman t lemen t or removal o f oil andgas ins t alla t ions . Applicableasse t re t iremen t cos t s arecapi t alisedas par t o f t hecarryingvalueo f t he t angible f ixedasse t andaredeprecia t edover t heuse f ul li f eo f t heasse t (i . e . uni t -o f -produc t ionme t hod) . Theliabili t y is accre t ed f or t hechangeini t s presen t valueoneachbalanceshee t da t e . Theaccre t ion e ff ec t is classi f iedas f inancial expense . Theasse t re t iremen t provisionand t hediscoun t ra t earerevieweda t eachbalanceshee t da t e . Changes ines t ima t es f or t heasse t re t iremen t obliga t ions , ne t o f asse t re t iremen t reimbursemen t righ t, arerecognised t owards oil andgas proper t ies . Asset ret i rement ob li gat i ons Provisions f or asse t re t iremen t obliga t ions represen t t he f u t ureexpec t edcos t s f or close-downandremoval o f oil equipmen t andproduc t ion f acili t ies . Theprovisionis basedon t hecompany ’ s bes t es t ima t e . Thene t presen t valueo f t hees t ima t edobliga t ionis calcula t edusingadiscoun t ra t eo f 3 . 3% (year end2022 : 3 . 1%) . Theassump t ions arebasedon t heeconomic environmen t a t t hebalanceshee t da t e . Ac t ual asse t re t iremen t cos t s will ul t ima t ely dependupon f u t uremarke t prices f or t henecessary works whichwill re f lec t marke t condi t ions a t t herelevan t t ime . Fur t hermore , t he t imingo f t heclose-downis likely t odependonwhen t he f ieldceases t oproducea t economically viablera t es . This in t urnwill dependupon f u t ureoil andgas prices , whichareinheren t ly uncer t ain . For es t ima t edceaseo f produc t ionandsensi t ivi t ies , re f erenceis made t o2023ESG repor t page28 For recovery o f cos t s o f decommissioningrela t ed t oasse t s acquired f rom Shell , Win t ershall DeaandEquinor , re f erenceis made t ono t e19 . C li mater i sk As describedinno t e32clima t echangerisk may accelera t e t heceaseo f produc t ionincer t ainscenarios . Under t he I EA ne t zeroscenario t heARO liabili t y will increaseby 494millionNOK and t hecorrespondingreceivableincreaseby 289millionNOK . Amounts i n NOK000 2023 2022 Asse t re t iremen t obliga t ions a t 1January Addi t ions Addi t ions t hroughbusiness combina t ion(seeno t e16) Changes ines t ima t es E ff ec t s o f changein t hediscoun t ra t e Asse t re t iremen t cos t s f rom billing Unwindingo f discoun t 5 915 084 118 145 3 969 801 -391938 -140901 -129544 194 820 4 237 442 89 343 2 005 748 418 756 -839226 -112623 115 645 9 535 467 5 915 084 Asset ret i rement ob li gat i onsat 31December O f t his : Asse t re t iremen t obliga t ions , non-curren t Asse t re t iremen t obliga t ions , curren t Asset ret i rement ob li gat i onsat 31December 9 431 431 104 036 9 535 467 5 915 084 0 5 915 084 Financial statements Page 96 Note 25. Other provisions O t her provisions consis t s o f provisions f or addi t ional con t ingen t considera t ion f rom OKEA ’ s acquisi t iono f t heBrage , I var AasenandNovaasse t s in 2022 , and f rom OKEA ’ s acquisi t iono f t heS t a tf jordasse t in2023 . Addi t ional con t ingen t considera t ion f rom OKEA ’ s acquisi t iono f t heBrage , I var AasenandNovaasse t s in2022 : Thecon t ingen t considera t ionis basedonanupsidesharingarrangemen t subjec t t ooil pricelevel andoil produc t ionper f ormanceduring t heperiod 2022-24 . Thecon t ingen t considera t ionwill bepaidi f t heaverageoil price f or eacho f t hesix hal f year periods during2022-24exceeds USD 80 / bbl . Thespli t on t hepriceexceeding80USD / bbl is 70% ne t a ft er t ax t oWin t ershall Deaand30% t oOKEA in2022anda42 . 5% t oWin t ershall Deaand 57 . 5% t oOKEA in2023-24 . The f air valueo f t hecon t ingen t considera t ionhas beenes t ima t edwi t hop t ionpricingme t hodology basedon t heBlack (1976) model f ramework . Themarke t prices applied t ocalcula t e t he f u t urecash f low is inlinewi t h t hoseapplied f or impairmen t t es t ing . Re f erence is made t ono t e9 f or de t ails onprices , in f la t ionandcurrency ra t es . Theexpec t ed f u t urecash f lows arediscoun t ed t one t presen t valueby applyinga discoun t ra t ea ft er t ax t ha t re f lec t s t heweigh t edaveragecos t o f capi t al (WACC) a t 10% . Theannual vola t ili t y o f t hes t ochas t ic process has beense t t o35% , basedonanes t ima t eo f t he t hes t andarddevia t iono f his t orical changes in t helogari t hm o f t heoil price . Addi t ional con t ingen t considera t ion f rom OKEA ’ s acquisi t iono f t heS t a tf jordasse t in2023 : OKEA shall pay t oEquinor anaddi t ional con t ingen t considera t ionwi t hcon t ingen t paymen t t erms applicable f or 2023-2025 f or cer t ain t hresholds o f realisedoil andgas prices . The s t ruc t ureis basedonpro f i t sharingoncrudeoil volumes solda t arealisedpriceo f 75–96USD / bbl in2023 , 64–85 USD / bbl in2024 , and53–72USD / bbl in2025 , as well as ondry gas volumes solda t arealisedpriceo f 170-341p /t hin2023 , 125–248p /t hin2024 , and37–75p /t hin2025 . Thepro f i t sharingwi t hin t heselimi t s is 90% a ft er t ax t oEquinor and10% t oOKEA . For realisedprices oncrudeoil above 96USD / bbl in2023and85USD / bbl in2024andrealisedprices ondry gas above341p /t hin2023and248p /t hin2024 t hepro f i t sharingis on50 / 50 a ft er t ax basis . OKEA keeps 100% o f realisedoil prices above72USD / bbl andgas prices above75p /t hin2025 . All numbers ares t a t edinreal 2023 andrealisedprices arebasedonannual averages . Thereis nocon t ingen t paymen t s t ruc t ure f or NGL . The f air valueo f t hecon t ingen t considera t ion has beenes t ima t edwi t hop t ionpricingme t hodology basedon t heBlack (1976) model f ramework andbasedonvolumes f rom RNB 2024 f igures . Themarke t prices applied t ocalcula t e t he f u t urecash f low is inlinewi t h t hoseapplied f or impairmen t t es t ing . Re f erenceis made t ono t e9 f or de t ails onprices , in f la t ionandcurrency ra t es . Theexpec t ed f u t urecash f lows arediscoun t ed t one t presen t valueby applyingadiscoun t ra t ea ft er t ax t ha t re f lec t s t heweigh t edaveragecos t o f capi t al (WACC) a t 10% . Theannual vola t ili t y o f t hes t ochas t ic process has beense t t o35% f or oil and 58% f or gas , basedonanes t ima t eo f t he t hes t andarddevia t iono f his t orical changes in t helogari t hm o f t heoil andgas prices . Accounting policies Provisions f or con t ingen t considera t ioninabusiness combina t ionis measureda t f air valuewi t hchanges in f air valuerecognisedin t heincome s t a t emen t. The f air valueis es t ima t edusinganop t ionpricingme t hodology , where t heexpec t edop t ionpayo ff is calcula t eda t each f u t urepaymen t da t eanddiscoun t edback t o t hebalanceda t e . Amounts i n NOK 000 20232022 Provisiona t 1January Addi t ions t hroughbusiness combina t ion(seeno t e16) Se tt lemen t s / paymen t s t oWin t ershall Dea Changes in f air value 68 917 0 173 467 116 041 -23035 -34748 10 934 -12376 230 28268 917 Other prov i s i ons at 31 December O f t his : O t her provisions , non-curren t O t her provisions , curren t (classi f iedwi t hin t radeando t her payables) Other prov i s i ons at 31 December 102 115 39 107 128 167 29 810 230 28268 917 Financial statements Page 97 Note 26. Interest bearing bond loans Changes i n i nterest bear i ng bond l oans: 1 178 610 2 294 873 -16163 -1401531 Accounting policies I nterest-bear i ng l oans and li ab ili t i es All loans andborrowings areini t ially recogniseda t cos t as represen t edby t he f air valueo f t heconsidera t ionreceivedne t o f issuecos t s and t ransac t ioncos t s associa t edwi t h t heborrowing . Followingini t ial recogni t ion , in t eres t -bearingloans andborrowings aresubsequen t ly measureda t amor t isedcos t using t hee ff ec t ivein t eres t me t hodwi t h t hedi ff erencebe t weenne t proceeds receivedand t heredemp t ionvaluebeingrecognisedin t heincomes t a t emen t over t he t erm o f t he loan . Amor t isedcos t is calcula t edby t akingin t oaccoun t any issuecos t s andany discoun t or premium onse tt lemen t. Amounts i n NOK000 31 / 12 / 2023 31 / 12 / 2022 BondloanOKEA04 Capi t alised t ransac t ioncos t s bondloanOKEA04 BondloanOKEA03 Capi t alised t ransac t ioncos t s bondloanOKEA03 1 271 550 -25690 0 0 0 0 1 194 705 -16095 Tota l i nterest bear i ng bond l oans 1 245 860 1 178 610 Amounts i n NOK 000 OKEA04 OKEA03 Tota l I n t eres t bearingbondloans a t 1January 2023 BondissueOKEA04 Capi t alised t ransac t ioncos t s OKEA04 Amor t isa t iono f t ransac t ioncos t s Bondbuy-back / early redemp t ion Foreignexchangemovemen t 0 1 340 150 -28102 2 412 0 -68600 1 178 610 0 0 16 095 -1299896 105 192 1 178 610 1 340 150 -28102 18 506 -1299896 36 592 I nterest bear i ng bond l oans at 31 December 2023 1 245 860 0 1 245 860 Amounts i n NOK000 2023 2022 I n t eres t bearingbondloans a t 1January Cash f lows : Gross proceeds f rom borrowings Transac t ioncos t s Repaymen t/ buy-back o f borrowings 1 340 150 -28102 -1328211 0 0 -1401531 Tota l cash f l ows: Non-cashchanges : Amor t isa t iono f t ransac t ioncos t s Foreignexchangemovemen t Loss / gain(-) onbuy-back / early redemp t ion 18 506 36 592 28 315 22 089 239 643 23 535 I nterest bear i ng bond l oans at 31 December 1 245 860 1 178 610 Financial statements Page 98 Bond l oan OKEA04: I nSep t ember 2023 t hecompany comple t edare f inancingo f t heOKEA03bondloanma t uringinDecember 2024 . Thecompany has issuedaUSD 125 millionsecuredbondloan , OKEA04 . Ma t uri t y da t e f or OKEA04is Sep t ember 2026 , andin t eres t ra t eis f ixeda t 9 . 125% p . a . wi t hhal f -yearly in t eres t paymen t s . OKEA04was issueda t par valueUSD 125million . Bond l oan OKEA03: TheUSD 120millionsecuredbondloanOKEA03was issuedinDecember 2019andwas scheduled t oma t ure f ull inDecember 2024 . Theloanwas issueda t apriceo f 99% o f t henominal valueandcarrieda f ixedin t eres t ra t eo f 8 . 75% p . a . wi t hsemi-annual in t eres t paymen t s . OKEA03was se tt ledinSep t ember 2023by way o f volun t ary early redemp t ionandwas calleda t apremium o f 103 . 2 . F i nanc i a l covenants During2023and2022 , anda t 31December 2023and2022 , t hecompany was incompliancewi t h t hecovenan t s under t hebondagreemen t s . TheOKEA04covenan t s compriseo f: (i) LeverageRa t io(To t al Deb t –LiquidAsse t s) / 12-m t hrollingEB I TDA o f nomore t han1 . 75x (ii) Minimum Liquidi t y o f USD 25million Secur i tygranted Theobliga t ions under OKEA04aresecuredwi t h t he f ollowingsecuri t y gran t edin f avour o f t heNordic Trus t eeAS ac t ingonbehal f o f t hebondholders : (a) t heaccoun t s , any money deposi t t hereinandany in t eres t accrued t hereon , whe t her bookedor no t; (b) t hereceivables over whichsecuri t y is crea t edor con t empla t ed t obecrea t edunder t heFac t oringagreemen t; (c) t helicensein t eres t s : (d) t heinsuranceclaims ; Financial statements Page 99 Note 27. Other interest bearing liabilities O f t his : O t her in t eres t bearingliabili t ies , non-curren t 427 128 462 078 Changes i n other i nterest bear i ng li ab ili t i es: O f t his : O t her in t eres t bearingliabili t ies , non-curren t 427 128427 128 507 952493 445 -48793-42730 I nSep t ember 2023 t hecompany comple t ed t hees t ablishmen t o f aUSD 25millionRevolvingCredi t Facili t y wi t ha t enor o f 2 . 5years . TheRevolving Credi t Facili t y will beavailable f or workingcapi t al purposes andwill enhance f inancial f lexibili t y f or t hecompany . A t 31December 2023 t hereareno draw downs on t he f acili t y . I nOc t ober 2021 t heYmelicencecomple t edacquisi t iono f t he I nspirer jack-uprig t hroughabareboa t char t er (BBC) agreemen t wi t hHavilaSirius AS (Havila) . Thepar t o f t heleasepaymen t s t oHavilacorresponding t o t hepurchasepricepaidby Havila t oMaersk is consideredas aninves t men t ina rigwi t hacorrespondingliabili t y , while t heremainingamoun t o f t he t o t al paymen t s is t rea t edas in t eres t expenses . This t rea t men t is basedon t he underlyingassessmen t t ha t t hereali t y o f t he t ransac t ionis t ha t i t is aninves t men t inarig f inancedwi t hain t eres t bearingliabili t y , ra t her t hanalease . OKEA ’ s propor t iona t eshareo f t heinves t men t andcorrespondingliabili t y is USD 55 . 95million . TheYmelicencehas t herigh t and t heobliga t ion t opurchase t heriga t t heendo f t heleaseperiod f or NOK 1 . I naddi t ion t heYmelicencehas t he Amounts i n NOK 000 31 / 12 / 2023 31 / 12 / 2022 Liabili t y Ymerig 477 123 507 952 Tota l other i nterest bear i ng li ab ili t i es 477 123 507 952 O t her in t eres t bearingliabili t ies , curren t 49 995 45 874 Tota l other i nterest bear i ng li ab ili t i es 477 123 507 952 Amounts i n NOK000 L i ab ili tyYmer i gTota l O t her in t eres t bearingliabili t ies a t 1January 2023 FinancingYmerig Repaymen t s Foreignexchangemovemen t 507 952 507 952 0 0 -48793 -48793 17 963 17 963 Other i nterest bear i ng li ab ili t i es at 31 December 2023 477 123477 123 O t her in t eres t bearingliabili t ies , curren t 49 99549 995 Other i nterest bear i ng li ab ili t i es at 31 December 2023 477 123477 123 Amounts i n NOK 000 20232022 O t her in t eres t bearingliabili t ies a t 1January Cash f lows : Gross proceeds f rom borrowings Repaymen t o f borrowings 00 -48793 -42730 Tota l cash f l ows: Non-cashchanges : FinancingYmerig Foreignexchangemovemen t 00 17 963 57 237 Other i nterest bear i ng li ab ili t i es at 31 December 477 123507 952 Financial statements Page 100 Note 28. Trade and other payables Tradecredi t ors Accruedholiday pay ando t her employeebene f i t s Workingcapi t al , join t opera t ions / licences Overli ft o f pe t roleum produc t s* Accruedin t eres t bondloans All payables ma t urewi t hin12mon t hs . * Thebalancea t 31 . 12 . 2023consis t s o f DraugenMNOK 76(15) , GjøaMNOK 8(0) , BrageMNOK 0(33) andS t a tf jordMNOK 38(0) . ** Theliabili t y a t 31December 2023consis t o f anaccrual f or de f erredconsidera t ionandadjus t men t s in t hepro&con t rase tt lemen t payable t oEquinor inconnec t ionwi t hOKEA ’ s acquisi t iono f t heS t a tf jordasse t in2023 . Amounts i n NOK000 31 / 12 / 2023 31 / 12 / 2022 O t her provisions , curren t (seeno t e26) Prepaymen t s f rom cus t omers Loan f rom shareholder OKEA Holdings L t d Accruedconsidera t ion f rom acquisi t ions o f in t eres t s inlicences O t her accruedexpenses 197 028 213 911 1 310 913 121 526 34 164 128 167 275 620 1 485 544 809 169 378 126 044 146 858 1 061 014 47 952 5 175 29 810 506 637 1 428 0 294 740 Tota l tradeand other payab l es 2 997 001 2 219 658 Financial statements Page 101 Note 29. Financial instruments Tota l 3 190 824 3 226 058 0 0 0 230 282 Tota l 3 342 590 230 282 3 572 873 Tota l 2 025 338 10 578 2 035 916 Tota l 2 424 594 68 917 2 493 512 F i nanc i a l i nstrumentsbycategory Year ended 31December 2023 F i nanc i a l assets Amounts i n NOK 000 Amort i sed cost Fa i r va l uethrough prof i t or l oss Tota l carry i ng amount Tradeando t her receivables * Cashandcashequivalen t s 889 643 2 301 181 35 235 0 924 877 2 301 181 35 235 F i nanc i a l li ab ili t i es Amounts i n NOK000 Amort i sed cost Fa i r va l uethrough prof i t or l oss Tota l carry i ng amount Tradeando t her payables * I n t eres t bearingbondloans O t her in t eres t bearingliabili t ies O t her provisions 1 619 608 1 245 860 477 123 0 1 619 608 1 245 860 477 123 230 282 Year ended 31December 2022 F i nanc i a l assets * Prepaidexpenses , VAT receivableandaccruedexpenses areno t included . Forwardcon t rac t s andpu t/ call op t ions oil areincludeda t f air value t hroughpro f i t or loss . Amounts i n NOK 000 Amort i sed cost Fa i r va l uethrough prof i t or l oss Tota l carry i ng amount Tradeando t her receivables * Cashandcashequivalen t s 921 313 1 104 026 10 578 0 931 890 1 104 026 F i nanc i a l li ab ili t i es Amounts i n NOK000 Amort i sed cost Fa i r va l uethrough prof i t or l oss Tota l carry i ng amount Tradeando t her payables * I n t eres t bearingbondloans O t her in t eres t bearingliabili t ies O t her provisions 738 032 1 178 610 507 952 0 0 0 0 68 917 738 032 1 178 610 507 952 68 917 * Prepaidexpenses , VAT receivableandaccruedexpenses areno t included . Forwardcon t rac t s areincludeda t f air value t hroughpro f i t or loss . Fa i r va l ueof f i nanc i a l i nstruments It is assessed t ha t t hecarryingamoun t s o f f inancial asse t s andliabili t ies , excep t f or in t eres t bearingbondloans , is approxima t ely equal t oi t s f air values . For in t eres t bearingbondloans t he f air valueis es t ima t ed t obeNOK 1 , 289milliona t 31December 2023(2022 : NOK 1 , 196million) . The OKEA04bondloanis planned t obelis t edon t heOsloS t ock Exchangeand t he f air valueis basedon t hela t es t quo t edmarke t price(level 2in t he f air valuehierarchy according t o I FRS 13) as per t hebalanceshee t da t e . Fair values o f pu t/ call op t ions oil , f orwardcon t rac t s f oreignexchangeand f orwardcon t rac t s CO2quo t as arebasedonquo t edmarke t prices a t t he balanceshee t da t e(level 2in t he f air valuehierarchy) . Thepu t/ call op t ions oil , t he f orwardcon t rac t s f oreignexchangeand t he f orwardcon t rac t s CO2 quo t as arecarriedin t hes t a t emen t o f f inancial posi t iona t f air value . Financial statements Page 102 Note 30. Financial risk management Carry i ng amount Cash F l ow < 1year 1-5 year> 5year 1 619 608 Tota l f i nanc i a l li ab ili t i es 3 572 873 4 056 229 1 937 793 1 899 340219 097 1 244 669 1 244 669 1 178 610 0 507 952 0 1 244 669 1 194 705 207 003 507 952 131 790 0 103 502 45 874 25 606 0 0 1 194 7050 103 502 0 207 539 254 540 76 983 29 202 29 810 39 1070 Overv i ew Thecompany is exposed t oavarie t y o f risks , includingcredi t risk , liquidi t y risk , in t eres t ra t erisk , oil andgas pricerisk andcurrency risk . This no t e presen t s in f orma t ionabou t t hecompany ’ s exposure t oeacho f t heabovemen t ionedrisks , and t hecompany ’ s objec t ives , policies andprocesses f or managingsuchrisks . Theno t ealsopresen t s t hecompany ’ s objec t ives , policies andprocesses f or managingcapi t al . Cred i t r i sk Thecompany has nosigni f ican t credi t risk . Thecompany ’ s exposure t ocredi t risk f or coun t erpar t ies t ode f aul t on t heir paymen t obliga t ions is considered limi t ed , as sales agreemen t s areonly en t eredin t owi t hsolidcus t omers andderiva t ivecon t rac t s areen t eredin t owi t hrepu t ablecoun t erpar t ies . Cashand cashequivalen t s a t year endaredeposi t s wi t hDNB Bank ASA . L i qu i d i tyr i sk Liquidi t y risk is t herisk o f beingunable t ose tt le f inancial liabili t ies as t hey f all due . Thecompany’s has t akenmi t iga t ingac t ions t oensure t ha t su ff icien t liquidi t y is securedunder normal as well as ex t raordinary circums t ances . Thecompany conduc t s de t ailedcash f low f orecas t ing , includingsensi t ivi t y analyses onkey variables , t oassureabili t y t omee t f inancial liabili t ies as t hey f all duewi t hou t incurringunaccep t ablelosses or riskingdamage t o t he company’s repu t a t ion . Market r i sk Thecompany is exposed t omarke t risks including f luc t ua t ions inhydrocarbonprices , f oreigncurrency ra t es , in t eres t ra t es andelec t rici t y prices , which cancana ff ec t t herevenues andcos t s o f opera t ing , inves t ingand f inancing . Theserisks aremanaged t hrough f inancial ins t rumen t s suchas hedging , deriva t ives andcommercial sales con t rac t s . Matur i tyana l ys i sfor f i nanc i a l li ab ili t i es Thecash f low f orecas t below assumes repaymen t on t hela t es t da t eavailable , eveni f expec t edrepaymen t may beearlier : 31 / 12 / 2023 Amounts i n NOK 000 Tradeando t her payables I n t eres t bearingbondloans I n t eres t bearingbondloans , in t eres t O t her in t eres t bearingliabili t ies O t her in t eres t bearingliabili t ies , in t eres t O t her provisions 1 619 608 1 245 860 0 477 123 0 230 282 1 619 608 1 271 550 348 087 477 123 109 579 230 282 0 116 029 49 995 23 994 128 167 0 0 1 271 5500 232 058 0 225 583 201 545 68 033 17 552 102 115 0 31 / 12 / 2022 Amounts i n NOK000 Carry i ng amount Cash F l ow < 1year 1-5 year> 5year Tradeando t her payables I n t eres t bearingbondloans I n t eres t bearingbondloans , in t eres t O t her in t eres t bearingliabili t ies O t her in t eres t bearingliabili t ies , in t eres t O t her provisions 68 917 68 917 Tota l f i nanc i a l li ab ili t i es 3 000 149 3 355 037 1 449 461 1 621 835283 742 Financial statements Page 103 The t ablebelow shows ama t uri t y analysis f or f inancial asse t s : Tradeando t her receivables 509 006 509 006 509 006 00 1 104 026 Tota l f i nanc i a l assets 1 613 031 1 613 031 I nterest rate r i sk A t 31December 2023 t hecompany has noin t eres t -bearingborrowings wi t h f loa t ingin t eres t ra t econdi t ions . ThebondloanOKEA04carries a f ixed in t eres t ra t eo f 9 . 125% p . a , and t heYmerigliabili t y carries aimplici t in t eres t ra t eo f 5 . 21% p . a . Sens i t i v i tyana l ys i s: I n t eres t ra t esensi t ivi t y is calcula t edbasedon t heexposure t oin t eres t -bearingdeb t wi t h f loa t ingin t eres t ra t econdi t ions a t t hebalanceshee t da t e . 2023 : A t 31December 2023 t hecompany has noin t eres t -bearingborrowings wi t h f loa t ingin t eres t ra t econdi t ions . 2022 : A t 31December 2022 t hecompany has noin t eres t -bearingborrowings wi t h f loa t ingin t eres t ra t econdi t ions . Currencyr i sk Thecompany is exposed t o f oreignexchangera t erisk rela t ing t o t hevalueo f NOK rela t ive t oo t her currencies , mainly due t oproduc t sales inUSD and GBP , opera t ional cos t s inUSD , developmen t cos t s inUSD , bank deposi t s inUSD andGBP , andin t eres t -bearingloans andborrowings inUSD . A t 31December 2023 , t hecompany ’ s exposure t oexchangera t erisk mainly rela t e t obank deposi t s andin t eres t -bearingloans andborrowings inUSD , andbank deposi t s inGBP . Sens i t i v i tyana l ys i sat 31December 2023: If NOK was 5% s t ronger agains t t heUSD on31December 2023 , t hecompany ’ s pro f i t a ft er t ax wouldhavebeenNOK 74 . 2millionhigher . If NOK was 5% weaker agains t t heUSD on31December 2023 , t hecompany ’ s pro f i t a ft er t ax wouldhavebeenNOK 74 . 2millionlower . If NOK was 5% s t ronger agains t t heGBP on31December 2023 , t hecompany ’ s pro f i t a ft er t ax wouldhavebeenNOK 40 . 4millionlower . If NOK was 5% weaker agains t t heGBP on31December 2023 , t hecompany ’ s pro f i t a ft er t ax wouldhavebeenNOK 40 . 4millionhigher . Exposureagains t o t her currencies is no t consideredma t erial . Sens i t i v i tyana l ys i sat 31December 2022: If NOK was 5% s t ronger agains t t heUSD on31December 2022 , t hecompany ’ s pro f i t a ft er t ax wouldhavebeenNOK 52 . 5millionhigher . If NOK was 5% weaker agains t t heUSD on31December 2022 , t hecompany ’ s pro f i t a ft er t ax wouldhavebeenNOK 52 . 5millionlower . If NOK was 5% s t ronger agains t t heGBP on31December 2023 , t hecompany ’ s pro f i t a ft er t ax wouldhavebeenNOK 1 . 7millionlower . If NOK was 5% weaker agains t t heGBP on31December 2023 , t hecompany ’ s pro f i t a ft er t ax wouldhavebeenNOK 1 . 7millionhigher . Exposureagains t o t her currencies is no t consideredma t erial . O il and gas pr i ce r i sk Thecompany’s revenuecomes f rom oil andgas sales , whichareexposed t o f luc t ua t ions in t heoil andgas pricelevel . Thecompany uses deriva t ive f inancial ins t rumen t s (pu t andcall op t ions) t omanageexposures t o f luc t ua t ions incommodi t y prices . Pu t op t ions are purchased t oes t ablishaprice f loor f or apor t iono f f u t ureproduc t iono f pe t roleum produc t s . I naddi t ionapriceceilingis es t ablishedby sellingcall op t ions , whichreduces t hene t premium paid f or hedging . A t 31December 2023 t herearenoou t s t anding f inancial f orwardcon t rac t s gas (wi t hou t physical delivery o f gas) . All ou t s t andingcon t rac t s a t 31 December 2022expiredinQ12023 . 31 / 12 / 2023 Amounts i n NOK 000 Carry i ng amountCash F l ow< 1year1-5 year> 5year Tradeando t her receivables Cashandcashequivalen t s Tota l f i nanc i a l assets 924 877 2 301 181 3 226 058 924 877 2 301 181 3 226 058 924 877 0 0 2 301 181 0 0 3 226 058 00 31 / 12 / 2022 Amounts i n NOK000 Carry i ng amountCash F l ow< 1year1-5 year> 5year Cashandcashequivalen t s 1 104 026 1 104 026 00 1 613 031 00 Financial statements Page 104 I naddi t ionOKEA has en t eredin t onon- f inancial con t rac t s wi t hphysical delivery o f gas in2024a t f ixedprice . A t 31December 2023 t heou t s t anding con t rac t s are37000000 t erms o f gas wi t hdelivery inQ12024- Q32024a t f ixedprices in t herangeo f 103- 144 . 5GBp /t herm . Revenue f rom t hese con t rac t s will berecogniseda t delivery o f t hegas . Cap i ta l management Theoverall objec t iveo f capi t al managemen t is t oensure t ha t t hecompany main t ains as t rong f inancial posi t ionandheal t hy capi t al ra t ios inorder t o suppor t i t s business andmaximiseshareholder value . Thecompany manages i t s capi t al s t ruc t ure , andmakes adjus t men t s t oi t, inligh t o f changes ineconomic condi t ions . Surplus liquidi t y is managedaccording t o t hecompany ’ s liquidi t y managemen t policy . C li mater i sk Thee ff ec t o f t heclima t echangerisks describedinno t e32is illus t ra t edby calcula t inga2% increasein t hein t eres t ra t eon t hebalanceo f in t eres t bearing deb t. A 2% increaseinin t eres t wouldincrease t heyearly in t eres t expenseby 25millionNOK . Financial statements Page 105 Note 31. Asset acquisitions, sales and swaps I nterest 2023PL740 2023PL1113 2023PL1113 50% 20% 10% DNO NorgeAS Sval Energi AS Harbour Energy NorgeAS OKEA ASA OKEA ASA OKEA ASA 01 / 01 / 2023 01 / 01 / 2023 01 / 01 / 2023 28 / 02 / 2023 31 / 08 / 2023 31 / 08 / 2023 Sa l es: I nterest 2023PL740 4 , 4424 % OKEA ASA M Ves t Energy AS 01 / 01 / 2023 31 / 10 / 2023 2023PL740 6 , 2788 % OKEA ASA Lime Pe t roleum AS 01 / 07 / 2023 29 / 12 / 2023 Swaps: I nterest 2022PL1119 10% OKEA ASA Equinor Energy AS 01 / 08 / 2022 30 / 11 / 2022 2022PL1014 / 1014B 20% Equinor Energy AS OKEA ASA 01 / 08 / 2022 30 / 11 / 2022 Acqu i s i t i ons: During2023and2022 , t hecompany comple t ed t he f ollowingacquisi t ions , sales andswaps o f in t eres t s inlicences on t heNorwegiancon t inen t al shel f, accoun t ed f or as acquisi t ions andsales o f asse t s : On31March2022 t hecompany acquired2 . 223% workingin t eres t in I var Aasen f rom Nep t uneEnergy NorgeAS andon1November 2022 t heacquisi t ion o f 35 . 2% inBrage , 6 . 4615% in I var Aasenand6% inNova f rom Win t ershall DeaNorgeAS was comple t ed . These t ransac t ions werede t ermined t o cons t i t u t eas business combina t ions f or accoun t ingpurposes . Re f er t ono t e16 f or f ur t her de t ails . YearL i cence Se ll er Buyer Effect i vedate Comp l et i on YearL i cence Se ll er Buyer Effect i vedate Comp l et i on YearL i cence Se ll er Buyer Effect i vedate Comp l et i on Financial statements Page 106 Note 32. Climate change impact and risks OKEA is apureplay oil andgas company on t heNCS . Thecompany ’ s s t ra t egy t here f ore f ocuses oncrea t ingvalue t hroughex t ending t heli f eo f exis t ingproducingasse t s t hroughopera t ional improvemen t s , maximizing t heuseo f exis t ingin f ras t ruc t ure , andreducingemissions . As apure play oil andgas company , t heenergy t ransi t ionandclima t echangewill impac t OKEA . OKEA f ollows t heTCFD guidelines f or repor t ingon clima t erisk andoppor t uni t ies , as describedin t hesus t ainabili t y repor t t oge t her wi t hOKEA’s risk assessmen t andmanagemen t o f clima t e change . Tradi t ionally t heclima t echangerisk is dividedin t o t womainca t egories , t ransi t ional risks andphysical risks . Trans i t i ona l r i sks Below are t hekey iden t i f iedclima t eassocia t edrisks wi t hpo t en t ial f or impac t ingOKEA’s business : - Marke t and t echnology : Morecompe t i t ivepricingonrenewableenergy sources will likely reducepricingonoil andgas andadversely impac t OKEA’s f inancial resul t s andshareholder re t urns . Several mi t iga t ingmeasures arepossible , someo f whichhas already been implemen t ed . This includes cos t reduc t ionini t ia t ives andco2reducingmeasures likeelec t ri f ica t iono f asse t s . - Policy andregula t ory : Regula t ionis anessen t ial driver o f t he t ransi t ion t o t helow carboneconomy . I ncreasedpricingo f CO2emissions and t axes in t heEU ETS f ramework will driveopera t ional cos t upandprovideuncer t ain t y in t heopera t ingmodel . Regula t ions onproduc t ion , developmen t andemissions may reduceaccess t onew explora t ionacreage , combinedwi t hres t ric t ions ondevelopingprovenresources would po t en t ially limi t f u t uregrow t hoppor t uni t ies . - Repu t a t ional : Changinginves t or sen t imen t andrisk percep t ion f or t helong t erm ou t look f or t heoil andgas sec t or may increase t hecos t o f capi t al and / or limi t po t en t ial access t onew capi t al . Al t hough t hesen t imen t havechangedsomewha t andleaningmore t owards energy securi t y during t herecen t year , several f inancial ins t i t u t ions havelimi t ed t hecapi t al available f or f inancingo f oil andgas companies . I ncreasedscru t iny f rom t hecapi t al marke t s onESG promp t s aclear ESG s t ra t egy andengagemen t wi t hs t akeholders . I mpac t on t he f inancial repor t ing Toillus t ra t e t hepo t en t ial impac t s on t he f inancial repor t ingwehaveincludedsensi t ivi t y analysis wi t hin t he f ollowingareas : - I mpairmen t (no t e9) : Wehaveincludedscenarioanalysis f or t he t hree I EA scenarios as describedinno t e9 . -Abandonmen t provisions (no t e24) : Theimpac t onbook valueo f abandonmen t liabili t ies andreceivables under t hene t zero I EA scenario . - I n t eres t expense(no t e30) : Wehaveincludedanalysis wi t ha2% increaseinin t eres t ra t eon t hecurren t loanbalances t oshow po t en t ial increasein f inancecos t under ascenariowi t hlower access t o f inancing . Phys i ca l r i sk - Physical : Ex t remewea t her even t s may impac t opera t ional as well and f inancial per f ormanceo f t hecompany ’ s business . Mi t iga t ing ac t ions may includeregularly upda t es o f me t eorology andoceanography da t ausedinprojec t andopera t ional planning , insurancecoverageand inclusiono f con t rac t clauses rela t ed t owea t her even t s . Opportun i t i es The f ollowingclima t echangerela t edoppor t uni t ies areiden t i f ied : -Weexpec t t ha t t ransac t ionac t ivi t y on t heNCS will increaseover t henex t years as companies dives t ageingasse t s . This couldrepresen t an oppor t uni t y f or OKEA inrealising t hegrow t hs t ra t egy andbecoming t heleadingmid- t ola t e-li f eopera t or on t heNCS . - I ncreasedrevenueincircular economy projec t s , e . g . decommissioningandgreens t eel . U t ilisecircular economy oppor t uni t ies andincreased pro f i t s t hroughresaleo f s t eel ando t her me t als f rom f u t uredecommissioningprojec t s . -Reduc t iono f cos t s t hroughini t ia t ives aimeda t reducingclima t erela t edimpac t s (e . g ., o ff shorewind) S t randedasse t s areapo t en t ial risk o f t he t ransi t ion t oalow carboneconomy . Several o f t herisk f ac t ors men t ionedabove , couldin t helonger t erm aloneor t oge t her lead t oanabrup t changein t hemarke t f or oil andgas andlead t oasuddenceaseo f produc t ion . Thepo t en t ial risk o f s t randedasse t s andexpedia t edasse t re t iremen t i f provedreserves canno t be f ully developeddue t o t heglobal carbon budge t is presen t, bu t somewha t limi t ed , f or OKEA . This is due t o t hemajori t y o f t herevenue f rom OKEA ’ s asse t s arenear t erm . Several scenarios re f lec t ingvarious aspec t s (shor t - andlong- t erm) o f po t en t ial economic , t echnological , andsocial developmen t s and t heir implica t ions f or t heenergy marke t and , consequen t ly , f or OKEAs business havebeenassessed . Re f erenceis made t ono t e9 f or impairmen t t es t doneunder t heassump t ions o f t he I EA scenarios f rom t heWorldEnergy Ou t look . Financial statements Page 107 Re f erenceis madeno t e10 f or in f orma t ionabou t compensa t ion t osenior managemen t andboardo f direc t ors . Note 33. Commitments and contingencies Accounting policies Cont i ngent li ab ili t i es Con t ingen t liabili t ies areno t recognisedin t he f inancial s t a t emen t s unless i t is assessed t obeprobable . Signi f ican t con t ingen t liabili t ies are disclosed , excep t f or con t ingen t liabili t ies where t heprobabili t y o f t heliabili t y occurringis considered t oberemo t e . Prov i s i ons A provision , o t her t hanaprovision f or con t ingen t considera t ioninabusiness combina t ion , is recognisedwhen t hecompany has apresen t obliga t ion(legal or cons t ruc t ive) as aresul t o f apas t even t, andi t is probable(i . e . morelikely t hanno t ) t ha t anou tf low o f resources embodying economic bene f i t s will berequired t ose tt le t heobliga t ion , andareliablees t ima t ecanbemadeo f t heamoun t o f t heobliga t ion . During t henormal courseo f i t s business , t hecompany may beinvolvedindispu t es , including t ax dispu t es . Thecompany makes accruals f or probableliabili t ies rela t ed t oli t iga t ionandclaims basedonmanagemen t’ s bes t judgmen t andinlinewi t h I AS 37and I AS 12 . As per endo f 2023and2022 , es t ima t ed exposures areno t signi f ican t andnoma t erial provisionwererecognised . Note 34. Related party transactions M i n i mum workprograms Thecompany is required t opar t icipa t ein t heapprovedwork programmes f or t helicences . Re f erenceis made t ono t e8 f or aspeci f ica t iono f f u t ure commi tt edcapi t al expendi t ure . L i ab ili tyfor damages /i nsurance Thecompany ’ s opera t ions involves risk f or damages t oproper t y , equipmen t and t heenvironmen t, includingpollu t ion . I ns t alla t ions andopera t ions arecoveredby anopera t ions insurancepolicy , includingloss o f produc t ionincomeinsurance , andcons t ruc t ionall risk insurancecoveringasse t s under developmen t. I nsurance for board members and ch i ef execut i ve off i cer Thecompany has aninsurancepolicy f or t heboardmembers and t hechie f execu t iveo ff icer f or po t en t ial liabili t y t o t hecompany and t hirdpar t ies . Theboardconsiders t hecoverage t obereasonable . Financial statements Page 108 Note 35. Reserves (unaudited) Proven and probab l ereserves 20232022 Balancea t 1January Produc t ion Acquisi t iono f reserves Projec t s ma t ured / New developmen t s Revisions o f previous es t ima t es ando t her changes Tota l reservesat 31December Note 36. Events after the balance sheet date Draugenli f e t imeex t ension f rom 2024 t o2040was gran t ed f rom t heMinis t ry o f Energy 11March2024 . Expec t edreserves represen t t hecompany ’ s shareo f reserves according t o t heSPE / WPC / AAPG / SPEE Pe t roleum Resources Managemen t sys t em (SPE - PRMS) publishedin2007andwi t hOsloS t ock Exchange ’ s requiremen t s f or t hedisclosureo f hydrocarbonreserves andcon t ingen t resources ; circular 9 / 2009 . The f igures represen t t hebes t es t ima t eo f provenandprobablereserves (2P / P50Basees t ima t e) . Re f erenceis made t o t heannual s t a t emen t o f reserves (ASR) repor t per 31December 2023availablea t www . okea . no / inves t or / repor t s /. Accounting policies Eventsafter theba l ancesheet date The f inancial s t a t emen t s areadjus t ed t ore f lec t even t s a ft er t hebalanceshee t da t e , t ha t provideevidenceo f condi t ions t ha t exis t eda t t his da t e . Even t s t ha t areindica t iveo f condi t ions t ha t arosea ft er t hebalanceshee t da t earedisclosedi f signi f ican t. I nJanuary 2024 , OKEA was o ff eredin t eres t s in t hreenew produc t ionlicences on t heNorwegiancon t inen t al shel f, t hrough t heAwards inPre- De f inedAreas (APA) f or 2023 . M ill barre l so il equ i va l ents(mmboe) 60 , 2 46 , 6 -8 , 9 -6 , 1 32 , 2 15 , 4 3 , 3 8 , 8 -3 , 6 -4 , 6 83 , 260 , 2 Financial statements Page 109 Confirmation from the board of directors and CEO Trondheim , 4April 2024 ____ Chaiwa t Kovavisarach Chairmano f t heBoard ____ Pha t pureeChinkulki t niva t Boardmember ____ MikeFischer Vicechair o f t heBoard ____ Elizabe t hAnneWilliamson-Holland Boardmember ____ NicolaCarol Gordon Boardmember ____ RuneOlav Pedersen Boardmember ____ FinnHaugan Boardmember ____ Per MagneBjellvåg Boardmember ____ SverreNes Boardmember ____ RagnhildAas Boardmember ____ JonArn t Jacobsen Boardmember ____ SveinJakobLiknes CEO Pursuan t t o t heNorwegianSecuri t ies TradingAc t sec t ion5-5wi t hper t ainingregula t ions , wecon f irm t ha t, t o t hebes t o f our knowledge , t he f inancial s t a t emen t s f or t heperiod f rom 1January t o31December 2023havebeenpreparedinaccordancewi t h I FRS as adop t edby EU , wi t hsuchaddi t ional in f orma t ionas requiredby t heNorwegianAccoun t ingAc t, andgivea t rueand f air view o f t hecompany’s asse t s , liabili t ies , f inancial posi t ionandresul t s o f opera t ions . Wecon f irm t ha t t heboardo f direc t ors ’ repor t provides a t rueand f air view o f t hedevelopmen t andper f ormanceo f t hebusiness and t heposi t iono f t he company , t oge t her wi t hadescrip t iono f t hekey risks anduncer t ain t y f ac t ors t ha t t hecompany is f acing . Financial statements Page 110 Reconciliations of alternative performance measures EB I TDA Amoun t s inNOK 000 Pro f i t / loss (-) f rom opera t ingac t ivi t ies Add : deprecia t ion , deple t ionandamor t isa t ion Add : impairmen t EB I TDA 2023 12 months 1 316 182 1 695 088 2 744 808 5 756 078 2022 12 months 3 526 080 769 359 497 584 4 793 024 EB I TDAX Amoun t s inNOK000 Pro f i t / loss (-) f rom opera t ingac t ivi t ies Add : deprecia t ion , deple t ionandamor t isa t ion Add : impairmen t / reversal o f impairmen t Add : explora t ionandevalua t ionexpenses EB I TDAX 2023 12 months 1 316 182 1 695 088 2 744 808 203 398 5 959 476 2022 12 months 3 526 080 769 359 497 584 327 506 5 120 530 Product i on expenseper boe Amoun t s inNOK 000 Produc t ionexpenses Less : processing t ari ff income Less : join t u t ilisa t iono f logis t ics resources Less : prepara t ion f or opera t ionasse t under cons t ruc t ion Ne t produc t ionexpenses Dividedby : producedvolumes (boe) Product i on expenseNOK per boe 2023 12 months 2 083 788 -130656 -21783 0 1 931 349 8 973 727 215 , 1 2022 12 months 1 616 020 -131596 -37512 0 1 446 912 6 108 797 236 , 8 Net i nterest-bear i ng debt Amoun t s inNOK000 I n t eres t bearingbondloans O t her in t eres t bearingliabili t ies O t her in t eres t bearingliabili t ies , curren t Less : Cashandcashequivalen t s Net i nterest-bear i ng debt 2023 12 months 1 245 860 427 128 49 995 -2301181 -578199 2022 12 months 1 178 610 462 078 45 874 -1104026 582 537 2023 12 months 2022 12 months Net i nterest-bear i ng debt exc l. other i nterest bear i ng li ab ili t i es Amoun t s inNOK `000 I n t eres t bearingbondloans Less : Cashandcashequivalen t s Net i nterest-bear i ng debt exc l. other i nterest bear i ng li ab ili t i es 1 245 860 -2301181 -1055321 1 178 610 -1104026 74 584 OKEA discloses al t erna t iveper f ormancemeasures as par t o f i t s f inancial repor t ingas asupplemen t t o t he f inancial s t a t emen t s preparedin accordancewi t hin t erna t ional accoun t ings t andards ( I FRS) . OKEA believes t ha t t heal t erna t iveper f ormancemeasures provideuse f ul supplemen t in f orma t ion t omanagemen t, inves t ors , bondholders ando t her s t akeholders andaremean t t oprovideanenhancedinsigh t andbe tt er unders t anding in t o t he f inancial developmen t o f OKEA andimprovecomparabili t y be t weenperiods . Financial statements Page 111 Definitions of alternative performance measures Product i on expenseper boeis de f inedas produc t ionexpenseless processing t ari ff incomeandjoin t u t ilisa t iono f resources income f or asse t s in produc t iondividedby producedvolumes . Expenses classi f iedas produc t ionexpenses rela t ed t ovarious prepara t ion f or opera t ions onasse t s under developmen t areexcluded . EB I TDA is de f inedas earnings be f orein t eres t ando t her f inancial i t ems , t axes , deprecia t ion , deple t ion , amor t isa t ionandimpairmen t s . EB I TDAX is de f inedas earnings be f orein t eres t ando t her f inancial i t ems , t axes , deprecia t ion , deple t ion , amor t isa t ion , impairmen t s andexplora t ion andevalua t ionexpenses . Net i nterest-bear i ng debt is book valueo f curren t andnon-curren t in t eres t -bearingloans , bonds ando t her in t eres t -bearingliabili t ies excluding leaseliabili t y ( I FRS 16) less cashandcashequivalen t s . Net i nterest-bear i ng debt exc l. other i nterest bear i ng li ab ili t i esis book valueo f in t eres t -bearingbondloans less cashandcashequivalen t s . Financial statements Page 112 PricewaterhouseCoopers AS, Kanalsletta 8, Postboks 8017, NO-4068 Stavanger T: 02316, org. no.: 987 009 713 MVA, www.pwc.no Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap To the General Meeting of OKEA ASA Independent Auditor’s Report Report on the Audit of the Financial Statements Opinion We have audited the financial statements of OKEA ASA (the Company), which comprise the statement of financial position as at 31 December 2023, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information. In our opinion the financial statements comply with applicable statutory requirements, and the financial statements give a true and fair view of the financial position of the Company as at 31 December 2023, and its financial performance and its cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the EU. Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. We have been the auditor of the Company for 9 years from the election by the general meeting of the shareholders on 25 September 2015 for the accounting year 2015 with a renewed election in 2020. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Impairment of Goodwill and Oil & Gas Properties, and Estimation of Asset Retirement Obligations have the same characteristics and risks as in the prior year, and therefore continue to be areas of focus this year. During 2023 the Company acquired working interests in North Sea oil fields from Equinor Energy AS. The judgmental nature of purchase price allocation calculations made Acquisition of Working Interests in North Sea Oil fields a Key Audit Matter for our audit of the 2023 financial statements. 2 / 7 Key Audit Matters How our audit addressed the Key Audit Matter Impairment of Goodwill and Oil & Gas Properties OKEA ASA has oil and gas properties with a carrying amount of NOK 7 198 586 thousand at 31 December 2023. In addition, the carrying value of goodwill (including technical goodwill) was NOK 2 295 470 thousand. In line with OKEA’s accounting policies for impairment of non-financial assets, management assessed whether there were impairment or reversal indicators. Based on identified impairment indicators, a calculation of recoverable amount by each CGU was prepared. Based on the results of the assessment of impairment and reversal indicators and the corresponding calculation of recoverable amounts, a total impairment charge of NOK 2 744 808 thousand was recognized in 2023 related to the Yme field and goodwill arising from the Acquisition of working interest in PL 037, the Statfjord Unit, the Statfjord Øst Unit and the Sygna Unit. Management’s assessment of recoverable amounts of goodwill, and oil & gas properties require estimates and application of assumptions relating to operational and market factors, which, in turn, involves judgment. In addition, the calculation of recoverable amounts requires financial modelling of cash flows related to cash generating units, which can be inherently complex, and may also require use of judgment. Furthermore, the valuation of oil & gas properties and goodwill are inherently uncertain due to the judgmental nature of the underlying estimates. We focused on this area because goodwill and oil & gas properties constitute a significant share of total assets in the balance sheet, and because the assessment of recoverable amounts is complex and requires management judgement which may have a direct impact on net profit. Please refer to note 9 for a description of management’s assessment of impairment. We assessed management’s identification of impairment- and reversal indicators and agreed that indicators were present. We obtained management’s calculation of recoverable amounts as of 31 December 2023. Management’s identification of cash generating units were in line with our expectations. For relevant cash generating units, including allocated technical goodwill, we assessed the key inputs to the calculation of recoverable amounts by:  comparing management´s short-term price assumptions against external price forward curves,  comparing management’s long-term oil price assumptions against long-term price assumptions communicated by peers and other publicly available sources,  comparing asset specific assumptions underlying the impairment test model (e.g. production profiles, capital expenditures, operating costs) towards information reported by the field operator in the 2024 RNB (reporting to Revised National Budget) numbers,  assessing the calculation from post to pretax impairment charge, and  benchmarking of inflation, exchange rates and discount rates applied against external market data. We also assessed the mathematical accuracy and methodology of management’s impairment models. Management determined that ordinary goodwill at the balance sheet date was not impaired. Consequently, we obtained and considered management’s assessment. We also calculated the market capitalization based on the quoted share price at year-end. We found support for the carrying value of oil and properties and ordinary goodwill as of 31 December 2023. We also assessed the sensitivity analysis and underlying calculations showing how the recoverable amounts of property plant and equipment and technical goodwill would be impacted by changes to underlying assumptions, such as change in hydrocarbon prices and discounts rates. In addition, we also considered consistency between the climate risk related 3 / 7 disclosures in note 32 and the sensitivity analysis to the impairment testing in note 9. We evaluated the appropriateness of the related note disclosures and found that they satisfied IFRS requirements. Estimation of Asset Retirement Obligations Management estimated asset retirement obligations for operated and non-operated assets as of 31 December 2023. Asset retirement obligations represent a non-current provision of NOK 9 431 431 thousand and a current provision of NOK 104 036 thousand at the balance-sheet date. The estimation of asset retirement obligations requires use of a number of judgmental assumptions. Important assumptions include timing of actual cash flows, amount of abandonment costs and discount rate. The timing of removal is also dependent on the reserves estimation and is impacted by the commodity price outlook. Calculation of asset retirement obligation requires financial modelling of cash flows related to the removal and decommissioning cost. Such modelling can be complex and may require use of further judgment. The abandonment cost estimates for the non- operated assets are based on the respective operators’ cost estimates. For the operated assets, the cost estimate is based on OKEA’s internal calculation and assessment. The calculation of cost estimates for the OKEA operated fields are based on several cost inputs, such as number of wells plugged, rig rates per day, and number of days per well. We focused on this area due to the significant value the asset retirement obligations represent in the balance sheet, and the level of management judgment used in determining the provision for asset retirement obligations. Refer to note 24 for a description of how management has estimated and accounted for the abandonment provision. Meetings were held with management to understand the process for identifying and measuring the asset retirement obligations. We obtained management’s assessment and model for calculation of abandonment provisions. We also considered the nature and details of the underlying calculation model. We found the methodology to be in line with requirements in IFRS. For the non-operated assets, we obtained the cost estimates prepared by the external operators of the non-operated fields from management. We checked if the external cost estimates were included as input in the calculation of the asset retirement obligation for the non-operated fields and challenged assumptions applied. For the operated assets, we assessed the cost estimate assumptions applied for reasonableness. This included, but was not limited to, the number of wells to be plugged, rig rates per day, and number of days per well. We also tested the model used for calculating the abandonment obligations and found that the model makes calculations as expected. We received management’s assessment of the timing of decommissioning and removal activities for each field. In addition, we benchmarked the inflation rate and the discount rate used in calculating the abandonment provision. Our testing substantiated that management assumptions were fair. We evaluated the appropriateness of the related note disclosures and found that they satisfied IFRS requirements. 4 / 7 Acquisition of Working Interest in North Sea Oil Fields On 29 December 2023 OKEA completed the acquisition of a 28% working interest in PL037 (Statfjord Area) from Equinor Energy AS, comprising a 23.9% working interest in Statfjord Unit, a 28% working interest in Statfjord Nord, a 14% working interest in Statfjord Øst Unit and a 15.4% working interest in Sygna Unit. Management determined that using the acquisition method of accounting in line with IFRS 3 requirements was appropriate. The purchase price allocation (PPA) and the measurement and determination of fair values required financial modeling of the cash flows relating to each tangible asset acquired and abandonment provision assumed, including tax effects. The modeling and the identification of assets are inherently complex and requires a number of estimates and judgements to be applied. We focused on this area due to the significant value the investment represents in the balance sheet, and the applied level of management judgement in determining the value of the assets and liabilities acquired from the transaction and resulting subsequent potential impacts on the income statement. Refer to note 16 for a description of the business combination and how management has accounted for the PPA. We obtained and read the Sale & Purchase Agreement between OKEA ASA and Equinor Energy AS, and held meetings with management to understand the nature and details of the transaction. We obtained and read managements purchase price allocation (PPA). We found the methodology to be in line with the requirements in IFRS, and that the model made calculations as expected. We challenged whether there could be other assets and liabilities not properly accounted for. As part of this process, we held several meetings where we discussed with management and obtained underlying documentation to support calculations and measurements in the PPA. A large part of the value assumed in the transaction was allocated to oil and gas properties. Management has measured the value of the investment in oil and gas properties as the net present value (NPV) after tax of future estimated cash flows. We applied selected procedures to compare the estimated future cash flows related to production profiles, operating and capital expenditures, and future crude and gas prices to relevant reliable external and internal information. We assessed the discount rate applied with reference to market data. We compared management estimates for asset retirement obligations to reliable external information, assessed supporting documentation and consistency with other assumptions, and tested for mathematical accuracy. Management’s calculation of deferred and payable taxes, we tested for mathematical accuracy and assessed the application of tax regulations. A material part of goodwill from the transaction relates to technical goodwill calculated based on the difference between the estimated fair market value and tax value of the assets acquired. We tested the mathematical calculation of ordinary and technical goodwill. We involved PwC valuation specialists to assess and discuss important parts of the PPA. We evaluated the appropriateness of the related note disclosures and found that they satisfied IFRS requirements. 5 / 7 Other Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the other information accompanying the financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report nor the other information accompanying the financial statements. In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report and the other information accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report and the other information accompanying the financial statements otherwise appears to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report or the other information accompanying the financial statements. We have nothing to report in this regard. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report  is consistent with the financial statements and  contains the information required by applicable statutory requirements. Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate Governance and Corporate Social Responsibility, and to the report on payments to governments. Responsibilities of Management for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:  identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 6 / 7  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.  evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.  conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.  evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements Report on Compliance with Requirement on European Single Electronic Format (ESEF) Opinion As part of the audit of the financial statements of OKEA ASA, we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name OkeaASA-31-12-23-en.zip, have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format. In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF regulation. 7 / 7 Management’s Responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. Auditor’s Responsibilities Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material respects, the financial statements included in the annual report have been prepared in compliance with ESEF. We conduct our work in compliance with the International Standard for Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial information”. The standard requires us to plan and perform procedures to obtain reasonable assurance about whether the financial statements included in the annual report have been prepared in compliance with the ESEF Regulation. As part of our work, we have performed procedures to obtain an understanding of the Company’s processes for preparing the financial statements in compliance with the ESEF Regulation. We examine whether the financial statements are presented in XHTML-format. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Stavanger, 4 April 2024 PricewaterhouseCoopers AS Arne Birkeland State Authorised Public Accountant OKEA ASA Kongens gate 8 7011 Trondheim OKEA ASA is a leading mid- to late-life operator on the Norwegian continental shelf (NCS). OKEA finds alue where others divest and has an ambitious strategy built on growth, value creation and capital discipline.