Aker BP

Earnings Release • Feb 10, 2022

Fourth quarter 2021 results

Fourth quarter 2021 results

Aker BP reported record high operating profit of USD 1,260 million and net

profit of USD 364 million for the fourth quarter 2021. For the full year 2021,

operating profit was USD 3,315 and net profit was USD 851 million. The company

continues to deliver oil and gas at low cost and with low emissions. Aker BP is

uniquely positioned for profitable growth from a large resource base, backed by

industry-leading alliance partners and a very strong financial position.

· Acquisition of Lundin Energy's oil and gas activities announced in December

· Record high financial performance in 2021 with free cash flow of USD 2.5

billion and net debt reduced to USD 1.7 billion

· Low carbon footprint with emissions below 5 kg CO\2\ per boe - among the

lowest in the industry

· Dividend per share proposed increased from USD 1.35 in 2021 to USD 1.90 in

2022

· Securing profitable growth with three field developments sanctioned in 2021

· Aiming to sanction four new projects in 2022 including NOAKA and Valhall

NCP/King Lear

· Added 163 mmboe to its 2P+2C resource base in 2021, more than two times the

year's production

· Stepping up exploration activity with 13 wells planned in 2022

"The high oil and gas prices contributed to record strong financial results for

Aker BP in 2021. However, in times like these, it is important to stay focused

on the things we can influence. For Aker BP, this means to continuously improve

and drive down costs and emissions, and to unlock new opportunities for

profitable growth," says Karl Johnny Hersvik, CEO of Aker BP.

"Aker BP's financial position is more robust than ever. The strong cash

generation has contributed to further reducing our debt level and has allowed us

to increase our dividends. Financial flexibility is the foundation for

withstanding the volatility of the commodity markets and to fund our investment

program," says David Tønne, CFO of Aker BP.

Fourth quarter 2021 summary

Aker BP reported total income of USD 1,849 (1,563) million and operating profit

of USD 1,260 (849) million for the fourth quarter 2021. Net profit was USD 364

(206) million. The company paid a dividend of USD 150 million (USD 0.4165 per

share) in the quarter. On 21 December 2021, the company announced a transaction

agreement with Lundin Energy AB to acquire Lundin Energy's oil and gas related

assets.

The company's net production in the fourth quarter was 207.0 (210.0) thousand

barrels of oil equivalent per day (mboepd). The decrease was mainly driven by

lower production from the Alvheim area and Skarv, partly offset by higher

production from the Valhall area compared to the previous quarter. Net sold

volume was 205.1 (224.8) mboepd. The average realised liquids price increased to

USD 78.8 (71.5) per barrel, while the average realised price for natural gas

increased to USD 169.5 (91.3) per barrel of oil equivalent (boe).

Production costs for the oil and gas sold in the quarter decreased to USD 202

(209) million due to lower volumes sold. The average production cost per

produced unit was USD 10.1 (9.0) per boe, with the increase driven by lower

production, higher power prices and well intervention costs in the Valhall area.

Exploration expenses amounted to USD 83 (97) million. Depreciation was USD 219

(247) million, equivalent to USD 11.5 (12.8) per boe, while net impairments

amounted to USD 79 million, mainly related to the Ula area.

This resulted in operating profit of USD 1,260 (849) million. After net

financial expenses of USD 43 (47) million, profit before taxes ended at USD

1,218 (802) million. Tax expenses amounted to USD 854 (596) million, and net

profit was USD 364 (206) million for the quarter.

The company continued progressing its portfolio of field development projects

according to plan. During the fourth quarter, the development concept was

decided for the NOAKA area development. In addition, development concepts were

decided for Valhall NCP & King Lear and for Trine & Trell in the Alvheim area,

and a PDO for Hanz in the Ivar Aasen area was submitted to the authorities.

Capital expenditure amounted to USD 442 (378) million in the quarter, mainly

related to development projects at the Alvheim and Valhall areas.

At the end of the quarter, Aker BP had total available liquidity of USD 5.4

(4.8) billion. Net interest-bearing debt was USD 1.7 (2.3) billion, including

USD 0.1 (0.2) billion in lease debt.

In November, the company disbursed dividends of USD 150 million, equivalent to

USD 0.4165 per share, reflecting an annualised dividend level of USD 600

million. During the fourth quarter, the Board resolved to further increase the

dividend level by 14 percent to USD 0.475 per share per quarter, effective from

1 January 2022.

On 21 December 2021, the company announced a transaction agreement with Lundin

Energy AB, pursuant to which Aker BP will acquire Lundin Energy's oil and gas

related assets. The transaction is subject to approval by the shareholders of

both companies at their respective general meetings, and approval by relevant

authorities. Closing of the transaction is anticipated around mid-2022.

Outlook

Aker BP has a strong financial position and remains well positioned for future

value creation. For 2022, the company's financial plan consists of the following

key parameters. The numbers relate to Aker BP's current portfolio only, and do

not reflect any effects from the proposed Lundin transaction.

· Production of 210-220 mboepd

· Capex of around USD 1.6 billion

· Exploration spend of around USD 400 million

· Abandonment spend of around USD 100 million

· Production cost of around USD 10 per boe

· Dividends of USD 1.9 per share for the full year, to be paid in four

quarterly instalments

Aker BP is planning for 13 exploration wells in 2022, with unrisked volume

potential estimated to around 250 mmboe net to the company.

Aker BP continues to progress its portfolio of field development projects, and

several key milestones are planned in 2022, including first oil from Hod and

Johan Sverdrup Phase 2, and final investment decisions and PDO submissions for

NOAKA, Valhall NCP & King Lear, Skarv Satellites, and Trine & Trell.

Decarbonisation is a strategic priority for Aker BP. The company's emissions

intensity in 2021 was 4.8 kg CO\2\ per boe, significantly lower than the

industry average. With current planned initiatives, the company is on track to

achieve a 50 percent reduction in its gross scope 1 emissions by 2030 and

expects to have near-zero gross emissions by 2050. The company is also

evaluating a decarbonisation strategy to achieve net zero by 2030.

Webcast and conference call

The company will host a conference call to present its fourth quarter 2021

results on 10 February 2022 at 08:30 CET. The conference call will be available

as a webcast on www.akerbp.com/en. To participate in the conference call, please

use the dial-in numbers and passcode below.

Phone number Norway: +47 2350 0347

Phone number UK: +44 (0) 330 336 9600

Participant passcode: 912023

Attachments

Aker BP 2021-Q4

Report.pdf (https://mb.cision.com/Public/1629/3502249/a60c1888693023c4.pdf)

Aker BP 2021-Q4

Presentation.pdf (https://mb.cision.com/Public/1629/3502249/94f89f2b7c4411a2.pdf)

Investor contacts:

Kjetil Bakken, VP Corporate Finance and Investor Relations, tel.: +47 91 889 889

Jørgen Torstensen, Senior IR Professional, tel.: +47 95 48 37 07

Media contacts:

Tore Langballe, VP Communications, tel.: +47 907 77 841

Ole-Johan Faret, Press Spokesman, tel.: +47 402 24 217

About Aker BP:

Aker BP is an independent E&P company with exploration, development and

production activities on the Norwegian Continental Shelf. Aker BP is the

operator of Alvheim, Ivar Aasen, Skarv, Valhall, Hod, Ula and Tambar. The

company is also a partner in the Johan Sverdrup field. Aker BP is headquartered

at Fornebu, Norway, and is listed on the Oslo Stock Exchange under the ticker

'AKRBP'. More about Aker BP at www.akerbp.com.

This information is considered to be inside information pursuant to the

EU Market Abuse Regulation and is subject to the disclosure requirements

pursuant to Section 5-12 the Norwegian Securities Trading Act.

This stock exchange release was published by Kjetil Bakken, VP Corporate Finance

and Investor Relations, Aker BP ASA, on 10 February 2022 at 07:00 CET.