OKEA ASA

Earnings Release • Oct 28, 2021

OKEA: Third quarter 2021 financial results and strategy update

OKEA: Third quarter 2021 financial results and strategy update

(Trondheim/Oslo, 28 October 2021) - OKEA ASA (OSE: OKEA) reported a net profit

after tax of NOK 97 million in the third quarter of 2021. Total operating

income was NOK 1 026 million, up from NOK 607 million in the previous quarter,

and EBITDA was NOK 797 million, up from NOK 311 million in the previous

quarter. Market conditions remain strong, and OKEA today announces an update on

the strategy including an ambition to initiate a dividend plan during 2022.

"OKEA delivered a strong operational performance in the third quarter.

Combined with highly favourable market conditions, this resulted in a more than

doubling of revenues year-on-year," said OKEA CEO Svein J. Liknes. "In

addition, Yme just started production, which represents a key milestone for the

company and will strengthen our production and cash flow further

and provide a solid platform for growth."

(Amounts in parentheses refer to previous quarter)

Third quarter 2021 summary

OKEA reported total operating income of NOK 1 026 (607) million and EBITDA of

NOK 797 (311) million for the third quarter 2021. Net profit was NOK 97 (200)

million.

The company's net production in the third quarter was 16 315 (13 210) boepd. The

production increase was mainly driven by high reliability at both Draugen and

Gjøa without any major planned maintenance work in the third quarter. Sold

volumes amounted to 16 979 (13 048) boepd. Market prices have continued to

improve during the quarter, which resulted in an average realised liquids price

of USD 67.4 (63.8) per boe and an average realised price for gas of USD 0.57

(0.32) per scm.

Expected recoverable reserves at Yme are estimated to approximately 10

million standard cubic meters of oil - or 63 million barrels - with OKEA's share

at 9.4 million barrels of oil.  At plateau, the Yme field will produce around

56 000 boepd, with OKEA's share around 8 400 boepd. Average production the next

12 months net to OKEA from the Yme field is estimated to 5 600 boepd.

Earlier this year, the Yme licence entered into an agreement to acquire

Mærsk Inspirer through a bareboat charter agreement with Havila Sirius AS and

take over the day-to-day operations of the jack-up rig from Maersk

Drilling. The transaction was effectuated in October and the re-organisation of

operations and ownership of the Mærsk Inspirer is expected to provide

significant cost improvement and cash flow benefits in the area of NOK 300

million net after tax to OKEA over the next nine months.

Guiding for 2021 remains unchanged. Production guiding for 2021 is 15?500

- 16 500 boepd and production outlook for 2022 is 17?000 - 18 000 boepd. Capex

guiding for 2021 of NOK 600 - 700 million includes planned investments on the

Hasselmus project for the year.

At the end of the quarter, OKEA's cash and cash equivalents amounted to NOK

1 504 million. Net interest-bearing debt amounted to NOK 874 million.

During the quarter, OKEA bought back OKEA02 bonds for NOK 108 million at an

average price of 102.5 and settled the NOK 159 million that was due to Shell, as

outlined in the second quarter 2021 financial report.

Strategy update

Along with the third quarter 2021 results, OKEA will also present an updated

company strategy today. Going forward, OKEA's strategy will be 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.

"We see very attractive fundamentals in the oil and gas market, with sustained

demand gap, which will support value creation on the NCS for

the next decade. Established NCS players are streamlining their

portfolios, providing increased consolidation opportunities for operators with a

solid track record such as OKEA. With this backdrop, and by

leveraging our transactional and operational experience from Draugen, OKEA aims

to be the leading operator of mid- to late-life assets on the

NCS by unlocking value through high quality

operations, strategic partnerships and cost-efficient

solutions and technology", said Liknes.

"OKEA has a clear ambition to deliver competitive shareholder returns driven by

solid growth, value creation and capital discipline," Liknes concludes.

OKEA CEO Svein J. Liknes and CFO Birte Norheim will host a presentation

at Haakon VIIs gate 2 in Oslo at 10:00 CEST today. The presentation will be

streamed live on the company's website www.okea.no and will be available on

demand afterwards.

The presentation and the financial report for the third quarter

2021 are enclosed.

For further information, please contact:

CEO, Svein J. Liknes, +47 917 67 704

CFO, Birte Norheim, +47 952 93 321

VP IR, Trond Omdal, +47 915 32 578

About OKEA | www.okea.no

OKEA ASA is an independent Exploration and Production (E&P) company and

operator on the Norwegian continental shelf with a current production of around

16,000 boepd. OKEA aims to deliver shareholder value through profitable

production growth within the current portfolio combined with mergers and

acquisitions targeting mid to late-life assets with potential for unlocking

upside value.

OKEA ASA is listed on Oslo Stock Exchange under the ticker OKEA.