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Aker BP
Investor Presentation • Oct 29, 2020
3528_rns_2020-10-29_f16e1292-a702-427e-ba27-34b84362544b.pdf
Investor Presentation
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Third quarter 2020
Aker BP ASA
29 October 2020
Disclaimer
This Document includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Document are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for Aker BP ASA's lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for Aker BP ASA's businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Document. Although Aker BP ASA believes that its expectations and the Document are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Document. Aker BP ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Document, and neither Aker BP ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.
Q3-2020 | AKER BP Uniquely positioned for value creation
Continued strong operational performance
- Production on track
- Low cost and low emissions
Building a leading E&P company
- Implementing new operating model
- Bond refinancing further strengthens financial flexibility
Potential to double production at break-evens below \$30
- Tax changes provide unique investment conditions
- Maturing projects with potential to add more than 500 mmboe1)
Key performance indicators Q3-2020 | STRONG OPERATIONAL PERFORMANCE
Q3-2020 | STRONG OPERATIONAL PERFORMANCE On track to deliver on 2020 production guidance
Production efficiency
Aker BP operated assets (percent)
Production
Q3-2020 | STRONG OPERATIONAL PERFORMANCE Industry-leading low carbon intensity
Emissions intensity1) CO2 - kg/boe
Contributing to the energy transition
Produce efficiently to return high value from oil & gas resources to our stakeholders
Minimise emissions
Reduce emissions from our operations focusing on the total footprint
Improve and share
Contribute with data, know-how and technology to other industries
Q3-2020 | LEADING THE INDUSTRY TRANSFORMATION New operating model to improve efficiency and reduce cost
Using the improvement toolbox…
…to build a leading operating model
Q3-2020 | TARGETING PROFITABLE GROWTH Ærfugl startup planned in Q4
…with the remainder of phase II on track for 2021
- Keeping the facilities full
- Large production increase at Skarv
- Low break-even project
- Total reserves of 300 mmboe (gross)
- Extends over 60 kilometers
- New technology unlocking resources
- Excellent performance by Aker BP's alliances
- Progress according to cost and schedule
- Major improvements since PDO
Q3-2020 | TARGETING PROFITABLE GROWTH Development projects well underway
Hod – first oil in Q1-22 Sverdrup phase 2 – first oil in Q4-22
Q3-2020 | TARGETING PROFITABLE GROWTH Uniquely positioned for further organic growth
Resource base provides unmatched opportunity set Aker BP's net reserves and resources per end-2019
Tax changes reduce break-evens and capital commitments Tax deductions for investments on the NCS, percent
Working towards concept selection for NOAKA Q3-2020 | TARGETING PROFITABLE GROWTH
NOAKA: Krafla, Fulla and North of Alvheim 11
Q3-2020 | TARGETING PROFITABLE GROWTH Significant part of our resource base ready for FID by 2022
Potential to double production at low break-evens
| Project1) | Area | FID2) | First oil |
|---|---|---|---|
| Valhall infill drilling |
Valhall area | 2020 | 2021 |
| Frosk | Alvheim area | 2021 | 2023 |
| Kobra East/Gekko | Alvheim area | 2021 | 2024 |
| Trell & Trine | Alvheim area | 2022 | 2025 |
| Hanz | Ivar Aasen area | 2022 | 2024 |
| Shrek | Skarv area | 2022 | 2025 |
| Ørn | Skarv area | 2022 | 2026 |
| Alve North |
Skarv area | 2022 | 2025 |
| Valhall NCP | Valhall area | 2022 | 2025 |
| NOAKA | NOAKA | 2022 | 2027 |
| Garantiana | Other | 2022 | 2025 |
net resources
break-even
x2 potential to double production
Q3-2020 | TARGETING PROFITABLE GROWTH Allocating capital to maximise value creation
Financial review
Q3-2020 | FINANCIAL REVIEW Oil and gas sales
Q3-2020 | FINANCIAL REVIEW Lifted volumes and realised prices
Crude oil liftings 2020-9M1)
mmbbl
Breakdown of realised liquids prices in Q3 USD/bbl
Income statement Q3 -2020 | FINANCIAL REVIEW
| USD million | Q3 2020 | Q2 2020 | Q3 2019 |
|---|---|---|---|
| Total income | 684 | 590 | 723 |
| Production costs | 134 | 196 | 167 |
| Other operating expenses |
7 | 15 | 6 |
| EBITDAX | 543 | 379 | 550 |
| Exploration expenses | 32 | 50 | 70 |
| EBITDA | 511 | 329 | 480 |
| Depreciation | 269 | 286 | 206 |
| Impairments | - | (136) | 78 |
| Operating profit (EBIT) | 242 | 178 | 196 |
| Net financial items |
(51) | (27) | (53) |
| Profit/loss before taxes | 191 | 151 | 143 |
| Tax (+) / Tax income ( - ) |
111 | (19) | 186 |
| Net profit/loss | 80 | 170 | (43) |
| EPS (USD) | 0.22 | 0.47 | (0.12) |
Statement of financial position Q3-2020 | FINANCIAL REVIEW
USD million
| Assets | 30.09.20 | 30.06.20 | 31.12.19 | Equity and liabilities | 30.09.20 | 30.06.20 | 31.12.19 |
|---|---|---|---|---|---|---|---|
| Goodwill | 1,647 | 1,647 | 1,713 | Equity | 1,929 | 1,912 | 2,368 |
| Other intangible assets |
2,051 | 2,054 | 2,537 | Other provisions for liabilities incl. P&A (long) |
2,650 | 2,655 | 2,645 |
| Property, plant and equipment |
7,219 | 7,175 | 7,023 | Deferred tax |
2,563 | 2,471 | 2,235 |
| Right-of-use asset | 126 | 137 | 194 | Bonds and bank debt | 4,373 | 3,712 | 3,287 |
| Receivables and other assets | 562 | 546 | 652 | Lease debt | 217 | 236 | 313 |
| Calculated tax receivables |
71 | 187 | - | Other current liabilities incl. P&A | 764 | 901 | 1,017 |
| Cash and cash equivalents |
819 | 142 | 107 | Tax payable | - | - | 361 |
| Total Assets |
12,495 | 11,889 | 12,227 | Total Equity and liabilities |
12,495 | 11,889 | 12,227 |
Value creation ambition supported by strong financial position
Committed long-term liquidity buffer
Available liquidity, USD billion1)
Conservative leverage Leverage ratio2)
Extended debt maturity profile
USD billion (as of 29 Oct 2020)
1) Available liquidity: Undrawn bank facilities and Cash and cash equivalents.
2) Leverage ratio: Net interest-bearing debt divided by EBITDAX last 12 months, excluding effects of IFRS16 Leasing
Cash flow Q3-2020 | FINANCIAL REVIEW
Expecting tax refund for fiscal year 2020 Q3-2020 | FINANCIAL REVIEW
Tax payments and refunds per quarter (USD million)
1) Estimated tax refunds in Q1-21 and Q2-21 are related to fiscal year 2020, assuming different average Brent oil prices for Q4-20 and USDNOK 9.4. The tax refund in Q4-20 is fixed in NOK and may deviate slightly from the indication depending on the USDNOK on the payment dates. The actual amounts for H1-21 will be adjusted after year-end to reflect actual 2020 results. Potential settlements of uncertain tax cases are excluded.
Q3-2020 | FINANCIAL REVIEW Guidance summary
Original 2020 guidance was based on USDNOK 10. Current 2020 guidance is based on actual USDNOK for Q1-Q3 and 9.4 for Q4. For the 2021 indications, USDNOK is assumed at 9.0.
Q3-2020 | AKER BP Priorities
- Drive operational excellence
- Flawless project execution
Implement new operating model
Reduce emissions from own operations
- Progress NOAKA according to plan
- Mature project portfolio for FID by 2022
Grow
Improve
Execute
Q3-2020 | APPENDIX 2020 exploration programme
| License | Prospect | Operator | Aker BP share |
Pre-drill mmboe |
Status |
|---|---|---|---|---|---|
| PL1008 | Nidhogg 1 |
Aker BP | 60 % | 37 96 - |
Discovery 6-15 mmboe |
| PL719 | Sandia 2 |
Spirit | 20 % | 23 527 - |
Dry |
| PL533 | Bask 3 |
Lundin | 35 % | 14 585 - |
|
| PL127C | Alve NE 4 |
Aker BP | 88 % | 8 25 - |
Currently drilling |
| PL780 | Sørvesten 5 |
Spirit | 40 % | 15 35 - |
Dry |
| PL981 | Mercx Ty 6 |
Lundin | 40 % | 22 92 - |
|
| PL858 | Stangnestind | Aker BP | 40 % | 13 108 - |
Postponed |
| PL722 | Shenzhou | Equinor | 20 % | 191 505 - |
Postponed |
| PL554 | Garantiana W | Equinor | 30 % | 7 28 - |
Postponed |
| PL442 | Liatårnet app. | Aker BP | 90 % | Postponed |
5
Q3-2020 | APPENDIX Guidance summary
| 2020 guidance | 2020-9M actual | Comments | |
|---|---|---|---|
| Production | 210-215 mboepd | 206.5 mboepd | Net production excl. over/underlift |
| Capex | USD ~1.3 billion | USD 1.01 billion | Excl. capitalised interest Incl. share of lease payments |
| Exploration spend | USD ~300 million | USD 166 million | Incl. share of lease payments |
| Abandonment spend | USD ~200 million | USD 73 million | Incl. share of lease payments |
| Production cost per boe | USD ~8 | USD 8.4 | Per boe produced |
| Dividends | USD 425 million | USD 354 million |
