OKEA ASA

Earnings Release • Mar 20, 2020

OKEA ASA - Operational and financial update

OKEA ASA - Operational and financial update

OKEA ASA - Operational and financial update

The industry is in the midst of an unprecedented combination of a global

pandemic coupled with a dramatic fall in oil prices. The Board of Directors and

the Management team of OKEA have been working closely together over the past

weeks to assess and understand the impacts of this on the business, and to put a

series of mitigations in place that will ensure the Company is able to withstand

the current market conditions for an extended period of time. The Company would

therefore like to provide the following financial and operational update to the

market as a result of these measures.

Most importantly, OKEA is in a very strong financial position. Currently, the

Company has a significant cash reserve of NOK 1.2 billion and the OKEA-operated

Draugen Field, which provides a substantial proportion of the Company's

revenues, has low lifting costs of less than 20 USD/bbl. It will therefore

remain a positive contributor to the Company even at current oil prices. The

next OKEA Draugen lifting is scheduled for May and this has been hedged just

below 50 USD/bbl.

The OKEA01 Bond was successfully refinanced and in Q4 2019 and replaced by a new

facility, OKEA03. This means that the Company does not face any bond maturities

until 2023 or refinancing requirements in the short term and has enough cash

available to withstand a sustained period of low oil prices. However, in a

continuing low oil price scenario certain bond covenants may temporarily become

in technical breach. The Company monitoring this closely and is prepared to, and

have the tools available to, take necessary actions going forward if required.

Importantly, the Company does not have any RBL facilities which could be at risk

of redetermination.

In addition to this, the Company has substantial flexibility to reduce

expenditure through focused cost reduction measures, together with the deferral

of non-essential activities into 2021 or beyond.  The Company will postpone all

project sanction decisions, such as drilling or seismic programmes. We will

further cancel sanctioned plans where possible and as agreed with Joint Venture

partners. These measures will result in reductions to previously planned

exploration expenditure of around 90% for the rest of the year.

The Yme project remains on schedule and we are working closely with the

Operator, Repsol, and the other JV partners to understand and mitigate the

impact that restrictions (particularly travel restrictions) caused by the COVID

-19 pandemic may have on the project. The project is still on schedule for first

oil in second half of 2020.

The Company has put in place a series of measures designed to protect our

employees and to ensure full continuity on OKEA operated projects, particularly

at the Draugen Field. Our staff are now predominantly working from home and

minimising social contact, and we have also stopped all business travel. On

Draugen, we have introduced a policy that increases time spent offshore and

reduced offshore manning levels from 70 to 37. We closely monitor the health of

offshore staff and are taking measures to ensure that anyone who has been (or

may have been) in contact with someone infected with the virus does not travel

offshore.

The current situation is affecting the entire industry, and not just OKEA. OKEA

has always believed that consolidation of small-medium sized players on the

Norwegian Shelf is inevitable and the current situation is likely to accelerate

that. We believe that OKEA is in a strong position to take advantage of any

opportunities that may arise and will continue to seek out new inorganic growth

opportunities.

The Board and Management will continue to closely monitor the situation and will

be prepared to react swiftly and decisively as necessary to ensure the long-term

strength of the Company. OKEA will continue to provide the market with updates

as the year progresses.

For further information, please contact:

Birte Norheim, CFO, +47 952 93 321, email: birte.norheim@okea.no

Ståle Myhre, VP Investor Relations, +47 917 51 878, email: stale.myhre@okea.no

About OKEA ASA

OKEA is an Exploration and Production (E&P) company and operator on the

Norwegian Continental Shelf with production of ~19 000 boe per day. OKEA aims to

grow through low-cost field developments of discoveries with reserves up to 100

million boe and through mergers and acquisitions (M&A). The operating

organisation is built on the acquisition of the producing field Draugen in 2018.

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

More information on www.okea.no