Investor Presentation • Feb 13, 2020
Investor Presentation
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13 February 2019
This presentation is prepared solely for information purposes, and does not constitute or form part of, and is not prepared or made in connection with, an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities. Investors and prospective investors in securities of any issuer mentioned herein are required to make their own independent investigation and appraisal of the business and financial condition of such company and the nature of the securities. The contents of this presentation have not been independently verified, and no reliance should be placed for any purposes on the information contained in this presentation or on its completeness, accuracy or fairness.
The presentation speaks as of the date sets out on its cover, and the information herein remains subject to change.
Certain statements and information included in this presentation constitutes "forward-looking information" and relates to future events, including the Company's future performance, business prospects or opportunities. Forward-looking information is generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions and could include, but is not limited to, statements with respect to estimates of reserves and/or resources, future production levels, future capital expenditures and their allocation to exploration, development and production activities. Forward-looking information involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. Such risks include but are not limited to operational risks (including exploration and development risks), productions costs, availability of equipment, reliance on key personnel, reserve estimates, health, safety and environmental issues, legal risks and regulatory changes, competition, geopolitical risk, and financial risks. Neither the Company or any officers or employees of the Company provides any warranty or other assurance that the assumptions underlying such forward-looking information are free from errors, nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecasted developments and activities. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable law.
This presentation contains non-IFRS measures and ratios that are not required by, or presented in accordance with IFRS. These non-IFRS measures and ratios may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS. Non-IFRS measures and ratios are not measurements of our performance or liquidity under IFRS and should not be considered as alternatives to operating profit or profit from continuing operations or any other performance measures derived in accordance with IFRS or as alternatives to cash flow from operating, investing or financing activities.
The Company's securities have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act"), and are offered and sold only outside the United States in accordance with an exemption from registration provided by Regulation S of the US Securities Act.
The presentation is subject to Norwegian law.
Safe and responsible operations (Serious incidents)
Cash flow from operating activities
•No serious incidents
•Production 17 020 boepd
•Completed first operated drilling campaign
•Awarded five licences in APA 2019
Tor Bjerkestrand, SVP Operations
Lower production due to maintenance and well shut-in
•5% production decrease from Q3 2019 to Q4 2019
•Lower Draugen production mainly due to shut-in of well
•Gjøa production impacted by unplanned shut-down and SEGAL capacity
Safe operations with production impacted by well shut-in
Field strategy, organisation and development plans
Improved operations and drilling excellence
Projects for emission reduction initiated
OKEA & ABB digital collaboration
OKEA Digital Platform (ODP) screendump 06 Feb @1200
| Value drives | Ambition |
|---|---|
| Safe production | • No harm no leaks |
| Environment | Prudent operator • |
| Well and reservoir potential |
Ultimate Recovery 70% • Near-field exploration • • Develop Draugen as hub |
| Plant regularity/ quality/ efficiency |
Availability 91% • Reliability 95% • • Production optimisation 6% |
| Cash flow | • Always cash positive • Robust at 40 dollar/barrel |
| Maximise field life | End of field life 2040+ • |
Hasselmus – 1st tieback to Draugen
10 DRAUGEN LRP 2019
Lower production due to unplanned maintenance
90% 95% 97% 75% 0% 20% 40% 60% 80% 100% Q1 19 Q2 19 Q3 19 Q4 19
Production regularity
Kjersti Hovdal, SVP Accounting and Controlling
Revenue decrease mainly due lower produced and sold volumes, offset by increased prices
| 4th quarter | 3rd quarter | Full year | |||||
|---|---|---|---|---|---|---|---|
| Figures in NOK million | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |
| Total operating income | 564 | 181 | 622 | 97 | 3 020 | 309 | |
| Production expenses | -205 | -90 | -144 | -2 | -709 | -97 | |
| Changes in over/underlift positions and inventory | 42 | 130 | 41 | -3 | -272 | 133 | |
| Depreciation and impairment | -171 | -82 | -177 | -6 | -809 | -100 | |
| Exploration and operating expenses | -176 | -89 | -115 | -51 | -402 | -197 | |
| Profit / loss (-) from operating activities | 55 | 51 | 227 | 36 | 827 | 49 | |
| Net financial items | -90 | -241 | -225 | -66 | -408 | -349 | |
| Profit / loss (-) before income tax | -35 | -190 | 1 | -30 | 419 | -300 | |
| Income taxes | 33 | 131 | -79 | -34 | -491 | 144 | |
| Net profit / loss (-) | -2 | -59 | -77 | -64 | -71 | -156 | |
| EBITDA | 226 | 133 | 404 | 42 | 1 636 | 149 | |
| Q4 Comments | |||||||
| • Income: One lifting on Draugen, lower production and lifting on Gjøa vs. Q3 |
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| • Production expenses: Higher than average mainly due to well maintenance work on wells on Draugen |
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| • Exploration expenses: Dry well Skumnisse, Infill Ø now capitalised, dry well PL910 Kathryn (Yme area). Seismic costs and field evaluation |
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| • Financials: favourable USD/NOK, offset by some costs related to refinancing expensed in Q4 |
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| • Taxes: deviation from 78% mainly due to impairment, financial items and uplift |
•Planned production start summer 2020
•Good progress on the project, with appraisal well ongoing
•Production start early Q1 2021
•Maturing Grevling/Storskrymten towards concept selection
•Located in Draugen and Grevling areas •Two new licences, three area extensions •Potential support of Draugen lifetime •Adding Grevling area exploration upside
| License | Block(s) | Operator | OKEA share |
|---|---|---|---|
| PL1060 | 6407/8,9 | Equinor Energy AS | 40% |
| PL1034 | 15/12 | Chrysaor Norge AS | 40% |
| PL973 B | 15/12 | Chrysaor Norge AS | 30% |
| PL093 F | 6407/9 | OKEA ASA | 44.56% |
| PL1003 B | 6406/3,6 | OKEA ASA | 60% |
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