Aker BP

Earnings Release • Jan 17, 2019

Capital Markets Day 2019

Aker BP ASA

17 January 2019

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.

This Document includes financial information relating to the year 2018. The financial statements for 2018 have not been completed at the time of this report, and all such information should therefore be considered as forward-looking statements.

AKER BP'S CAPITAL MARKETS DAY 2019 Today's agenda

Time		Speaker
09:00	Welcome
	High growth, low cost and improved efficiency	Karl Johnny Hersvik, CEO
	Maximizing value of our producing assets	Svein J. Liknes, SVP Operations & Asset Development
	Our main growth projects	Karl Johnny Hersvik, CEO
	Break
11:00	Creating value through exploration	Evy Glørstad-Clark, SVP Exploration
	Returning value creation to shareholders	Alexander Krane, CFO
	Concluding remarks	Karl Johnny Hersvik, CEO
12:00	Q&A session
12:30	End

High growth, low cost and improved efficiency

Capital Markets Day 2019

Karl Johnny Hersvik Chief Executive Officer

AKER BP CAPITAL MARKETS DAY 2019 High growth – low cost – improved efficiency

2018 ACHIEVEMENTS Key focus areas in 2018

Strong operational performance

Increased reserves and resources

Capital discipline

Strengthen position in core areas

Deliver on the dividend ambition

2

3

4

2018 ACHIEVEMENTS Production volume and cost as guided

Strong operational performance

Increased reserves and resources

Capital discipline

Strengthen position in core areas

Deliver on the dividend ambition

155 700 boed produced

>80% oil and liquids

USD 12 per boe production cost

2018 ACHIEVEMENTS Organic and acquired growth in profitable volumes

Strong operational performance

Increased reserves and resources

Capital discipline

Strengthen position in core areas

Deliver on the dividend ambition

>100% organic Reserve Replacement Ratio

+18%

in contingent resources

~55 mmboe

net volumes in Frosk and Gekko

2018 ACHIEVEMENTS Strong capital discipline

Strong operational performance

Increased reserves and resources

Capital discipline

Strengthen position in core areas

Deliver on the dividend ambition

USD 1.20 bn

2018 capital spending below plan

-30%

lower abandonment expenditures than planned

On track current field developments

2018 ACHIEVEMENTS Added important assets to lift future production

Strong operational performance

Increased reserves and resources

Capital discipline

Strengthen position in core areas

Deliver on the dividend ambition

11 licences

acquisition of portfolio from Total

King Lear acquisition of gas/cond. discovery from Equinor

~170 mmboe

net recoverable resources acquired

2018 ACHIEVEMENTS Returning the value creation to shareholders

AKER BP CAPITAL MARKETS DAY 2019 High growth – low cost – improved efficiency

RECONSTRUCTING THE WAY WE OPERATE OUR BUSINESS Targeting significant efficiency improvements

Production cost per barrel

Full cycle project break-even below

RECONSTRUCTING THE WAY WE OPERATE OUR BUSINESS Our improvement journey

RECONSTRUCTING THE WAY WE OPERATE OUR BUSINESS Aker BP's four main improvement pillars

Reorganizing the value chain with partnerships and alliances

Aker BP in the forefront for digitalization of E&P

Securing effective processes

Establish flexible business models

AKER BP CAPITAL MARKETS DAY 2019 High growth – low cost – improved efficiency

HIGH AMBITIONS FOR VALUE CREATION Profitable growth from existing portfolio

Production ambition (mboepd)

HIGH AMBITIONS FOR VALUE CREATION Driving down cost – targeting USD 7 per barrel

Production cost (USD/boe)

HIGH AMBITIONS FOR VALUE CREATION Low carbon operator with continued focus on safety

CO2 emissions intensity1)

kg CO2 per boe (2017)

Serious Incident Frequency (SIF)

Per million exposure hours

HIGH AMBITIONS FOR VALUE CREATION Exploring for valuable growth opportunities

Excellent acreage position for future success

Number of licences on the NCS per company

HIGH AMBITIONS FOR VALUE CREATION Counter-cyclical and value-driven approach to M&A

A cornerstone of Aker BP's growth agenda

HIGH AMBITIONS FOR VALUE CREATION Increased ambition for dividend payout

Returning the value creation to shareholders (USD million)

Profitable growth from excellent project pipeline

AKER BP CAPITAL MARKETS DAY 2019 High growth – low cost – improved efficiency

Maximizing value of our producing assets

Capital Markets Day 2019

Svein J. Liknes SVP Operations & Asset Development

Aker BP portfolio overview

Alvheim area (operator) High production efficiency and continued resource growth

Valhall/Hod (operator) Billion barrels produced, ambition to produce another billion

Ivar Aasen (operator) Pioneering digital operations model

Skarv / Ærfugl (operator) Strong base performance and area upside potential

Ula/Tambar (operator) Late life production with significant upside potential

Johan Sverdrup (partner) World class development with superior economics

NOAKA (operator) Targeting an area development

MAXIMIZING VALUE OF OUR PRODUCING ASSETS Maturing a large resource base

Development in 2P reserves (mmboe)

Development in 2C contingent resources (mmboe)

Key levers to drive value creation MAXIMIZING VALUE OF OUR PRODUCING ASSETS

Alvheim area

ALVHEIM AREA Alvheim area overview

Production history (mboepd gross)

Ownership and reserves

Field	Licence	Aker BP interest	Partners	2P reserves mmboe net
Alvheim	203	65%	ConocoPhillips, Lundin	66
Volund	150	65%	Lundin	13
Vilje	036 D	46.9%	Equinor, PGNiG	7
Bøyla /Frosk	340	65%	Vår, Lundin	7
Skogul	460	65%	PGNiG	6
Net 2P reserves				99

EXECUTE Outstanding production efficiency

Alvheim area production (mboepd net)

Alvheim area production efficiency

IMPROVE Building alliances to drive efficiency improvements

Subsea Alliance – the first of its kind

Delivering significant cost improvements1)

GROW Alvheim's resource base keeps growing

2018 resource additions

• Frosk discovery
• ~50 mmboe gross
• Test production from 2019
• Gekko appraisal
• ~40 mmboe gross
• Trine & Trell acquisition
• ~40 mmboe gross
• Tieback distance to Alvheim

More exploration in 2019

• Froskelår
• Rumpetroll

GROW Alvheim preparing for the next growth cycle

• 10 20 30 40 50 60 2018 2019 2020 2021 2022 2023 Non-sanctioned Sanctioned Skogul Frosk test producer Infill wells Frosk Trine Trell Gekko Infill wells

Valhall area

VALHALL AREA Valhall area overview

Production history (mboepd gross)

Ownership and reserves

Field	Licence	Aker BP interest	Partners	2P reserves mmboe net
Valhall	Valhall Unit	90%	Pandion	262
Hod	033	90%	Pandion	4
Net 2P reserves				265

EXECUTE Valhall – improving regularity and continued drilling

Production efficiency gradually improving

Production efficiency data from 2015-2016 based on McKinsey benchmark survey. From Q1-17 based on company data. 40

EXECUTE Valhall Flank West – on track

Project description

• Reserves 60 mmboe (gross)
• Unmanned wellhead platform tied back to Valhall
• Six wells option for six more
• Capex NOK 5.5 billion
• Break-even oil price USD 28.5 per barrel

Progressing as planned

Jul 17 Dec 17 Jul 18 Dec 18 Jul 19 Dec 19 Jul 20

EXECUTE Continuous improvement in plugging performance

Faster, cheaper and with minimal CO2 and NOx emissions

Targeting cheaper, better and smarter wells IMPROVE

Fishbones – a promising stimulation technology currently being tested at Valhall

"Oil and gas in tight reservoirs represent huge opportunities for value creation on the NCS. However, profitable recovery requires willingness from operators and licensees to test and implement new technologies, such as the Fishbones stimulation."

Ingrid Sølvberg Director Development and operations

GROW Towards a doubling of production

Valhall area production outlook (net mboepd)

GROW Huge resource potential to be unlocked at Valhall

Ambition to produce another billion barrels from the Valhall area1)

Ivar Aasen

First manned platform in Norway to be controlled from shore IMPROVE

Onshoring the Ivar Aasen control room

• Implemented 16 January 2019
• Developing industry-leading digital solutions to gain experience and prepare Aker BP's Field of the Future
• Improved collaboration with onshore engineering resources

An important step towards the

Field of the Future

The offshore control room moved onshore as the first in Norway

IVAR AASEN Ivar Aasen overview

Production history (mboepd gross)

Ownership and reserves

Field	Licence	Aker BP interest	Partners	2P reserves mmboe net
Ivar Aasen	Ivar Aasen Unit	34.8%	Equinor, Spirit, Wintershall, Neptune, Lundin, OKEA	49
Hanz	028 B	35.0%	Equinor, Spirit	6
Net 2P reserves				55

Smart service contract with Framo and Cognite IMPROVE

• New approach to operations and maintenance
• Providing live data to the pump producer from three Aker BP fields
• Has already contributed to design improvements
• Enabling "pumping as a service" and new business models for Aker BP

GROW Targeting stable production

Ivar Aasen production outlook (mboepd net)

SKARV Skarv area overview

Production history (mboepd gross)

Ownership and reserves

Field	Licence	Aker BP interest	Partners	2P reserves mmboe net
Skarv & Ærfugl	Skarv Unit	23.835%	Equinor, DEA, PGNiG	90
Snadd Outer	212 E		30% Equinor, DEA, PGNiG
Net 2P reserves				106

EXECUTE Driving productivity improvements at Skarv

Production efficiency

Production efficiency data from 2015-2016 based on McKinsey benchmark survey. From Q1-17 based on company data. 53

EXECUTE Ærfugl development on track

Tie-back to Skarv

• Gross reserves 275 mmboe
• Capex NOK 4.5 billion (PDO estimate, phase 1)
• Production start late 2020
• Break-even oil price USD 18.5 per barrel
• Phase 2 concept selection planned in 2019

Progressing as planned

Jul 17 Dec 17 Jul 18 Dec 18 Jul 19 Dec 19 Jul 20 Dec 20

GROW Skarv production to be boosted by Ærfugl

Skarv area production outlook (mboepd net)

ULA AREA Ula area overview

Ownership and reserves

Field	Licence	Aker BP interest	Partners	2P reserves mmboe net
Ula	019	80%	Faroe	39
Tambar	065	55%	Faroe	8
Oda	405	15%	Spirit (operator), Suncor, Faroe	7
Net 2P reserves				54

IMPROVE Establishing stable and robust operations at Ula

Current priorities for the Ula area

Upgrading the facilities

• Improve HSE standards
• Enable efficient drilling
• Strengthen integrity
• Improve production regularity
• Build a better subsurface understanding
• Improve reservoir model
• Reservoir pilots supporting growth strategy
• Optimize production efficiency

Stabilize production

• Oda on stream
• Drilling of new Ula wells

Develop plan for growth

• IOR targets
• Tie-back opportunities
• Exploration

GROW Gradually maturing new growth initiatives

Ula area production outlook (mboepd net)

GROW Ambition to rejuvenate Ula as area hub

Significant growth opportunities

Increased oil recovery

• The Ula reservoir has responded extremely well to WAG and has further potential to be exploited
• Further potential in Ula Triassic
• Tambar infill and injection options

Tie-ins of discoveries

• King Lear acquired in 2018 can provide Ula with gas to maximize WAG production
• Discoveries with Aker BP interest: Krabbe and Desmond
• Third party discoveries

Exploration potential

• Several targets identified Kark to be drilled in 2019
• Focusing on further prospectivity in Upper Jurassic

Additional platform required

• Focusing on maturing the projects
• Timing of new production is estimated from 2025

Ula Area - illustrative production potential mboepd gross

Key levers to drive value creation MAXIMIZING VALUE OF OUR PRODUCING ASSETS

Our main growth projects

Capital Markets Day 2019

Karl Johnny Hersvik Chief Executive Officer

Johan Sverdrup

Illustration: TRY/Equinor, Johan Sverdrup Field Centre incl. Phase 2 63

Johan Sverdrup – a world class oil field

KEY FACTS

A Norwegian giant

• Gross resources: 2.2-3.2 bn boe
• Current reserves: 2.7 bn boe

Aker BP interest 11.57%

• Operated by Equinor

Phase 1

• First oil plan November 2019 • Processing capacity 440 mboepd

Phase 2

• Production from Q4 2022 • Processing capacity 660 mboepd

Break even oil price below USD 20 per boe

Illustration: Equinor 64

JOHAN SVERDRUP Important contributor to production growth and cash flow

Production and capex outlook

NOAKA

NOAKA: North Of Alvheim Krafla Askja 66

NOAKA NOAKA area overview

Resources

Discovery	Licence	mmboe gross1)	Aker BP share	mmboe net1)	Operator
Askja/Krafla	035/072	236	50%	118	Equinor
Frigg	903 76		-	-	Equinor
Frigg Gamma/Delta	442	84	90%	75	Aker BP
Frøy	364	41	90%	37	Aker BP
Fulla	873	66	40%	26	Aker BP
Langfjellet	442	33	90%	30	Aker BP
Rind	026	33	92%	30	Aker BP
TOTAL		568	56%	317

Targeting an area development at NOAKA

Significant recoverable resources

• Total of ~550 mmboe

Aker BP favors a central processing hub (PQ)

• Highest value creation
• Maximum resource utilisation
• Capacity for future discoveries

An Aker BP "Field of the Future"

• Remote operations
• Unmanned installations
• Expanded subsea facilities
• Zero discharge/emission

Concept selection delayed

NOAKA Comparing the development concepts

PQ UPP

All numbers based on Aker BP estimates as per January 2019 Break-even defined as the oil price necessary to achieve positive NPV using 10% discount rate

Summary

HIGH AMBITIONS FOR VALUE CREATION Profitable growth from existing portfolio

Creating value through exploration

Capital Markets Day 2019

Evy Glørstad-Clark SVP Exploration

EXPLORATION STRATEGY Factors shaping the exploration strategy

The Aker BP exploration formula EXPLORATION STRATEGY

Maximize value of operated hubs

60 %

Explore for new hub potential 40 %

Smart integration of data and technology

Unlocking the power of data to identify more opportunities EXPLORATION STRATEGY

Technology supports growth EXPLORATION STRATEGY

Invest in data around our hubs – Alvheim analogue

• Proven to deliver ILX1) value
• Rapid and robust field development

OBN2) seismic entering NCS exploration

• 10-fold increased signal and measure the full wave field
• Demonstrate subtle opportunities, robust and rapid development
• 2018 and 2019 acquisition

Leverage imaging technology

• Efficiency gains in compute accommodates high end imaging
• Aker BP engaged in developing next generation of advanced imaging for the NCS

EXPLORATION PERFORMANCE Success in the Alvheim area

New discovery and positive appraisal

• Discoveries a result of long-term strategy in area, data acquisition and G&G evaluations
• Frosk proved ~50 mmboe oil (gross)
• Pre-drill estimate 3-21 mmboe
• Located near Bøyla, tied back to Alvheim
• Multilateral production and appraisal well planned in 2019
• Frosk follow-up potential to be tested in 2019
• Froskelår and Rumpetroll prospects to be drilled 2019

Successful appraisal of Gekko

• Oil column thicker than previously assumed and excellent reservoir properties
• Estimated gross recoverable resources ~40 mmboe
• Located near Alvheim

EXPLORATION PERFORMANCE High value creation from 2018 exploration program

Estimated value of 2018 exploration program

EXPLORATION OUTLOOK Large and promising 2019 program

License	Prospect	Operator	Aker BP share			Pre-drill mmboe
PL869	Froskelår Main	Aker BP	60 %	45	-	153
PL869	Froskelår NE	Aker BP	60 %	7	-	23
PL869	Rumpetroll	Aker BP	60 %	45	-	148
PL033	Hod Deep West	Aker BP	90 %	2	-	22
PL916	JK	Aker BP	40 %	100	-	420
PL857	Gjøkåsen	Equinor	20 %	26	-	1 427
PL782S	Busta	ConocoPhillips	20 %	54	-	199
PL942	Ørn	Equinor	30 %	8	-	40
PL777	Hornet	Aker BP	40 %	14	-	137
PL814	Freke-Garm	Aker BP	40 %	16	-	81
PL502	Klaff	Equinor	22 %	50	-	372
PL762	Vågar	Aker BP	20 %	62	-	128
PL019C	Kark	Aker BP	60 %	15	-	48
PL838	Shrek	PGNIG	30 %	10	-	22
TBD	NOAKA area	Aker BP

EXPLORATION OUTLOOK Notable wells – ILX opportunities

Interpreted as the same injectite complex as the Frosk discovery

• High chance of success
• Predrill est. 45-153 mmboe
• Drilling start: January 2019
• Potential discovery likely to be produced over the Bøyla field

Sand injectite complex near Frosk discovery1)

Froskelår Main Rumpetroll Hod Deep West

Play test in Valhall area1)

• Moderate chance of success
• Predrill est. 45-148 mmboe
• Untested injectite play in the Frosk area

• Large upside potential

• Production well extension to test new, deeper play

• Valhall basement
• High value barrels to existing hub
• Low exploration cost

EXPLORATION OUTLOOK Notable wells – growth opportunitites

Low relief structure close to Johan Sverdrup

• Moderate chance of success
• Predrill est. 100-420 mmboe
• Potential discovery can represent a stand-alone development

Cluster development potential in known play type

• Moderate chance of success
• Hornet predrill est. 14-137 mmboe
• Freke-Garm predrill est. 16-81 mmboe
• Cluster development potential

Permian carbonate play in the Norwegian Sea

• Moderate chance of success
• Predrill est. 62-128 mmboe
• Potential game changer in untested play in the area

EXPLORATION OUTLOOK The Barents Sea – large potential, but limited success so far

Aker BP licenses in the Barents Sea

• Several plays tested
• Disappointing well results so far
• Permian play tests postponed to 2020

Undiscovered potential1) (billion boe)

• Most remaining resources left in the Barents Sea
• 50% of YTF in Triassic succession
• 54% of YTF in Barents Sea North

Large acreage position Large volumes yet to find Hard to unlock Triassic potential

Triassic exploration models

• Largest YTF volume
• Implement well results and new technology
• Large acreage position positioned for the play

EXPLORATION OUTLOOK Significant value creation potential from 2019 exploration program

Estimated risked value of 2019 exploration program

LICENSING ROUNDS Aker BP offered 21 new licenses in the 2018 APA round

Defining and exploring in new potential core areas through APA

• Ellida High risk/high reward, technological upside
• Barents Sea Systematically derisking and highgrading the Triassic play
• Sleipner Area Securing acreage pending success in 2019 program

Increasing footprint in producing hub areas in available APA acreage

• Skarv Firm well commitment on ILX opportunities with high upside
• NOAKA Firm well commitment
• Securing attractive opportunities in other ILX acreage (Central Graben, Johan Sverdrup)

New growth opportunities Strengthen ILX potential Balanced exploration portfolio

APA activity aims to strengthen existing portfolio in prioritized area

• High technical quality on applications and competitive work programs
• 11 operated and 10 partner operated licenses offered to Aker BP in APA 2018
• 2nd largest acreage portfolio on the NCS

EXPLORATION Creating value for the future

High-potential 2019 exploration program with 15 prospects to be drilled

EXECUTE IMPROVE GROW

Digitalize to improve decisions and value creation

Large and growing license portfolio with significant opportunity set

Returning value creation to shareholders

Capital Markets Day 2019

Alexander Krane Chief Financial Officer

FINANCIAL STRATEGY Allocating capital to drive value

Key financial priorities

INVEST IN PROFITABLE GROWTH Strong cash generation from existing portfolio

Current producing fields and sanctioned projects only

1) Assuming USDNOK of 8.5 for 2019, and 8.0 thereafter

2) Free cash flow: Net cash flow from operating activities minus Net cash flow used in investment activities

INVEST IN PROFITABLE GROWTH Large opportunity set for organic growth…

2P reserves

2C contingent resources

INVEST IN PROFITABLE GROWTH … with highly attractive economics

INVEST IN PROFITABLE GROWTH Investing in profitable growth while maintaining flexibility

Capitalized interest is excluded. USDNOK assumptions: 8.5 in 2019, 8.0 thereafter. 91

INVEST IN PROFITABLE GROWTH Driving down production cost

Production cost (USD/boe)

Stepping up exploration activity in 2019 INVEST IN PROFITABLE GROWTH

Exploration spend (USD million)

INVEST IN PROFITABLE GROWTH Strong P&A performance

Abandonment spend (USD million)

P&A: Plug & Abandonment 94

Strong performance in 2018

• Valhall P&A campaign successfully completed
• 2019 plan
• Valhall QP decom
• Jette P&A
• Hod P&A

2020-23 outlook

• Continued decom and P&A in the Valhall Area
• Timing flexibility

Tax efficient

• Fully deductible same year as incurred at 78% tax rate

INVEST IN PROFITABLE GROWTH Increased cash flow from profitable asset portfolio

Current producing fields and sanctioned and non-sanctioned projects

Strong balance sheet MAINTAIN SUFFICIENT FINANCIAL CAPACITY

Pricing of Aker BP bonds versus oil price

Leverage ratio

MAINTAIN SUFFICIENT FINANCIAL CAPACITY Flexible capital structure

High debt capacity – low utilization

MAINTAIN SUFFICIENT FINANCIAL CAPACITY Prudent risk management

Oil price hedging	Insurance	Interest rates
 Buying put options to secure up to 100 percent of after-tax production value next 12-18 months	 All assets insured in the commercial market with S&P rating of minimum A-	 Policy: Up to 60% of gross debt at fixed interest rate
 Currently covered for H1-2019: • 23% of expected oil volume • 83% of net value after tax • Strike USD ~55 per barrel	 Loss of production covered after 45 days at net USD 50 per barrel	 Per end 2018, 62% of gross debt is at fixed rate  Actively using swaps to manage exposure

MAINTAIN SUFFICIENT FINANCIAL CAPACITY Managing foreign exchange risk

P&L effect of revaluation of tax balances 1Q16-3Q181)

MAINTAIN SUFFICIENT FINANCIAL CAPACITY Leverage ratio scenarios at different oil prices 1)

An approximation

PAY ATTRACTIVE DIVIDENDS Returning the value creation to shareholders

Dividend policy

Dividends (USD million)

• Ambition to pay out value creation as dividends
• Strong cash flow from existing portfolio
• Profitable growth from excellent project pipeline
• Strong balance sheet

Revised plan for dividend payout

• USD 750 million in 2019
• Annual increase of USD 100 million

Robustness

• Targeting leverage ratio below ~1.5x
• Maintain stable credit rating
• Significant capex flexibility

Guidance summary FINANCIAL SUMMARY

	2018 guidance	2018 preliminary1)	2019 guidance2)
Production	155-160 mboepd (lower half)	155.7 mboepd 155-160 mboepd
Capex	USD 1.25 billion	USD 1.20 billion	USD 1.6 billion
Exploration spend	USD 400 million	USD 359 million	USD 500 million
Abandonment spend	USD 250 million	USD 243 million	USD 150 million
Production cost per boe	USD ~12	USD ~12	USD ~12.5
Dividends	USD 450 million	USD 450 million	USD 750 million

FINANCIAL SUMMARY Aker BP's key financial priorities

Key financial priorities