Aker BP

Earnings Release • Jan 15, 2018

Aker BP: Strengthened position as a leading independent offshore E&P company

Aker BP: Strengthened position as a leading independent offshore E&P company

Aker BP ASA ("AKER BP") is hosting its annual Capital Markets Day today. During

2017, Aker BP increased its reserves (2P) by a net of 202 million barrels of oil

equivalents (mmboe), to a total of 913 mmboe. The company delivered significant

growth, while simultaneously chasing cost per barrel produced, and had efficient

operations with high operational uptime. Aker BP has a strong cash flow outlook

and a robust balance sheet with a USD 2.9 billion liquidity reserve, enabling

the company to increase dividends for 2018 to USD 450 million, and further

strengthen its position as the leading independent E&P company offshore.

"We are well positioned for further growth. The acquisition of Hess Norge in

2017 significantly enhanced our production and resource base, and the submitting

of three PDO's late 2017 represents further important building blocks in our

growth ambition," says Aker BP CEO Karl Johnny Hersvik.

Aker BP's pro-forma production in 2017 was 160 mboepd, including the production

from Hess Norway. About 80 percent was oil and 20 percent gas. 2018 production

is expected to be between 155 and 160 mboepd, with an average production cost of

12 USD/boe. With its current portfolio, the company has the potential to produce

330 mboepd in 2023 (from both sanctioned and non-sanctioned projects),

representing a compound average growth rate of 13 percent.

While the company's oil and gas reserves grew to 913 mmboe at the end of 2017,

contingent resources were estimated at 785 mmboe at year-end 2017, each with an

increase of approximately 30 percent from the previous year. Organic reserve

replacement ratio (RRR) was 2.3 times production, and the total RRR was 4.5

times.

Aker BP has a robust balance sheet with USD 2.9 billion in available liquidity,

providing the company with ample financial flexibility and dividend capacity. At

year-end 2017, the company's net interest-bearing debt was estimated at USD 3.2

billion. Aker BP plans investments of approximately USD 1.3 billion in 2018.

Exploration expenses are expected to be approximately USD 350 million, while

decommissioning expenditures are estimated at USD 350 million in 2018. The

increase in decommissioning spend is mainly due to the increased ownership at

Valhall.

Dividends

"Our financial position has been strengthened. We have seen a rapid de

-leveraging, and foresee a solid cash generation combined with a strong

liquidity position.  We are proposing to increase dividends for 2018 to USD 450

million, and have a clear ambition to grow dividends further in the coming years

by USD 100 million annually to 2021," says Hersvik.

Exploration

Aker BP has an ambition to discover a net of 250 mmboe oil and gas in the 2016 -

2020 period. The company will continue its active exploration strategy in 2018

with 12 exploration wells to be drilled, with risked pre-drill estimates ranging

from 50 - 150 mmboe net to Aker BP.

Development

In 2017, the company submitted three PDOs (Plan for Development and Operation)

to the Ministry of Petroleum and Energy (MPE) for the Valhall Flank West, Ærfugl

and Skogul fields. These developments will substantially strengthen Aker BP's

reserves and production from its operated field centers at Valhall, Skarv and

Alvheim, while at the same time contribute to reduce the overall cost per barrel

for the company.

Production

Production output from the Alvheim FPSO increased compared to previous year due

to new wells at Viper-Kobra and Volund infills. Further infill wells are being

matured to arrest the production decline and minimize unit production cost.

Aker BP is maturing further infill projects at the Valhall area. New wells will

be drilled from the Valhall injection platform, while abandoned wells are being

plugged. The ambition is to produce another 1 billion boe from the area.

At the Skarv area, a PDO was submitted for Ærfugl in 2017. In the first phase,

three new wells will be tied into Skarv. The estimated first gas from the new

wells will be in 2020. New drilling opportunities to increase oil production and

optimize production are being matured.

The first year of production from Ivar Aasen was successful, and plateau

production was reached in Q4-2017, one year ahead of plan. Near-by exploration

prospects are being evaluated, and area infill drilling opportunities

identified.

Further infill wells at Ula and Tambar are being evaluated, and the Oda

development is ongoing. The Tambar re-development is well underway, expecting

first oil in 2018.

Summary of 2018 guidance

Production: 155-160 mboepd

Production cost: USD ~12 per boe

CAPEX: USD ~1.3 billion

EXPEX: USD ~350 million

Decom. expenditures: USD ~350 million

Dividends (proposed): USD 450 million

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Year-end 2017 2P reserves:  913 mmboe

Year-end 2017 2C contingent resources:  785 mmboe

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Investor contacts:

Jonas Gamre, VP Investor Relations, tel.: +47 971 18 292

Kjetil Bakken, IR Manager, tel.: +47 91 889 889

Media contact:

Tore Langballe, VP Communications, tel.: +47 907 77 841

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About Aker BP:

Aker BP is a fully-fledged E&P company with exploration, development and

production activities on the Norwegian Continental Shelf. Aker BP is the

operator of Alvheim, Ivar Aasen, Skarv, Valhall, Hod, Ula and Tambar. The

company is also a partner in the Johan Sverdrup field. Aker BP is headquartered

at Fornebu, Norway, and is listed on the Oslo Stock Exchange under the ticker

'AKERBP'. More about Aker BP at www.akerbp.com.

This information is subject to disclosure requirements pursuant to section 5-12

of the Norwegian Securities Trading Act.