AKER BP ASA
KARL JOHNNY HERSVIK, CEO ALEXANDER KRANE, CFO 28 APRIL 2017
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.
AKER BP ASA Highlights
Production
Q1-17 production of 145.3 mboepd, +15% from Q4-16
Finance
- Q1-17 EBITDA USD 487 million, EPS USD 0.20
- Q1-17 Free cash flow* of USD 168 million (USD 0.50 per share)
- Quarterly dividend of USD 62.5 million (DPS of USD 0.185) to be disbursed in May
Operations
- Ivar Aasen ramp up ahead of expectations
- Redevelopment of Tambar sanctioned
- Concept selection (DG2) passed on Snadd, Valhall Flank West and Storklakken – on track to submit PDO before year-end
- Oil discovery at the Filicudi prospect in the Barents Sea
Financials
Q1 2017
FINANCIALS Statement of income
| Income statement (USD mill) |
Q1 2017 |
Q1 2016 |
FY 2016 |
| Total operating income |
646 |
205 |
1,364 |
| Production costs |
121 |
34 |
227 |
Other
operating expenses |
8 |
5 |
22 |
| EBITDAX |
517 |
165 |
1,115 |
| Exploration expenses |
30 |
36 |
147 |
| EBITDA |
487 |
129 |
968 |
| Depreciation |
184 |
114 |
509 |
| Impairment losses |
30 |
38 |
71 |
| Operating profit/loss (EBIT) |
273 |
(23) |
387 |
Net financial
items |
(47) |
8 |
(97) |
| Profit/loss before taxes |
227 |
(16) |
290 |
| Tax (+) / Tax income (-) |
158 |
(48) |
255 |
| Net profit/loss |
69 |
32 |
35 |
| EPS (USD) |
0.20 |
0.16 |
0.15 |
FINANCIALS Statement of financial position
Assets
(USD mill) |
31.03.17 |
31.03.16 |
| Goodwill |
1,818 |
739 |
Other intangible
assets |
1,664 |
924 |
Property, plant
and equipment |
4,600 |
3,090 |
| Receivables and other assets |
678 |
263 |
Calculated
tax receivables (short) |
395 |
215 |
Cash and
cash equivalents |
183 |
155 |
|
|
|
Total
Assets |
9,337 |
5,387 |
Equity and liabilities
(USD mill) |
31.03.17 |
31.03.16 |
| Equity |
2,455 |
371 |
Other provisions for liabilities incl.
P&A
(long) |
2,325 |
461 |
Deferred
tax |
1,164 |
1,384 |
| Bonds |
513 |
518 |
| Bank debt |
2,000 |
2,221 |
| Other current liabilities incl. P&A (short) |
760 |
431 |
| Tax payable |
120 |
- |
Total
Assets |
9,337 |
5,387 |
FINANCE Cash flow and liquidity
First quarter 2017
- Free cash flow of USD 168 million
- Dividend of USD 62.5 million (USD 0.185 per share) paid out in February
- Net interest-bearing debt (book value) of USD 2.33 bn
- Cash and undrawn debt facilities of USD 2.6 bn
Financing
- Leverage ratio decreased to 1.3x per March 31, 2017
- USD 62.5 million (USD 0.185 per share) to be paid out on or about May 19, 2017
- Assessing Aker BP's capital structure going forward
FINANCE 2017 Guidance
No changes made from guidance provided at CMD in January 2017
| Item |
Guidance Aker BP ASA
FY 2017 |
Actual per
Q1 2017 |
Comments |
| CAPEX |
USD 900 –
950 million |
USD 214 million |
- |
| EXPEX |
USD 280 –
300 million |
USD 59 million |
- |
| Production |
128 –
135 mboepd |
145.3 mboepd |
Expecting Viper-Kobra
decline throughout 2017,
maintenance at Valhall
and Skarv
in Q3-2017 |
| Production cost |
USD ~11 per boe |
USD 9.2 per boe |
Production volume guidance unchanged,
maintenance in Q3-2018 |
| Decommissioning cost |
USD 100 –
110 million |
USD 8 million |
Maersk Invincible rig to commence
P&A activity at Valhall
in May 2017 |
Note: Guidance based on USD/NOK 8.5
Operations
Q1 2017
PRODUCTION Oil and gas production
- Q1 2017 production of 145.3 mboepd (+15% from Q4-16)
- Strong production from Viper-Kobra
- Ramp-up of Ivar Aasen ahead of expectations
- Realized oil price of 54 USD/bbl, gas price of 0.21 USD/scm
- Strong execution focus has ensured high uptime and high production across assets
Net production* (boepd)
GREATER ALVHEIM AREA (65.0%*) Further developing the Alvheim area
- Stable and high production in Q1-2017 from Alvheim area
- Operational efficiency of 97%
- Production cost of 4.3 USD/boe in Q1-2017
- Transocean Arctic commenced drilling in the Alvheim area in December 2016
- Currently drilling infill wells at Volund; one single-lateral completed and one tri-lateral well ongoing
- Drill one exploration well in Volund West area
- Two Boa infill wells planned in the second half of 2017
- Further maturing opportunities for the area
- Continued work on subsurface maturation to maximize recovery with lowest number of wells
- Storklakken concept selection (DG2) internally approved in March, targeting PDO (DG3) towards the end of 2017
- Tie-back to Alvheim FPSO via Vilje
- First oil planned for 2020
- Sale of 35% (retaining 65%) to PGNiG in March
New projects in the Alvheim area
IVAR AASEN (34.8%) Strong performance during first quarter of operation
Key events
- High uptime and strong production performance during first quarter of operation
- 91% uptime (96% ex. 3 rd party losses)
- Production in accordance with agreed delivery commitment on Edvard Grieg
- Commissioning of remaining systems, water injection and export compressor ongoing
- Residual project scope handed over to operations for execution by maintenance & modification contractor
- Drilling of 2017 drilling scope commenced in March with Maersk Interceptor
- New drilling record: 1,742m within a 24 hour time period
Official opening of the Ivar Aasen field
JOHAN SVERDRUP (11.6%) Johan Sverdrup project progressing according to plan
Key events
Project progressing according to plan:
- Most major contracts have been awarded
- Platform construction ongoing on 22 engineering and construction sites globally
- Completed pre-drilling of eight oil producers and four pilot wells
- Pre-drilling of water injection wells are ongoing
Costs continue to come down
- Phase 1 CAPEX estimated at NOK 97 billion (nom.) with break-even oil price below 20 USD/boe
- Full field CAPEX estimated at NOK 137 152 billion (nom.) with break-even oil price below 25 USD/boe
Concept selection for Phase 2 was approved in March, the project aims to deliver PDO in second half of 2018
VALHALL (36.0%) / HOD (37.5%) HUB Realising upsides
Key events
- IP Platform drilling program commenced in Q1 -17
- 7 wells campaign of which three are planned in 2017
- Valhall Flank West project concept selection approved
- Planned as unmanned wellhead platform with 12 well slots, tied back to Valhall field center
- PDO planned for late 2017, first oil expected in 2020
- Valhall Flank North water injection accelerated towards a planned concept selection in Q2 -17
- Maturing further growth opportunities in the area, including
- Valhall Flank West upsides
- Valhall Flank North
- Valhall Flank South
- Hod West and Saddle wells
- Hod East and Water Flood
- Lower Hod formation
ULA (80.0%) / TAMBAR (55.0%) HUB Tambar re-development approved
- Increased production from Ula/Tambar in Q1-17 due to increased WAG-effects and one additional well available at Tambar
- Development targeting 27 mmboe (gross) through drilling of two additional infill wells and gas lift
- Extends the production life from 2018 to at least 2028
- Expected to lift production by 4 6 mboepd (gross) for several years
Project break-even below 20 USD/boe
- CAPEX of NOK 1.7 billion (gross)
- Modifications on Tambar and Ula platforms
- First oil expected in first half 2018
Drilling to commence with Maersk Interceptor in Q4-2017
- Testing OWC in the northern part of the field
- Increased understanding of the Tambar reservoir
SKARV AREA (23.8%) Maturing Snadd towards PDO
Key events
- Stable operations and production throughout quarter
- 98% operational efficiency in Q1-2017
- Test production from Snadd A1H well continues
- Partnership decision to conduct seismic survey during summer 2017
- Snadd project progressing as planned
- Development comprising of six subsea wells tied back to Skarv FPSO, including topsides modifications
- Phase 1 passed concept selection (DG2) in March
- PDO planned in Q4-17
- First gas scheduled for 2020
Exploration activities 2017 EXPLORATION
Discovery at Filicudi, Tonjer dry, Gohta (NE) ongoing
- Investing in additional seismic
- Entered into framework agreement for 4D seismic on existing operated assets with Western Geco
- Acquisition of 12,000 km2 3D seismic data from PGS
- Acquisition of 7,000 km2 3D seismic data from TGS
| License |
Prospect
name |
Operator |
Aker BP
share |
Pre-drill
mmboe* |
Time |
| PL150B |
Volund
West |
Aker BP |
65% |
5 -
22 |
Q2 |
| PL677 |
Hyrokkin |
Aker BP |
60% |
6 –
55 |
Q3 |
| PL442 |
Nordfjellet/Delta |
Aker BP |
90% |
10
–
39 |
Q3 |
| PL492 |
Gohta
(NE) |
Lundin |
60% |
Appraisal |
Q1 |
| PL533 |
Filicudi |
Lundin |
35% |
24 –
146 |
Q1 |
| JS Unit |
Tonjer |
Statoil |
11,6% |
26 –
114 |
Q1 |
| PL048G |
Central 3 |
Statoil |
3,3% |
8 -
21 |
Q3 |
Discovery at the Filicudi (35%) prospect EXPLORATION
Gross resource estimated of 35 – 100 mmboe (gross)
- Encountered 129 meters of high quality sandstone reservoir in Jurassic and Triassic targets
- Coring, logging, oil and gas sampled from wireline tools
- Multiple additional prospects identified in PL533 with total gross unrisked prospective resources of up to 700 mmboe
- Considering drilling up to two additional prospects in PL533 during 2017
- Hufsa: Gross unrisked prospective resources of 285 mmboe
- Hurri: Gross unrisked prospective resources of 218 mmboe
IMPROVEMENT Reorganizing value-chain by alliances
- Entered into long-term framework agreements with key suppliers for development of fixed facilities offshore
- Duration of six years, with options to extend four more years
- Valhall license has approved use of alliance model for Valhall Flank West development
- Fully aligned with Aker BP's strategy to increase flow efficiency to reduce costs, cut bureaucracy and increase quality
- Ambition to reduced engineering hours per ton platform by 50% and a 25% reduction in execution time
- 50% reduction in engineering hours implies reduction of about 190 man-years for a 5,000 MT topside
OUTLOOK Summary and outlook
Operations
- Continue drilling in the Alvheim area
- Ramp-up of production at Ivar Aasen
- IP drilling at Valhall
- Commence P&A operations at Valhall
- Collect 4D seismic for four areas
- Maturation of Snadd, Valhall Flank West and Storklakken towards PDO before year -end
Finance
- Proposed dividend of USD 62.5 million (USD 0.185 per share) to be paid out in May
- Assessment of capital structure in Aker BP going forward
Business development
• The company to pursue further growth opportunities going forward both to enhance production and increase dividend capacity, while maintaining the highest HSE standards