Aker BP

Earnings Release • Oct 14, 2019

AKERBP: Update on third quarter 2019 financial results

AKERBP: Update on third quarter 2019 financial results

Aker BP will publish its financial report for the third quarter 2019 on Tuesday

22 October 2019. The company issues this statement to summarise its production

and sales volumes and certain accounting-related topics for the quarter.

Oil and gas production and sales

Aker BP's net production in the third quarter 2019 was 146.1 thousand barrels of

oil equivalents per day ("mboepd"). The production volumes were below plan

mainly due to delayed stimulation and consequently start of production from new

wells at Valhall following the planned maintenance shutdown in June. The delay

has no impact on reserves. The start-up of new wells at Valhall, and the ramp-up

of the Johan Sverdrup field which started production in early October, are

expected to contribute to significant production growth over the coming

quarters.

Net sold volumes, which are the basis for revenue recognition in the financial

statement, were 143.3 mboepd, reflecting 2.9 mboepd in underlift. Production

volumes per field are specified below. The volumes are subject to final re

-allocation.

Asset Q3-19 Q2-19 Q3-18

Alvheim area 51.4 53.1 56.7

Ivar Aasen       22.5 19.1 22.7

Skarv 21.7 22.7 23.3

Ula area 8.6 6.2 10.5

Valhall area 40.3 24.5 36.0

Other 1.7 1.7 1.4

Net production 146.1 127.3 150.6

Over/(underlift) (2.9) 13.4 (2.3)

Net sold volume 143.3 140.7 148.3

Of which liquids 113.4 112.8 117.6

Of which natural gas 29.8 27.9 30.7

Operating expenses

As described in the second quarter 2019 report, the company in June discovered a

failure in the tether frame connections on one of the Mid Water Assemblies

("MWA") at Alvheim. In the third quarter, costs related to repairs amounted to

approximately USD 14 million net to Aker BP. These costs will be recorded as

production costs in the third quarter, with any related insurance recoveries to

be recognised in future periods.

Impairment of technical goodwill

The company expects to make an impairment charge in the third quarter 2019 of

approximately USD 80 million related to technical goodwill. There is no deferred

tax associated with technical goodwill, hence this charge will not be tax

deductible.

Tax

The effective tax rate for the third quarter is expected to be impacted by

impairment of technical goodwill and an increase in deferred tax primarily

driven by currency movements (stronger USD versus NOK). As a result, the

effective tax rate is expected to be well above 100 percent for the quarter. The

tax payments during the quarter were USD 106 million, in line with previous

guidance.

Disclaimer

The information in this statement is based on a preliminary assessment of the

company's third quarter 2019 financial results. The company has not completed

its financial reporting and related review and control procedures. The estimates

provided may therefore be subject to change and the financial statements finally

approved and released by the company may deviate materially from the information

herein.

Contact:

Kjetil Bakken, VP Investor Relations, tel.: +47 918 89 889

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.