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Aker BP Earnings Release 2023
3528_rns_2023-10-27_c01083c2-72fa-42cc-96bb-b042b93ab13a.pdf
Earnings Release
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Third quarter 2023
27 October 2023 Aker BP ASA
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.
Highlights
Third quarter 2023
Good operational performance
- Low cost and low emissions
- Maintenance activities impacted production volume
Project developments on track
- Schedule and cost estimates reiterated
- KEG in production five months ahead of plan
Strong cash flow
- Higher realised prices and cost control
- Dividends of USD 0.55 per share in quarter
Adjustments to full -year guiding
- Production up to 455 -465 mboped
- Production cost down to USD 6.0 -6.5 per boe
Production
1,000 barrels oil equivalent per day (mboepd)
Production cost
USD per boe
Injury frequency (TRIF) Safety
6
TRIF: Total recordable injuries per million exp. hours, rolling 12 months average
A global leader in low GHG emissions
Decarbonising the business
Aker BP emission intensity, kg CO2e/boe
160 Industry net emission intensity
Kg CO2 /boe equity share (2022)1
140
Delivery of high-return projects on quality, time and cost
Construction activities well underway and KEG start-up five months ahead of plan
| Aker BP | Net capex estimate | PDO submission | Production start |
|||
|---|---|---|---|---|---|---|
| Field development | ownership | Gross/net volume | 2021 | 2023 | ||
| Asset area | 80.0% | 10/8 mmboe | USD 0.2bn | 2023 | ||
| Frosk | 50/40 mmboe | USD 0.9bn | 2021 | 2025 | ||
| Alvheim | Kobra East & Gekko (KEG) | 80.0% | 25/15 mmboe | USD 0.4bn | 2022 | |
| Tyrving | 61.3% | USD 0.2bn | 2021 | 2024 | ||
| Hanz | 35.0% | 20/7 mmboe | USD 1.3bn | Dec-22 | 2027 | |
| Edvard Grieg & | 50.0% | 87/49 mmboe | 2026 | |||
| lvar Aasen | Symra | 65.0% | 2027 | |||
| Solveig Phase II | 68.1% | 119/51 mmboe | USD 1.0bn | Dec-22 | 2027 | |
| Skarv | Alve North | 23.8% | Dec-22 | 2027 | ||
| ldun North | 2027 | |||||
| Ørn | 30.0% | |||||
| Valhall PWP | 90.0% | 230/187 mmboe | USD 5.5bn | 2027 | ||
| Valhall | Fenris | 77.8% | 2027 | |||
| 87.7% | USD 10.7bn | Dec-22 | 2027 | |||
| Yggdrasil | Hugin | 50.0% | 650/413 mmboe | 2027 | ||
| Munin | 47.7% | |||||
| Fulla |
Kobra East & Gekko on stream
Five months ahead of plan
- Project executed in two-thirds of the original time schedule
- World-class drilling operations main contributor to accelerated development
- New record with 13,600m reservoir exposure from a single well
- Subsea alliance effectively expedited work accordingly
- Significantly improved project economics
Project execution progressing according to plan
- Key milestones achieved on schedule
- Main contracts awarded and capacity secured
- Project execution on track with fabrication underway at multiple locations
- No serious HSSEQ incidents
- Total capex estimate in line with plans
Our development projects are driving growth and value creation
Lifting Aker BP's production by 250-300 mboepd in 2028
Production outlook
mboepd
Robust and profitable project portfolio
\$35-40/bbl
Project portfolio break-even oil price1
~25%
Project portfolio IRR at \$65/bbl oil price
1-2 years
Project portfolio payback at \$65/bbl oil price
2023 exploration program
| Licence | Prospect | Operator | Aker BP share |
Pre-drill mmboe |
Status |
|---|---|---|---|---|---|
| PL867 | Gjegnalunden | Aker BP | 80% | 3-9 mmboe | |
| PL1141 | Styggehøe | Aker BP | 70% | Dry | |
| PL554 | Angulata | Equinor | 30% | Dry | |
| PL919 | Ve | Aker BP | 80% | 3-5 mmboe | |
| PL873/442 | Øst Frigg Beta/Epsilon | Aker BP | 48%/88% | 53-90 mmboe | |
| PL1148 | Carmen | Wellesley | 10% | 56-289 mmboe | |
| PL1005 | Rondeslottet | Aker BP | 40% | Suspended | |
| PL035 | Krafla Mid Statfjord | Aker BP | 50% | Dry | |
| PL 984 | Norma | DNO | 10% | Discovery | |
| PL929 | Ofelia appraisal | Neptune | 10% | 16 - 39 |
Ongoing |
| PL272 | Surtsey | Aker BP | 50% | 2 - 16 |
Ongoing |
| PL442 | Frigg Gamma Delta/Ypsilon | Aker BP | 88% | 9 - 22 |
Q4 |
| PL211CS | Adriana appraisal (Dvalin N) |
Wintershall Dea | 15% | 32 - 57 |
Q4 |
| PL956 | Ringhornet Ty |
Vår Energi | 20% | 7 - 27 |
Q4 |
| PL917 | Magellan/Hubert | Vår Energi | 40% | 16 - 55 |
Q4 |
| PL261 | Storjo West | Aker BP | 70% | 4 - 32 |
Q4 |
| PL1170 | Ferdinand | Aker BP | 35% | 31 - 65 |
Moved to 2024 |
| PL869 | Rumpetroll South |
Aker BP | 80% | 10 - 45 |
Moved to 2024 |
Financial highlights
- Strong realised prices
- Cost control and good project execution
- High cash flow
Sales of oil and gas
Volume sold mboepd
Realised prices USD/boe
Q3-22 Q4-22 Q1-23 Q2-23 Q3-23
Liquids Natural gas
Total income USD million
Liquids Natural gas Other
Income statement
USD million
| Q3 2023 | Q2 2023 | |
|---|---|---|
| Total income | 3 513 | 3 291 |
| Production costs | 252 | 247 |
| Other operating expenses | 12 | 13 |
| EBITDAX | 3 249 | 3 031 |
| Exploration expenses | 74 | 27 |
| EBITDA | 3 174 | 3 004 |
| Depreciation | 557 | 645 |
| Impairments | - | 102 |
| Operating profit (EBIT) | 2 618 | 2 257 |
| Net financial items | (53) | (50) |
| Profit/loss before taxes | 2 565 | 2 207 |
| Tax (+) / Tax income ( - ) |
1 977 | 1 811 |
| Net profit / loss | 588 | 397 |
| EPS (USD) | 0.93 | 0.63 |
450 mboepd (477) Oil and gas sales
\$84 per boe (75)
Net realised price
\$6.0 per boe (5.6)
Production cost
77% (82%) Effective tax rate
Cash flow
USD million
| Q3-23 | Q2-23 | Q1-23 | Q4-22 | |
|---|---|---|---|---|
| Operating cash flow before tax | 2 963 | 2 938 | 3 251 | 3 762 |
| Taxes paid | (862) | (2 817) | (1 569) | (2 995) |
| Cash flow – operations |
2 101 | 121 | 1 682 | 807 |
| Cash flow – investments |
(944) | (776) | (705) | (708) |
| Free cash flow | 1 157 | (655) | 977 | 98 |
| Net debt drawn/repaid | (2) | 488 | - | - |
| Dividends | (348) | (348) | (348) | (332) |
| Interest, leasing & misc. | (138) | (75) | (106) | 2 |
| Cash flow – financing |
(488) | 66 | (454) | (329) |
| Net change in cash | 669 | (589) | 523 | (231) |
| Cash at end of period | 3 375 | 2 689 | 3 280 | 2 756 |
\$1.2 bn (-0.7) Free cash flow (FCF)
\$1.83(-1.04)
FCF per share
\$0.55 (0.55)
Dividend per share
Tax payments
Sensitivity for H1-2024
USD million
2 500
Tax instalments for fiscal year 2023 set in June
- Q3 and Q4-22 instalments fixed
- Based on forecast full-year 2023 performance
- Opportunity to adjust in Oct-23 and Jan-24
Adjustment in October 2023
- Full-year tax estimate increased due to high prices
- Voluntary additional payment of NOK 5.5 billion in October
- Avoiding interest and reduce tax overhang from 2023 in 2024
Q4-23 assumptions for H1-24 sensitivity analysis
- Gas prices assumed at USD 13 per mmbtu
- USDNOK rate assumed at 11.0
- Two oil price scenarios illustrated
Balance sheet
USD million
| Assets | 30.09.23 | 30.06.23 | 30.09.22 restated |
|---|---|---|---|
| PP&E | 16 123 | 16 218 | 15 307 |
| Goodwill | 13 554 | 13 554 | 13 193 |
| Other non-current assets |
3 166 | 3 248 | 3 057 |
| Cash and equivalent | 3 375 | 2 689 | 3 042 |
| Other current assets | 1 909 | 1 603 | 2 015 |
| Total Assets |
38 127 | 37 312 | 36 613 |
| Equity and liabilities | |||||
|---|---|---|---|---|---|
| Equity | 12 524 | 12 316 | 11 320 | ||
| Financial debt | 5 754 | 5 766 | 5 198 | ||
| Deferred taxes | 10 182 | 9 725 | 8 972 | ||
| Other long-term liabilities | 4 090 | 4 674 | 4 298 | ||
| Tax payable | 4 070 | 3 351 | 5 419 | ||
| Other current liabilities | 1 509 | 1 480 | 1 406 | ||
| Total Equity and liabilities |
38 127 | 37 312 | 36 613 |
\$6.8 bn (\$6.1)
Total available liquidity
33% (33%)
Equity ratio
0.19 (0.22)
Leverage ratio1
1) Net interest-bearing debt divided by twelve months rolling EBITDAX, excluding any impacts from IFRS 16
Maintaining financial flexibility
Net interest-bearing debt Excl. leases, USD billion
4
Leverage ratio1
Liquidity available2 USD million
Investment grade credit ratings
BBB Baa2 BBB
10% dividend growth in 2023
- The Board resolved to pay a quarterly dividend of USD 0.55 per share in the fourth quarter 2023
- For Aker BP, distributions shall reflect the capacity through the cycle
- Ambition to increase dividends by a minimum of 5 percent per year, with additional potential at higher commodity prices
- The dividend policy is designed with the goal of ensuring the company retains its investment grade credit rating
Dividends
2023 guidance
| Previous guidance |
Actual YTD -23 |
New guidance |
|
|---|---|---|---|
| Production | 445 | 461 | 455 |
| mboped | -470 | -465 | |
| Production cost | 6.0 | 6.2 | 6.0 |
| USD/boe | -7.0 | -6.5 | |
| Capex | 3.0 | 2.2 | 3.0 |
| USD billion | -3.5 | -3.5 | |
| Exploration | 0.4 | 0.3 | 0.4 |
| USD billion | -0.5 | -0.5 | |
| Abandonment USD billion |
0.1 -0.2 |
0.13 | ~0.2 |
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