Aker BP — Interim / Quarterly Report 2019

Jul 12, 2019

Second quarter 2019

Aker BP ASA

12 July 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.

AKER BP Second quarter 2019

Execute

Improve

Production in line with plan High maintenance activity P&A completed ahead of plan

Drilling faster with dual operations Reduced financing cost after refinancing

Exploration success Johan Sverdrup and Valhall Flank West on track for first oil in Q4

Key figures		Q2-19	Q1-19	Q2-18*
Production	mboepd	127.3	158.7	157.8
Sales	mboepd	140.7	162.0	151.3
Realized liquids price	USD/bbl	69.3	63.9	73.9
Realized gas price	USD/scm	0.16	0.24	0.28
Total income	USDm	785	836	925
EBITDA	USDm	522	539	698
Operating profit	USDm	354	287	516
Net profit	USDm	62	10	128
Effective tax rate	USDm	77%	96%	74%
EPS	USD	0.17	0.03	0.36
DPS	USD	0.52	0.52	0.31

Grow

AKER BP High activity across the value chain

4

6

simultaneous drilling operations 17

exploration wells in 2019

development projects in installation mode

127 300

boe per day production in Q2 2

projects safely executed in 2019 Exploration update

EXPLORATION UPDATE Creating value from Exploration

High success rate and efficient execution

Successful exploration in core areas

• 9 wells drilled so far in 2019
• 3 discoveries

Industry leading drilling performance

• Safe and highly efficient drilling

Adding two wells to the program

• Nipa license PL 986 in NOAKA area
• Nidhogg license PL 1008 in Skarv area

EXPLORATION UPDATE Liatårnet – material discovery in the NOAKA area

Building momentum for an area development

A significant oil discovery

• Volume in place estimated to 500-700 mmboe
• More data needed to determine drainage strategy and recovery
• Recoverable volume prelim. estimated to 80-200 mmboe

Located in the middle of the NOAKA area

• Licence PL 442 Aker BP operator with 90% interest
• Adjacent to Frigg-Gamma/Delta discovery
• Adds value and robustness to an area development

Area overview

World's first dual drilling operations EXPLORATION UPDATE

Drilling faster and faster

• Dual drilling completed safely and efficiently on three wells
  • JK
  • Hornet
  • Freke-Garm
• Deepsea Stavanger – rig with world class capabilities
  • Two top drives
  • Two circulating systems
  • Two drill crews
• Saving time and money
  • Time savings of ~30 hours per well
  • Cost savings of up to NOK 15 million per well

Precision maneuvering two wellbores with a separation of 10 meters simultaneously

EXPLORATION UPDATE 2019 exploration program

Status per July 2019 – two new wells added in Q2

License	Prospect	Operator	Aker BP share	Est. spud	Pre-drill mmboe	Status
PL869	Froskelår Main	Aker BP	60 %	Q1	45 - 153	Discovery 60-130 mmboe
PL857	Gjøkåsen	Equinor	20 %	Q1	26 - 1427	Dry
PL033	Hod Deep West	Aker BP	90 %	Q1	2 - 22	Dry
PL869	Froskelår NE	Aker BP	60 %	Q2	7 23 -	Discovery 2-10 mmboe
PL916	JK	Aker BP	40 %	Q2	100 - 420	Dry
PL814	Freke-Garm	Aker BP	40 %	Q2	16 81 -	Dry
PL777	Hornet	Aker BP	40 %	Q2	14 137 -	Dry
PL502	Klaff	Equinor	22 %	Q2	50 372 -	Ongoing
PL869	Rumpetroll	Aker BP	60 %	Q2	45 148 -	Ongoing
PL442	Liatårnet	Aker BP	90 %	Q2	39 331 -	Discovery 80-200 mmboe
PL942	Ørn	Equinor	30 %	Q3	8 40 -
PL762	Vågar	Aker BP	20 %	Q3	63 130 -
PL782S	Busta	Conoco	20 %	Q3	54 199 -
PL019C	Kark	Aker BP	60 %	Q3	15 48 -
PL986	Nipa	Aker BP	30 %	Q3	35 115 -	NEW: Added in Q2
PL838	Shrek	PGNIG	30 %	Q4	10 22 -
PL1008	Nidhogg	Aker BP	60 %	Q4	26 70 -	NEW: Added in Q2

Operational update

Production overview OPERATIONAL REVIEW

Production per hub, mboepd Production efficiency per hub

2017 2018 2019-Q1 2019-Q2

OPERATIONAL REVIEW Alvheim

• Volund sidetrack well on stream
• Skogul development on track
• Frosk test producer completed
• Discovery Froskelår NE Rumpetroll ongoing

Production efficiency

OPERATIONAL REVIEW Valhall

• Valhall Flank West on track platform installed
• Valhall QP topside removed
• Lower production in Q2 due to planned maintenance

Production efficiency

OPERATIONAL REVIEW Safe and efficient decommissioning

Removal of Valhall QP

Recovery of Jette Xmas trees

OPERATIONAL REVIEW Ivar Aasen

• New well on stream completed with Fishbone
• Currently drilling next production well
• Production down in Q2 due to power outages

OPERATIONAL REVIEW Skarv

• Steady production and high efficiency
• Increased gas injection to optimize liquids production
• Ærfugl development on track
  • Drilling and subsea installation in H2
  • Concept selected for Phase II FID planned in Q4

Production efficiency

OPERATIONAL REVIEW Ula

• Lower production due to planned maintenance
• Conversion of Ula DP completed
• New drilling campaign started

Production efficiency

Production (mboepd)

Ula Tambar Oda

Johan Sverdrup OPERATIONAL REVIEW

On track

• All topsides installed
• Remaining activities before production start:
  • Hook-up, commissioning and completion
  • Tie-back of pre-drilled wells
  • Tie-in of export pipelines
• Production start planned for November
• PDO for Phase 2 approved by the authorities

Photo: Equinor / Arne Reidar Mortensen 19

Financial review

FINANCIAL REVIEW Oil and gas sales

Income statement FINANCIAL REVIEW

USD million	Q2 2019	Q1 2019	Q2 2018*
Total operating income	785	836	925
Production costs	198	200	151
Other operating expenses	4	7	1
EBITDAX	583	629	773
Exploration expenses	60	90	75
EBITDA	522	539	698
Depreciation	168	183	183
Impairment losses	-	69	-
Operating profit/loss (EBIT)	354	287	516
Net financial items	(86)	(37)	(22)
Profit/loss before taxes	268	249	494
Tax (+) / Tax income (-)	206	239	366
Net profit/loss	62	10	128
EPS (USD)	0.17	0.03	0.36

Statement of financial position FINANCIAL REVIEW

USD million

Assets	30.06.19	31.03.19	31.12.18*	Equity and liabilities	30.06.19	31.03.19
Goodwill	1,791	1,791	1,860	Equity	2,664	2,799
Other intangible assets	2,522	2,483	2,433	Other provisions for liabilities incl. P&A (long)	2,560	2,505
Property, plant and equipment	6,300	5,954	5,746	Deferred tax	1,991	1,867
Right-of-use asset	239	225		Bonds and bank debt	2,635	2,226
Receivables and other assets	522	534	614	Lease debt	375	369
Calculated tax receivables	17	15	11	Other current liabilities incl. P&A	829	784
Cash and cash equivalents	102	114	45	Tax payable	439	567
Total Assets	11,493	11,117	10,709	Total Equity and liabilities	11,493	11,117

FINANCIAL REVIEW Increased financial capacity and reduced cost

New Revolving Credit Facilities (RCF)

• USD 4 billion, senior unsecured
• Replaces the secured RBL, with extended maturity
• Reduced interest cost and commitment fee

New bond issued

• USD 750 million, senior unsecured
• Coupon 4.75%, due 2024

Supported by credit ratings

• S&P Global: BB+, positive outlook
• Moody's: Ba1, stable outlook
• Fitch: BBB-, stable outlook (new rating)

Debt maturity profile (USD million)

Cash flow – second quarter 2019 FINANCIAL REVIEW

USD million

Tax payments FINANCIAL REVIEW

USD million

The instalments for 2019 are based on company estimates, and are converted from NOK using an exchange rate of 8.5. The amounts payable in 2020 will be adjusted based on actual income for FY2019.

FINANCIAL REVIEW Guidance summary

	Actual per 2019-6M	Updated 2019 guidance1)
Production2)	142.9 mboepd	155-160 mboepd
Capex3)	USD 740 million	USD 1.6-1.7 billion (previous USD ~1.6 billion)
Exploration spend	USD 278 million	USD ~550 million (previous USD ~500 million)
Abandonment spend	USD 62 million	USD ~100 million (previous USD ~150 million)
Production cost per boe4)	USD 14.3	USD ~12.5
Dividends	USD 375 million	USD 750 million

3) Excl. capitalized interest, incl. payments on lease debt 4) Per produced boe

Concluding remarks

AKER BP Priorities ahead

Safe and efficient operations

Excellent project execution

Keep momentum on improvement agenda

Leverage technology to drive value creation

High exploration and appraisal activity

• Mature resources to reserves
• Start up of new fields

Maersk Invincible at Valhall Flank West

Grow

Improve

Execute