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Aker BP Interim / Quarterly Report 2021

Jul 15, 2021

3528_rns_2021-07-15_8a831263-a31f-47b4-b880-0f29b24989b5.pdf

Interim / Quarterly Report

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Second Quarter 2021

15 July 2021

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

Second quarter 2021

Successfully completed maintenance programme

  • Higher prices offset lower volume
  • Ongoing projects on track
  • Strong HSE performance and cost discipline

Progressing the project portfolio as planned

  • PDO submitted for Kobra East & Gekko
  • NOAKA approaching concept select
  • Turning Skarv into an area hub

Financial position further improved

  • Strong cash flow
  • Inaugural EUR bond
  • Debt maturities extended

Production performance

Oil and gas production (mboepd) Production efficiency (percent)

HSSE performance

Total Recordable Injury Frequency 1) CO2

emissions intensity 2)

1) Total recordable injuries per million exp. hours, rolling 12 months average

2) Kg CO2emissions per barrel of oil equivalents produced, rolling 12 months average

Financial performance

Production cost (USD/boe)

Realised oil and gas prices (USD/boe)

Capital spend (USD million) Operating cash flow (USD million)

Key performance indicators H1-2021

SAFETY FIRST

1.2

Total Recordable Incidents Frequency (TRIF)1) PRODUCTIONVOLUME

210.4 4.2 \$8.8 82

thousand barrels of oil equivalents per day PRODUCTIONCOST

PRODUCTIONEFFICIENCY

%

per boe produced Aker BP operated assets, gross

EMISSIONSINTENSITY

kg

CO2 emissions per boe 1)

1) 12 months rolling average per end H1-2021

Ongoing projects

On schedule

Hod

  • Jacket installed offshore in July
  • Topside sail-away planned in August
  • Production start planned in Q1-22

Skarv area

  • Production from Gråsel started in June
  • Increased gas capacity on the Skarv FPSO
  • Ærfugl phase 2 on schedule for production start in Q4-21

Johan Sverdrup phase 2

  • Jacket installed offshore in June
  • Installation of processing platform planned in H1-22
  • On schedule for production start in Q4-22

PDO submitted for Kobra East & Gekko

Adds volume and reduces unit cost and emissions for Alvheim FPSO

Reserves (gross)

Capex (gross)

65%Aker BP interest

Break-even

Upcoming projects

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1) The NOAKA area development consists of North of Alvheim (Aker BP operated), Fulla (Aker BP operated) and Krafla (Equinor operated)

2) Operated by Equinor

NOAKA approaching concept select

North of Alvheim, Krafla and Fulla

Frøy NUI

Re-development 12 well slots

Rind subsea 6-slot Dual drilling template

Fulla subsea

6-slot Dual drilling template

NOA and Fulla drilling and wells

  • ~30 wells
  • Heavy duty Jack up rig
  • Semisubmersible rig

8-legged jacket 16 well slots

NOA PdQ

Langfjellet subsea 2 x 6-slot Dual drilling template

Krafla Askja UPP, NUI Askja. NUI Krafla

Gas export

Export / power

  • Oil export
  • Rich gas export
  • Power from shore

500 mmboe >60% 2027

Resources Aker BP Production start

gross avg. interest targeted

Turning Skarv into an area hub

  • Ærfugl phase 2 on track
  • Gråsel on stream in June
  • Ørn operatorship transfer to Aker BP
  • Aiming for FID for Skarv Satellites1) in 2022
  • Maturing new exploration campaign

Exploration 2021

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2

6

1

1) Aker BP interest increased from 15% to 35% through transaction with DNO

2) Aker BP interest increased from 40% to 55% through transaction with Lundin

Financial review

Second quarter 2021

Oil and gas sales

Second quarter 2021

Volumes sold

mmboe

Liquids Natural gas

Total incomeUSD million

Liquids Natural gas Other

Realised prices USD per boe

Liquids

\$66.9 +11%

Natural gas \$45.1 +17%

Production cost

Second quarter 2021

Unit production cost USD per boe

First half 2021\$8.8

Full-year guidance \$8.5-9.0

Income statement

Second quarter 2021

Income statement

Second quarter 2021

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    1. Reduction in cost of sold volumes due to lower production and underlift
    1. Increase in Exploration expenses mainly driven by NOAKA field evaluation
    1. Currency gain on new EUR Bond drives reduction in Net financial items

Cash flow

Second quarter 2021

USD million

1) Including payments on lease debt which are classified as financing activities in the statement of cash flow

2) Net cash flow from operating activities and investment activities including payments on lease debt

3) Includes interest paid, fees related to RCF, and FX effect on cash held

Statement of financial position

USD million

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Optimising the capital structure

Inaugural EUR bond issued

  • EUR 750 million 1.125% Senior Notes (2021/29)
  • Opens a new source of liquidity

Last USD high yield bond redeemed

Call option exercised at 2.375% premium for the USD 750 million Senior Notes 4.75% (2019/24)

RCF facilities extended

  • USD 2.0 bn Liquidity Facility extended to 2025/26
  • USD 1.4 bn Working Capital Facility extended to 2024 with options for two 1-year extensions
  • Average LIBOR margin 1.1% and commitment fee 0.4%

Low leverage and superior flexibility

Net interest-bearing debt

Excl. leases, USD million

Leverage ratio

Liquidity available USD million

Capital allocation priorities

    1. Maintain financial capacity and investment grade credit rating
    1. Allocate capital to investments in profitable projects
    1. Return value creation to shareholders

Cash tax sensitivity

USD million

1) Estimated payments of current tax on income for fiscal year 2021 for Aker BP at various oil price scenarios (average Brent for the full year), assuming USDNOK 8.5. Tax payments for 2H-21 were fixed in June. The payments in 1H-22 will be adjusted after year-end to reflect actual 2021 results. Potential payments related to uncertain tax cases are excluded.

Guidance summary

First half 2021

2
0
2
1
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T
I
N
2
0
2
2
0
1
-
b
d
m
o
e
p		 C
A
P
I
T
A
L
S
P
E
N
D
2
2
2
3
-
U
S
D
b
i
l
l
i
o
n		 P
R
O
D
U
C
T
I
O
N
C
O
S
T
8
9
0
5
-
U
S
D
/
b
o
e		 D
I
V
I
D
E
N
D
S
0
4
5
U
S
D
i
l
l
i
m
o
n
2
0
2
H
1
1
-
l
t
a
c
a
s
u		 2
0
1
4
b
d
m
o
e
p		 0
1
S
b
i
l
l
i
U
D
o
n		 8
8
S
/
b
U
D
o
e		 2
2
5
S
i
l
l
i
U
D
m
o
n

Concluding remarks

Second quarter 2021

Building a leading E&P company

Status after the first half of 2021

Operational performance as planned

  • Strong safety record and low emissions
  • Production and cost on schedule
  • Ongoing projects on track

Maturing our project portfolio

  • Aiming to sanction 500 mmboe by end-2022
  • Well under way to deliver on NOAKA
  • Strong support from alliance partners

Superior financial flexibility

  • High cash flow
  • Strong financial position
  • Returning value to shareholders

www.akerbp.com

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