Energy SpA — Earnings Release 2020

Nov 18, 2020

BW Energy: Third Quarter 2020 Results

BW Energy: Third Quarter 2020 Results

HIGHLIGHTS THIRD QUARTER

* EBITDA of USD 22.2 million compared to USD 21.8 million in Q2 2020

* Safeguarding people, operations and assets amid COVID-19 pandemic

* Q3 2020 gross production of 1.4 million barrels or ~15,500 bbls/day (gross)

* Strong cash position of USD 145.3 million

* Acquisition of jack-ups for the Dussafu development

* Continuation of Tortue Phase 2 campaign subject to easing of COVID-19

restrictions

EBITDA for the third quarter of 2020 was USD 22.2 million, up from USD 21.8

million in the second quarter of 2020 mainly due to increased realised oil

price.

Dussafu daily operations continue to perform in line with expectations from four

wells (DTM-2H, DTM-3H, DTM-4H and DTM-5H) with a quarterly production of

approximately 15,500 barrels per day (gross) of oil to the FPSO BW Adolo. Total

gross production in the third quarter was 1.42 million barrels of oil. One

lifting was completed to BW Energy in the quarter realising an average price of

about USD 46 per barrel. Production cost (excluding royalty) was USD 19.6 per

barrel. This includes approximately USD 2 million of additional costs related to

the COVID-19 pandemic in the quarter. The Company sold 548,441 barrels of oil

net in the quarter compared to 532,357 barrels net in the second quarter of

"We are ready to resume value-adding development activities on the Dussafu

license led by the connection of the Tortue Phase 2 wells, and restart the

Hibiscus/Ruche project utilising a converted jack-up rig to reduce investments,

time to first oil and environmental footprint," says Carl K. Arnet, CEO of BW

Energy. "We continue to manage the pandemic to maintain stable operations while

preparing for COVID-19 restrictions to be lifted to a level where we can

efficiently execute our plans."

Total Dussafu production for 2020 is projected to be approximately 14,250

barrels per day (gross) based on four producing wells, compared to 11,800

barrels per day on average in 2019. The decrease from the previous projection of

15,000 - 16,000 barrels per day (gross), is due to a maintenance program and

associated shutdown of the FPSO in October. The shutdown brings BW Energy in

compliance with Gabonese production allocations to meet the nation's OPEC

quotas.

Full year OPEX per barrel is expected to increase to around USD 19 per barrel,

compared to USD 17-18 per barrel from previous guidance. Both production and

costs have been impacted from the COVID-19 restrictions. The drilling of DTM-

7H, and the connection of DTM-6H and -7H to BW Adolo has been deferred to mid-

2021 with first oil expected in third quarter 2021. The Hibiscus/Ruche project

will be reactivated as soon as current COVID-19 restrictions are eased to allow

for efficient project execution.

Net financial expense was USD 2.8 million for the third quarter, mainly

representing the lease liability interest expense for the FPSO BW Adolo. Total

equity at 30 September 2020 was USD 448.4 million compared to USD 455.3 million

at the end of Q2 2020. The equity ratio was 59.2% compared to 58.7% at the end

of Q2 2020. The company generated an operating cash flow of USD 25.7 million

with a cash balance of USD 145 million on 30 September 2020, compared to USD

128 million on 30 June 2020.

BW Energy has a solid liquidity situation and intends to establish a reserve-

based lending (RBL) facility for Dussafu with a syndicate of leading banks when

investing activities can resume.

DEVELOPMENT PLANS AND OUTLOOK

In November, BW Energy concluded on an alternative development plan for the

Hibiscus/Ruche satellite field, utilising a converted jack-up as an offshore

installation. The Company has acquired two jack-up drilling rigs for a total of

USD 14.5 million. Structural engineering for the first conversion has commenced.

Using a converted jack-up is expected to reduce capital investments by around

USD 100 million and enable a substantial reduction to field development related

CO(2) emissions and installation cost as the unit can "self-install".

The cash break even oil for the Hibiscus/Ruche (phase 1 and 2) development has

moved down to approximately USD 25 per barrel Brent, and the total Dussafu

license production cost is expected to decline to approximately USD 11 per

barrel with production growth from the remaining Tortue wells and Hibiscus/Ruche

development. A final decision to restart the Hibiscus/Ruche development is

subject to a lifting of COVID-19 restrictions to allow for efficient project

execution.

The Maromba project continues to progress towards the environmental approval and

optimisation of the field development plan with respect to investment,

operational costs, and schedule. The Field Development Plan was approved by the

regulator (ANP) in August and final investment decision is planned by the first

quarter of 2022.

BW Energy will today hold a conference call followed by a Q&A hosted by CEO Carl

K. Arnet, CFO Knut R. Sæthre and COO Lin G. Espey at 14:00 CET.

Conference call information:

To dial in to the conference call where the third quarter results and Q&A will

be hosted, please dial in to one of the following numbers:

Norway: +47 23 96 00 36

France: +33 170 918 701

UK: +44 203 059 58 69

US: +1 631 3026 547

Singapore: +65 31 57 64 17

You can also follow the presentation via webcast with supporting slides,

available on:

https://webinars.on24.com/q4/bwenergyq32020

(https://www.globenewswire.com/Tracker?data=-K2cu4G2haa7mxNNsMZ0dgVUlbUO-

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Please note, that if you follow the webcast via the above URL, you will

experience a 30 second delay compared to the main conference call.

For further information, please contact:

Knut R. Sæthre, CFO BW Energy, +47 91 11 78 76

ir@bwenergy.no

About BW Energy:

BW Energy is a growth E&P company with a differentiated strategy targeting

proven offshore oil and gas reservoirs through low risk phased developments. The

Company has access to existing FPSOs to reduce time to first oil and cashflow

with lower investments than traditional offshore developments. The main assets

are 73.5% of the producing Dussafu Marine Permit offshore Gabon and a 95%

interest in the Maromba field in Brazil, both operated by the Company. Total net

2P+2C reserves are 247 million barrels at the start of 2020.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.