Energy SpA — Earnings Release 2020

Nov 2, 2020

BW Energy: Acquisition of jack-ups to be converted for Dussafu developments and Q3 production update

BW Energy: Acquisition of jack-ups to be converted for Dussafu developments and Q3 production update

Acquisition of jack-ups to be converted for Dussafu developments and Q3

production update

BW Energy has concluded on an alternative development plan for the

Hibiscus/Ruche satellite field in the Dussafu license offshore Gabon, utilising

a converted jack-up rig to reduce investments and time to first oil.

Subsequently, the Company has acquired two jack-up drilling rigs, the 2003-built

sister-units "Atla" and "Balder", from Borr Drilling Ltd.  BW Energy will pay a

total of USD 14.5 million for the two units.

"A jack-up conversion will enable us to reduce capital investments by about USD

100 million compared to our previous development plan," said Carl Krogh Arnet,

the CEO of BW Energy. "We are benefitting from the availability of high-quality

jack-up units at very attractive prices due to the current drilling market

slump. By re-using facilities we will also achieve a substantial reduction in

field development related CO2 emissions compared to a newbuild platform."

The seismic reprocessing carried out by BW Energy has indicated the potential

for a substantial increase to the Greater Hibiscus oil-in-place volumes, making

further developments in the Hibiscus/Ruche area highly likely.

"This development concept offers tangible financial, schedule and environmental

benefits. We have consequently decided to secure a second jack-up at a very

attractive price to prepare for the future development of the Dussafu license,"

said Carl Krogh Arnet. "Acquiring a sister unit will enable us to re-use the

engineering and project plans for a second development with obvious synergies."

Calculations show that redeployment and conversion projects offer 70%-80%

reductions to greenhouse-gas emissions compared to new built assets due to

reduced steel consumption and shorter yard stays. Further tangible benefits are

reduced installation cost as a jack-up can "self-install" after mobilisation to

the field and no need for piling into the seabed for stability.

As announced on 16 September, the new development plan is expected to lower the

estimated cash-break even oil price for the Hibiscus/Ruche (phase 1 and 2)

development to approximately USD 25 per barrel Brent. With the planned increased

production from Hibiscus/Ruche, the Dussafu license production cost, including

the Tortue field, is expected to drop to approximately USD 11 per barrel.  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 initial FID approved for the Hibiscus/Ruche development was approved in the

fourth quarter of 2019 with an estimated gross development cost of about USD

660 million for both phases and proven resources (2P) of gross 112 million

barrels of recoverable oil.

THIRD QUARTER 2020 PRODUCTION UPDATE

Gross production from Tortue averaged 15,449 bbls/day in the third quarter of

2020, amounting to a total gross production of 1,421,329 bbls of oil. BW Energy

completed one lifting in the quarter, realising an average price

of approximately USD 46 per barrel. Production cost (excluding royalties) was

USD 19.6 per barrel. This includes approximately USD 2 million of additional

costs related to the COVID-19 pandemic in the quarter.

BW Energy's share of gross production was 1,044,676 bbls of oil. Net sold

volume, which is the basis for revenue recognition in the financial statement,

was 548,441 bbls, reflecting an under-lift position of 299,110 bbls at the end

of the third quarter.

The company generated a positive cash flow with a cash balance of USD 145

million at 30 September 2020, compared to USD 128 million at 30 June 2020.

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 were 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.