Energy SpA — Interim / Quarterly Report 2020

Nov 18, 2020

Q3 2020

CEO Carl K. Arnet CFO Knut R. Sæthre COO Lin G. Espey

18 November 2020

Disclaimer

This Presentation has been produced by BW Energy Limited exclusively for information purposes. This presentation may not be redistributed, in whole or in part, to any other person.

This document contains certain forward-looking statements relating to the business, financial performance and results of BW Energy and/or the industry in which it operates. Forwardlooking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of BW Energy or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of BW Energy or any of its parent or subsidiary undertakings or any such person's officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. BW Energy assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our actual results.

No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither BW Energy nor any of its parent or subsidiary undertakings or any such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Actual experience may differ, and those differences may be material.

By attending this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of BW Energy and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the businesses of BW Energy. This presentation must be read in conjunction withthe recent Financial Information and the disclosures therein.

This announcement is not an offer for sale or purchase of securities in the United States or any other country. The securities referred to herein have not been registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be sold in the United States absent registration or pursuant to an exemption from registration under the U.S. Securities Act. BW Energy has not registered and does not intend to register its securities in the United States or to conduct a public offering of its securities in the United States. Any offer for sale or purchase of securities will be made by means of an offer document that may be obtained by certain qualified investors from BW Energy. Copies of this Presentation are not being made and may not be distributed or sent into the United States, Canada, Australia, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other measures.

In any EEA Member State that has implemented Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market (together with any applicable implementing measures in any member State, the "Prospectus Regulation"), this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation.

This Presentation is only directed at (a) persons who are outside the United Kingdom; or (b) investment professionals within the meaning of Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); or (c) persons falling within Article 49(2)(a) to (d) of the Order; or (d) persons to whom any invitation or inducement to engage in investment activity can be communicated in circumstances where Section 21(1) of the Financial Services and Markets Act 2000 does not apply.

Highlights

EBITDA of USD 22.2 million with one lifting completed to BWE in Q3 2020

Strong cash position of USD 145 million

Investment project execution awaits lifting of COVID-19 restrictions

• Ensuring health and safety of all stakeholders while maintaining uninterrupted operations amid COVID-19 pandemic
• Planning for restart of Tortue Phase 2 drilling and tie-in operations
• Progressing preparations for Hibiscus/Ruche development with reduced CAPEX and time to first oil
• Acquired jack-ups to lower Hibiscus/Ruche development costs by USD 100 million and further enhance Dussafu value potential

Zero-harm objective for people and environment

Minimizing impact to environment Working for local society Sound governance

• Continued focus on resource efficient developments based on reusing existing offshore assets – jack-up purchase
• Supporting local communities in Gabon, Brazil and Namibia
• Zero LTI in the third quarter
• Zero environmental incidents in the third quarter

Estimated GHG emission-savings from redeployment of existing FPSO¹vs. newbuild

1) FPSO BW Adolo case study based on Co2 emission tied to steel consumption and operations

Well positioned in current oil demand and price environment

• Predicting future energy demand and the oil price carries a lot of uncertainty
• Significantly reduced future price expectations compared to the beginning of the year
• BW Energy's strategy is to be robust at levels well below current oil price and have excellent returns at the current Brent forward curve
• Focus on reducing break-even and using the market downturn and asset repricing to ensure delivery on strategy
• Cost efficient oil and gas to remain a substantial part of energy mix in the foreseeable future

Dussafu

Stable operational performance

• Q3 production 1.42 million bbls, equal to ~15,500 bbls/day gross
• Q3 OPEX at USD 19.6 per barrel, down from USD 21 per barrel for 2019
• Full year OPEX expectation increased from USD 17-18 to USD ~19 per barrel
• ‒ Impact from extended COVID-19 costs and restrictions
• ‒ Production impact of complying with OPEC quotas

Restart of Tortue development activities

• Completion and tie-in of Tortue phase 2 wells DTM-6H and DTM-7H
• ‒ LOI in place for Borr Norve drilling rig
• ‒ Tentative drilling start late March 2021
• ‒ Gross project investment forecast remains at USD 238 million (original FID budget of USD 275 million)
• ‒ First oil from DTM-6H and DTM-7H expected Q3 2021
• Prepared to resume all project activities as soon as COVID-19 restrictions are eased sufficiently for efficient project execution

Significantly improved Hibiscus / Ruche economics

Hibiscus Structure Map – Reprocessed Seismic

• Jack-up conversion reduces investments, time to first oil and environmental footprint of the development
• Revised development CAPEX gives:
• ‒ Reduced cash break-even of USD ~25 per barrel (Brent)
• ‒ 15% IRR at <USD 30 per bbl (Brent)
• Exploration activities focused on unlocking the significant additional reserves indicated by seismic re-processing and the successful Hibiscus exploration well drill in 2019

Conversion concept with multiple benefits

• Acquisition of two jack-up drilling rigs for a total of USD 14.5 million
• ‒ 2003-built sister rigs Atla and Balder, Friede& Goldman JU 2000 DESIGN
• Atla MODU conversion to Hibiscus Alpha offshore installation (OI) engineering project started
• Substantial reduction of field development CO² emissions compared to a newbuild platform
• ‒ Less seabed invasive as no need for piling for stability
• Reduced CAPEX by USD ~100 million
• ‒ Substantial reuse of existing MODU facilities excluding drilling package
• ‒ Reduced installation cost as a jack-up can "self-install"
• Reduced time from project execution start until first oil

Dussafu production forecast

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

• 2020 estimated production of ~5.2 million bbls gross vs. previous forecast of 5.4-5.8 million bbls
• ‒ Equal to an average ~14,250 bbls/day
• Q4 impact from COVID-19, maintenance and compliance with OPEC reductions
• One lifting completed in August

Quarterly gross production (kbbls/day) Actual and planned quarterly lifting schedule to BW Energy:

Gross production profile

USD per bbl 60

Attractive Dussafu economics at current oil prices

• Full year OPEX expectation of USD ~19 per barrel
• OPEX expected to decline to approximately USD 11 per barrel at FPSO nameplate capacity

Significant remaining potential

Large inventory of exploration prospects and leads

• The large portfolio of prospects and leads suggests a program of two exploration wells per year for the coming five years with a potential to add up to 100 million barrels of reserves
• Initial two exploration wells included in current drilling rig LOI

Maromba

Progressing Maromba towards FID

• Field Development Plan for Maromba approved by ANP
• Project team progressing project towards environmental approval (IBAMA)
• ‒ Site and soil survey planned for Q4 2020
• Project and field economics enhancements are ongoing
• ‒ Optimising CAPEX and OPEX
• ‒ Reducing time from execution start to first oil
• ‒ Assessing life extension program for Polvo FPSO
• ‒ Pursuing tax reductions by marginal field status
• On track to FID for phase 1 in a sub-USD 40 per bbl oil price environment while achieving 15% IRR (incl. remaining acquisition costs)

Q3 Financials

Income statement

USD million	Q3 2020	Q2 2020	Change
Operating revenue	38.3	32.0	6.3
Operating expenses	(16.1)	(10.2)	(5.9)
EBITDA	22.2	21.8	0.4
Depreciation	(8.0)	(7.7)	(0.3)
Depreciation - ROU	(9.6)	(10.0)	0.4
Amortisation	(0.2)	(0.2)	-
Impairment	-	-	-
Gain/(loss) sale of assets	-	-	-
Other expenses	(17.8)	(17.9)	0.1
Operating profit/(loss)	4.4	3.9	0.5
Interest income	0.1	0.2	-
Interest expense	-	-	-
Lease liability interest expense	(3.1)	(3.3)	0.1
Other financial items	0.2	(0.5)	0.7
Net financial income/(expense)	(2.8)	(3.6)	0.8
Profit/(loss) before tax	1.6	0.3	1.3
Income tax expense	(8.4)	(5.9)	(2.5)
Net profit/(loss) for the period	(6.8)	(5.6)	(1.2)

• EBITDA increased by USD 0.4 million
• ‒ Additional 170kbbls sold in Q2 vs. Q1 (including DMO delivery)
• ‒ Oil price averaging USD 46 per barrel in Q3 vs. USD 41 per barrel in Q2

Balance sheet

ASSETS	Q3 2020	Q2 2020	Change
Property and other equipment	0.5	0.5	(0.0)
Right-of-use assets	225.0	234.6	(9.6)
E&P tangible assets	237.3	251.9	(14.6)
Intangible assets	107.1	100.7	6.4
Other non-current assets	7.5	6.8	0.7
Total non-current assets	577.4	594.5	(17.2)
Inventories	18.3	8.6	9.7
Trade receivables and other current assets	16.3	45.6	(29.3)
Cash and cash equivalents	145.3	127.6	17.7
Total current assets	179.9	181.8	(1.9)
TOTAL ASSETS	757.3	776.3	(19.0)

EQUITY AND LIABILITIES	Q3 2020	Q2 2020	Change
Shareholders' equity	448.4	455.3	(6.9)
Total equity	448.4	455.3	(6.9)
Long-term related parties payables	-	-	0.0
Deferred tax liabilities	4.4	4.0	0.4
Asset retirement obligations	12.9	12.7	0.2
Long-term lease liabilities	231.4	235.4	(4.0)
Derivatives	1.7	2.0	(0.3)
Total non-current liabilities	250.4	254.1	(3.7)
Trade and other payables	42.4	51.0	(8.6)
Short-term lease liabilities	15.9	15.8	0.1
Tax liabilities	0.2	0.1	0.1
Total current liabilities	58.5	66.9	(8.4)
Total liabilities 18	308.9	321.0	(12.1)
TOTAL EQUITY AND LIABILITIES	757.3	776.3	(19.0)

• Reduction in Right-of-use assets and E&P tangible assets mainly due to depreciation
• ‒ Additional Reduction of E&P tangible assets due to reclassification to Intangible assets
• Reduction in trade receivables due to receipt of funds from oil sales
• Prepared to resume accretive investments
• ‒ Strong cash position
• ‒ Solid balance sheet with 59.2% equity ratio

Cash flow overview

Investment in assets (CAPEX)

Summary

Key value catalysts

Dussafu exploration Tortue Phase 2 Hibiscus/Ruche

• Seismic reprocessing evaluation
• Up to 10 additional exploration wells planned from late 2020 until 2026
• Tortue Phase 2 Q3 2021: +8-9,000 gross bbls/day peak

development

• Hibiscus / Ruche development with first oil Q1 2023
• Hibiscus / Ruche is expected to lift Dussafu production to FPSO nameplate capacity (~45,000 bbls/day)

• ANP approved FDP in Q3 2020

Maromba to

first oil

• Target FID Q1 2022
• First oil expected 1H 2024

Additional Value Levers

• FPSO tank expansions

• Reduced unit well cost

• FPSO Adolo de-bottlenecking additional 30,000 bbls/day

• Satellite field developments

• Development cost reductions identified (path to FID 15% IRR at sub-USD 40 per bbl)

• Polvo FPSO
• Work to reduce royalty rates

Q&A