Galp Energia

Earnings Release • Jul 27, 2015

July 27, 2015

RESULTS SECOND QUARTER 2015

An integrated energy player focused on exploration and production

RCA figures except otherwise noted.

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• Ebitda reached €446 m, benefitting from Galp Energia's integrated business profile with strong results in Downstream & Gas
• Q2 production increased to 43.8 kboepd with ramp-up of FPSO Cidade de Mangaratiba in Lula/Iracema
• FPSO Cidade de Itaguaí production to start soon at Iracema North, one quarter ahead of schedule
• Average 2015 working interest production now expected around c.43 kboepd
• 2015 Ebitda guidance revised upwards to €1.3 bn 1.5 bn, from €1.1 bn 1.3 bn

EXECUTION UPDATE

FINANCIAL OVERVIEW

CONCLUDING REMARKS

APPENDIX

Refining margins vs Brent price

(\$/bbl)

Iberian Market Growth

• Oil price in the \$55-65/bbl range

• Strong US gasoline demand and crude oversupply kept refining margins high

• Iberian oil market growing YoY for seven consecutive quarters

• Iberian natural gas market grew 6% YoY, benefiting from lower hydro power production

5 LULA/IRACEMA: FPSO #4 PRODUCTION TO START ONE QUARTER AHEAD OF SCHEDULE

(150 kbopd)

Production to start soon at Iracema North, with one producer well already connected

12 wells already drilled

SECOND QUARTER 2015 RESULTS

LULA/IRACEMA: PERFORMANCE ABOVE EXPECTATIONS

• Plateau since June 2012 Plateau since September 2014 Producing c.130 kbopd with four producer wells

• 5 th producer well to be connected during 4Q15, leading to plateau

• FPSO at Mauá shipyard, in Brazil, for topsides integration to be performed by BRASA/SBM

• Expected to be deployed in Lula Alto by 1H16

• Sail away from China towards Mauá shipyard expected in 3Q15

• Expected to be deployed in Lula Central by 1H16

SECOND QUARTER 2015 RESULTS

⁸ LULA/IRACEMA: EXECUTING MITIGATION MEASURES

(150 kbopd)

Gas/CO² injection and compression modules awarded in May

New contracts with lower execution risk and neutral impact on cost and on Galp's expected delivery timing

Development plans of Atapu, Berbigão and Sururu fields submitted to ANP in June

Three FPSO replicant units: Atapu South and Atapu North in 2018 and Berbigão/Sururu in 2019

Pilot tie-back of Sururu to Atapu North FPSO expected by

ACTIVITIES ¹⁰ IN REMAINING SANTOS BASIN PROJECTS

• Carcará North appraisal well concluded in July, confirming the extension of the discovery
• DST to be performed during 2H2015

• Carcará NW second stage started in July

• Reviewing current appraisal program, with Elida and Citera wells postponed

• Focus on maturing development solution for oil and condensates
• Sépia discovery extending into BM-S-24

DEVELOPING MOZAMBIQUE LNG PROJECT

(2.5 mtpa – 3 mtpa)

• FEED and EPCIC proposals received for FLNG project
• LNG long term offtake agreements at advanced stage of negotiation

(2x5 mtpa LNG trains – 1 st phase)

• Onshore development project progressing
• Advanced unitisation negotiations with Area 1

SECOND QUARTER 2015 RESULTS

Refining margins

(\$/boe and \$/bbl)

High availability of the refining system and sourcing optimisation allowed to capture market dynamics

NG volumes

Trading activity supported by M/L term structured contracts

EXECUTION UPDATE

FINANCIAL OVERVIEW

CONCLUDING REMARKS

APPENDIX

Profit & Loss RCA (€ m)

	2Q14	1Q15	2Q15	QoQ	YoY	1H15	YoY
Turnover	4,615	3,923	4,253	8 %	(8%)	8,176	(6%)
Ebitda	271	398	446	12%	64%	844	57%
E&P	107	9 4	120	27%	12%	215	2 %
R&M	4 1	165	224	36%	n.m.	390	n.m.
G&P	116	131	9 2	(30%)	(21%)	223	(6%)
Ebit	143	250	303	21%	n.m.	553	n.m.
Associates	1 6	2 6	1 7	(34%)	7 %	4 3	31%
Financial results	(17)	(73)	(10)	87%	42%	(83)	(42%)
Taxes	(59)	(71)	(108)	52%	83%	(179)	70%
Non-controlling interests	(17)	(11)	(15)	31%	(13%)	(26)	(14%)
Net Income	6 8	121	189	56%	n.m.	310	n.m.
Net Income (IFRS)	6 1	(10)	100	n.m.	64%	9 0	20%

Operating results benefited from improved European refining margins and higher production despite lower G&P performance

Availability and reliability of refining system allowed to fully capture market dynamics

Net profit improved to €189 m, following strong operating performance

14

Capital Expenditure (€ m)

E&P accounted for 91% of Group capex, of which development activities accounted for 89%

Downstream and gas capex mainly to maintenance and safety activities

Balance Sheet (€ m)¹

	Jun.2015	Mar.2015	Dec.2014	Jun-Mar	Jun-Dec
Fixed and LT assets	7,778	7,830	7,599	(52)	180
Work in progress	2,093	1,924	1,768	169	325
Working capital	851	863	968	(12)	(117)
Loan to Sinopec	835	925	890	(89)	(54)
Other assets (liabilities)	(591)	(518)	(512)	(73)	(79)
Capital employed	8,874	9,100	8,945	(226)	(71)
Net debt2	2,329	2,353	2,520	(24)	(191)
Equity	6,545	6,747	6,425	(202)	120
Net Debt + Equity	8,874	9,100	8,945	(226)	(71)

Working capital positively impacted by lower inventories

Net debt of €1.5 bn considering loan to Sinopec as cash and equivalents, with implicit net debt to Ebitda of 0.9x

EXECUTION UPDATE

FINANCIAL OVERVIEW

CONCLUDING REMARKS

APPENDIX

• Focus on Lula/Iracema project execution with production ramping-up faster than expected
• Monitor closely the execution of next FPSOs with some critical contracts being replaced
• Improved R&M performance, record E&P production and solid trading activity
• Stronger financial position

EXECUTION UPDATE

FINANCIAL OVERVIEW

CONCLUDING REMARKS

APPENDIX

Main E&P data

		2Q14	1Q15	2Q15	QoQ	YoY	1H15	YoY
Working interest production	kboepd	25.7	41.5	43.8	6 %	71%	42.7	59%
Oil production	kbopd	24.5	38.4	40.5	6 %	65%	39.4	53%
Net entitlement production	kboepd	21.9	38.7	40.9	6 %	87%	39.8	71%
Angola	kbopd	6.6	7.8	7.4	(5%)	12%	7.6	9 %
Brazil	kboepd	15.3	31.0	33.5	8 %	n.m.	32.2	98%
Realised sale price	USD/boe	108.5	50.6	53.0	5 %	(51%)	51.8	(49%)
Production cost	USD/boe	18.9	11.8	7.6	(35%)	(60%)	9.6	(39%)
DD&A	USD/boe	23.7	16.3	18.7	15%	(21%)	17.6	(23%)
Ebitda	€ m	107	94	120	27%	12%	215	2 %
Ebit	€ m	72	44	57	30%	(21%)	101	(28%)
CAPEX	€ m	219	273	285	5 %	30%	558	40%

Higher production in Brazil due to FPSO #3 startup and FPSO #1 and #2 at plateau

Angola NE production increased 0.8 kbopd YoY

Ebitda increased 12% YoY due to higher production, despite much lower oil price

Main R&M data

		2Q14	1Q15	2Q15	QoQ	YoY	1H15	YoY
Galp Energia refining margin	USD/boe	(0.2)	5.9	7.3	24%	n.m.	6.6	n.m.
Refining cash cost 1	USD/boe	2.7	2.4	2.6	8 %	(7%)	2.5	(14%)
Raw materials processed	kboe	20,365	26,195	29,800	14%	46%	55,995	40%
Total refined product sales	mton	4.1	4.4	4.7	7 %	15%	9.1	17%
Sales to direct clients	mton	2.3	2.3	2.3	1 %	0 %	4.6	2 %
Ebitda	€ m	41	165	224	36%	n.m.	390	n.m.
Ebit	€ m	(33)	88	161	84%	n.m.	249	n.m.
CAPEX	€ m	36	5	21	n.m.	(41%)	26	(44%)

Refining margin benefited from recovery of European margins and sourcing optimisation

Sales to direct clients stable YoY

Ebitda increase of €184 m YoY mainly driven by refining performance

1 Includes impact from refining margin hedging operations Note: Unit refining margin, premium to benchmark and cash costs based on total raw materials processed

SECOND QUARTER 2015 RESULTS

Main G&P data

		2Q14	1Q15	2Q15	QoQ	YoY	1H15	YoY
NG supply total sales volumes	3 mm	1,826	2,195	1,869	(15%)	2 %	4,064	4 %
Sales to direct clients	3 mm	814	999	919	(8%)	13%	1,918	5 %
Trading	3 mm	1,013	1,195	951	(20%)	(6%)	2,146	3 %
Ebitda	€ m	116	131	92	(30%)	(21%)	223	(6%)
Ebit	€ m	97	112	76	(32%)	(21%)	188	(6%)
CAPEX	€ m	9	3	5	75%	(39%)	9	(48%)

Sales to direct clients up YoY, mainly on increased volumes sold to the electrical segment

Lower trading volumes given fewer opportunities in the international market

Decrease in trading volumes and lower natural gas prices in the markets driving lower Ebitda YoY

Investor Relations team

Pedro Dias, Head Otelo Ruivo, IRO Cátia Lopes Joana Pereira Marta Silva Pedro Pinto

+351 21 724 08 66 Investor.relations@galpenergia.com Results & presentation weblink :

www.galpenergia.com/en/investidor/Relatorios-eresultados/resultados-trimestrais

For further information on Galp Energia, please go to: www.galpenergia.com