Galp Energia

Earnings Release • Apr 27, 2015

April 27, 2015

RESULTS FIRST QUARTER 2015

An integrated energy player focused on exploration and production

RCA figures except otherwise noted.

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FOCUSED MANAGEMENT TEAM COMMITTED TO STRATEGY EXECUTION

FIRST QUARTER 2015 RESULTS

• Ebitda reached €398 m, benefitting from Galp Energia's integrated business profile
• Production increased to 41.5 kboepd with Lula/Iracema's FPSO #1 and #2 at full capacity and ramp-up of FPSO #3
• FPSO #4 on track to start operations in Iracema North by 4Q15

FINANCIAL OVERVIEW

CONCLUDING REMARKS

Refining margins vs Brent price

(\$/bbl)

• Oil price stabilized in the \$50-60/bbl range
• Refining margins benefited from lower oil prices reaching the highest value since 3Q12

Iberian Market Growth

(kton, mmcm)

• Iberian oil market growing for 6 consecutive quarters, with relevant YoY growth
• Iberian natural gas market grew YoY in the quarter for the first time since 2011

FIRST QUARTER 2015 RESULTS

⁶ LULA/IRACEMA: FPSO #1 AND #2 PRODUCING AT PLATEAU

• Plateau since June 2012
• Average availability of c.95%

• Five producer wells and four injector wells connected, including one horizontal well

• Plateau since September 2014

• Average availability of c.95%

• Five producer wells, one EWT and three injector wells connected

• Output of c.100 kbopd reached during 1Q15

• 4 th producer well expected to be connected in 3Q15

• Plateau production expected by 1H16

• Topside integration works progressing at Brasfels shipyard

• Production expected to start during 4Q15
• Drilling and completion activities being performed prior to FPSO arrival

FIRST QUARTER 2015 RESULTS

DEVELOPING MOZAMBIQUE AND ANGOLA PROJECTS ⁸

(2.5 – 3 mtpa and 2x5 mtpa LNG trains – 1 st phase)

• World-class gas project being materialised

• FEED and EPCIC ongoing

• Steady contribution to Group's production in 1Q15

• Lianzi production expected to start during 2H15 through tie-back to the CPT of BBLT

R&M benefited from European refining margins and Iberian market recovery

LNG trading activity supported by structured contracts, mainly to Latin America, Asia and Europe

1.2

FINANCIAL OVERVIEW

CONCLUDING REMARKS

Profit & Loss RCA (€ m)

	1Q14	4Q14	1Q15
Turnover	4,125	4,470	3,923
Ebitda	265	399	398
E&P	104	102	9 4
R&M	3 6	191	165
G&P	122	101	131
Ebit	130	258	250
Associates	1 7	1 4	2 6
Financial results	(42)	(49)	(73)
Taxes	(46)	(73)	(71)
Non-controlling interests	(13)	(16)	(11)
Net Income	4 7	137	121
Net Income (IFRS)	1 4	(249)	(10)

• Operating results benefited from improved European refining margins and higher LNG volumes sold
• Upstream Ebitda impacted by falling oil prices
• Net income up YoY to €121, from a weak 1Q14

Capital Expenditure (€ m)

• E&P activities accounted for 96% of Group capex, of which Lula/Iracema represented c.58%
• Exploration and appraisal capex mainly channelled to Brazil
• Downstream and gas capex allocated to maintenance and safety activities

Balance Sheet (€ m)¹

	Dec.2014	Mar.2015	Mar-Dec
Fixed and LT assets	7,599	7,830	+232
Work in progress	1,768	1,924	+156
Working capital	968	863	(105)
Loan to Sinopec	890	925	+35
Other assets (liabilities)	(512)	(518)	(6)
Capital employed	8,945	9,100	+155
Net debt2	2,520	2,353	(167)
Equity	6,425	6,747	+322
Net Debt + Equity	8,945	9,100	+155

• Working capital positively impacted by lower oil prices
• Net debt of €1.4 bn considering loan to Sinopec as cash and equivalents, with implicit net debt to Ebitda of 1.0x

FINANCIAL OVERVIEW

CONCLUDING REMARKS

• Focus on Lula/Iracema project execution, with reservoir delivering ahead of expectations
• Improved R&M and G&P performance and record E&P production
• Strong financial position maintained
• Management team fully committed to execute and enhance strategy in place

FINANCIAL OVERVIEW

CONCLUDING REMARKS

Main E&P data

		1Q14	4Q14	1Q15
Working interest production	kboepd	28.1	36.3	41.5
Oil production	kbopd	26.9	34.0	38.4
Net entitlement production	kboepd	24.6	33.4	38.7
Angola	kbopd	7.3	8.1	7.8
Brazil	kboepd	17.3	25.3	31.0
Realised sale price	USD/boe	96.2	66.4	50.6
Production cost	USD/boe	13.1	11.4	11.8
Ebitda	€ m	104	102	9 4
Ebit	€ m	6 8	6 5	4 4
CAPEX	€ m	178	315	273

• Higher production in Brazil, due to FPSO #3 ramp-up and FPSO #1 and #2 producing at plateau
• Angola NE production increased 0.5 kbopd as PSA effects offset the decrease in WI production
• Ebitda decreased 8% QoQ, despite higher production

17

Main R&M data

		1Q14	4Q14	1Q15
Galp Energia refining margin	USD/boe	0.9	4.7	5.9
Refining cash cost 1	USD/boe	3.0	2.2	2.4
Raw materials processed	kboe	19,539	27,592	26,195
Total refined product sales	mton	3.7	4.6	4.4
Sales to direct clients	mton	2.2	2.4	2.3
Ebitda	€ m	3 6	191	165
Ebit	€ m	(45)	105	8 8
CAPEX	€ m	1 0	4 0	5

• Premium to benchmark of \$0.6/boe in the quarter impacted by planned partial outages in Sines and Matosinhos
• Sales to direct clients increased by 4% YoY, following the recovery in the Iberian market
• Ebitda up YoY from a weak 1Q14, but also now benefiting from a recovering Iberian market

Main G&P data

		1Q14	4Q14	1Q15
NG supply total sales volumes	m3 m	2,078	1,885	2,195
Sales to direct clients	m3 m	1,011	968	999
Trading	m3 m	1,067	917	1,195
Ebitda	€ m	122	101	131
Ebit	€ m	104	8 4	112
CAPEX	€ m	7	8	3

• Trading volumes increased on the back of higher contribution from LNG structured sales
• Sales to direct clients down YoY, mainly on residential clients as competition intensified in the Iberian markets
• Lower contribution from Infrastructure due to downward revision of rate of return to c.8%

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