Galp Energia

Earnings Release • Feb 8, 2016

February 8, 2016

RESULTS FOURTH QUARTER 2015

An integrated energy player focused on exploration and production

RCA figures except otherwise noted.

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• Q4 Ebitda of €309 m, with integrated portfolio supporting FY EBITDA of €1.564 bn
• Q4 working interest production increased to 52.1 kboepd given contribution from FPSO #3 and #4 in Brazil and the start-up of Lianzi in Angola
• Sépia East DoC submitted and Carcará appraisal activities confirming high quality and reservoir productivity

Key Indicators

	Guidance - CMD 2015	Actual
Ebitda RCA	€1.1 bn - €1.3 bn	€1.56 bn
Capex	€1.3 bn - €1.5 bn	€1.28 bn
Production growth (WI)	30%-35%	50%
Refining utilisation rate (%)	80 – 85	85
Oil sales to direct clients (mton)	9.5 – 10	9.1
NG/LNG sales (bcm)	5 - 7	7.7

EXECUTION UPDATE

FINANCIAL OVERVIEW

CONCLUDING REMARKS

APPENDIX

Refining margins vs Brent price

(\$/bbl)

• Crude oversupply pushed oil price to an 11-year low during 4Q15
• Refining margins impacted by middle distillates inventory surplus during 4Q15, although \$1.1/bbl higher YoY

Source: Platts, APETRO, CORES, REN, Enagas

Iberian Market Growth

• Iberian oil market up 2.4%, supported by low prices and economic recovery

• Iberian NG market up 6.0%, due to low hydraulicity

• Full ramp-up achieved in 13 months, ahead of plan

• Five producer wells and five injector wells connected

• Started operations in July 2015 and reached c.90 kbopd, with three producer and three injector wells connected

• 4 th producer well expected to be connected during 1Q16

LULA/IRACEMA: FPSO #5 IMMINENT START OF PRODUCTION IN LULA ALTO

(150 kbopd)

Total of 10 wells already drilled in the Lula Alto area, with the first producer well currently being connected

Unit to reach full capacity during 2017

(150 kbopd)

FPSO at Brasa shipyard in Brazil for final integration works

Expected to be deployed in Lula Central by mid-2016

CONTINUING TO DE-RISK OTHER PROJECTS IN BRAZIL

• Carcará North and Carcará NW confirmed the discovery of light oil and the extension of the discovery
• DST in Carcará North confirmed excellent productivity and high quality reservoir
• Sépia East DoC submitted in November 2015
• Sépia East to be unitised with Sépia (ToR area)
• Pitu North well confirmed the extension of Pitu discovery
• 3D seismic data acquisition expected in 2016

ADVANCING ON AFRICAN DEVELOPMENT PROJECTS

• Lianzi started production in October 2015
• Development drilling campaign ongoing in Kaombo

• Focus on cost reduction and fiscal terms renegotiations

• Focus on developing a robust and competitive FLNG solution for Coral

• Mamba Unitisation Agreement with Area 1 signed in November 2015

DOWNSTREAM AND GAS: STRONG PERFORMANCE

• Refining system high availability during 2015

• Business performance benefitted from market dynamics and cost optimisation

• Stable sales to direct clients benefiting from higher electrical segment demand

• Robust trading activity, supported by structured LNG contracts and by network opportunities in Europe

EXECUTION UPDATE

FINANCIAL OVERVIEW

CONCLUDING REMARKS

APPENDIX

Profit & Loss RCA (€ m)

	4Q14	3Q15	4Q15	QoQ	YoY	12M15	YoY
Turnover	4,470	3,906	3,435	(12%)	(23%)	15,517	(13%)
Ebitda	399	411	309	(25%)	(22%)	1,564	19%
E&P	102	8 9	5 3	(41%)	(48%)	356	(20%)
R&M	191	245	166	(32%)	(13%)	800	94%
G&P	101	7 2	8 8	22%	(13%)	382	(13%)
Ebit	258	263	180	(32%)	(30%)	996	29%
Associates	1 6	1 7	2 4	41%	48%	8 4	39%
Financial results	(51)	(11)	(4)	63%	92%	(98)	32%
Taxes	(73)	(69)	(47)	(32%)	(36%)	(294)	16%
Non-controlling interests	(16)	(20)	(5)	(73%)	(66%)	(51)	(23%)
Net Income	137	180	149	(18%)	9 %	639	71%
Net Income (IFRS)	(240)	2 7	6	(78%)	n.m	123	n.m.

• Resilient operating results despite challenging environment
• Upstream results impacted by lower oil prices despite growing production
• Net income increased 9% YoY, benefitting from Group integrated profile
• 2015 IFRS net income of €123 m impacted by inventory effect (€272 m) and non-recurring items (€244 m)

Capital Expenditure (€ m)

• E&P accounted for 75% of Group capex, of which development activities accounted for 86%
• Brazil represented c.70% of total Upstream capex due to Lula/Iracema development execution

FOURTH QUARTER 2015 RESULTS

Downstream and gas capex of c.€109 m¹

E&A: Exploration & Appraisal D&P: Development & Production 1 Including the acquisition of c.33% stake in Setgas for €39 m. Excluding this impact, 4Q15 Group capex was €392 m, of which c.€70 m allocated to the downstream and gas activities.

14

Balance Sheet (€ m)¹

	Dec.2015	Set.2015	Dec.2014	Dec-Set	Dec-Dec
Fixed and LT assets	7,877	7,638	7,599	239	278
Work in progress	2,077	2,016	1,768	61	309
Working capital	527	577	968	(50)	(442)
Loan to Sinopec	723	781	890	(58)	(167)
Other assets (liabilities)	(517)	(536)	(512)	19	(5)
Capital employed	8,609	8,459	8,945	150	(336)
Net debt2	2,422	2,387	2,520	35	(98)
Equity	6,187	6,072	6,425	115	(238)
Net Debt + Equity	8,609	8,459	8,945	150	(336)

• Working capital positively impacted by lower inventories and client receivables
• Net debt decreased €98 m during 2015 despite intensive capex
• Net debt of €1.7 bn considering loan to Sinopec as cash and equivalents, with implicit net debt to Ebitda of 1.2x 3

EXECUTION UPDATE

FINANCIAL OVERVIEW

CONCLUDING REMARKS

APPENDIX

• Maintaining the focus on Lula/Iracema project execution:
• FPSO #1, #2 and #3 producing steadily at plateau
• FPSO #4 in production ramp-up, with the 4th producer well expected by 1Q16
• FPSO #5 at Lula Alto with imminent first oil
• FPSO #6 to be deployed by mid-2016
• Production growth and integrated business profile key to face current market conditions
• Maintained strong financial position

EXECUTION UPDATE

FINANCIAL OVERVIEW

CONCLUDING REMARKS

APPENDIX

Main E&P data

		4Q14	3Q15	4Q15	QoQ	YoY	12M15	YoY
Working interest production	kboepd	36.3	45.7	52.1	14%	43%	45.8	50%
Oil production	kbopd	34.0	42.2	48.9	16%	44%	42.5	48%
Net entitlement production	kboepd	33.4	43.9	49.2	12%	48%	43.2	60%
Angola	kbopd	8.1	6.1	7.6	23%	(6%)	7.2	0 %
Brazil	kboepd	25.3	37.8	41.6	10%	65%	36.0	82%
Realised sale price	USD/boe	66.4	43.8	30.0	(32%)	(55%)	43.5	(51%)
Production cost	USD/boe	11.4	9.5	10.5	10%	(9%)	9.8	(27%)
DD&A	USD/boe	14.9	15.4	9.8	(37%)	(34%)	14.8	(26%)
Ebitda	€ m	102	89	53	(41%)	(48%)	356	(20%)
Ebit	€ m	65	33	12	(63%)	(82%)	145	(51%)
CAPEX	€ m	333	223	321	44%	-4%	1,103	8 %

• Higher production in Brazil QoQ, mainly due to FPSO #3 and #4
• Angola NE increased 1.4 kbopd QoQ due to the higher contribution from BBLT and the start-up of Lianzi, in Angola
• Ebitda decreased 48% YoY following lower Brent price despite production increase

Main R&M data

		4Q14	3Q15	4Q15	QoQ	YoY	12M15	YoY
Galp Energia refining margin	USD/boe	4.7	6.7	4.1	(38%)	(12%)	6.0	n.m.
Refining cash cost 1	USD/boe	2.1	2.9	2.0	(29%)	(4%)	2.5	(1%)
Raw materials processed	kboe	27,592	29,814	28,763	(4%)	4 %	114,572	23%
Total refined product sales	mton	4.6	4.8	4.6	(4%)	1 %	18.6	10%
Sales to direct clients	mton	2.3	2.4	2.2	(7%)	(5%)	9.1	0 %
Ebitda	€ m	191	245	166	(32%)	(13%)	800	94%
Ebit	€ m	105	173	94	(45%)	(10%)	516	n.m.
CAPEX	€ m	40	24	60	n.m.	50%	110	2 %

• Q4 premium to benchmark of \$0.1/boe impacted by planned outages for maintenance in some units
• Sales to direct clients down YoY, following the wholesale accounts' rationalisation
• Ebitda down YoY mainly due to lower refining margins and a time lag effect on oil products pricing

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

Main G&P data

		4Q14	3Q15	4Q15	QoQ	YoY	12M15	YoY
NG supply total sales volumes	3 mm	1,885	1,909	1,692	(11%)	(10%)	7,665	3 %
Sales to direct clients	3 mm	968	933	992	6 %	2 %	3,843	2 %
Trading	3 mm	917	976	700	(28%)	(24%)	3,822	3 %
Ebitda	€ m	101	72	88	22%	(13%)	382	(13%)
Ebit	€ m	84	54	71	32%	(15%)	313	(14%)
CAPEX	€ m	8	8	491	n.m.	n.m.	651	n.m.

• Trading volumes decreased YoY with fewer opportunities in the international market
• Sales to direct clients up YoY on higher production of electricity from natural gas in Iberia
• Ebitda down YoY mainly due to lower contribution from the power business

Investor Relations team

Pedro Dias, Head Otelo Ruivo, IRO Cátia Lopes Joana Pereira João Pereira 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