Galp Energia

Earnings Release • May 2, 2017

May 2, 2017

Cautionary Statement

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Actual future results, including financial and operating performance; demand growth and energy mix; Galp's production growth and mix; the amount and mix of capital expenditures; future distributions; resource additions and recoveries; project plans, timing, costs, and capacities; efficiency gains; cost savings; integration benefits; product sales and mix; production rates; and the impact of technology could differ materially due to a number of factors. These include changes in oil or gas prices or other market conditions affecting the oil, gas, and petrochemical industries; reservoir performance; timely completion of development projects; war and other political or security disturbances; changes in law or government regulation, including environmental regulations and political sanctions; the outcome of commercial negotiations; the actions of competitors and customers; unexpected technological developments; general economic conditions, including the occurrence and duration of economic recessions; unforeseen technical difficulties; and other factors.

The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice. Galp and its respective representatives, agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this presentation to reflect any change in events, conditions or circumstances.

2

First quarter 2017 results

1Q17 highlights

• 1Q17 Ebitda of €419 m, up 43% YoY on the back of better performance in E&P and R&M
• Upstream benefiting from higher oil prices and production ramp-up in Brazil, despite FPSO #1 and FPSO #2 maintenance during the quarter
• Strong R&M results reflecting higher refining margins YoY and solid marketing performance
• Lower contribution from G&P driven by sourcing constraints, and few LNG trading operations
• Stable net debt despite temporary working capital increase

Agenda

Execution Update

Financial Overview

Appendix

1Q17: OPEC cuts support oil price above \$50/bbl

Brent price vs. Refining margin (\$/bbl) Iberian market evolution (kton, mmcm)

• Crude prices rebound on OPEC's compliance with production cuts agreement

• Refining margins resilient, despite oil price increase

• Iberian oil market growing, sustained by higher economic activity

• Iberian gas market supported by lower wind and hydroelectric production

Consistent growth with WI production of 88 kboepd

• Production growth sustained by the ramp-up of FPSOs #5 and #6, which more than offset maintenance in units #1 and #2
• First replicant on location, with production start-up expected soon

Brazil Angola

• Declining WI production in blocks 14/14k due to the natural decline of the fields
• Ongoing drilling campaign in block 32, on track to start production during 2018

Downstream businesses to maintain resilient contribution

R&M G&P

• Resilient refining results, with realised margin of \$5.1/boe also benefiting from sourcing opportunities

• Solid marketing performance, supported by Iberian economic momentum

• Natural gas activity impacted by sourcing constraints and lower LNG trading contribution

• Deconsolidation of the regulated infrastructure business in 4Q16

Agenda

Execution Update

Financial Overview

Appendix

Q1 Ebitda of €419 m, up 6% QoQ and 43% YoY

Profit & Loss RCA (€m)

	1Q16	4Q16	1Q17
Turnover	2,822	3,547	3,844
Ebitda	293	396	419
E&P	48	232	204
R&M	148	105	187
G&P	90	53	22
Others	8	6	6
Ebit	137	238	220
Associates	21	24	32
Financial results	3	(27)	(12)
Taxes	(39)	(88)	(123)
Non-controlling interests	(9)	(27)	(18)
Net Income	114	121	99
Net Income (IFRS)	(58)	80	134

• E&P Ebitda to have increased QoQ, excluding one-off events from previous quarter
• Downstream supported by resilient refining margins and robust marketing, offsetting constrained contribution from natural gas and deconsolidation of GGND
• Increase in taxes due to higher E&P results and non-cash deferred tax adjustments
• RCA net income down 13% YoY, with IFRS net income of €134 m, impacted by nonrecurring items of -€18 m and inventory effect of +€54 m

10 Capex of €227 m, mostly allocated to upstream development

Capital Expenditure (€m)

• Over 90% of total investment allocated to E&P, with Brazil and Angola developments accounting, respectively, for 68% and 15% of overall expenditure in the quarter
• Downstream capex of c.€18 m

First quarter 2017 results

CFO contribution supporting investment cycle

Change in net debt (€m)

	1Q16	4Q16	1Q17
Ebit + DD&A	158	481	480
Dividends from Associates	-	26	-
Change in Working Capital	141	51	(203)
Cash flow from operations	300	558	277
Net capex1	(343)	(200)	(204)
Net financial expenses	(28)	(22)	(21)
Taxes	(25)	(30)	(81)
Dividends paid	-	(6)	-
FCF	(96)	300	(30)
GGND deconsolidation2	-	632	-
Others3	50	2	5
Change in net debt	45	(935)	24

• Working capital increased €203 m in the quarter, driven by a temporary increase in inventories
• Net debt stable despite working capital increase

¹The first quarter of 2017 includes the proceeds of €22 m from the sale of the 25% indirect stake in Âncora project, and the fourth quarter of 2016 includes the proceeds of €141 m from the sale of 22.5% in GGND.

² Deconsolidation of assets and liabilities from GGND (4Q16).

3 Includes CTAs (Cumulative Translation Adjustment) and partial reimbursement of the loan granted to Sinopec.

Maintaining a solid financial position

Balance Sheet (€m)¹

	31 December, 2016	31 March, 2017	Var 31 . vs Dec ., 2016
Net fixed assets	7,723	7,901	177
Work in progress	2 650 ,	2 687 ,	37
Working capital	490	693	203
Loan to Sinopec	610	561	(49)
Other assets (liabilities)	(410)	(586)	(176)
Capital employed	8,414	8,569	155
Net debt2	1,870	1,895	24
Equity	6,543	6,674	131
Net Debt + Equity	8,414	8,569	155

• Net fixed assets increased €177 m to €7.9 bn driven by the increase of investment during the period
• Net debt of €1.3 bn considering loan to Sinopec as cash and equivalents, with implicit net debt to Ebitda of 1.0x³

¹IFRS figures. ²Not considering loan to Sinopec as cash.

³As at 31 March 2017, ratio considers net debt including loan to Sinopec as cash, plus €176 m corresponding Sinopec MLT Shareholder Loan to Petrogal Brasil, and LTM RCA Ebitda of €1,537 m.

Agenda

Execution Update

Financial Overview

Appendix

E&P: Working interest production up 56% YoY

Main E&P data

		1Q16	4Q16	1Q17
Working interest production1	kboepd	56.3	84.9	88.0
Oil production	kbpd	52.9	75.6	76.9
Net entitlement production1	kboepd	53.7	82.7	86.2
Angola	kbpd	7.9	6.8	6.9
Brazil	kboepd	45.8	75.8	79.3
Oil and gas average sale price2	USD/boe	26.2	42.1	45.4
Production costs	USD/boe	8.9	5.8	8.0
DD&A3	USD/boe	15.8	5.8	13.4
Ebitda RCA	€ m	48	232	204
Ebit RCA	€ m	(22)	191	106
Net Income from E&P Associates	€ m	3	4	9
CAPEX	€ m	316	269	209

• Brazilian production increased 5% QoQ, mainly due to ramp-up of FPSOs #5 and #6
• Increasing weight of gas sales due to the connection of Brazilian units to the pre-salt export network
• Unit costs normalised in 1Q17, continuing to benefit from production dilution

Note: Unit figures based on net entitlement production.

¹Includes natural gas exported, excludes natural gas used or reinjected.

²In the fourth quarter of 2016, the contribution of the trading activity related to the oil produced was reallocated from the R&M business to the E&P business. The full year impact was accounted for in 4Q16, but the average realised sale price in 4Q16 is normalised. ³Includes abandonment provisions.

15 R&M: Supportive refining margins and marketing performance

Main R&M data

		1Q16	4Q16	1Q17
Galp refining margin	USD/boe	4.1	5.2	5.1
Refining cash cost1	USD/boe	2.0	1.7	1.7
Impact of hedging on refining margin2	USD/boe	0.1	(0.2)	(0.0)
Raw materials processed	mmboe	25.2	28.8	26.1
Total refined product sales	mton	4.1	4.6	4.4
Sales to direct clients	mton	2.1	2.2	2.1
3 Ebitda RCA	€ m	148	105	187
Ebit RCA	€ m	78	1	94
Net Income from R&M Associates	€ m	1	0	(2)
CAPEX	€ m	23	68	16

• Spread over benchmark of \$1.6/boe due to sourcing opportunities during the quarter
• Refining margin hedging with neutral impact in Ebitda
• Solid contribution from marketing activities, whilst reducing exposure to wholesale clients

Note: Unit figures based on total raw materials processed. ¹Excluding impact of refining margin hedging operations.

²Impact on Ebitda.

In the fourth quarter of 2016, the contribution of the trading activity related to the oil produced was reallocated from the R&M business to the E&P business. The full year impact was accounted for in 4Q16.

G&P: Ebitda impacted by NG sourcing restrictions

Main G&P data

		1Q16	4Q16	1Q17
NG/LNG total sales volumes	mm3	1,860	1,861	2,006
Sales to direct clients	mm3	901	1,048	1,149
Trading	mm3	960	814	857
Ebitda RCA	€ m	90	53	22
Ebit RCA	€ m	75	42	15
Net Income from G&P Associates	€ m	18	20	25
CAPEX	€ m	3	4	2

• Higher volumes driven by the increase in sales to the electrical and industrial segments
• Natural gas results impacted by sourcing restrictions and lower LNG trading opportunities
• Regulated infrastructure contribution of €8 m accounted for under Associates following the deconsolidation of GGND

Investor Relations team

Pedro Dias, Head Otelo Ruivo, IRO Cátia Lopes João G. Pereira João P. Pereira Teresa Rodrigues

+351 21 724 08 66 investor.relations@galp.com Results & presentation weblink :

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

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