Earnings Release • Jan 20, 2022
Earnings Release
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OKEA fourth quarter 2021 trading update
(Trondheim 20 January 2022) OKEA ASA (OSE: OKEA) today announces a trading
update for the fourth quarter of 2021 with a production of 16 038 (16 315)
barrels of oil equivalents per day (boepd), and a total operating income of NOK
1 725 (1 026) million.
(Amounts in parentheses refer to previous quarter)
'OKEA delivered another strong operational quarter with high reliability at
Draugen and Gjøa', says OKEA CEO, Svein J. Liknes. 'High oil prices and record
-high European gas prices contributed to exceptionally strong cash flow, and
total revenues for the quarter were on par with the full year revenues for 2020.
With the Yme field now onstream, OKEA is well positioned for further growth.'
Fourth quarter 2021 petroleum production and sales
OKEA produced 16 038 (16 315) boepd in the fourth quarter with high reliability
at both Draugen and Gjøa. Production from the Yme field started in October with
further commissioning of process systems and start-up of additional wells in
January and February.
Sold volumes in the fourth quarter amounted to 18 102 (16 979) boepd. Market
prices have continued to improve during the quarter which resulted in an average
realised liquids price of USD 78.0 (67.4) per boe* and an average realised price
for gas of USD1.11 (0.57) per scm**.
OKEA received Gjøa tariff income of NOK 24 million, NOK 13 million revenues from
joint utilisation of Draugen logistic resources and a net gain from gas forward
contracts of NOK 54 million.
+--------------------+-------+-------+-------+-------+-------+-------+
| |Unit |Q4 2021|Q3 2021|Q4 2020|FY 2021|FY 2020|
+--------------------+-------+-------+-------+-------+-------+-------+
|Total operating |MNOK |1,725 |1,026 |584 |3,882 |1,730 |
|income | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
|Realised liquids |USD/boe|78.0 |67.4 |39.0 |65.3 |36.3 |
|price | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
|Realised gas price |USD/scm|1.11 |0.57 |0.19 |0.62 |0.11 |
+--------------------+-------+-------+-------+-------+-------+-------+
|Net production |Boepd |16,038 |16,315 |16,171 |15,530 |16,147 |
+--------------------+-------+-------+-------+-------+-------+-------+
|Net production - |Boepd |10,580 |11,365 |10,961 |10,793 |11,152 |
|liquids | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
|Net production - |Boepd |5,458 |4,950 |5,210 |4,737 |4,995 |
|gas | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
|Third-party volumes |Boepd |419 |165 |- |147 |- |
|available for sale | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
|Over/underlift/inven|Boepd |1,645 |499 |2,623 |166 |-276 |
|tory adjustments | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
|Net sold volume |Boepd |18,102 |16,979 |18,794 |15,843 |15,871 |
+--------------------+-------+-------+-------+-------+-------+-------+
|Net sold volumes - |Boepd |11,629 |11,966 |14,016 |10,782 |11,145 |
|liquids | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
|Net sold volumes - |Boepd |6,473 |5,013 |4,778 |5,061 |4,726 |
|gas | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
| | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
|Cash and cash |MNOK |2,039 |1,504 |871 |2,039 |871 |
|equivalents | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
|Net interest |MNOK |750 |874 |1,529 |750 |1,529 |
|-bearing debt | | | | | | |
+--------------------+-------+-------+-------+-------+-------+-------+
- barrels of oil equivalents
*Boe - barrels of oil equivalents
**Scm- standard cubic metres
***Compensation volumes from Duva received (tie-in to Gjøa) included in Net sold
volumes - gas
Status on 2021 guiding
2021 full-year average production was 15,530 boepd and capex was NOK 638
million, both within the guiding range.
+----------+-----+-----------+---------------+
| |Unit |Preliminary|Guiding |
+----------+-----+-----------+---------------+
|Production|Boepd|15,530 |15,500 - 16,500|
+----------+-----+-----------+---------------+
|Capex |MNOK |638 |600 - 700 |
+----------+-----+-----------+---------------+
For guiding purposes capex figures do not include capitalised interest.
Impairments
As previously communicated, the transfer of ownership of the Inspirer rig to the
Yme licence was completed during Q4. For accounting purposes, the transaction
results in recognition of a pre-tax impairment charge, materially offset under
income taxes for change in deferred taxes following the impairment and reduction
in taxes payable from uplift. The impairment charge primarily results from lower
net asset value from the Yme field as uplift reduces tax payable. The
reorganisation of operations and ownership of the Inspirer rig is expected to
provide significant cost improvement and cash flow benefits of around NOK 300
million net after tax to OKEA over the next six months.
Financial position
At the end of the quarter, cash and cash equivalents and liquid investments
amounted to NOK 2 249 (1 504) million. Net interest-bearing debt amounted to NOK
750 (874) million which includes the value of OKEA's share of the lease contract
with Havila for the Inspirer rig of NOK 493 million.
During the quarter, OKEA bought back OKEA02 bonds for a nominal value of USD
11.8 million at an average price of 103.6 to par. By end of 2021, OKEA had
bought back OKEA02 bonds for a nominal value of USD 38.4 million at an average
price of 95.7 to par of which USD 6.3 million has been cancelled.
In December, OKEA received NOK 109 million in proceeds for the sale of OKEA's
regional headquarter Råket 2 in Kristiansund.
Financialrisk management
OKEA uses derivative financial instruments to manage exposures to fluctuations
in commodity prices.
By year end 2021,OKEA hadsold forward30% of the net after tax exposure for
natural gasfor Q1-22 at an average price of 304 GBp/th, 20% for Q2-22 at an
average price of 216 GBp/th and 20% of Q3-22 at an average price of 213 GBp/th.
Disclaimer
The information contained in this statement is based on a preliminary assessment
of the company's fourth quarter 2021 operating and financial results and may be
subject to change.
Fourth quarter 2021 financial report on 11 February 2022
OKEA ASA will release its fourth quarter 2021 results on Friday 11 February
2022at 06:00 CET. A presentation of the results will be held on the same day
through a webcast and audioconference starting 08:00 CET. The presentation will
be held by Svein J. Liknes(CEO) and Birte Norheim (CFO).
The webcast can be followed at www.okea.no
orhttps://channel.royalcast.com/landingpage/hegnarmedia/20220211_8/ (https://eur0
1.safelinks.protection.outlook.com/?url=https%3A%2F%2Fchannel.royalcast.com%2Flan
dingpage%2Fhegnarmedia%2F20220211_8%2F&data=04%7C01%7Ctrond.omdal%40okea.no%7C2af
ca663fa544552fff508d9db274c28%7Cf4d0f33e32cb4b0caafe6e0cefbc9ea9%7C0%7C0%7C637781
784105721065%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6
Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata=i3ldd8rRi6WQODrk95577LURzWhCaz2eekM%2F1AAIMOg
%3D&reserved=0)
Dial in details for the audioconference:
Norway: +47 2195 6342
UK: +44 203 769 6819
PIN Code: 681934
For further information, please contact:
CEO Svein J. Liknes, +47 917 67704
CFO Birte Norheim, +47952 93321
VP IR Trond Omdal, +47 915 32578
About OKEA
OKEA ASA is a leading mid to late-life operator on the Norwegian continental
shelf (NCS) with a current target production of 18 000 - 19 000 boe per day in
2022. OKEA finds value where others divest and has an ambitious growth strategy
built on accretive M&A activities, value creation and capital discipline.
OKEA is listed on the Oslo Stock Exchange (OSE: OKEA).
More information is available at www.okea.no (http://www.okea.no)
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