OKEA ASA — Interim / Quarterly Report 2020

Feb 5, 2021

Presentation of fourth quarter 2020 OKEA ASA

5 February 2021

Q4 Highlights

Operations

• No serious incidents at Draugen, Covid-19 situation managed
• High production reliability at Draugen and Gjøa
• Yme onshore work completed, and rig successfully installed at location
• Production 16 171 boepd

Financials

• Revenues from oil and gas NOK 581 million
• EBITDA NOK 229 million
• Net profit NOK 182 million
• Cash position NOK 871 million

Positioned for growth

• Significant organic growth potential without need for new equity
• o Two new wells Gjøa P1 planned onstream in February
• o Start-up of Yme H2-21
• o Final Investment Decision Hasselmus first tie-in to Draugen
• o Vette acquisition potential coordinated development with Grevling
• o Three firm exploration wells planned Jerv, Ilder, Ginny
• o Expanding portfolio: Six new licenses in APA 2020 four as operator

3

Financials

Oil and gas production, sales and revenues

Income statement

Figures in NOK million	Q4 '19	Q3 '20	Q4 '20	2020	2019	Operating income:
Total operating income	564	321	584	1 730	3 020
Production expenses	-205	-154	-189	-696	-709
Changes over/underlift in positions and inventory	4 2	-31	-74	1 7	-272	Production expenses:
Depreciation	-163	-147	-179	-699	-704
Impairment	-9	-572	117	-1 387	-105
Exploration , general and adm . expenses	-176	-20	-91	-184	-402	Impairment:
Profit / loss (-) from operating activities	5 5	-603	167	-1 219	827
Net financial items	-90	7 6	243	-12	-408
Profit / (-) before income loss tax	-35	-527	410	-1 231	419
Income taxes	3 3	508	-227	628	-491
/ (-) Net profit loss	-2	-19	182	-603	-71
EBITDA	226	116	229	867	1 636
						Financial items:
						Income taxes:
						to financial items and uplift

Q4'20 comments

Operating income:

• Higher sold volumes partly offset by lower realized prices for liquids compared to Q4'19

Production expenses:

• NOK/boe of 110 compared to 121 Q4'19

Impairment:

• Reversal of impairment on Yme asset

Exploration, general and adm. expenses:

• Field evaluation activities mainly relating to Hasselmus and Grevling and seismic expenses
• Higher SG&A in Q4'20 due to effect of annual recalculation of cost allocation to licences including employee share-based incentive program

Financial items:

• Unrealised gain on USD nominated bond loans following strengthening of NOK against USD during the quarter, partly offset by interest expense

Income taxes:

• Effective tax rate of 55%; deviation from 78% due

Statement of financial position

Figures in NOK million

Assets	31 12 2019	30 09 2020	31 12 2020
Goodwill	1 426	769	769
Oil and properties gas	3 886	3 509	3 758
Other non-current assets	2 969	3 031	3 029
Trade and other receivables	622	452	514
Tax refund , current	0	573	296
Cash and cash equivalents	1 663	883	871
Other assets	421	518	540
Total assets	10 986	9 735	9 776
Total equity	1 681	900	1 083
Liabilities
Asset retirement obligations	4 024	4 089	4 200
Deferred liabilities tax	830	742	941
Interest-bearing loans and borrowings	2 557	2 688	2 400
Trade and other payables	1 372	988	890
Income payable tax	295	146	14
Other liabilties	227	181	248
Total liabilities	9 305	8 834	8 694
Total equity and liabilties	10 986	9 735	9 776

Year-end 2020 comments

• Cash and cash equivalents NOK 871 million
• Current tax refund NOK 296 million
• NOK 86 million from exploration expenditures
• NOK 210 million remaining for tax losses in 2020
• Interest-bearing debt of NOK 2 400 million
• Reversed asset impairment Yme NOK 117 million increases oil and gas properties
• Asset retirement obligation offset by non-current receivable from Shell

Cash development

Outlook: Guiding on production & capex

Operations and assets

Production volumes and highlights

High production reliability from both Draugen and Gjøa

Draugen (OKEA operated)

• •No serious incidents
• •High production reliability (99%)
• •Started fuel gas import that secures the power supply at Draugen and contributes to maintaining a high production reliability

Gjøa (Neptune operated)

• •No serious incidents
• •High production reliability (99%)
• •Higher production in Q4 despite strike in October mainly due to high production reliability
• •Full year production 27% ahead of plan
• •P1 project on plan, startup Q1 2021

Hasselmus - Tie-back to Draugen

• •Final Investment Decision in 2021 on Hasselmus as first tieback to Draugen with first gas planned for 2023
• •Maintaining high reliability and availability on Draugen field
• •Power-from-shore Final Investment Decision planned 2022
• •Ambition to increase oil recovery on Draugen to 70% and extend lifetime of field to 2040+

Gjøa – Two new wells in the P1 segment onstream in February

• Two new wells in the P1 segment planned onstream in February
• Tie-in of Nova and Duva in Q2-21 OKEA compensated for deferred production when tie-in projects come onstream as well as tariff payments
• Potential tie-in of the OKEA-operated Aurora discovery
• Awarded license between Gjøa and Aurora in APA 2020

Yme New Development Project

• •Onshore work completed and jack-up rig installed at the field
• •Hook-up, commissioning and preparation for production start up ongoing
• •Planned production start in 2021 well within reach
• •Production 7 500 boepd net to OKEA at plateau the first-year average 4 900 boepd net to OKEA

Vette and Grevling - Potential coordinated development

• •Acquisition of Repsol's 40% share in PL972, which includes the Vette oil discovery
• •OKEA estimates recoverable volumes in the Vette discovery of 30-50 mmboe
• •A coordinated serial development of the Vette and Grevling fields could potentially reduce breakeven cost for both fields
• •Exploration wells on Jerv and Ilder prospects near Grevling planned for H1-21

Six new licences awarded in APA 2020

The new licences contain 8 discoveries

• •OKEA operator for four licences
• •Exploration & field development opportunities near Draugen & Gjøa
• •Entry into Norne area with Falk discovery

Production licence	Block(s)	Operator	Partners	OKEA WI	Initial work programme
PL1125	6608/10,11	OKEA ASA	Lime Petroleum AS	50%	2 year Drill or Drop*
PL1119	6406/2,3,5,6	OKEA ASA	Equinor Energy AS, Pandion Energy AS	40%	1 year Drill or Drop
PL1117	6406/6, 6407/4	OKEA ASA	Vår Energi AS, ONE-Dyas Norge AS	50%	2 year Drill or Drop
PL1116	6407/5,6	OKEA ASA	M Vest Energy AS	60%	1 year Drill or Drop
PL1115	6407/5,8	Wintershall Dea Norge AS	OKEA ASA	40%	2 year Drill or Drop
PL1108	35/9	DNO Norge AS	OKEA ASA, Pandion Energy AS	30%	2 year Drill or Drop

Outlook & concluding remarks

A dramatic year petroleum markets – Outlook significantly improved

Outlook

Significant growth in activities

Multiple milestones ahead in 2021

• Two new production wells from P1 segment in Gjøa
• New production from Yme
• Final Investment Decision on Hasselmus
• Three firm exploration wells planned; Jerv, Ilder and Ginny
• Possible appraisal well at Aurora
• Concept selection on Vette and Grevling
• Maturing a significantly larger license portfolio following successful APA 2020 awards
• ❑ 100% growth in number of operatorships
• ❑ 8 new discoveries added to portfolio
• ❑ 15+ additional exploration prospects added to portfolio