Slide 1: 2014 2Q results and strategy update
2014 2Q results and strategy update July 31, 2014 eni.com
Slide 2: Result highlights
result highlights e&p production in line with guidance confirming exploration track record good results from gas renegotiations persisting weakness in mid-downstream oil >50% CFFO growth* (H1 14 vs H1 13) * CFFO pre working capital variation 2
Slide 3: 2014 a weaker scenario
2014 a weaker scenario oil price $/bl eur/usd eni new scenario Italian gas demand and price refining margin - SERM* * SERM: please see appendix for definition 3
Slide 4: Eni strategic drivers and main actions
eni strategic drivers and main actions boosting upstream value accelerating gas contract renegotiations increasing refining capacity cuts cash flow target cost savings and efficiency additional disposal plan enhancing guidance in a weaker scenario 4
Slide 5: The transformation to a fully integrated company
the transformation to a fully integrated company staff development, downstream retail exploration operations & upstream midstream & market technology industrial* gas & power * refining, petrochemicals, power plants, retail oil 5
Slide 6: Upstream - maximising value of our operations
upstream - maximising value of our operations exploration production reloading our exploration portfolio 2014 guidance confirmed 42,000 sqkm new acreage 2013-17 CAGR confirmed at 3% 2015 +3% including impact of Kashagan & Angola LNG delays +3% +3% 1H2014 new discoveries > 400 Mil boe equity 6
Slide 7: Pre-salt exploration and discoveries
pre-salt exploration and discoveries Gabon –Block D4 West Africa pre-salt Libreville structural trap of 40 sqkm a successful exploration campaign Congo Marine XII (Litchendjili and Nenè): 320 mt hydrocarbon column 2,5 bln boe of resources in place offshore shallow water at 13 Km Gabon Bl
Slide 8: Unlocking the value of our exploration
unlocking the value of our exploration e&p disposal programme | bn € >9 exploration dual model diversifying risk managing exposure accelerating cash in remaining disposal exiting mature assets 4YP portfolio re-balancing 8
Slide 9: 2014 – 2015: two years of major start-ups
2014 – 2015: two years of major start-ups 4YP contribution | kboed start up project country op start up date progress Longhorn Ph.3 USA √ 1Q 14 West Franklin Ph.2 UK 4Q 14 Hadrian South USA 4Q 14 Lucius USA 4Q 14 Asgard Mikkel Norway 4Q 15 2014-2015 15/06 West Hub Angola √ 4Q 14 Eldfisk II Ph.1 Norw
Slide 10: Gas contract renegotiations deliver enhanced results
gas contract renegotiations deliver enhanced results 2014 EBIT guidance | mln € Take or Pay cash recovery | bn € 2.0 1.0 Original New 2013 2017 > € 700 mln improvement Substantial recovery of the €1.9 bn take or pay by 2017 cash and EBIT breakeven brought forward to 2014 10
Slide 11: Refining – increase resilience at lower margin
refining – increase resilience at lower margin ORIGINAL PLAN: 35% REDUCTION eni refineries shutdown of Gela gasoline line refinery under sale Venezia start-up Green Diesel Plant green plant in 2Q14 sales of CRC refinery conversion of one refinery NEW PLAN: >50% REDUCTION conversion/restruc
Slide 12: General services efficiency programme
general services efficiency programme general services costs | mln € total cost savings > €1.7 bn in the 4YP 12
Slide 13: Cash flow trend
cash flow trend original vs new plan | bn € main impacts on CFFO Kashagan / A-LNG delay avg Weaker gas market capex Lower refining margin E&P near field production Gas supply re-negotiations Refining capacity cuts Working capital improvement CFFO >40% vs 2013 13
Slide 14: Key targets confirmed or enhanced
key targets confirmed or enhanced E&P +3% production CAGR to 2017 G&P breakeven anticipated to 2014 R&M cash breakeven within end ‘15 at lower scenario >€1.7bn of costs savings in 2014-17 + €2.0bn additional disposal avg 2014-15 vs 2013 >40% CFFO +20% FCF 14
Slide 15: Appendix
appendix eni.com
Slide 16: Assumptions and sensitivity
assumptions and sensitivity updated strategy strategy PPT 02/2014 2014 2015 2014 2015 Brent dated ($/bl) 108 103 104 98 FX avg (€/$) 1,35 1,3 1,3 1,3 Standard Eni Ref. Margin ($/bbl) 1,8 2,1 3,5 4,3 Henry Hub ($/mmbtu) 4,8 4,4 3,7 4,1 NBP ($/mmbtu) 9,2 9,9 10,5 10,0 4YP sensitivity* Ebit adj (bln €)