Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — FY2013 Earnings Presentation
26 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Feb 10, 2014
Slide 1: Results Fourth Quarter and Full Year 2013
10 February 2014 Results FOURTH QUARTER AND FULL YEAR 2013 An integrated energy player focused on exploration and production
Slide 2: Disclaimer
Disclaimer RCA figures except otherwise noted. By attending or reading this presentation, you acknowledge and agree to be bound by the following limitations and restrictions. This presentation has been prepared by GALP Energia, SGPS, S.A. (“GALP Energia” or the “Company”) and may be amended and supp
Slide 3: Agenda
Key highlights Strategy execution update Business overview Final remarks Appendix 3 Fourth quarter and full year 2013 results
Slide 4: Key highlights
Key highlights ▪ Lula-1 project performing according to plan, while Lula NE production continues its ramp-up ▪ Key appraisal activities underway to optimise Iara development plan with DoC at YE2014 ▪ Pitú well opened a new play in Potiguar offshore basin with the first oil accumulation discovery in
Slide 5: Strategy execution update
Key highlights Strategy execution update Business overview Final remarks Appendix 5 Fourth quarter and full year 2013 results
Slide 6: E&P: Lula/Iracema: an outstanding project being executed according to plan
E&P: Lula/Iracema: an outstanding project being executed according to plan 2010 2013 2014 2015-2017 ▪ Development plan ▪ Start of production of ▪ FPSO #2 ramp-up during ▪ Seven additional FPSO to submitted for FPSO #2 in June, with one the year and to reach full start producing in the Lula/Iracema f
Slide 7: E&P: Lula NE project on track for full production ramp-up by 4Q14
E&P: Lula NE project on track for full production ramp-up by 4Q14 Lula NE milestones Schedule Status Delivery of FPSO Cidade de Paraty May-13 Start of production Jun-13 Connection of injector well Aug-13 Connection of producer well1 4Q13 (in Jan-14) Connection to gas export pipeline 1Q14 Installatio
Slide 8: E&P: Appraisal works at Iara key to better delineate development plan
E&P: Appraisal works at Iara key to better delineate development plan Iara field ▪ Performing DST at Iara HA ▪ One EWT scheduled for 2014, with location pending final results at Iara HA ▪ Two FPSO already contracted, but appraisal activities underway key to assess potential for additional units ▪ Do
Slide 9: E&P: Continued appraisal works to de-risk Júpiter and Carcará
E&P: Continued appraisal works to de-risk Júpiter and Carcará Block BM-S-24 Block BM-S-8 Bracuhy results reinforced volumes of oil and Evaluating whether to drill Carcará Extension in condensates to be developed in the block one or two different stages 9 Fourth quarter and full year 2013 results
Slide 10: E&P: Pitú well proved first oil accumulation discovery in Potiguar offshore basin
E&P: Pitú well proved first oil accumulation discovery in Potiguar offshore basin Potiguar offshore basin ▪ Pitú results opened a new play in high potential frontier area offshore Brazil ▪ Well with two objectives in the Cretaceous interval, Upper Aptian and of Lower Aptian age ▪ Currently completin
Slide 11: R&M: Challenging refining conditions, whilst Iberian market stabilising
R&M: Challenging refining conditions, whilst Iberian market stabilising Benchmark refining margin in 2013 ($/bbl) Iberian oil market (YoY change) 10.0 1Q13 2Q13 3Q13 4Q13 1% 8.0 6.0 -2% 4.0 2.0 -6% 0.0 -2.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -12% 10y range Galp Energia benchmark margin
Slide 12: G&P: Continued strong business performance
G&P: Continued strong business performance Natural gas sales to direct clients (bcm) LNG trading sales (bcm) 4.6 4.4 4.0 4.1 3.0 2.2 0.7 0.5 2010 2011 2012 2013 2010 2011 2012 2013 Stable demand for natural gas in Iberia 3 bcm traded in 2013, with 36 cargoes sold Peninsula of c.4 bcm per year mainly
Slide 13: Business overview
Key highlights Strategy execution update Business overview Final remarks Appendix 13 Fourth quarter and full year 2013 results
Slide 14: 4Q13 Ebitda up 16% YoY driven by higher E&P production
4Q13 Ebitda up 16% YoY driven by higher E&P production Profit & Loss (€ m) ▪ Ebitda benefited mainly from 4Q13 4Q12 YoY QoQ 2013 YoY higher production in Brazil, Turnover 4,717 4,231 +11% (19%) 19,620 +6% following start of production at Lula NE Ebitda 271 234 +16% (13%) 1,141 +11% E&P 109 77 42% (1
Slide 15: Maintaining a robust financial position
Maintaining a robust financial position Balance sheet (€ m)1 ▪ Disciplined working capital management in the period, namely of inventories Dec.2013 Sep.2013 Dec - Sep Dec.2012 Dec - Dec Fixed and LT assets 6,883 6,833 +50 6,599 +284 ▪ Net debt stable at €2.2 bn with Working capital 1,294 1,404 (110)
Slide 16: In 4Q13, capex allocated to E&P activities accounted for c.70% of total capex
In 4Q13, capex allocated to E&P activities accounted for c.70% of total Capital expenditure (€ m) G&P ▪ Development activities in BM-S- R&M E&P - Production 11 accounted for c.70% of E&P E&P - Exploration capex, including infrastructure, 963 development wells and RDA 862 campaign ▪ Downstream and ga
Slide 17: Successfully aligning debt maturities with expected cash flow profile
Sucessfully aligning debt maturities with expected cash flow profile Debt reimbursement profile1 (€ m) 1,000 ▪ Placement of €500 m inaugural 800 bond in 4Q13, currently trading 600 with an yield of 3,3% (5Y fixed rate) 400 200 ▪ Gross debt1 of €3.7 bn with an 0 2014 2015 2016 2017 2018 2019 2020+ av
Slide 18: Final remarks
Key highlights Strategy execution update Business overview Final remarks Appendix 18 Fourth quarter and full year 2013 results
Slide 19: Final remarks
Final remarks ▪ Strong commitment to execute Lula/Iracema development project on time and on budget ▪ Intensive appraisal during 2014 to de-risk development of Iara, Júpiter and Carcará ▪ Positive cash flow from downstream and gas activities, despite persistent tough refining environment in Europe ▪
Slide 20: Save the date: Galp Energia Capital Markets Day 2014
SAVE THE DATE Galp Energia Capital Markets Day 2014 London, 4 March 2014
Slide 21: Appendix
Key highlights Strategy execution update Business overview Final remarks Appendix 21 Fourth quarter and full year 2013 results
Slide 22: Production increased 24% YoY driven by Lula NE start-up
Production increased 24% YoY driven by Lula NE start-up Main E&P data ▪ Brazil production increased by 3.2 kboepd YoY, following start- 4Q13 4Q12 YoY QoQ 2013 YoY up of FPSO #2 and two EWT in 4Q13 Working interest production kboepd 25.3 23.4 +8% (2%) 24.5 +0% Net entitlement production kboepd 21.9 1
Slide 23: R&M results capped by harsh refinery environment
R&M results capped by harsh refinery environment Main R&M data ▪ Refining margin of $1.7/bbl benefited from contribution of 4Q13 4Q12 YoY QoQ 2013 YoY upgrade project, although Galp Energia refining margin USD/bbl 1.7 0.9 +83% +5% 2.2 (2%) currently below cash cost Refining cash cost USD/bbl 2.5 2.7
Slide 24: LNG trading volumes increased by 44% YoY driving G&P Ebitda up 7% YoY
LNG trading volumes increased by 44% YoY driving G&P Ebitda up 7% YoY Main G&P data ▪ Robust LNG trading activity, with 9 cargoes sold in 4Q13, mainly to 4Q13 4Q12 YoY QoQ 2013 YoY LatAm and Asian markets NG supply total sales volumes mm3 1,941 1,558 +25% (2%) 7,090 +13% Sales to direct clients mm3
Slide 25: Short term outlook
Short term outlook ▪ 1Q14 WI production expected to reach c.26 kboepd, benefiting from second producer well at Lula NE whilst impacted by continuing decline in Angola ▪ Refining business to be impacted by a general turnaround at Sines refinery, which works will start in March ▪ Oil products volumes
Slide 26: For further information on Galp Energia
Investor Relations team Tiago Villas-Boas, Head Catarina Aguiar Branco Cátia Lopes Maria Borrega Pedro Pinto +351 21 724 08 66 Investor.relations@galpenergia.com For further information on Galp Energia, please go to: www.galpenergia.com Results & presentation weblink www.galpenergia.com/en/investido