Okea Asa · OSL:OKEA
Okea Asa — Investor Presentation (November 2019)
31 slides from Okea Asa's investor presentation, November 2019
Slide 1: OKEA ASA Corporate Presentation
OKEA ASA Corporate Presentation November 2019
Slide 2: General and disclaimer
General and disclaimer This presentation is prepared solely for information purposes, and does not constitute or form part of, and is not prepared or made in connection with, an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities. Investors and p
Slide 3: Agenda
01 Company overview and strategy 02 Asset portfolio 03 Financial highlights 04 Appendix 3
Slide 4: OKEA – a leading independent E&P company on the NCS
OKEA – a leading independent E&P company on the NCS OKEA at a glance Production • Founded in 2015 by a management team with a strong track record in Development HQ (Trondheim) creating value from both organic growth and M&A on the NCS Draugen (44.56% WI, op.) • NOK 4.5bn transaction with Shell in 20
Slide 5: Experienced senior management team with proven NCS track record
Experienced senior management team with proven NCS track record Erik Haugane Anton Tronstad Birte Norheim Kjersti Hovdal CEO SVP Projects and CFO1 SVP Controlling & Technology Accounting Erik Haugane was the founder of Pertra (2001) and Anton Tronstad has thirty years’ experience at Birte Norheim wa
Slide 6: Tier 1 operating organisation acquired from a supermajor
Tier 1 operating organisation acquired from a supermajor Fully fledged, full-cycle operator organisation Proven capabilities and excellent track record Operations Projects & Technology 145 16 Supermajor capabilities • Long standing organisation from Shell with employees employees employees with inde
Slide 7: OKEA targets further growth through both organic means and M&A
OKEA targets further growth through both organic means and M&A Utilising current platform of assets and organisation… …to create a leading NCS independent through organic growth and M&A • Differentiated position as a medium sized independent with operated production and development assets in Norway
Slide 8: OKEA is committed to operating safely and responsibly
OKEA is committed to operating safely and responsibly Environmental Social Governance Committed to supply the essential energy of oil and gas in an energy efficient manner and Safe operations – No harm, no leaks Strong focus on operating in the interest of all smallest possible environmental footpri
Slide 9: Attractive and stable operating environment on the NCS
Attractive and stable operating environment on the NCS Oil and gas sector in Norway Positive production outlook1 • Norway is an OECD country rated AAA/Aaa/AAA by S&P/Moody’s/Fitch mmboepd Historical Reserves Resources in fields Resources in discoveries Undiscovered 5,0 Forecast • Production started
Slide 10: Asset portfolio
01 Company overview and strategy 02 Asset portfolio 03 Financial highlights 04 Appendix 10
Slide 11: Diversified portfolio of high quality assets
Diversified portfolio of high quality assets • Giant oil field with substantial remaining Net production (excl. development options and prospective resources)1 Draugen reserves and highly accessible upsides kboepd Draugen Gjøa incl. P1 Ivar Aasen Yme Hasselmus (Draugen) (44.56%, op.) • Reliable oper
Slide 12: Draugen – Material, long life oil producer
Producing Draugen – Material, long life oil producer Asset overview Field facts (gross 100%) • Giant oil field with world-class reservoir, in production since 1993 • Partners: OKEA (44.56%, Op.), Petoro Hasselmus / Norway State DFI (47.88%), Neptune (7.56%) • Concrete mono-tower platform with five s
Slide 13: Draugen – OKEA has revitalised the field in 2019
Producing Draugen – OKEA has revitalised the field in 2019 What we have done How we have done it – “The OKEA way” • Identified potential for a development strategy • Focus on safe and efficient execution – no ‒ Positioned for new APA licences serious incidents or spills ‒ Plan to develop Hasselmus g
Slide 14: Gjøa – High margin production with tie-in optionality
Producing Gjøa – High margin production with tie-in optionality Asset overview Field facts (gross 100%) • Gas/condensate field located in a highly prolific Northern North Sea area Hamlet • Partners: Neptune (30%, Op.), Petoro/Norway State DFI (30%), Wintershall DEA (28%), OKEA ‒ Second largest North
Slide 15: Gjøa – Highly prolific area with potential for further value creation
Producing Gjøa – Highly prolific area with potential for further value creation Area map Gross reserves and resources base1 Key comments mmboe Fields and discoveries in greater area (No OKEA ownership) • Gjøa is a key regional hub with long-term potential ‒ Already host for Vega, while both Nova and
Slide 16: Ivar Aasen – small interest in a material high-quality producing field
Producing Ivar Aasen – small interest in a material high-quality producing field Asset overview Field facts (gross 100%) • Ivar Aasen is a field in the northern part of the North Sea, 30 kilometres • Partners: Aker BP (34.78%, Op.), south of the Grane and Balder fields Equinor (41.47%), Spirit Energ
Slide 17: Yme – Next field to come onstream
Development Yme – Next field to come onstream Asset overview Field facts (gross 100%) • Destined for abandonment, the Yme redevelopment was rejuvenated by • Partners: Repsol (55%, Op.), OKEA (15%), OKEA in 2016 and the PDO was approved in March 2018 LOTOS (20%), KUFPEC (10%) ‒ Development concept ba
Slide 18: Yme – development is +80% complete
Development Yme – development is +80% complete Current status Project timeline 2017 2018 2019 2020 • Project continues to progress and has been significantly de-risked through Activity Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 recent activities ‒ Wellhead module successfully installed offshore in Se
Slide 19: Operated inventory of medium term organic growth options
Other Operated inventory of medium term organic growth options Grevling & Storskrymten (35% / 60%, op.) Mistral (60%, op.) Exploration & Appraisal Grevling & Storskrymten Focus: will not sanction until have an economically robust development • Two adjacent oil discoveries in the southern North • Rei
Slide 20: High level of activity in coming years
High level of activity in coming years Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Target further debottlenecking and cost reductions Draugen Appraisal well BOK/BOV1 Hasselmus Hasselmus FID Progressing redevelopment of Gjøa P1 towards first oil late 2020 Gjøa P1 production start Gjøa Progress and de-r
Slide 21: Financial highlights
01 Company overview and strategy 02 Asset portfolio 03 Financial highlights 04 Appendix 21
Slide 22: Value-creation while maintaining a prudent financial strategy
Value-creation while maintaining a prudent financial strategy ...and further acceleration of growth Strong cash flow from operations… • Ongoing developments to be brought into production • Long-life assets with low unit costs • Rich organic and inorganic opportunity set on the NCS 4 1 • Diversified
Slide 23: Continued strong financial performance in Q3 2019
Continued strong financial performance in Q3 2019 Comments Key highlights – Q3 2019 • Strong performance in Q3 2019 with production of 18,125 kboepd Shell transaction closed Production (kboepd) ‒ Uptime on Draugen of 97%, up from 86% in the previous quarter ‒ Production on Gjøa impacted by modificat
Slide 24: High degree of flexibility in capex programme
High degree of flexibility in capex programme Net capital investment programme1 Comments USDm Sanctioned Planned • Committed capex set to fall significantly as Yme and Gjøa P1 come onstream in 2020 175 • Exercising strict capital discipline and return requirements 150 when evaluating investment oppo
Slide 25: Substantial cash flow generation drives rapid deleveraging
Substantial cash flow generation drives rapid deleveraging Comments Projected pro forma net debt development at USD 60/bbl3 • Robust cash flow from current producing fields USDm NIBD NIBD/EBITDA NIBD/EBITDA 200 1,2x ‒ Production base of ~19,000 boepd with high cash margins ‒ Unit opex of USD 19.6/bo
Slide 26: Hedging, risk mitigation and abandonment arrangements
Hedging, risk mitigation and abandonment arrangements • OKEA seeks to maintain strong financial discipline and a robust balance sheet with a conservative debt to equity mix • Objective to maintain a strong liquidity position at any point in the cycle Financial Leverage • Development and E&A activity
Slide 27: Unique NCS fiscal regime attractive backdrop for investments
Unique NCS fiscal regime attractive backdrop for investments Norwegian State (AAA rated) provides a strong shelter for capex Tax system description 100 • Marginal tax rate for E&P activities off Norway is 78%, made up of 22% Corporate Tax (CT) and 56% Special Petroleum Tax (SPT) 90 89.6% • Depreciat
Slide 28: Appendix
01 Company overview and strategy 02 Asset portfolio 03 Financial highlights 04 Appendix 28
Slide 29: Material reserve and resource base
Material reserve and resource base Overview per 1 January 2019 (Management estimates) Net 2P reserves per 01.01.2019 (Management estimates vs CPR) WI Net reserves mmboe Management estimate CPR (dated 1 March 2019) Comment (%) (mmboe) 55.6 55.6 Draugen 44.56% 29.7 Producing asset Gjøa 12.00% 11.6 Pro
Slide 30: Definitions and abbreviations
Definitions and abbreviations Term Definition Term Definition Term Definition 2C Best estimate of contingent resources DG3 Decision Gate 3: Final Investment Decision mmboe Million of barrels of oil equivalent 2P Proved and Probable reserves E&A Exploration and Appraisal mmscf Million standard cubic
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