Okea Asa · OSL:OKEA
Okea Asa — Q3 2020 Earnings Presentation
23 slides from Okea Asa's earnings presentation, Oct 28, 2020
Slide 1: Presentation of third quarter 2020
Presentation of third quarter 2020 OKEA ASA 28 October 2020
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: Q3 Highlights
Q3 Highlights Operations • No serious incidents at Draugen, Covid-19 situation managed • High production reliability at Draugen and Gjøa • Continued excellent project execution on Draugen; turnaround successfully completed in July • Production of 13,303 boepd Financial • Revenues from oil and gas of
Slide 4: Financials
Financials
Slide 5: Oil and gas production, sales and revenues
Oil and gas production, sales and revenues Revenue decrease mainly due to lower market prices and reduced volumes due to planned maintenance Oil and gas volume (boepd) Crude oil liftings (kboe) Realised prices (USD/boe) Petroleum revenues (NOK million) Production Sales Liquids Natural gas -27% +2% -
Slide 6: Income statement
Income statement Q3 comments 3rd quarter 9 months Figures in NOK million Income: 2020 2019 2020 2019 Total operating income 321 622 1 146 2 455 • Significantly lower market prices for oil and gas compared to last year Production expenses: Production expenses -154 -144 -507 -504 • NOK/boe of 118 comp
Slide 7: Impairment
Impairment NOK million -572 5 000 4 850 4 125 Q3 - Impairment 4 500 444 4 278 -569 4 000 •Impairment of NOK 569 million on Yme due 3 500 to delayed production start and capex 3 000 increase 2 500 2 000 •Improved forward curves for oil and gas was a positive contributor; increased recoverable 1 500 a
Slide 8: Cash development Q3 2020
Cash development Q3 2020 NOK million 1 300 1 200 154 323 1 100 216 1 000 28 900 53 800 700 600 500 917 883 400 300 200 100 0 Cash 30.06.20 Operating activities Taxes received Investment activities Interest paid Buy-back bond loan Cash 30.09.20 8
Slide 9: Financial robustness and flexibility for growth
Financial robustness and flexibility for growth •Temporary tax amendments: • Significantly improves cash position with tax refund for tax year 2020 and 2021 • Direct expensing and 24% uplift • Triggers revised assessment of profitable projects and improved project economy •Significant buffer to cove
Slide 10: Operations and assets
Operations and assets
Slide 11: Production volumes and highlights Q3
Production volumes and highlights Q3 High production reliability from both Draugen and Gjøa Daily average production (boepd) Draugen (OKEA operated) 25 000 • No incidents • High production reliability (99%) 20 000 19 099 • Lower production due to maintenance 18 125 turnaround 17 020 16 047 • Mainten
Slide 12: Draugen (OKEA operated) - Significantly improved performance
Draugen (OKEA operated) - Significantly improved performance Demonstrated improvements in production performance under OKEA operatorship OKEA operatorship Draugen oil production last 3 years 12
Slide 13: Draugen - Improvement program for all parameters
Draugen - Improvement program for all parameters Improving financial performance and extending field life NOK 750m NOK 200m 90% RF** 70% (from NOK 900m) (from NOK 300m) (from 86%) (from RF 67%) OPEX* Ops. CAPEX Production Reserves -15% + -33% + +4% +50% Cost reduction Remaining reserves Cost reducti
Slide 14: Innovation in OKEA
Innovation in OKEA Subsea scale squeeze carried out with half of standard industry cost Standard vessel: • Subsea scale squeeze required every second year to limit Barium Sulphate precipitation near wellbore and in tubing • Cost down from NOK 25 million to NOK 12 million per operation* Siem Pride: V
Slide 15: Draugen Subsea Scale Squeeze the OKEA way
Draugen Subsea Scale Squeeze the OKEA way Siem Pride • Optimized working procedures enabled scope to be carried out with a much smaller boat than industry standard • We used our contracted supply vessel Siem Pride • Logistic planning and management for small vessel operation • Reduced manning • ROV
Slide 16: Draugen – Energy supply
Draugen – Energy supply • From start in 1993 to 2018, energy was supplied by associated gas • Since 2018 until now, a mix of associated gas and diesel was used • Draugen Gas Import Project • Substituting diesel used for power by gas import • Starting now, October 2020 • Contributes to maintaining a
Slide 17: Hasselmus development
Hasselmus development The first tie-back to the Draugen platform •The first OKEA operated subsea development •Fast track development •16 mmboe with a break even below 30 USD/boe •First gas early 2023 •FEED restarted in July 2020 (stopped in March due to Covid-19 and market turmoil) •Main collaborati
Slide 18: Calypso – Oil prospect near Draugen
Calypso – Oil prospect near Draugen Strengthening OKEA’s position and resource potential in the Draugen area • Agreement signed in September with Neptune for 30% of their working interest in PL938 Calypso O • Estimated potential of 10-37 million bbls of oil • Committed to an exploration well expecte
Slide 19: Aurora – Potential gas development
Aurora – Potential gas development Strengthening OKEA’s optionality in the Gjøa area; strategic fit with low-cost field development • Purchase from Equinor (40%) approved by MPE • OKEA appointed as Operator • OKEA’s operator capabilities - a key enabler for the deal • Partners are Petoro (35%) and W
Slide 20: Development project – Yme (Repsol operated)
Development project – Yme (Repsol operated) •Production start postponed and capex increased •Onshore completion scheduled for late 2020 •Production start in 2021 •At plateau adds 7 500 boepd net to OKEA; on average adds 4 900 boepd in the first production year 20
Slide 21: Outlook & concluding remarks
Outlook & concluding remarks
Slide 22: Outlook
Outlook Current portfolio to yield substantial production growth Targeted organic development requires no new equity Continue to seek inorganic growth opportunities Demonstrated strong operator capabilities improves strategic position Guiding 2020: • Production: 14 000 – 15 000 boepd • Capex: NOK 1
Slide 23: loxe
loxe