Var Energi Asa · OSL:VAR
Var Energi Asa — Q3 2024 Earnings Presentation
27 slides from Var Energi Asa's earnings presentation, Oct 22, 2024
Slide 1: Third quarter 2024 Results presentation
Third quarter 2024 Results presentation 22 October 2024
Slide 2: Today's presenters
Today’s presenters Nick Walker Stefano Pujatti Ida Marie Fjellheim CEO CFO VP Investor Relations
Slide 3: Third quarter 2024 highlights
Third quarter Operational performance in-line with expectations • Production of 281 kboepd the first nine months of 2024, in line with expectations 2024 highlights • Planned maintenance shutdowns successfully completed • Continued strong operational performance on operated assets Production Producti
Slide 4: Fastest growing E&P
Fastest growing E&P Barents Sea 186 Hammerfest licenses 1/3 operated 3rd largest oil and gas producer in Norway Diversified asset base 43 fields Norwegian Sea 6 operated Interests in ~50% of all producing assets on the NCS 2nd largest exporter of gas from Norway North Sea 4 hub Florø areas Balder Ar
Slide 5: Production in line with expectations
Production in line with expectations for the period Production guidance 2024 Gas share Q3 Production Efficiency YTD² narrowed¹ 34% 92%4 280-290 kboepd kboepd 2993 Upper range 287 Production YTD 2024² 256 Lower range 281 kboepd YTD February2 Q1 24 Q2 24 Q3 24 Q4 24 1. Original full-year guidance of 2
Slide 6: Adding ~150 kboepd new production in next three quarters
Adding ~150 kboepd new production in next three quarters kboepd Infill drilling ~400 Balder Infill Sustaining 350-400 kboepd Future Other Halten drilling towards 2030 Johan East Castberg New • Maximise recovery and infill projects drilling 281 280-290 • High value early phase projects • Near field a
Slide 7: Safe and responsible
Safe and responsible Serious incident frequency1 Total recordable injury frequency2 1.0 3.2 3.1 1.9 0.4 0.3 2022 2023 YTD³ 2024 2022 2023 YTD³ 2024 Zero material safety or environmental incidents in Q3 1. SIF: Serious actual and potential incident per million worked hours . 12 months rolling average
Slide 8: Accelerated decarbonisation
Accelerated decarbonisation Carbon emission intensity kg CO2 /boe1 17 12 10.1 <6 Global average 2023 YTD 20242 2030 target Methane emissions near zero Member of Inclusion in <0.02 % share of gas sales3 OGMP 2.04 OSEBX Top 5% B ESG index in the industry1 rating2 1. Equity share emissions – Scope 1 2.
Slide 9: Unit opex reduced to below 13 USD/boe
Unit opex reduced to below 13 USD/boe Full year unit opex guidance reduced to < 13 USD/boe2 USD/boe 14.1 Reducing opex by end-2025 < 13 12.6 • New projects USD ~4 per boe ~10 • Lower-cost Neptune assets • High-grading the portfolio • Cost synergies/improvements 2023 2024 guiding YTD 20241 End-2025 t
Slide 10: Creating value and growth
Creating value and growth Reserves1 Contingent resources2 Prospective resources3 1.24 billion boe 0.75 billion boe >1 billion boe >3 billion boe 7 projects coming on >20 early phase ~60 exploration stream and high projects wells next four years quality assets 1. 2023 Annual statement of reserves - P
Slide 11: Projects in execution
Delivering growth Projects in execution Barents Sea Johan Castberg Snøhvit Future 7 projects developing >400 mmboe1 Norwegian Sea Smørbukk North Halten East Ormen Lange Ph.3 Åsgard LPP3 USD ~35 per boe ~2 years Breakeven Pay-back Balder Area Balder X >25% >80% complete IRR across portfolio 4 of 7 pr
Slide 12: Balder area to deliver value for decades to come
Balder area to deliver value for decades to come Extending lifetime to 2045+ ~80 kboepd FPSO sail away at peak production¹, gross spring 2025 Targeted start-up ~150 mmboe 2P reserves¹, gross within Q2 2025 Balder Phase V sanctioned ~5 USD/bbl 33 mmboe¹ 2P reserves production cost USD 30 per boe brea
Slide 13: Johan Castberg nearing start-up
Johan Castberg nearing start-up Capturing long term value from the prolific Barents Sea Progressing towards 220 kboepd first oil in Q4 2024 vessel capacity¹,², gross FPSO anchored 450-650 mmboe at field location recoverable resources¹,², gross ~4 USD/bbl production cost 1. Operator’s estimate 12 2.
Slide 14: Halten East – accelerated schedule
Halten East – accelerated schedule ~80 kboepd at peak production¹, gross Progressing towards ~100 mmboe first oil in Q1 2025 recoverable reserves¹, gross ~3 kg/boe CO2 intensity Subsea tieback delivering 100-200 mmboe¹ gross unrisked Image: Equinor high value barrels potential in the area for future
Slide 15: Exploration delivering results
Exploration delivering results Barents Sea 4 discoveries from 9 wells 29-57 mmboe Haydn “Play opener” 35-80 mmboe2 Estimated net recoverable resources Lavrans 12-25 mmboe2 Norwegian Sea Cerisa 44% 6 of 15 ~350 USD million 18-39 mmboe2 North Sea Success rate year to date wells remaining¹ net explorat
Slide 16: Financial highlights
Financial highlights 76 USD/boe USD 1.3 billion weighted average realised price CFFO after tax 0.7x USD 2.1 billion NIBD / EBITDAX Available liquidity1 USD 270 million >50% Dividend Q3 2024 and Q4 2024 of USD ~500 million2 of synergy guidance potential from Neptune transaction on track to be deliver
Slide 17: Strong realised prices
Strong realised prices Additional gas revenues above spot prices of Total petroleum revenues USD million USD 322 million year-to-date 1 616 1 933 1 829 Indicative gas sales portfolio1 Gas sales split (%) 1 282 1 147 1 035 100% 522 560 587 UK Q3 2023 Q2 2024 Q3 2024 75% Oil Gas NGL France 50% Realise
Slide 18: High cash flow generation
High cash flow generation CFFO and Capex 3.5 USD million 3 030 3.0 2 563 2.5 2 184 USD 1 310 million 1 980 Q3 2024 Cash flow from operations (CFFO) 2.0 1 310 1.5 Development Capex 975 1.0 773 711 718 guidance reduced to 650 0.5 USD ~2.6 billion¹ 0.0 Q3 2023 Q2 2024 Q3 2024 YTD 2023 YTD 2024 CFFO Cap
Slide 19: Continued strong liquidity position
Continued strong liquidity position Cash flow development Q3 2024 Available liquidity USD million USD million 28 2 080 26 1 840 24 22 20 165 1 290 18 16 1 525 14 (325) 12 146 10 1 470 1 310 8 790 (699) (270) (11) 6 790 315 4 315 2 0 Cash at end- CFFO before Working Taxes paid CFFO Cash flow Net Divi
Slide 20: Continued strong financial position
Continued strong financial position Net interest-bearing debt and leverage ratio1 Maturity profile USD billion 0.8x 1.0 USD million 0.7x 0.8 13 W/C and liquidity facility 0.5x 0.6 12 extended to 2027 0.4 First Reset Date 15 11 0.2 February 2029 10 0.0 -0.2 9 -0.4 1 286 8 -0.6 6.2 6.0 7 5.8 -0.8 -1.0
Slide 21: Cash tax sensitivities
Cash tax sensitivities Tax payments – sensitivities for 1H 20251 USD million² 1 000 800 NOK ~8 billion Q4 2024 tax payments (USD ~800 million)2,3 600 $85/75 boe oil/gas price $80/70 boe oil/gas price $75/65 boe oil/gas price 400 200 0 Q3 2024 Q4 20243 Q1 2025 Q2 2025 1. Price assumptions reflects av
Slide 22: Attractive and predictable dividends
Attractive and predictable dividends Dividends USD million Dividend guidance Planned dividend Q4 2024 for 2024 270 270 270 270 270 20-30% of CFFO (after tax)1 270 ~30% USD million of CFFO after tax Dividend for Q3 2024 of USD ~0.11 per share paid 5 November 2024 Paid in NOK at exchange rate of USD/N
Slide 23: Guidance and outlook
Guidance and outlook 2024 Longer-term End-2025: ~400 kboepd Production 280-290 kboepd 2025-2030: 350-400 kboepd Production cost Below USD 13 per boe End-2025: USD ~10 per boe 2025-28: USD ~2.6 billion excl. exploration and abandonment USD 1.5-2.5 billion excl. exploration and abandonment p.a. Capex
Slide 24: Resilient results with significant production growth ahead
Resilient results with significant production growth ahead Operational performance in-line with expectations Strong financial results Delivering growth with ~150 kboepd in new production over the next 3 quarters Industry leading ESG performance Continued attractive and predictable dividends
Slide 25: Appendix
Appendix $K var energi aT 1
Slide 26: Exploration program 2024
Exploration program 2024 Vår Pre-drill Estimated Barents Sea Energi unrisked recoverable License Prospect Operator Status share resources resources mmboe1 mmboe1 PL 917 Hubert Vår Energi 40 % Dry PL 917 Magellan Vår Energi 40 % Dry PL 956 Ringhorne North Vår Energi 50 % 13-23 Discovery Haydn “Play o
Slide 27: Disclaimer
Disclaimer The Materials speak only as of their date, and the views expressed are subject to change based on a number of factors, including, without limitation, macroeconomic and market conditions, investor attitude and demand, the business prospects of the Group and other issues. The Materials and