Mol Hungarian Oil & Gas Plc Class A · BET:MOL
Mol Hungarian Oil & Gas Plc Class A — MOL Group — Investor Presentation (November 2015)
74 slides from Mol Hungarian Oil & Gas Plc Class A's investor presentation, November 2015
Slide 1: Investor Presentation November 2015
INVESTOR PRESENTATION November 2015 1
Slide 2: Content
CONTENT I. Executive summary 4 II. Upstream 18 III. Downstream 32 IV. Financials 50 V. Appendix 61 2
Slide 3: Key goals and messages: Group/Financials
KEY GOALS AND MESSAGES: GROUP/FINANCIALS At least USD 2.2BN CCS GROUP EBITDA in 2015 with resilient integrated business model Up to USD 1.3BN ORGANIC CAPEX (2015), financed from Operating Cash Flow Strong balance sheet (~1.0X NET DEBT TO EBITDA AT Q3 2015) and above EUR 4BN LIQUIDITY from diversifie
Slide 4: I. Executive Summary
> |. EXECUTIVE SUMMARY > MOLGROUP 4
Slide 5: MOL Group: a mid-cap integrated international oil & gas company
Executive Summary MOL GROUP: A MID-CAP INTEGRATED INTERNATIONAL OIL&GAS COMPANY INTEGRATED BUSINESS MODEL COMPANY OVERVIEW $ Market capitalization (30 Sep 2015; bn USD) 4.6 Countries of operation 33 CCS EBITDA (USD BN) Number of employees 26,500 2014 1.2 0.9 0.1 2.2 Production – mboepd 103 2015 targ
Slide 6: Upstream: growing international portfolio with strong, stable CEE presence
Executive Summary UPSTREAM: GROWING INTERNATIONAL PORTFOLIO WITH STRONG, STABLE CEE PRESENCE KEY DATA 14 Exploration and 8 Production Countries Organic Reserve Replacement Ratio at 103% in 2014 Low cost producer: avg. unit OPEX at 8.5 USD/boe 3 10 PRODUCTION – 4 MBOEPD (Q1-Q3 7 2015) 103 78 Producti
Slide 7: Increasing organic production and active portfolio management for further growth
Executive Summary INCREASING ORGANIC PRODUCTION AND ACTIVE PORTFOLIO MANAGEMENT FOR FURTHER GROWTH BALANCE RISK AS WELL AS SEEK NEW ACCRETIVE GROWING PRODUCTION EXPLORATION AND DEVELOPMENT OPPORTUNITIES Gradual ramp up of production from international projects Utilise opportunities that arise from l
Slide 8: Downstream: deep integration guarantees extended margin capture
Executive Summary DOWNSTREAM: DEEP INTEGRATION GUARANTEES EXTENDED MARGIN CAPTURE CLEAN CCS-BASED DS UNIT EBITDA(1) (USD/BBL) 18 Peer range 16 MOL-Group 14 MOL-Group ex. INA 12 Bratislava 10 Danube 8 Rijeka 6 Sisak 4 2 Rijeka 0 Sisak Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 -2 2012 2012 2012 2012 2
Slide 9: Targets USD 500mn additional improvement by 2017 on a 2014 basis
Executive Summary TARGETS USD 500MN ADDITIONAL IMPROVEMENT BY 2017 ON A 2014 BASIS DOWNSTREAM FREE CASH FLOW GENERATION BY 2017 (MN USD)1 Key Contributors 1 2 USD 350mn asset & market 1300 - 1400 1 efficiency improvement mostly 150 through revenue increase: in production, 400-500 350 in supply & sal
Slide 10: Natural gas transmission activity provides stable returns
Executive Summary NATURAL GAS TRANSMISSION ACTIVITY PROVIDES STABLE RETURNS COMPETITIVE ADVANTAGES & MAIN DRIVERS Sole transmission system operator license Strategic location in the heart of CEE region for potential transit developments Domestic business: regulated domestic transmission has stable c
Slide 11: Conservative financial policy: strong balance sheet has top priority
Executive Summary FINANCIALS: STRONG BALANCE SHEET HAS TOP PRIORITY CONSERVATIVE FINANCIAL POLICY: organic CAPEX financed from operating cash flow ~1.0X NET DEBT TO EBITDA & ~18% NET GEARING (Q3 2015) At least USD 2.2BN CCS GROUP EBITDA IN 2015 Up to USD 1.3BN ORGANIC CAPEX (2015) ABOVE EUR 4BN LIQU
Slide 12: Conservative financial policy: organic capex financed from operating cash flow
Executive Summary CONSERVATIVE FINANCIAL POLICY: ORGANIC CAPEX FINANCED FROM OPERATING CASH FLOW OPERATING CASH FLOW VS. CAPEX (USD BN) Inorganic Organic Operating CF 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2008 2009 2010 2011 2012 2013 2014 Q1-Q3 2015 NET DEBT TO EBITDA (X) GEARING (%) 3,5 3.5 Limit of Net
Slide 13: Resilient business model capable of generating USD 2.2bn in 2015
Executive Summary RESILIENT BUSINESS MODEL CAPABLE OF GENERATING USD 2.2BN IN 2015, EVEN AT ~55USD/BBL ENVIRONMENT EBITDA TARGET AND SENSITIVITY CAPEX PLAN MOL is relatively well shielded against the oil Scope adjustments and potential effect of lower oil price drop price on partners Strong Integrat
Slide 14: Dividend: predictable pay-out with balance sheet stability in focus
Executive Summary DIVIDEND: PREDICTABLE PAY-OUT WITH BALANCE SHEET STABILITY IN THE FOCUS DIVIDEND HISTORY OF LAST 4 YEARS (HUF BN) AND KEY PRINCIPLES 60 Pay out dividend to Special dividend shareholders whilst Regular dividend maintaining adequate 13 financial stability Balance sheet has top priori
Slide 15: MOL executive team, top management and incentive schemes
Executive Summary MOL EXECUTIVE TEAM, TOP MANAGEMENT AND INCENTIVE SCHEMES EXECUTIVE BOARD MANAGEMENT INCENTIVE SCHEMES Stable and Proved SHORT TERM INCENTIVES: Executive Management Maximum opportunity between 0.85x and 1x of base salary Team Pay-out linked to yearly performance, based on financial
Slide 16: Shareholder structure
Executive Summary SHAREHOLDER STRUCTURE MOL shares are listed on the Budapest, Luxembourg and Warsaw Stock Exchanges. Our depository receipts are traded on London’s International Order Book and OTC in the USA. SHAREHOLDER STRUCTURE AS OF 30 SEPTEMBER 2015 Credit Agricole UniCredit Bank AG Treasury s
Slide 17: Corporate commitment to SD & HSE improvement
Executive Summary CORPORATE COMMITMENT TO SD & HSE IMPROVEMENT SUSTAINABLE DEVELOPMENT FRAMEWORK AT DJSI PERFORMANCE OF MOL GROUP MOL GROUP 100 Sustainable Development Framework: All 90 levels of the organization have a focus on HSE 80 and Sustainable Development 70 60 SD Commitee of the Board of Di
Slide 18: II. Upstream Operation
II. UPSTREAM OPERATION Export started from Shaikan, Commercial production to start on Akri-Bijeel in November 2014 18
Slide 19: Continue production increase and utilise opportunities from lower oil price
Upstream CONTINUE PRODUCTION INCREASE AND UTILISE ALL OPPORTUNITIES THAT ARISE FROM CURRENT LOWER OIL PRICE ENVIRONMENT Around 105 MBOEPD production targeted for 2015 OVER 30% REDUCTION IN CAPEX SPENDING compared to original plan Reach FLAT TO DECLINING UNIT COST across all countries Capture the val
Slide 20: Production activities in 8 countries
Upstream PRODUCTION ACTIVITIES IN 8 COUNTRIES Provide a good basis for the next years CEE total Production (Q1-Q3 2015): 103 mboepd Russia Reserves (SPE 2P 2014): 555 MMboe Reserves: 75 MMboe Croatia, Hungary Production: 7 mboepd Reserves: 318 MMboe Production: 78 mboepd Kazakhstan Reserves: 60 MMbo
Slide 21: 103% organic reserves replacement ratio in 2014
Upstream 103% ORGANIC RESERVES REPLACEMENT RATIO IN 2014 With further 1160 MMboe1 exploration potential from current assets 103% ORGANIC RESERVES REPLACEMENT RATIO IN ABOVE 100% RESERVE REPLACEMENT RATIO 2014 TARGETED IN 3 YEARS AVERAGE Reserves booking from Kurdistan (Shaikan) Seek for new accretiv
Slide 22: Continuous increase of production in the following years
Upstream CONTINUOUS INCREASE OF PRODUCTION IN THE FOLLOWING YEARS Targeting around 105 mboepd this year PRODUCTION OUTLOOK AROUND 105 MBOEPD TARGET (RISKED, ENTITLEMENT BASED) FOR 2015 mboepd Accelerated field (re)development 120 115-120 projects in CEE, reverse production 110-115 decline in Croatia
Slide 23: M&A: balance risk and seek new accretive exploration and development opportunities
Upstream M&A: BALANCE RISK AS WELL AS SEEK NEW ACCRETIVE EXPLORATION AND DEVELOPMENT OPPORTUNITIES PURSUING OPPORTUNITIES TO FURTHER BALANCE ENHANCE INTERNATIONAL EXPLORATION PORTFOLIO OUR COUNTRY RISK PROFILE OMAN, PAK, RUS, NORTH HUN, SEA NOR KRI KRI, UK, LOWER RISK PAK EXPLORATION KAZ, PAK, RUS,
Slide 24: CEE: mitigate the production decline and maximise cash flow
Upstream CEE: MITIGATE THE PRODUCTION DECLINE AND MAXIMISE CASH FLOW Well optimisation and EOR projects target growing production in Croatia HUNGARY AND CROATIA (124+194 MMBOE) - PRODUCTION OUTLOOK 80 Unique know-how and well developed infrastructure ensures quick cash generation 60 mboepd Targeting
Slide 25: Hungary: keep production decline rate below 5%
Upstream HUNGARY: KEEP PRODUCTION DECLINE RATE BELOW 5% Along with several efficiency improvement measures to maximise cash-flow HUNGARY (124 MMBOE) More than 75 years of E&P experience with more than 40 years of EOR/EGR technological knowledge Extensive surface infrastructure Fast development provi
Slide 26: CEE: optimisation contributes to mitigation of natural decline
Upstream CEE: OPTIMISATION CONTRIBUTES TO MITIGATION OF NATURAL DECLINE Field development Well performance GOALS strategy on portf. level improvement - reserve transfer • ALS optimisation Maximize extraction of • Fracking profitable barrels • Well workover Stabilise production decline • Well interve
Slide 27: Kurdistan R.I.: increase expected in the coming years
Upstream KURDISTAN R.I.: INCREASE EXPECTED IN THE COMING YEARS KURDISTAN REGION OF IRAQ (15 MMBOE*) Shaikan: producing from 9 wells through two production facilities Exports started from Shaikan in Q1 2014 Akri-Bijell: future work program to be based on the final CPR Close ties and strong co-operati
Slide 28: Shaikan: ongoing commercial production through 40mboepd facilities
Upstream SHAIKAN: ON-GOING COMMERCIAL PRODUCTION THROUGH 40MBOEPD CAPACITY PRODUCTION FACILITIES SHAIKAN HIGHLIGHTS (GROSS FIGURES) Injection 9.2 billion barrels STOIIP estimated for base case (CPR point estimate March 2014) Operator comissioned CPR in October 2015 doubled 2P reserves On-going comme
Slide 29: North Sea, UK: sizeable mid-term production
Upstream NORTH SEA, UK: SIZEABLE MID-TERM PRODUCTION With 6 mboepd contribution already in 2015 NORTH SEA, UK (30 MMBOE) Successfully entered the region in 2014 – established local office in Aberdeen with experienced team Majority of assets already in development or production phase Current work pro
Slide 30: Expanding our North Sea portfolio entering Norway
Upstream EXPANDING OUR NORTH SEA PORTFOLIO ENTERING NORWAY Further balancing the country risk profile & doubling the resource potential of the Group’s exploration portfolio ACQUISITION OF ITHACA PETROLEUM NORGE Acquiring 100% ownership in Ithaca Petroleum Norge – a pre-qualified operator Further bal
Slide 31: Pakistan: over years of successful operation
Upstream PAKISTAN: OVER 15 YEARS OF SUCCESSFUL OPERATION Continue highly successful campaign in TAL with exploration in nearby blocks HIGHLIGHTS AND KEY FOCUS AREAS 16 MMBOE 10 discoveries since 1999 in 3 different blocks Noticeable operation experience – TAL block production (100%) is over 70 mboep
Slide 32: CIS: moving forward towards value monetisation
Upstream CIS: MOVING FORWARD TOWARDS VALUE MONETISATION Successful appraisal programme closed on FED with additional 24 MMboe reserve booking RUSSIA (75 MMBOE) – STILL A CORE COUNTRY WITH GROWTH POTENTIAL Portfolio restructured after monetising ZMB field and 49% in Baitugan and Yerilkinsky Intensive
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Slide 34: III. Downstream Operation
III. DOWNSTREAM OPERATION 34
Slide 35: CEE stronghold: integrated operation of competitive asset base
Downstream ’CEE STRONGHOLD’: INTEGRATED OPERATION OF COMPETITIVE ASSET BASE Deep downstream integration instead of „pure refining concept” guarantees extended margin capture on our landlocked markets Delivered USD 500mn Clean EBITDA improvement in 2014 vs 2011 with New Downstream Program NEXT DOWNST
Slide 36: Deep downstream integration guarantees extended margin capture
Downstream DEEP DOWNSTREAM INTEGRATION GUARANTEES EXTENDED MARGIN CAPTURE IN OUR LANDLOCKED MARKETS DOWNSTREAM INTEGRATION (FUELS)1 23% Other wholesale 45% Bratislava Captive wholesale Bratislava Danube 89% 79% Rijeka Sisak Fuel & naphtha 32% captive production 39% market2 in refineries Own Retail o
Slide 37: Refining asset complexity and profitability above peer group average
Downstream REFINING ASSET COMPLEXITY AND PROFITABILITY ABOVE PEER GROUP AVERAGE REFINERY NELSON COMPLEXITY OF THE PEER CLEAN CCS-BASED DS UNIT EBITDA2(USD/BBL) GROUP1 18 14 6.1 Mtpa Peer range 11,5 8.1 Mtpa 16 MOL-Group 12 10,6 MOL-Group ex. INA 14 10 9,1 4.5 Mtpa 2.2 Mtpa 12 8 10 NCI 6,1 6 8 4 6 4
Slide 38: Mid-cycle refinery margin supported by lower oil price environment
Downstream ‚MID-CYCLE’ REFINERY MARGIN SUPPORTED BY LOWER OIL PRICE ENVIRONMENT Demand growth of CEE is still well ahead of Western-Europe GROUP REFINERY MARGIN EXPECTATIONS (USD/BBL) MOTOR FUEL DEMAND CHANGE (2014/2013, %) USD/bbl 7 Expected range of mid- cycle group refinery margin 6 Core-3 (HU/SK
Slide 39: DS 2016 outlook: macro conditions to remain supportive
Downstream DS 2016 OUTLOOK: MACRO CONDITIONS TO REMAIN SUPPORTIVE ALBEIT LOWER THAN 2015 LEVELS INTEGRATED PETROCHEMICAL MARGIN OUTLOOK GROUP REFINERY MARGIN OUTLOOK (USD/BBL) (EUR/T) 9 900 8 800 7 YTD 2015 YTD 2015 700 6 600 5 4-5 USD/bbl 500 4 400-500 EUR/t 400 3 AVG. 2012-14 2 300 AVG. 2012-14 1
Slide 40: Successful New Downstream Program delivery (USD 500mn)
Downstream SUCCESSFUL NEW DOWNSTREAM PROGRAM DELIVERY (USD 500MN) NDSP DELIVERY 2011 VS 2014 (MN USD) ~160 ~140 874 • Petchem margin • Impact of IES conversion increase (+85 EUR/t) ; • Non-realized NDSP 500 • Brent price drop (-12 contribution of IES USD/bbl) • Planned & unplanned SDs 350 1 2011 CCS
Slide 41: Downstream strategy: maximise free cash flow generation
Downstream : MAXIMISE FREE CASH FLOW GENERATION WITH FURTHER EFFICIENCY IMPROVEMENT AND ADD- ON GROWTH PROJECTS Wholesale GOALS Normalized DS CCS Retail 2017 EBITDA fuel volume fuel volume free cash flow1 USD 500mn 150% USD ~900 USD CCS EBITDA 5.4 Bnlpa of own sales mn 1.3-1.4bn improvement producti
Slide 42: Targets USD 500mn additional improvement by 2017
Downstream TARGETS USD 500MN ADDITIONAL IMPROVEMENT BY 2017 DOWNSTREAM FREE CASH FLOW GENERATION BY 2017 (MN USD)1 Any potential future add-on projects (e.g. Rijeka DC, 1 2 Sensitivity to SSBR, petchem projects, 1300 - 1400 refinery margin retail M&A) is evaluated on change standalone basis with str
Slide 43: USD 350mn asset & market efficiency improvement & USD 150mn from growth projects
Downstream USD 350MN ASSET & MARKET EFFICIENCY IMPROVEMENT & USD 150MN TARGETED FROM GROWTH PROJECTS EFFICIENCY IMPROVEMENT GROWTH PROJECTS’ CONTRIBUTION 1 2 (CUMULATIVE, MN USD) (MN USD) 20% 350 Production 1. Availability & 80% maintenance 2. Production flexibility cost revenue and yield improvemen
Slide 44: Production roadmap targets uptime, energy efficiency and yield improvement
Downstream PRODUCTION ROADMAP TARGETS UPTIME INCREASE, 1 ENERGY EFFICIENCY & YIELD IMPROVEMENT A 97% 96,0% 96% HSE 95% 94,7% Operational Availability Optimize maintenance costs and increase operational availability 94% of MOL Group assets 2014 2015 2016 2017 2018 Maintenance Efficiency Move up one q
Slide 45: Supply & sales: growing contribution through volumetric increase
Downstream SUPPLY & SALES: GROWING CONTRIBUTION THROUGH 1 DELIVERING VOLUMETRIC INCREASE B CENTRAL REGION: SALES AND MARGIN GROWTH 1 Sales volume growth 2 Margin revenue growth TRADING BELT: 150% SALES TO NEW MARKETS / NEW CUSTOMERS OWN PRODUCED FUELS 3 Stabilize market +50% 4 Extend market reach AD
Slide 46: Well established retail network in the CEE with further growth potential
Downstream WELL ESTABLISHED RETAIL NETWORK IN THE CEE WITH FURTHER GROWTH POTENTIAL GROUP RETAIL NETWORK RETAIL NETWORK INTEGRATION 6 #FS/kbpd of ref. Capacity 5 Slovnaft 316 4 Czech Republic Slovakia Slovnaft 252 3 57 2 Austria 363 Hungary 200 1 40 Italy 434 Romania Croatia 0 BiH 109 Slovenia 42 10
Slide 47: Conceptual change in retail to improve financial contribution
Downstream CONCEPTUAL CHANGE IN RETAIL TO IMPROVE 1 FINANCIAL CONTRIBUTION C VISION PILLARS RETAIL TARGETS To be customers’ Growing number of retail stations (network optimization first choice in fuel and M&A): and convenience SELLING POINTS retailing and 1 914 # of fuel stations become a Power > 2
Slide 48: Network growth and non-fuel margin boost elevate retail cash flow
Downstream NETWORK GROWTH AND NON-FUEL MARGIN BOOST ELEVATE RETAIL CASH FLOW CONTRIBUTION RETAIL FREE CASH FLOW GENERATION BY 2017 (MN USD) 1 ~30-50 ~100 300 250-270 205 50% 151 2013 EBITDA 2014 EBITDA NxDSP (Efficiency, 2017 CCS EBITDA ’Normalized’ Normalized capability and CAPEX(1) free cash flow
Slide 49: Deeply integrated petrochemical portfolio
Downstream DEEPLY INTEGRATED PETROCHEMICAL PORTFOLIO PETCHEM VALUE CHAIN1 A TOP 10 European polymer producer and the biggest producer in CEE: 420 kT HDPE Naphtha Efficient assets & up-to-date product portfolio Gasoil LDPE 285 kT2 LPG Integrated and optimized feedstock supply Strong regional position
Slide 50: Extending the petrochemicals value chain to increase profitability
DOWNSTREAM Downstream EXTENDING THE PETROCHEMICALS VALUE CHAIN TO INCREASE PROFITABILITY LDPE4 BUTADIENE SYNTHETIC RUBBER PILLARS PILLARS PILLARS New 220 ktpa capacity LDPE unit New 130 ktpa capacity Butadiene Entering into the synthetic rubber replaces 3 old ones at Slovnaft Extraction Unit (BDEU)
Slide 51: Adriatic connection of landlocked refineries improves security of supply
Downstream ADRIATIC CONNECTION OF LANDLOCKED REFINERIES IMPROVES SECURITY OF SUPPLY ADRIATIC PIPELINE ACCESS ESTABLISHED Restore the reliable operation of Friendship 1 Increased pipeline pipeline capacity 6Mtpa = SN Potentially able to fully cover Danube and Bratislava refineries crude supply via Ad
Slide 52: IV. Financial Overview
IV. FINANCIAL OVERVIEW yy GROUP
Slide 53: Strong balance sheet has top priority
Financials STRONG BALANCE SHEET HAS TOP PRIORITY CONSERVATIVE FINANCIAL POLICY: organic CAPEX financed from operating cash flow 1.0X NET DEBT TO EBITDA & BELOW 20% NET GEARING (2015YE) At least USD 2.2BN CCS GROUP EBITDA IN 2015 Up to USD 1.3BN ORGANIC CAPEX (2015) ABOVE EUR 4BN LIQUIDITY from diver
Slide 54: Conservative financial policy
Financials CONSERVATIVE FINANCIAL POLICY Organic CAPEX financed from operating cash flow OPERATING CASH FLOW VS. CAPEX (USD BN) Inorganic Organic Operating CF 3.4 3.2 3.0 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 2008 2009 2010 2011 2012 2013 2014 2015 Q1-Q3
Slide 55: Continuously strengthening financial position
Financials CONTINUOUSLY STRENGTHENING FINANCIAL POSITION NET DEBT TO EBITDA (X) GEARING (%) 3,5 3.5 Limit of Net Debt to EBITDA 40 36 3,0 35 33 31 30 28 2,5 25 1,96 25 2,0 1,72 20 1,66 18 1,44 20 1,5 1,38 1,31 16 15 0,97 1,0 0,79 10 0,5 5 0,0 0 2008 2009 2010 2011 2012 2013 2014 2015 2008 2009 2010
Slide 56: Up to USD 1.5bn capex planned for 2016
Financials UP TO USD 1.5BN CAPEX PLANNED FOR 2016 UPSTREAM DOWNSTREAM Prediminantly Investments related to developmenet projects DS & implementations in CEE & North Sea US CAPEX Other 45% Maintenance CAPEX 55% 2016 ORGANIC CAPEX SHOULD BE FINANCED FROM OPERATING CASH-FLOW ADEQUATE FLEXIBILITY: MAINT
Slide 57: MOL has sufficient liquidity for acquisitions
Financials MOL HAS SUFFICIENT LIQUIDITY FOR ACQUISITIONS… EUR 4.0bn total available liquidity as of Q3 2015 DRAWN VERSUS UNDRAWN FACILITIES TOTAL AVAILABLE LIQUIDITY (EUR MILLION) (EUR MILLION) 7 000 4 500 EUR 3 954m 4 000 6 000 475 411 3 500 610 5 000 719 2824 3 000 4 000 1946 2 500 mEUR 3 000 197
Slide 58: Sufficient liquidity from diversified funding sources
Financials SUFFICIENT LIQUIDITY FOR ACQUISITIONS FROM DIVERSIFIED FUNDING SOURCES EUR 4.0bn total available liquidity as of Q3 2015 Aim for cost rationalization keeping diversification in mind MID- AND LONG-TERM COMMITTED FUNDING RECENT EVENTS PORTFOLIO Other Syndicated USD 1.5bn Revolving Credit Fa
Slide 59: Average maturity of 2.24 years
Financials AVERAGE MATURITY OF 2.24 YEARS Diversified and balanced maturity structure 2 500 2 000 2015 MOL EUR 750m bond repaid in 1 500 October EUR M 1384 1 000 110 13 6 500 1 130 880 2 750 750 452 446 0 7 37 54 37 19 19 1 37 37 Reported 2015 2016 2017 2018 2019 2020 2021 cash&cash equivalents Repo
Slide 60: Credit rating above sovereign rating at Fitch, one notch below at S&P
Financials CREDIT RATING ABOVE SOVEREIGN RATING AT FITCH, ONE NOTCH BELOW AT S&P (AFTER UPGRADE OF HUNGARY) FFO/ DEBT* HISTORICAL FOREIGN LONG TERM RATINGS 45,00% MOL, S&P Hungary, S&P MOL, Fitch Hungary, Fitch 40,00% A 35,00% A- 30,00% BBB+ 25,00% BBB 20,00% BBB- 15,00% BB+ 10,00% BB 5,00% 0,00% 20
Slide 61: Key items of taxation
Financials KEY ITEMS OF TAXATION HUNGARY Revenue based ’Crisis tax’ abolished from 2013 – ~HUF 30bn negative effect p.a. in 2010-12 Profit based ’Robin Hood’ nominal tax rate is 31% only energy related part of the profit affected (~70%), thus implied RH tax rate is cca. 22% only the Hungarian operat
Slide 62: Executive incentive schemes
Financials EXECUTIVE INCENTIVE SCHEMES On the top level, more than two thirds of total remuneration is variable and performance driven SHORT TERM INCENTIVES Maximum opportunity between 0.85x and 1x of base salary depending on executive Pay-out linked to yearly performance based on financial, operati
Slide 63: V. Appendix
V. APPENDIX PMOLGROUP
Slide 64: North Sea Region - UK
Appendix NORTH SEA REGION - UK Entry in 2014 Operating Block W.I. Other partner(s) shareholder Dana (21%), Apache Scott 22% Nexen (42%) (10%), Maersk (5%) Rochelle 15% Nexen (41%) Endavour (44%) Broom 29% Enquest (63%) Ithaca (8%) Cladhan 33% TAQA (65%) Sterling (2%) Premier Oil Cairn Energy (20%),
Slide 65: Overview of MOL's assets in Kurdistan Region of Iraq
Appendix OVERVIEW OF MOL’S ASSETS IN KURDISTAN REGION OF IRAQ Entry in 2007 amongst the first ones BLOCK W.I. FULLY OPERA DILUTED TOR W.I. Akri-Bijeel 80% 51.2% MOL GKP Shaikan 20% 13.6% (75%) Khor Mor 10% 10% Pearl Petrole Chemchemal 10% 10% um 65
Slide 66: Akri-Bijeel
Q3 2015 >> Field Development License Discovery well with additonal workover, sidetracked, tested and completed in 2014, producing Appraisal well drilled Development well, drilling is ongoing Production Facility in operation > MOLGROUP 66
Slide 67: Shaikan: commercial production started, first export cargo delivered
Appendix SHAIKAN: COMMERCIAL PRODUCTION STARTED, 1ST EXPORT CARGO DELIVERED IN JAN 2014 6.7/9.2/13.3 billion barrels STOIIP estimated for Low/Best/High cases (based on CPR estimate March 2014) 67
Slide 68: Structure of our production sharing contracts
Appendix STRUCTURE OF OUR PRODUCTION SHARING CONTRACTS SIMPLIFIED PSA SCHEME (SHAIKAN) Oil produced Royalty Oil 10% of total Crude oil 40% Available crude Oil Cost oil Total Profit Oil Recovery oil Based on ”R” factor (Op. expl. and appr. costs Contractor’s profit oil share Government Contractor’s s
Slide 69: Kazakhstan
= KAZAKHSTAN Block boundary Rozhkovsky Production Licence under approval 3D seismic survey 2014 3D seismic survey 2015 Country border Discovery well Drilled and tested appraisal well 2014 Discovery and appraisal well Drilled exploration well tested in 2014 Ongoing exploration well Planned exploratio
Slide 70: Russia
Appendix RUSSIA MATJUSHKINSKY BAITUGAN 70
Slide 71: Pakistan
= PAKISTAN is Se ee Exploration License Existing Development & Production Lease Planned Development & Production Lease 2D seismic processing, interpretation Planned gravity survey 3D seismic processing, interpretation Planned 3D seismic survey Central Processing Facility Gas Treatment Unit COVES TaN
Slide 72: Introduction of MOL Group specific refinery margins
Appendix INTRODUCTION OF MOL GROUP SPECIFIC REFINERY MARGINS 10 9.4 8.8 8.6 9 8.3 MOL Group refinery margin 7.7 8 7.1 7.3 7.4 7.4 7.2 Complex refinery margin (MOL+SN) 6.8 6.5 7 6.3 6.2 6.2 5.9 6.1 6.0 7.0 6 5.6 5.5 5.3 5.5 5.6 5.3 5.0 5.2 5.0 5 4.4 4.6 4.6 4.9 4.8 4.7 4.3 4.2 4.2 USD/bbl 3.8 3.8 3.6
Slide 73: Disclaimer
DISCLAIMER "This presentation and the associated slides and discussion contain forward-looking statements. These statements are naturally subject to uncertainty and changes in circumstances. Those forward-looking statements may include, but are not limited to, those regarding capital employed, capit
Slide 74: More info at www.molgroup.info
MORE INFO AT WWW.MOLGROUP.INFO CONTACT: PHONE: +36 1 464 1395 E-MAIL: INVESTORRELATIONS@MOL.HU