North Energy Asa · OSL:NORTH

North Energy Asa — Q2 2013 Earnings Presentation

26 slides from North Energy Asa's earnings presentation, Aug 23, 2013

  1. Slide 1: North Energy Q2 2013

    North Energy Q2 2013 23 August 2013

  2. Slide 2: Important information

    Important information This presentation and its appendices (together the “Presentation”) have been prepared and delivered by North Energy ASA (“North Energy” or the “Company”). The Presentation is prepared for information purposes only, and is not to be used for any other purpose. The Presentation d

  3. Slide 3: Agenda

    Agenda  Highlights Q2  Financial update  Exploration update  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no 3

  4. Slide 4: Highlights Q2 and later events

    Highlights Q2 and later events  6 awards in the 22nd Licencing Round  Norvarg appraisal well confirms the extensive nature of the discovery  Farm-down of 10% interest in PL 299 Frode prior to drilling  Licence transaction of NOK 28.2 million with Lime firmed up  Financial capacity to expand lic

  5. Slide 5: Agenda

    Agenda  Highlights Q2  Financial update  Exploration update  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no 5

  6. Slide 6: Profit & Loss

    Profit & Loss Q2 Q1 Q2 Year MNOK 2013 2013 2012 2012 Profit (66,1) - - (46,9) Sale of PL 299 Payroll 12,2 16,2 10,7 56,8 Depreciation 2,1 2,5 2,5 10,2 Exploration expenses 163,9 27,7 166,2 540,1 PL299, seismic acq. and PL cost Other operating expenses 8,3 8,7 10,9 41,1 Operating loss (120,4) (55,2)

  7. Slide 7: Balance sheet

    Balance sheet Q2 Year end Year end MNOK 2013 2012 2011 Assets Fixed Assets 396,2 304,2 418,6 Capitalized drilling cost Long term receivables 201,9 0,0 0,0 Tax receivable refund - Dec 2014 Short term receivables 609,6 540,6 608,4 Tax receivable refund - Dec 2013 Cash and cash equivalents 21,2 28,5 34

  8. Slide 8: Financed throughout 2014

    Financed throughout 2014 Net cash* position Q2 2013  Net cash position of NOK 193 million  Unused exploration loan facility of NOK 503 million * Excluding 1) loan of NOK 27,5 million and sale proceeds of NOK 28,2 million to Lime Petroleum Plc. and 2) convertible loan balance of NOK 16,9 millon tow

  9. Slide 9: Credit facility with Rex

    Credit facility with Rex  Covering seismic interpretation over the next 4 years using Virtual Drilling technology  Credit facility of MNOK 100  No commitments or obligations  8% interest payable  No installments, but with full repayment option  12 months net debt convertible at 3 specific date

  10. Slide 10: Credit facility with TGS

    Credit facility with TGS  Covering purchase of seismic data and services over 4 years  Cash payment of 35%  Credit facility of MNOK 200  No commitments or obligations  8% interest payable  No installments, but with full repayment option  12 months net debt convertible at 3 specific dates duri

  11. Slide 11: Capacity for several new wells

    Capacity for several new wells TGS and Rex purchases eligible for 78% exploration tax refund  Net cash position of Balance sheet Off balance sheet NOK 193 million  Rex convertible loan provides a free cash potential of NOK 75 million  TGS convertible loan provides a free cash potential of NOK 110

  12. Slide 12: Agenda

    Agenda  Highlights Q1  Financial update  Exploration update  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no 12

  13. Slide 13: Second well on Norvarg structure

    Second well on Norvarg structure Leiv Eiriksson  Tests proved deep contact, huge structure and drilled poorly developed channels  Higher porosity than in well 1  Gas sampled and interpreted on logs deeper than before  New unknown geology and channels inside new larger area Top Kobbe, Norvarg and

  14. Slide 14: Test results from appraisal well not to be compared to rates from production wells

    Test results from appraisal well not to be compared to rates from production wells  Damage done by the well to reduce Vertical well Deviated well Horizontal well production rates is not known  Kristin Field gave 10 x improvement of rates after penetrating damaged zone Channel  Stimulation  Chisw

  15. Slide 15: New and unmapped geology filled with gas gives new potential for production rates

    New and unmapped geology filled with gas gives new potential for production rates  Gas in every well on Bjarmeland platform, except for Eik  Norvarg-Ververis structures likely 1 to contain largest gas accumulation in the Barents Sea  25 km with unknown geology between Norvarg 1 and Ververis 1  N

  16. Slide 16: Prospectivity to be clarified by tailor-made 3D seismic over larger area

    Prospectivity to be clarified by tailor-made 3D seismic over larger area  Greater area needs mapping as a complete system of variety of channels with better 3D data  North Energy reviewing potential 3D Broadband Seismic acquisition campaign  May start in early 2014 enabling a well in Q3 2015  Su

  17. Slide 17: North Energy defending its position as second to Statoil in the Barents Sea in 22nd Round

    North Energy defending its position as second to Statoil in the Barents Sea in 22nd Round  Awarded six licences in the Barents Sea  Only Statoil got more (7)  Entry into Skrugard Area and included in upcoming drilling campaign  Work praised by Minister following awards North Energy ASA · post@no

  18. Slide 18: Declared 22R winner by the media following trend from previous rounds in the Barents Sea

    Declared 22R winner by the media following trend from previous rounds in the Barents Sea Barents Sea awards since North Energy start-up Statoil 19 North Energy 14 OMV 13 Eni 12 Det norske 8 GDF Suez 7 Rocksource 7 Lundin 7 Wintershall 6 Edison 6 0 5 10 15 20 North Energy ASA · post@northenergy.no ·

  19. Slide 19: North Energy taking part in adding resources on the Skrugard trend

    North Energy taking part in adding resources on the Skrugard trend  Three attractive licences Apollo 2014 along the Skrugard trend Bjørnøya Basin with proven oil  Firm well on PL 713 with Wisting 2013 Statoil as operator and Rosneft and Edison as partners  Increasing commercial value of portfolio

  20. Slide 20: Implementing Virtual Drilling (VD) in 2013 to improve success rate

    Implementing Virtual Drilling (VD) in 2013 to improve success rate  Testing VD on 59 prospects in 2 years  16 predicted positive  11 Drilled with commercial oil (69%)  5 failures had weak anomalies  25 predicted negative  24 of 25 were dry (96%)  18 positives not drilled yet  6 in 3rd party

  21. Slide 21: Not everything that glitters is gold, but with no glitter there seems to be no hope

    Not everything that glitters is gold, but with no glitter there seems to be no hope  Dry well cost may be reduced by 30 analyses 60 analyses predicting dry wells with high in 2012 in 2014 certainty  Savings seen already in 2013  Pitfalls and sources of error investigated for calculating risk Sele

  22. Slide 22: Utilizing VD for optimizing the portfolio

    Utilizing VD for optimizing the portfolio  Revised agreement with Lime Petroleum  Licence transaction of NOK 28,2 mill replacing previous agreement after relinquishment of several licences  Farm-out of two licences to Spike Petroleum  PL 299 Frode: 10%, remaining North share 10%  PL 590 Mikkeli

  23. Slide 23: Drilling and DoD schedule

    Drilling and DoD schedule  Drill or drop decisions to be made during the next six months  PL 503 - Q4 2013  PL 590 - Q1 2014  PL 587 - Q1 2014  PL 595 - Q1 2014  PL 601 - Q2 2014  Firm wells  PL 510 Tvilling Sør - 2014  PL 713 Halddi - 2015 North Energy ASA · post@northenergy.no · (+47) 78

  24. Slide 24: Agenda

    Agenda  Highlights Q1  Financial update  Exploration update  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no 24

  25. Slide 25: Outlook

    Outlook  3 months  Application APA 2013  12 new VD evaluations  Drill or drop decision:  PL 564 Barents Sea  PL 503 North Sea  12 months  Award APA 2013  Exploration well on PL 510  Drill or drop decisions:  PL 590 Norwegian Sea  PL 587 Norwegian Sea  PL 601 in Norwegian Sea  PL 595 in

  26. Slide 26: Q&A

    Q&A North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no 26

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