Slide 1: Fourth quarter 2022 & strategy update
Fourth quarter 2022 & strategy update 10 February 2023 Aker BP ASA
Slide 2: Disclaimer
Disclaimer This Document includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Document are based on current expectations, estimates and projections about globa
Slide 3: 2022 – a transformational year for Aker BP
2022 – a transformational year for Aker BP The E&P company of the future Successful integration Major investment Strong results with Lundin Energy plans submitted and operations 3
Slide 4: Highlights fourth quarter 2022
Highlights fourth quarter 2022 High production Low cost New projects 432 mboepd 7.2 USD/boe 10 PDOs above guidance in line with guidance submitted in December Johan Sverdrup Phase 2 Low emissions Lundin integration First oil 3.1 kg CO2/boe #OneTeam achieved 15 December lowest in the industry From 1
Slide 5: Aker BP – a reliable energy supplier
Aker BP – a reliable energy supplier Gas production operated by Aker BP Aker BP oil sales to European buyers billion cubic metres (gross) million barrels (net) +32% +29% Increased 8.7 105 production from Skarv 6.6 81 74 5.3 2020 2021 2022 2020 2021 2022 Combined volumes from Aker BP and Lundin Energ
Slide 6: Our strategic priorities
Our strategic priorities Aker BP leads the industry transformation as the E&P company of the future Deliver high return Establish the next Operate safely Decarbonise projects on quality, wave of profitable and efficiently our business time and cost growth options Return maximum value to our sharehol
Slide 7: Operate safely and efficiently
Operate safely and efficiently
Slide 8: Safety is our priority number one
Safety is our priority number one Injury frequency (TRIF) 2.4 1.9 1.8 1.7 1.6 1.6 1.4 1.3 1.2 1.2 1.2 1.1 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 TRIF: Total recordable injuries per million exp. hours, rolling 12 months average 8
Slide 9: Strong operational performance
Strong operational performance Oil and gas production per area Production efficiency 1,000 barrels oil equivalent per day (mboepd) Capacity utilisation (operated assets) 432 410-420 412 96% 95% 87% 88% 80% 207 208 181 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 H2-22 guiding Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Johan Sv
Slide 10: Production cost in line with guidance
Production cost in line with guidance Targeting USD ~7 per boe Breakdown of Q4-22 production cost 12.4 11.8 Tariff & transport 9.2 22 % 8.3 7.2 Base opex 48 % Projects 12 % Power & environment tax 18 % 2019 2020 2021 2022-H1 2022-H2 10
Slide 11: Decarbonise our business
#AkerBP Decarbonise our business
Slide 12: Aker BP's decarbonization strategy to net zero
Aker BP’s decarbonization strategy to net zero Net zero across operations by 2030 Aker BP’s targets Scope 1 + 2 Scope 3 1. Carbon intensity <4 kg CO2e/boe Avoid Reduce Neutralise Upstream scope 3 reduction through procurement 2. Methane intensity < 0.1 % Support new industries 3. Scope 2 emissions ~
Slide 13: Strong progress on decarbonisation in 2022
Strong progress on decarbonisation in 2022 Emission intensity Main drivers for the reduction Kg CO2/boe ▪ Increased ownership in low-emission assets 5.2 5.3 following the Lundin transaction 4.9 4.9 4.7 4.7 4.5 4.2 4.0 3.8 3.5 ▪ Edvard Grieg and Ivar Aasen electrified as part of 3.1 Johan Sverdrup Ph
Slide 14: Aker BP – a global leader in low CO2 emissions
Aker BP – a global leader in low CO2 emissions 160 140 Net emission intensity, 2022 120CO /boe equity share Kg 2 100 80 60 40 20 1 0 261 286 101 106 111 116 121 126 131 136 141 146 151 156 161 166 171 176 181 186 191 196 201 206 211 216 221 226 231 236 241 246 251 256 266 271 276 281 11 16 21 26 31
Slide 15: Clear pathway to reduce absolute emissions close to zero
Clear pathway to reduce absolute emissions close to zero Aker BP high level CO2 emissions forecast of operated assets Gross operated scope 1&2 emissions Million t CO2 Electrification Electrification of Retirement of Retirement of All producing 1.8 of Valhall Grieg/Aasen Ula² Skarv/Alvheim² assets el
Slide 16: Deliver high-return projects on quality, time and cost
Deliver high-return projects on quality, time and cost
Slide 17: Strong 2022 project deliveries
Strong 2022 project deliveries Hod delivered in record speed ▪ First oil in April – less than two years after FID Production start Johan Sverdrup Phase 2 ▪ Increases gross plateau production capacity from 535 to 720 mboepd with an aim increase to 755 mboepd Four tie-back projects in execution ▪ Fros
Slide 18: Aker BP project overview
Aker BP project overview Aker BP Production Asset area Field development Gross/net volume Net capex estimate PDO submission ownership start Kobra East & Gekko 80.0% 50/40 mmboe USD 0.9bn 2021 2024 Alvheim Frosk 80.0% 10/8 mmboe USD 0.2bn 2021 2023 Tyrving 61.3% 25/15 mmboe USD 0.4bn 2022 2025 Hanz 3
Slide 19: Grow production by executing our projects
Grow production by executing our projects Planning to produce around 525 mboepd in 2028 Production outlook Ten PDOs submitted in December mboepd ~525 ▪ Net resources of 730 mmboe 24% ▪ The projects lift Aker BP’s production by 250-300 mboepd in 2028 PDOs 17% ▪ Low CO2 emission intensity ▪ Full-cycle
Slide 20: Alliances with leading suppliers – with proven track record
Alliances with leading suppliers – with proven track record The cornerstone of project planning and execution Alliances established with leading suppliers ▪ Covering majority of capital spend ▪ Subsea, Fixed Facilities, Modifications and Drilling ▪ One team - Common goals - Shared incentives Organis
Slide 21: Aker BP's key principles for successful project execution
Aker BP’s key principles for successful project execution Partnerships Frontloading Standardisation ✓ Competence and learning ✓ Early planning and maturation ✓ Well designs and equipment ✓ Continuity ✓ Supplier involvement ✓ Topside and subsea equipment ✓ Common goals and incentives ✓ Secured yard a
Slide 22: Execution through alliances and incentive-based contracts
Execution through alliances and incentive-based contracts Capacity secured with alliance partners The ten PDOs …with the majority of work performed …and compensation formats that incentivise in December… by the alliance partners… productivity and cost reductions 100% Skarv satellites Other facilitie
Slide 23: Signed contracts with all major yards in Norway
Signed contracts with all major yards in Norway Close and early collaboration to ensure capacity, construction quality and efficiency Aker Solutions Stord Aker Solutions Verdal Aker Solutions Egersund Aker Solutions Sandnessjøen ▪ PWP Topside Fabrication/Integration ▪ Fenris Topside and Jacket ▪ Hug
Slide 24: Establish the next wave of profitable growth options
Establish the next wave of profitable growth options
Slide 25: Exploration strategy
Exploration strategy Licence map Uniquely positioned on the NCS Aker BP operator ▪ 2nd largest in Norway with ~200 licences Aker BP partner ▪ Operator for ~70% Targeting 250 mmboe by 2027 ▪ Drill 10-15 exploration wells per year ▪ 80/20 near-field/new areas New ways of working ▪ Combining two strong
Slide 26: 2022 – a successful exploration year
2022 – a successful exploration year Aker BP discovered most resources on the NCS in 2022 Preliminary estimates of 2022 discoveries* mmboe (Aker BP share) 3 2 113 4 19 Two discoveries in the Skarv area 38 ▪ Newt and Storjo East ▪ Follow-up potential ▪ Future tie-backs to Skarv FPSO 47 Lupa – large d
Slide 27: 2023 exploration program
2023 exploration program 2023 exploration wells Licence Prospect Operator Aker BP Pre-drill Status share mmboe PL867 Gjegnalunden Aker BP 80% 3 - 124 Tech. disc PL265 P-Graben Equinor 27% 8 - 33 Dry PL1141 Styggehøe Aker BP 70% 10 - 41 Q1 PL554 Angulata Equinor 30% 8 - 64 Drilling PL919 Ve Aker BP 8
Slide 28: Significant upside potential around existing assets
Significant upside potential around existing assets Reserves and resources billion boe ▪ Skarv: Exploration opportunities (ILX) and development of tight reservoirs ▪ Edvard Grieg/Ivar Aasen: Infills, ILX and basement upside enabled by 4D seismic ▪ Johan Sverdrup: Infill drilling to extend plateau an
Slide 29: Value creation through M&A and organic growth
Value creation through M&A and organic growth The making of a NCS champion 432* mboepd 211 mboepd 139 mboepd 77 mboepd 2 16 1 mboepd mboepd mboepd 2006 2009 2014 2016 2017 2020 2022* * Average daily production Q4 2022 29
Slide 30: Return maximum value to our shareholders and our society
Return maximum value to our shareholders and our society
Slide 31: Financial highlights fourth quarter 2022
Financial highlights fourth quarter 2022 Sales volume Integration synergies Leverage ratio 428.3 mboepd 250 USD million 0.2 run-rate estimate Net debt/EBITDAX Realised prices Free cash flow Credit rating 96 USD/boe 7.7 USD/share BBB/Baa2 in 2022 All 3 agencies upgraded in 2022 Production cost Divide
Slide 32: Sales of oil and gas
Sales of oil and gas Volume sold Total income Realised prices mboepd USD million USD/boe 428 4 866 281 407 66 64 1 666 3 826 914 170 171 216 205 2 291 153 45 173 2 026 150 40 362 1 849 342 693 45 626 3 182 118 618 2 887 101 101 87 171 79 165 128 1 554 1 364 1 199 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q4-21
Slide 33: Production cost
Production cost Based on produced volumes USD million USD/boe 288 275 12.0 11.6 218 10.1 192 198 7.3 7.2 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Base opex Tariffs & transport Opex projects Power and environmental taxes 33
Slide 34: Capital spend below guidance
Capital spend below guidance Capex, expex and abex, USD billion 1.6 0.1 0.3 1.2 ▪ Stronger USD than anticipated 0.2 ▪ Some activities phased to 2023 0.7 0.5 0.1 1.2 ▪ Strong cost performance in execution 0.4 0.4 0.1 1.0 0.1 0.1 0.6 0.4 0.4 0.3 Q1-22 Q2-22 Q3-22 Q4-22 H2-22 H2-22 guidance actual Cape
Slide 35: Income statement
Income statement Fourth quarter 2022 USD million Q4 2022 Q3 2022 Change Comment Comments restated 1. Realised prices down ~25% from Q3 Total income 3 826 4 866 -1 040 1 Production costs 286 236 50 2 2. USD 7.2 (7.3) per boe produced Other operating expenses 16 9 7 3. USD 16.1 (15.7) per boe EBITDAX
Slide 36: Statement of financial position
Statement of financial position Assets 31.12.22 30.09.22 31.12.21 Comment restated restated 1 Comments PP&E 15 887 15 307 10 214 1. Change in accounting principle for Goodwill 13 935 13 193 1 647 Abandonment provisions increases the Other non-current assets 2 984 3 057 1 863 present value of the lia
Slide 37: Cash flow
Cash flow Fourth quarter 2022 USD million 3 762 2 955 Q4-2022 2022 FCF per share4) FCF per share4) Two instalments plus $0.13 $7.7 voluntary additional payment in Q4-2022 Dividend per share Dividend per share Expex/Abex $0.525 $2.0 807 (708) Capex 98 (332) 2 - 231 Operating Taxes paid Operating Inve
Slide 38: Actual performance vs guidance
Actual performance vs guidance Second half 2022 – post Lundin completion Guidance Actual Production (mboped) 410-4201) 422 Opex (USD/boe) ~7 7.2 Capex (USDbn) 1.2 1.0 Exploration (USDbn) 0.3 0.2 Abandonment (USDbn) 0.1 0.03 1) Original production guidance was 410-435 mboepd. This was narrowed in to
Slide 39: Capital allocation priorities
Capital allocation priorities Aker BP’s financial frame – designed to drive value creation and shareholder return 1 Financial capacity 2 Profitable growth 3 Return value Maintain financial flexibility and Invest in robust projects Resilient dividend growth in line investment grade credit rating with
Slide 40: Maintain financial flexibility
Maintain financial flexibility Net interest-bearing debt Liquidity available2) Bond maturities Excl. leases, USD billion USD billion USD/EUR million 4.0 2 3.7 6.4 6.2 6.2 1.8 3.5 5.6 1 750 1.6 5.4 3.0 4.8 1 500 2.6 1.4 2.5 4.4 2.5 1.2 2.2 2.2 2.0 1 1 000 0.9 1.6 3.0 0.8 2.8 2.8 1.5 750 0.6 2.2 0.6 2
Slide 41: Grow production with robust high return projects
Grow production with robust high return projects Production outlook Robust and profitable project portfolio ~525 $35-40/bbl 500 430-460 400 Project portfolio break-even oil price 300 ~25% 200 Project portfolio IRR at $65/bbl oil price 100 1-2 years - 2016 2018 2020 2022 2024 2026 2028 Project portfo
Slide 42: Investing in robust and profitable projects
Investing in robust and profitable projects In an investment-friendly tax system Aker BP est. capex before tax Aker BP est. capex after tax USD billion USD billion 6 6 ▪ Around 85% of the planned 5 capex is related to projects 5 subject to the temporary tax system with 86.9% tax 4 4 deduction 3 3 ▪
Slide 43: The Norwegian petroleum tax system
The Norwegian petroleum tax system Supportive for investments Ordinary tax system Temporary tax system ▪ The temporary tax system 100.0 100.0 was introduced summer 1.0 1.0 1.0 1.0 86.9 2020 to stimulate 81.7 1.0 1.0 1.0 1.0 1.0 78.0 investments1) 72.8 1.0 ▪ Applicable for projects with PDO submitted
Slide 44: Strong and resilient cash flow as basis for dividend growth
Strong and resilient cash flow as basis for dividend growth Aker BP value creation plan 2023-2028 Dividends USD billion, accumulated USD per share 2.5 2.20 ▪ Low cost production gives 2.08 20 $90/bbl 2.00 resilient dividend capacity 2.0 ▪ Distributions shall reflect the 15 capacity through the cycle
Slide 45: 2023 guidance
2023 guidance 2022 2023 actuals guidance Production (mboped) 309 430-460 (H2-22: 422) Opex (USD/boe) 8.7 7.0-8.0 (H2-22: 7.2) Capex (USDbn) 1.6 3.0-3.5 Exploration (USDbn) 0.4 0.4-0.5 Abandonment (USDbn) 0.1 0.1-0.2 45
Slide 46: Tax guidance
Tax guidance Tax payments - Sensitivity for 2023 Process for tax payments USD million ▪ Tax for the year is paid in six bimonthly instalments, starting in 3 500 August, plus final settlement 1) ▪ Initial tax estimate for the year is made in Q2, the Aug-Dec 3 000 instalments are then fixed in NOK $11
Slide 47: Summary – Executing on our strategic priorities
Summary – Executing on our strategic priorities Deliver high return Establish the next Operate safely Decarbonise projects on quality, wave of profitable and efficiently our business time and cost growth options Equity GHG intensity Discover 250 Zero serious incidents < 4kg CO2e/boe Grow production
Slide 48: Appendix
#AkerBP Appendix
Slide 49: World-class oil and gas portfolio
World-class oil and gas portfolio Large scale, low risk assets on the Norwegian Continental Shelf 2P reserves1 2C resources1 Production2 arstad 1.86bn 0.74bn 432 boe boe mboepd Sandnessj en Skarv Trondheim Johan Sverdrup Edvard Grieg / Ivar Aasen Valhall area Partner, 31.6% Operator, ~35-65% Operato
Slide 50: Yggdrasil
Yggdrasil Hugin, Fulla and Munin Gross volume estimate 650 mmboe Aker BP (operator) 87.7% / 47.7% / 50.0% Production start est. 2027 Net capex est. (nominal) USD 10.7bn 50
Slide 51: Valhall PWP-Fenris
Valhall PWP-Fenris Gross volume estimate 230 mmboe Aker BP (operator) 90.0% / 77.8% Production start est. 2027 Net capex est. (nominal) USD 5.5bn 51
Slide 52: Skarv satelites
Skarv satelites Alve Nord, Idun Nord and Ørn Gross volume estimate 119 mmboe Aker BP (operator) 68.1% / 23.8% / 30.0% Production start est. 2027 Net capex est. (nominal) USD 1.0bn 52
Slide 53: Utsira High
Utsira High Symra, Solveig fase 2 and Troldhaugen Gross volume estimate 124 mmboe Aker BP (operator) 50.0% / 65.0% / 80.0% Production start est. 2026/27 Net capex est. (nominal) USD 1.8bn 53
Slide 54: Alvheim projects
Alvheim projects Kobra East & Gekko, Frosk and Tyrving Gross volume estimate 85 mmboe Aker BP (operator) 80.0% / 80.0% / 61.3% Production start est. 2023-25 Net capex est. (nominal) USD 1.5bn 54
Slide 55: www.akerbp.com
AkerBP www.akerbp.com