Var Energi Asa · OSL:VAR
Var Energi Asa — Merger or Acquisition (June 2023)
26 slides from Var Energi Asa's merger presentation, Jun 23, 2023
Slide 1: Accelerating growth and value creation
Accelerating growth and value creation Acquisition of Neptune Energy’s Norwegian oil and gas assets and operations | 23 June 2023
Slide 2: 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 equity market conditions, investor attitude and demand, the business prospects of the Group and other specific issues. Th
Slide 3: Today's presenters
Today’s presenters Torger Rød Stefano Pujatti Ida Marie Fjellheim CEO CFO Head of Investor Relations 3
Slide 4: Vår Energi to acquire Neptune Energy Norge AS
Vår Energi to acquire Neptune Energy Norge AS1 Growth and value creation Path to ESG leadership Strong cash flow, attractive distributions © Neptune Energy 4 1. Hereafter referred to as “Neptune Norway”
Slide 5: Transaction summary
Transaction summary • Vår Energi ASA (“Vår Energi”) to acquire 100% of the shares of Neptune Energy Norge AS (“Neptune Norway”) • Eni S.p.A (“Eni”) to acquire remaining assets of Neptune group, outside of Germany and Norway in a Transaction separate transaction structure • Sellers are China Investme
Slide 6: Executing on M&A strategy and continuing +50 years of value creation on the NCS
Executing on M&A strategy and continuing +50 years of value creation on the NCS Accelerating growth and value creation Robust portfolio Realising our potential Strong gas position Strengthened management and organisation High-value growth Updated growth and value creation strategy Exploration excell
Slide 7: Neptune Norway's assets and operations – a perfect fit
Neptune Norway’s assets and operations – a perfect fit Realising our potential 12 producing assets, of which 3 operated, located in Vår Energi’s strategic hub areas Growth and value 7 operated by Equinor, Vår Energi’s largest NCS partner creation A leading E&P 2P reserves of 265 mmboe1 (end-20
Slide 8: Adding scale, diversification and longevity
Adding scale, diversification and longevity Proforma estimated figures of the combined company Production 2P reserves Gas share of reserves Emission intensity2 Opex +31% +25% +9pp. -33% -8% Q1 2023 production (kboepd) End-2022 2P reserves (billion boe) End-2022 gas share of 2P reserves (%) FY 2022 (
Slide 9: Complementary asset portfolio...
Complementary asset portfolio... Neptune Norway’s high-quality NCS assets located near existing hub areas 2P reserves Production Asset Operator Interest YE 20221,2 Q1 20231,3 Snøhvit Equinor 12% 135.5 mmboe 16.3 kboepd (incl. Melkøya LNG) Snøhvit Hammerfest Includes Melkøya LNG plant Njord Equinor 2
Slide 10: ...fully aligned with existing hub strategy
...fully aligned with existing Neptune Norway’s high-quality NCS assets located near existing hub areas hub strategy The Barents Sea Operator of Goliat and partner in the Johan Castberg development Snøhvit Highly strategic long-life LNG Hammerfest Hub synergies asset Strengthening positions in exist
Slide 11: Strengthened position and increased longevity in the Barents Sea
Strengthened position and increased longevity in the Barents Sea Johan Castberg (30% WI) Operated by Equinor The Snøhvit field holds significant reserves ... Goliat (65% WI) Operated by Vår Energi Barents Sea 2P reserves as of year-end 20221 (mmboe) 59 369 174 Snøhvit Field (12% WI) Operated by Equi
Slide 12: Strong organisational fit
Strong organisational fit Fostering a high-performing organisation Complementary skills across all E&P disciplines Increasing organisational flexibility, competences and capacity Neptune Energy Norge to be fully integrated From ~1000 to ~1300 employees on- and offshore; the overall organisation stru
Slide 13: Strong ESG performance supporting path to ESG leadership
Strong ESG performance... ... supporting Vår Energi’s path to ESG leadership Industry average Shared ambition of being the safest operator Strong HSSE statistics on operated assets TRIF1 3.2 1.92 3.03 FY 2022 On track for 50% emission reduction from operated Emission intensity assets by 20308 FY 2
Slide 14: Consistent with Vår Energi's shareholder value creation framework
Consistent with Vår Energi’s shareholder value creation framework Efficient and highly cash-generative assets... ...strengthening future dividend capacity Resilient low-cost portfolio High-value production Low-cost barrels with production cost of USD ~9 per boe1 growth to >350 kboepd with ambition t
Slide 15: Strong liquidity position and flexibility to fully finance the acquisition
Strong liquidity position and flexibility to fully finance the acquisition Ample liquidity headroom Leverage ratio well below target2 Solid debt financing structure USD million USD billion Maturity profile (USD million) 10 NIBD/EBITDAX target over- 2 Below 1.3x the-cycle 28 9 4 045 26 3 769 8 1 24 0
Slide 16: Attractive dividend policy maintained
Attractive dividend policy maintained Dividends USD million 1 075 Dividend policy of 20-30% of cashflow from operations after tax over the cycle 950 Robust returns with flexibility over the cycle 800 Transaction expected to strengthen future dividend capacity 20-30% of CFFO (after tax) (illustrative
Slide 17: A leading E&P independent on the NCS
A leading E&P independent on the NCS © Equinor Accelerating growth and Path to ESG leadership Strong cash flow, value creation attractive distributions Immediate access to high-value barrels Attractive portfolio with low emissions Highly cash-generative portfolio supportive of and maintaining a mate
Slide 18: Appendix
& var energi
Slide 19: Neptune Norway allows Vår Energi to add highly complementary assets
Neptune Norway allows Vår Energi to add highly complementary assets Key assets Snøhvit Gudrun Working Interest: 12.0% Working Interest: 25.0% The first offshore development in the Barents Sea, A HPHT oil and gas field in the North Sea supplying gas to Melkøya, the world's developed by a steel platfo
Slide 20: Snøhvit
Snøhvit The Barents Sea 2P reserves split1,2 • Snøhvit was the first offshore development in the Barents Sea and it is one of 8% 5% the key producers in Neptune’s Norwegian portfolio, with production expected to continue towards 2050 135.5 • The field is connected via a 143 km pipeline for liquefact
Slide 21: Njord Area
Njord Area The Norwegian Sea 2P reserves split1,2 • A key production area in the Norwegian Sea and a hub for Bauge, Hyme and Fenja, in which Vår Energi has an existing working interest, tying into the Urd 21% Njord A platform 39% Marulk 65.3 • A re-development programme was carried out including ext
Slide 22: Gjøa Area
Gjøa Area The North Sea 2P reserves split1,2 18% 16% • Gjøa is the first floating production platform to be powered sustainably by onshore facilities. A 100 km submarine cable delivers hydropower generated electricity 30.3 from Mongstad. Electricity from the mainland saves 200,000 tonnes in CO2 mmbo
Slide 23: Fram Area
Fram Area The North Sea 2P reserves split1,2 • Area consists of the Fram, Byrding and Fram H-Nord fields. In addition, the Fram 12% licences consists of the Echino Sør and Blasto discoveries with more prospects 22% being evaluated as part of the Fram Future Area Development plan 13.0 • Vår Energi ha
Slide 24: Gudrun
Gudrun Balder/Grane Area Bøyla Ringhorne Øst • A high-pressure high-temperature oil and gas field in the North Sea developed by a steel platform resting on the seabed Breidablikk • To be partially powered from shore via Sleipner starting in late 2023, as part of Balder the Utsira High area electrifi
Slide 25: Two transactions agreed in parallel
Two transactions agreed in parallel Vår Energi acquires Neptune Energy Norge AS and ENI acquires Neptune’s business in other jurisdictions besides Germany Direct SPA Direct SPA Neptune Energy Neptune group’s Norge AS international operations inter-conditionality except Germany Neptune Germany carved
Slide 26: var energi
=r var energi