Aker BP ASA · OSL:AKRBP
Aker BP ASA — Investor Presentation (September 2023)
55 slides from Aker BP ASA's investor presentation, September 2023
Slide 1: Investor presentation
Investor presentation September 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: Contents
Contents Page 4 Company overview Page 9 Oil & gas will remain a crucial part of the energy mix Page 11 Our strategic priorities Page 12 Operate safely and efficiently Page 16 Decarbonise our business Page 21 Deliver high return projects on quality, time and cost Page 34 Establish the next wave of pr
Slide 4: Aker BP's investment proposition
Aker BP’s investment proposition The E&P company of the future ✓ World-class assets with high efficiency and low cost ✓ Low emissions and clear pathway to net zero ✓ Driving transformation through digital and alliances ✓ Profitable growth from unique resource base ✓ Financial strength & growing divi
Slide 5: 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 445-470 boe boe mboepd Sandnessj en Skarv Trondheim Johan Sverdrup Edvard Grieg / Ivar Aasen Valhall area Partner, 31.6% Operator, ~35-65% Ope
Slide 6: The making of a NCS champion
The making of a NCS champion Growth through M&A and organic project developments ~460* mboepd 211 mboepd 139 mboepd 77 mboepd 2 16 1 mboepd mboepd mboepd 2006 2009 2014 2016 2017 2020 2022 2023* 6
Slide 7: Reserves and resources
Reserves and resources Year-end 2022 2P oil and gas reserves 2C contingent resources Discoveries Skarv 7% Alvheim Area Area 6% 8% Alvheim Area Non-op 8% 26% Johan Sverdrup Grieg/Aasen 35% Area 11% Grieg/Aasen Area 1,859 mmboe 14% 744 mmboe Yggdrasil 20% Yggdrasil Valhall Area 17% 27% Valhall Area 21
Slide 8: Significant value creation to shareholders
Significant value creation to shareholders Total return on Aker BP shares, including dividends 10-yr CAGR: 19% 5-yr CAGR: 15% 25 3-yr CAGR: 7% 20 Aker BP 15 Index 10 Index of US oil companies 5 Index of European oil companies 0 Source: Bloomberg, Total Shareholder Return (measured in NOK). Per Augus
Slide 9: Oil & gas will remain a crucial part of the energy mix
Oil & gas will remain a crucial part of the energy mix Total energy supply (IEA WEO 2022) Stated policies scenario Announced pledges scenario Net zero emissions by 2050 scenario 2010 2020 2030 2040 2010 2020 2030 2040 2010 2020 2030 2040 Oil Natural gas Coal Nuclear Renewables Oil Natural gas Coal N
Slide 10: Our contribution as a pure play E&P company
Our contribution as a pure play E&P company Maximize Minimize Share technology value emissions and knowledge for shareholders and the society from our operations to enable new industries while producing the energy the world needs 10
Slide 11: 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 12: Operate safely and efficiently
Operate safely and efficiently 12
Slide 13: Safety is our priority number one
Safety is our priority number one Injury frequency (TRIF) 1.9 1.8 1.6 1.6 1.6 1.3 1.2 1.1 1.1 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 TRIF: Total recordable injuries per million exp. hours, rolling 12 months average 13
Slide 14: High production, high efficiency and low cost
High production, high efficiency and low cost Production of oil & gas Production efficiency Production cost 1,000 barrels oil equivalent per day (mboepd) Capacity utilisation (operated assets) USD per boe 481 453 432 412 96% 96% 12.0 95% 93% 80% 7.3 7.2 7.2 5.6 181 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q2-2
Slide 15: Strong performance at Johan Sverdrup
Strong performance at Johan Sverdrup A giant field with excellent reservoir properties Daily oil production since start-up of Johan Sverdrup 755,000 bblpd ▪ Successfully executed development phase 2 ▪ Oil production capacity successfully tested to 755 mbblpd ▪ Long field life (+50 yrs) and a future
Slide 16: Decarbonise our business
#AkerBP Decarbonise our business 16
Slide 17: 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 18: Strong progress on decarbonisation
Strong progress on decarbonisation Continued progress on decarbonisation Main drivers for the reduction Aker BP emission intensity, kg CO2e/boe ▪ Increased ownership in low-emission assets 5.3 following the Lundin transaction 3.8 ▪ Edvard Grieg and Ivar Aasen electrified as part of 3.2 Johan Sverdru
Slide 19: 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 0 101 106 111 116 121 126 131 136 141 146 151 156 161 166 171 176 181 186 191 196 201 206 211 216 221 226 231 236 241 246 251 256 261 266 271 276 281 286 31 11 16 21 26
Slide 20: 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 21: Deliver high-return projects on quality, time and cost
Deliver high-return projects on quality, time and cost 21
Slide 22: Aker BP project overview
Aker BP project overview 770 mmboe net oil and gas volume at net capex after tax of around USD 3 billion Aker BP Production Asset area Field development Gross/net volume Net capex estimate PDO submission ownership start Frosk 80.0% 10/8 mmboe USD 0.2bn 2021 2023 Alvheim Kobra East & Gekko 80.0% 50/4
Slide 23: Project execution progressing according to plan
Project execution progressing according to plan ▪ All major contracts placed ▪ Important milestones achieved ▪ Governmental approvals of all PDOs ▪ Yggdrasil: Common system design freeze in Q2 ▪ PWP-Fenris: System design freeze on schedule for Q3 – Fenris jacket and pre-drill module fabrication star
Slide 24: Yggdrasil
Yggdrasil New North Sea area hub by joining forces across licenses Aker BP Hugin: 87.7% Gas ~40% of (operator) Munin: 50.0% estimated volumes Fulla: 47.7% Partners Equinor and Power supply LOTOS Norge from shore Munin Unmanned production platform Volume estimate 650 mmboe (gross) / Hugin A 413 mmboe
Slide 25: Valhall PWP-Fenris
Valhall PWP-Fenris Unlocks new volumes and secures life-time extension on Valhall PWP WP/IP PH Aker BP Valhall: 90.0% Establishes Valhall (operator) Fenris: 77.8% as area gas-hub Partners PGNiG and Pandion Power supply from shore Valhall Volume estimate 230 mmboe (gross) / Minimal emissions 187 mmbo
Slide 26: Skarv Satellites
Skarv Satellites Investments in future flexibility enabling further area development Aker BP Alve North: 68.1% Gas ~70% of (operator) Idun North: 23.8% estimated volumes Ørn: 30.0% Partners Equinor, Wintershall DEA Low operational and PGNiG cost Volume estimate 119 mmboe (gross) / Low incremental Al
Slide 27: Utsira High projects
Utsira High projects Increased capacity utilisation at Ivar Aasen and Edvard Grieg platforms Aker BP Solveig Phase II: 65.0% Adds low-cost (operator) Symra: 50.0% production Hanz: 35.0% Partners Equinor, OMV, Unlocks potential Wintershall Dea and future developments Sval Energi Solveig Volume estima
Slide 28: Alvheim projects
Alvheim projects Unlocks new volumes, reduces unit cost and secures life-time extension on Alvheim Aker BP Frosk: 80.0% Tie-backs to existing (operator) KEG: 80.0% infrastructure Tyrving: 61.3% Accounts for ca. 50% Partners Vår Energy, of net Alvheim ConocoPhillips, Petoro, volumes in 2024/25 LOTOS
Slide 29: Grow production by executing our projects
Grow production by executing our projects Planning to produce around 525 mboepd in 2028 Production outlook PDOs submitted mboepd ~525 ▪ Net resources of 770 mmboe 24% ▪ The projects lift Aker BP’s production by 250-300 mboepd in 2028 PDOs 17% ▪ Low CO2 emission intensity ▪ Full-cycle portfolio break
Slide 30: 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 31: 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 32: Execution through alliances and incentive-based contracts
Execution through alliances and incentive-based contracts Capacity secured with alliance partners The 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 facilities, L
Slide 33: 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 34: Establish the next wave of profitable growth options
Establish the next wave of profitable growth options 34
Slide 35: 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 36: Significant 2023 oil discovery in the Yggdrasil area
Significant 2023 oil discovery in the Yggdrasil area Øst Frigg will be an integrated part of ongoing project development ▪ Current volume estimate of 53-90 mmboe, twice as large as the original pre-drill estimate ▪ Increases the resource base for the Yggdrasil project by around 10% ▪ Strong field ec
Slide 37: 2023 exploration program
Ferdinand 2023 exploration program Licence Prospect Operator Aker BP Pre-drill Status share mmboe PL867 Gjegnalunden Aker BP 80% 3-9 mmboe PL1141 Styggehøe Aker BP 70% Dry PL554 Angulata Equinor 30% Dry PL919 Ve Aker BP 80% 3-5 mmboe PL873/442 Øst Frigg Beta/Epsilon Aker BP 48%/88% 53-90 mmboe PL114
Slide 38: 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 39: Return maximum value to our shareholders and our society
Return maximum value to our shareholders and our society 39
Slide 40: 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 41: Optimising our capital structure
Optimising our capital structure Bond transactions in June 2023 Bond maturities USD/EUR billion ▪ USD 1,500 million in new Senior Notes issued ▪ USD 0.5 billion aggregate principal amount of 5.60% Senior 1.75 Notes due in 2028 ▪ USD 1.0 billion aggregate principal amount of 6.00% Senior Notes due in
Slide 42: Maintaining financial flexibility
Maintaining financial flexibility Net interest-bearing debt Liquidity available2 Excl. leases, USD billion USD billion 7 2 6.7 1.8 6.4 6 6.2 6.1 1.6 5.6 5 1.4 1.2 4 3.7 1 3.1 3 3.3 2.5 0.8 3.0 2.2 2.8 2.7 2.0 0.6 2 0.54 2.2 0.4 1 0.21 0.21 0.22 0.2 0.16 0 0 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q2-22 Q3-22
Slide 43: 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 500 445-470 400 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 44: 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 45: 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 46: 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 47: 2023 guidance
2023 guidance Previous Actual New guidance H1-23 guidance Production 430-460 467 445-470 mboped Opex 7.0-8.0 6.3 6.0-7.0 USD/boe Capex 3.0-3.5 1.3 3.0-3.5 USD billion Exploration 0.4-0.5 0.2 0.4-0.5 USD billion Abandonment 0.1-0.2 0.1 0.1-0.2 USD billion 47
Slide 48: Second quarter 2023
Second quarter 2023 13 July 2023 Aker BP ASA
Slide 49: Second quarter 2023 highlights
Second quarter 2023 highlights Delivering on the strategy Deliver high return Establish the next Return maximum value Operate safely Decarbonise to our shareholders projects on quality, wave of profitable and efficiently our business and our society time and cost growth options 481 mboepd Equity GHG
Slide 50: Sales of oil and gas
Sales of oil and gas Volume sold Realised prices Total income mboepd USD/boe USD million 4 877 477 281 450 428 69 407 66 3 816 66 1 666 64 3 310 3 291 914 582 399 150 153 2 026 173 409 99 384 342 362 118 626 3 182 45 77 2 887 101 2 712 2 858 87 78 64 128 1 364 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q2-22 Q3-
Slide 51: Income statement
Income statement USD million Before impairment Q2 2023 Impairments Actual Q1 2023 Actual 477 mboepd (450) Total income 3 291 3 291 3 310 Oil and gas sales Production costs 247 247 263 Other operating expenses 13 13 16 EBITDAX 3 031 3 031 3 031 $75 per boe (81) Exploration expenses 27 27 98 Net reali
Slide 52: Cash flow - Second quarter 2023
Cash flow - Second quarter 2023 USD million Q2-23 Q1-23 Q4-22 Q3-22 Operating cash flow before tax 2 938 3 251 3 762 3 602 $-0.7 bn (1.0) Taxes paid (2 817) (1 569) (2 995) (1 241) Free Cash Flow (FCF) Cash flow – operations 121 1 682 807 2 361 Cash flow – investments Free cash flow (776) (705) (708
Slide 53: Cash tax
Cash tax Tax payments - Sensitivity for H1-2024 USD million Process for tax payments 2 500 ▪ Tax for the year is paid in six bimonthly instalments, starting in August, plus final settlement ▪ Initial tax estimate for the year is made in Q2, the 2 000 $90/bbl H2-instalments are then fixed in NOK ▪ Op
Slide 54: Statement of financial position
Statement of financial position USD million Assets 30.06.23 31.03.23 30.06.22 PP&E 16 218 16 220 restated 16 620 $6.1 bn ($6.7) Goodwill 13 554 13 636 14 246 Total available liquidity Other non-current assets 3 248 3 122 3 181 Cash and equivalent Other current assets 2 689 1 603 3 280 1 671 2 154 1
Slide 55: www.akerbp.com
AkerBP www.akerbp.com