Slide 1: Second quarter 2022 & strategy update
Second quarter 2022 & strategy update 20 July 2022
Slide 2: Today's agenda
Today’s agenda Who will be speaking today… 1. Introduction 2. Second quarter 2022 review 3. Strategy update 4. Q&A Karl Johnny Hersvik David Tønne CEO CFO 2
Slide 3: 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 4: Second quarter 2022
Second quarter 2022 20 July 2022
Slide 5: The E&P company of the future
The E&P company of the future Created by combining two leading independents ✓ 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 &
Slide 6: Highlights
Highlights Second quarter 2022 Lundin integration ▪ Transaction completed 30 June ▪ Leadership appointed and synergies progressing ▪ New decarbonisation plan established Operations ▪ Summer maintenance progressing as planned ▪ Projects on track for PDO submission by year-end ▪ Exploration success in
Slide 7: Status on integration
Status on integration Transaction Organizational Decarbonisation plan completed 30 June integration on track established • Lundin Energy Norway is now a • New organisational structure • Decarbonization targets and subsidiary of Aker BP ASA and defined and leaders appointed plan defined renamed to AB
Slide 8: Production review
Production review Oil and gas production Production efficiency Q2 comments mboepd Capacity utilisation 222 210 207 208 199 40 90% 181 89% 87% 88% 41 32 40 45 80% ▪ One-month planned maintenance 45 74% shutdowns at Valhall and Ula ▪ Shorter maintenance shutdowns at Skarv and Johan Sverdrup 182 167 16
Slide 9: HSSE performance
HSSE performance Injury frequency (TRIF) 1) CO2 emissions intensity 2) 6.3 2.4 5.7 5.0 4.8 4.8 4.7 1.9 4.5 4.4 1.8 4.3 4.2 1.7 1.6 1.6 1.4 1.2 1.2 1.2 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 ▪ Safety is always the top pr
Slide 10: Lundin Energy E&P business
Lundin Energy E&P business Operational highlights – first half 2022 ✓ Production on plan 181 mboepd ✓ High production efficiency 86 percent ✓ Low operating costs 4.5 USD/boe ✓ Industry-leading carbon intensity 2.9 kg CO2/boe 10
Slide 11: Project portfolio progressing according to plan
Project portfolio progressing according to plan Valhall Skarv ✓ First oil on Hod achieved in Q2 2022 ✓ Ærfugl Phase II started production in Q4 2021 ✓ Valhall NCP & King Lear PDO by end 2022 ✓ Skarv Satellites PDO scheduled in Q4 2022, first oil scheduled from 2024 Johan Sverdrup phase II Edvard Gri
Slide 12: Gas discovery in Skarv Area
Uer Gas discovery in Skarv Area Storjo East – Gas discovery 25-80 mmboe ▪ Significantly larger than pre-drill estimate of 16-45 mmboe ▪ Aker BP 70 percent working interest ▪ Further delineation planned in 2023 Newt Storjo East Barlindåsen Large campaign in prospective Skarv area ▪ Targeting net unri
Slide 13: 2022 exploration program
Lupa 2022 exploration program Exploration map Licences Prospect Operator Aker BP Pre-drill Status share P90-P10 Grefsenkollen & PL873 Aker BP 40% 17 - 40 1-7 mmboe Øst Frigg PL685 Laushornet Aker BP 40% 73 - 306 Dry PL1085 Overly Aker BP 55% 46 - 135 4-12 mmboe PL261 Storjo East Aker BP 70% 16 - 46
Slide 14: Financial review
Financial review Second quarter 2022 14
Slide 15: Production and sales of oil and gas
Production and sales of oil and gas Volumes produced & sold Total income Realised prices mboepd USD million USD/boe 225 2 291 223 195 205 216 2 026 Q2-2022 Q1-2022 40 173 1 849 41 40 45 693 32 1 563 626 Liquids Liquids 45 618 $117.5 $100.9 346 1 133 1 124 139 130 182 167 169 167 163 1 554 136 1 364
Slide 16: Capital spend
Capital spend USD million Abex Capex Expex Capex ▪ Previous Aker BP 2022 guidance USD 1.6 bn 597 ▪ Spend year-to-date below budget due to phasing 554 63 513 16 ▪ Expected to ramp up in second half of the year 27 95 143 438 435 402 109 16 37 Expex 67 98 116 ▪ Previous Aker BP 2022 guidance USD 0.4 bn
Slide 17: Production costs down due to planned maintenance
Production costs down due to planned maintenance Increased unit cost in Q2 due to lower production as a result of planned maintenance shutdowns Production cost Production cost USD million USD/boe Tariffs & transport Opex projects Absolute cost down in the quarter Base opex 11.6 12.0 • Lower tariffs
Slide 18: Income statement
Income statement Second quarter 2022 USD million Q2 2022 Q1 2022 Change Comment Comments Total income 2 026 2 291 (265) 1 1. Gas ~31% and liquids ~67% of income Production costs 190 220 (30) in Q2 Other operating expenses 20 7 13 2 EBITDAX 1 816 2 064 (248) 2. Includes transaction related costs Expl
Slide 19: Cash flow
Cash flow Second quarter 2022 USD million Taxes paid (748) Q2-2022 Q1-2022 WC Expex/Abex Capex 1 187 (383) 803 FCF per share FCF per share (39 ) -649 $2.2 $3.0 (1,243) (171 ) Dividend per share Dividend per share 1) 2) 3) $0.48 $0.48 Operating Invest- Free Net cash Dividends Interest Change in cash
Slide 20: Statement of financial position
Statement of financial position Before and after completion of Lundin transaction (USD million) 31.03.22 30.06.22 30.06.22 31.03.22 30.06.22 30.06.22 Assets Equity and liabilities before before after before before after PP&E 8 257 8 479 15 988 Equity 2 708 2 724 12 061 Goodwill 1 647 1 647 14 246 Fi
Slide 21: Superior financial flexibility
Superior financial flexibility 2) Net interest-bearing debt Liquidity available Bond maturities Excl. leases, USD billion USD billion USD/EUR million 6.2 1 750 3.7 Lundin USD 5.4 1 500 Aker BP EUR 3.1 4.8 4.9 Aker BP USD 4.4 4.4 2.6 1 000 2.2 1.23 750 1.6 2.8 0.85 500 2.0 0.56 0.7 0.54 1.4 1.5 0.33
Slide 22: Tax guidance
Tax guidance Tax payments - Sensitivity for fiscal year 2022 New tax system approved USD million ▪ Key changes are immediate depreciation and refund of tax losses in special petroleum tax (71.8%), combined with the removal of uplift ▪ Will work in tandem with temporary system for 2022 $110 PDO Proje
Slide 23: Operational guidance for second half 2022
Operational guidance for second half 2022 Production Capital spend Production cost mboepd USD billion USD/boe 410-435 1.7 Abex: 0.1 376 11.8 Expex 0.3 1.2 Lundin 181 Lundin 0.3 ~7 Capex 1.3 4.4 Aker BP Aker BP 0.9 195 H1 H2 H1 H2 H1 H1 H2 actual guidance actual guidance Lundin Aker BP guidance H2 gu
Slide 24: Returning value USD 2.0/share
Returning value Aker BP dividends USD per share USD 2.0/share Updated guidance for full year 2022 2.08 ~48% 2.00 Yearly growth from 2021 1.90 1.25 1.18 1.35 ~11% Quarterly growth from Q2 2022 0.74 0.19 Resilient growth Ambition to grow by minimum 5% per year at oil prices above 40 $/bbl 2016 2017 20
Slide 25: Strategy update
# AkerBP Strategy update 20 July 2022 ae
Slide 26: The E&P company of the future
The E&P company of the future Created by combining two leading independents ✓ 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 &
Slide 27: The E&P company of the future
The E&P company of the future Reserves & Production Industry-leading Industry-leading Sustainable Resources growth low production cost low carbon emissions dividend growth 2.8 bn ~400 <$7 <4 kg $2.0 barrels mboepd in 2022, USD/boe CO2/boe USD/share oil equivalent ~525 mboepd in 2028 targeted from 20
Slide 28: Profitable growth from unique resource base
Profitable growth from unique resource base Reserves and resources per end-2021 Production outlook excl. 3P and exploration upsides billion boe mboepd Actual Sanctioned Non-sanctioned 500 400 300 200 100 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 $30/bbl Capital efficient ~525 mbo
Slide 29: Uniquely positioned to deliver affordable, sustainable and reliable energy
Aker BP is uniquely positioned to deliver affordable, sustainable and reliable energy Affordable Sustainable Reliable Opex (USD/boe) 2021e kg CO2 /boe 2020e World Governance Indicator, political stability and absence of violence/terrorism 16 94 15 21 90 20 20 20 13 13 13 13 12 17 12 66 14 9 9 9 9 55
Slide 30: Driving the transformation of the E&P industry
Driving the transformation of the E&P industry Strategic alliances to reorganise the value chain Digital transformation of core processes Organisation Production optimisation and Maintenance Alliance energy efficiency $ Subsurface Well Field Scope Incentives interpretation & construction & developme
Slide 31: Strong and resilient cash flow generation
Strong and resilient cash flow generation Aker BP value creation plan 2022-2028 Free cash flow scenarios USD billion, accumulated USD billion, accumulated 30 $ 90/bbl 25 Thousands $90/bbl 25 20 20 $ 65/bbl $65/bbl 15 Dividend Cash flow capacity 15 from operations and debt after tax repayment 10 10 $
Slide 32: 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 33: Our strategic priorities next 5 years
Our strategic priorities next 5 years Aker BPs strategic framework Return maximum value to our shareholders and our society Lead the transformation of E&P Digitalisation – Alliances – Future Operations Deliver growth on time, Establish the next wave of Operate safely and efficiently Decarbonise our
Slide 34: Operate safely and efficiently
Operate safely and efficiently World-class assets with high efficiency and low cost 34
Slide 35: World-class portfolio of producing assets
World-class portfolio of producing assets Wisting Large scale, low risk assets on the Norwegian Continental Shelf 2P reserves1) 2C resources1) 2022e arstad 1.4bn 1.4bn >400 boe boe mboepd Sandnessj en Skarv Trondheim Johan Sverdrup Edvard Grieg / Ivar Aasen Vallhall area Partner, 31.6% Operator, ~35
Slide 36: Safe and efficient operations
Safe and efficient operations Injury frequency Production efficiency Production cost forecast (TRIF) % of max production potential USD/boe 95% 90% 92% 90% NCS production facilities1) 12.4 84% 9.2 8.3 3.1 NCS mobile units1) ~7 <7 1.9 1.6 1.2 2019 2020 2021 2022 2019 2020 2021 2021 Target 2019 2020 20
Slide 37: Decarbonize our business
Decarbonize our business Low emissions and clear pathway to net zero 37
Slide 38: The challenge
The challenge Affordable, sustainable and reliable energy for all Oil & gas will remain a crucial part of the energy mix Aker BP’s contribution as a pure play E&P company Sustainable Development scenario (SDS) Maximize value creation for shareholders and the society while producing the energy the wo
Slide 39: World-class low emissions
World-class low emissions Leading the way on low carbon Emissions intensity 2020 Key drivers behind Aker BP’s low emissions kg CO2/boe, equity share 20 20 20 21 Electrification Power from Shore to Valhall (2012) – Johan Sverdrup (2019)– 17 Edvard Grieg & Ivar Aasen (late 2022) 14 11 11 11 12 12 Effi
Slide 40: Decarbonization plan to net zero
Decarbonization plan to net zero Net zero across operations by 2030 1) Aker BP’s targets Electrification with power from shore 1. Carbon intensity <4 kg CO2e/boe >80% of production from 2023 2. Methane intensity < 0.1 % Starting Asset retirement point 3. Scope 2 emissions ~0 from 2023 Operational em
Slide 41: Aker BP set to further improve emissions performance
Aker BP set to further improve emissions performance Concrete actions taken to reduce emissions More than 80% of production with ~0 scope 1 emissions Energy efficiency: Targeting 2% improvement p.a. Driven by continued electrification and asset retirement Examples of recent achievements1) 100% 2020:
Slide 42: 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 (MT) Electrification of Estimated baseline with 1.8 no decarbonization measures1) Grieg / Aasen Retirement Current forecast 1.6 Electrification o
Slide 43: Neutralising residual emissions from 2030
Neutralising residual emissions from 2030 CO2 neutralisation status ✓ Leading low CO2 intensity is a competitive advantage for Aker Cumulative capture from existing projects BP to become net zero across operations Cumulative emissions to offset ✓ Main priority is to avoid and reduce our own emission
Slide 44: Deliver growth on time, cost and quality
Deliver growth on time, cost and quality Profitable growth from unique resource base 44
Slide 45: Uniquely positioned for profitable growth
Uniquely positioned for profitable growth ▪ Large resource base and diversified project portfolio with low break evens 1.4 bn boe 2C resources ▪ Supportive and investment friendly fiscal regime 15 projects ▪ Alliance model enabling strong execution in volatile supplier market with PDO in 2022 ▪ Port
Slide 46: Investing in highly profitable growth
Investing in highly profitable growth Aiming to sanction ~900 of 1,400 mmboe by end 2022 in new developments1) Projects targeting FID by end-22 Post tax unlevered IRR for projects with FID by end-2022 mmboe net to Aker BP Preliminary figures* USD 90/bbl USD 65/bbl USD 40/bbl 1 000 200% 180% ~900 >30
Slide 47: Investment-friendly fiscal regime
Investment-friendly fiscal regime Accelerated tax deductions reduce financial risk and improve project economics Aker BP est. capex before tax Aker BP est. capex after tax New tax system approved in June USD billion USD billion 5 5 Will work in tandem with temporary system from 2020 in response to t
Slide 48: Alliances – the cornerstone of our execution model
Alliances – the cornerstone of our execution model Key to secure capacity in the supply chains Aker BP’s alliance model Long-term collaboration model ▪ One team ▪ Common goals ▪ Shared incentives Key benefits ▪ Access to capacity and competence Organisation ▪ Improved efficiency ▪ Drive continuous i
Slide 49: Transforming drilling performance
Transforming drilling performance Enabled by digitalization and world-class alliance partners Performance Benchmark from Drilling & Wells Rushmore benchmarking 2021-2022 Meter/dry hole day +52% Collaborative Well Planning (CWP) NCS average Aker BP average Digital Well Planning (DWP) Total $/meter -1
Slide 50: On track to sanction 900 mmboe by end-2022
On track to sanction 900 mmboe by end-2022 Area 2021 2022 2023 2024 2025 2026 2027 Kobra East & Gekko Alvheim Frosk Trell & Trine Hanz Edvard Grieg Lille Prinsen & Ivar Aasen Rolvsnes Full Field Solveig Phase II NOA Fulla NOAKA Krafla Ærfugl phase 2 Skarv Skarv satellites (Ørn, Shrek, Alve Nord, Idu
Slide 51: Strong production growth with high-return barrels
Strong production growth with high-return barrels Production outlook1) mboepd ~525 mboepd 500 production by 2028 30 $/bbl 400 300 Targeted NPV-10 breakeven 200 100 Capital efficient with supportive tax system 0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Actual Sanctioned Non-sanctio
Slide 52: Establish the next wave of profitable growth options
Establish the next wave of profitable growth options Uniquely positioned on the NCS 52
Slide 53: Significant upsides to current plans around existing assets
Significant upsides to current plans around existing assets Wisting • Skarv: Exploration prospectivity (ILX) and development of tight reservoirs arstad • Edvard Grieg/Ivar Aasen: Infills, ILX and basement upside enabled by 4D seismic • Johan Sverdrup: Infill drilling to extend plateau and accelerate
Slide 54: Exploration strategy
Exploration strategy Licence map Uniquely positioned on the NCS Aker BP operator ▪ Second largest licence holder with 189 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
Slide 55: Disciplined approach to M&A
Disciplined approach to M&A Value creation through a combination of M&A and organic growth (market cap) NOK ~200bn NOK NOK 73bn 52bn NOK NOK <NOK 4bn 8bn 1bn 2006 2009 2014 2016 2017 2022 55
Slide 56: Summary
2* AkerBP Summary 56
Slide 57: Our strategic priorities next 5 years
Our strategic priorities next 5 years Aker BPs strategic framework Return maximum value to our shareholders and our society Lead the transformation of E&P Digitalisation – Alliances – Future Operations Discover 250 Zero serious incidents Equity GHG intensity mmboe by 2027 < 4kg CO2e/boe Grow product
Slide 58: The E&P company of the future
The E&P company of the future Reserves & Production Industry-leading Industry-leading Sustainable Resources growth low production cost low carbon emissions dividend growth 2.8 bn ~400 <$7 <4 kg $2.0 barrels mboepd in 2022, USD/boe CO2/boe USD/share oil equivalent ~525 mboepd in 2028 targeted from 20
Slide 59: www.akerbp.com
AkerBP www.akerbp.com