26 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Apr 29, 2013
Slide 1: Results First Quarter 2013
29 April 2013 Results FIRST QUARTER 2013 An integrated energy player focused on exploration and production
Slide 2: Agenda
Key highlights Strategy execution update Business overview Final remarks Appendix 2 Results - First quarter 2013
Slide 3: Key highlights
Key highlights ▪ Ongoing exploration campaign, namely in Potiguar and in Namibia ▪ Focus on mitigating execution risk, with two additional FPSO contracted for Lula field ▪ FPSO Cidade de Paraty already located in Lula NE, on track to start production by the beginning of June ▪ Ebitda in 1Q13 of €253
Slide 4: Strategy execution update
Key highlights Strategy execution update Business overview Final remarks Appendix 4 Results - First quarter 2013
Slide 5: Currently drilling the first exploration well in Namibia
Currently drilling the first exploration well in Namibia Namibia: hydrocarbon seepage map ▪ Wingat prospect at the Walvis basin started to be drilled on March 26, and results are expected until the end of the 2Q13 ▪ Material 2013 exploration campaign with combined gross potential of c.8 bn bbl1 reco
Slide 6: Drilling the first exploration well at the Brazilian Equatorial margin
Drilling the first exploration well at the Brazilian Equatorial margin Potiguar ▪ Drilling of the Araraúna prospect in Potiguar started on February 11, targeting the Cretaceous interval ▪ Results expected at the end of the quarter, with potential to open a new play-fairway ▪ Two additional explorati
Slide 7: Drilling at the Agulha-1 oil prospect expected to start in May
Drilling at the Agulha-1 oil prospect expected to start in May Mozambique ▪ Agulha-1 (former K Bulge) prospect is the first exploration well targeting oil, and results are expected until early 3Q13 ▪ Drilling at the South to start in May following conclusion of appraisal campaign at the Mamba/Coral
Slide 8: Carrying a promising exploration and appraisal drilling campaign
Carrying a promising exploration and appraisal drilling campaign Galp Energia 2013 drilling schedule Spud Duration Well Area Target Interest E/ A date (# days) status Brazil* Lula Lula West-2 10% A 4Q12 - Concluded Iara Iara West-2 10% A 4Q12 150 In progress Iara Iara HA 10% A 4Q13 120 - BM-S-8 Carc
Slide 9: Continuously reinforcing confidence on Lula development project
Continuously reinforcing confidence on Lula development project Lula/Iracema planned installed capacity (kbopd) ▪ Two additional FPSO contracted on the international market to start producing by 1,400 Lula West 2016 1,200 Lula Ext.S. 1,000 Lula Alto ▪ First six FPSO leased and Lula Central subsequen
Slide 10: Lula field, with second FPSO on track for first oil in early June
Lula field, with second FPSO on track for first oil in early June FPSO Cidade de Paraty (120 kbopd) ▪ FPSO Cidade de Paraty is already on location being moored, after it passed on all standard safety tests ▪ Production to start through one producing well, and two more wells to be connected until the
Slide 11: Testing WAG performance in Lula field
Testing WAG performance in Lula field CMD 2013: Lula/Iracema - Recovery factor ▪ Recovery factor in Lula/Iracema fields recently revised upwards from 23% to 28% ▪ Starting to test the WAG mechanism with FPSO Cidade de Angra dos Reis in May ▪ WAG performance expected to improve reservoir management a
Slide 12: New units at the Sines refinery operating steadily
New units at the Sines refinery operating steadily New units at the Sines refinery ▪ Gradual start-up of new units constraining margin capture in 1Q13 ▪ Hydrocraker currently operating at full capacity ▪ Refining system ready to increase profitability from 2Q13 onwards, considering the international
Slide 13: Business overview
Key highlights Strategy execution update Business overview Final remarks Appendix 13 Results - First quarter 2013
Slide 14: Ebitda in Q1 of €253 m, up 24% YoY
Ebitda in Q1 of €253 m, up 24% YoY Profit & Loss (€ m) ▪ Ebitda increase mainly driven by positive improvement in 1Q13 1Q12 YoY QoQ refining and LNG trading Turnover 4,471 4,795 (7%) +6% activities Ebitda 253 204 +24% +8% E&P 91 88 +4% +19% ▪ Financial results benefited from R&M 59 32 +82% (26%) low
Slide 15: Solid gearing maintained
Solid gearing maintained Balance sheet (€ m) ▪ Fixed assets increase driven by investment in the upstream activities Mar.2013 Dec.2012 Mar - Dec Fixed assets 6,862 6,599 +263 ▪ Net debt increased on the back Work in progress 2,803 2,655 +148 of capex execution and working Other assets (liabilities)
Slide 16: Short term outlook
Short term outlook ▪ 2Q13 working interest production targeted at c.22 kboepd, as FPSO Cidade de Angra dos Reis undergoes maintenance work ▪ Upgrade project full contribution expected in the 2Q, as the hydrocracking complex operates steadily ▪ Iberian economic environment still impacting demand of o
Slide 17: Final remarks
Key highlights Strategy execution update Business overview Final remarks Appendix 17 Results - First quarter 2013
Slide 18: Final remarks
Final remarks ▪ Exploration campaign to proceed in other areas, namely Agulha-1 in Mozambique and Bracuhy in Santos basin ▪ Second FPSO at Lula field begins production at the beginning of June, contributing to relevant production growth in 2H 2013 ▪ Enhanced oil recovery techniques to be tested with
Slide 19: Appendix
Key highlights Strategy execution update Business overview Final remarks Appendix 19 Results - First quarter 2013
Slide 20: Net entitlement production up 21% YoY in 1Q13
Net entitlement production up 21% YoY in 1Q13 Main E&P data ▪ Lula-1 project drove production 1Q13 1Q12 YoY QoQ growth with an average production of 11.5 kboepd Working interest production kboepd 23.5 22.6 +4% +1% Net entitlement production kboepd 20.1 16.5 +21% +14% Angola kbopd 8.2 8.7 (6%) +19% ▪
Slide 21: Improved refining activity driving 82% increase in R&M Ebitda
Improved refining activity driving 82% increase in R&M Ebitda Main R&M data ▪ Refining business benefited from improved refining 1Q13 1Q12 YoY QoQ margins and higher crude Galp Energia refining margin USD/bbl 1.8 0.8 n.m. +92% volumes processed Refining cash cost USD/bbl 2.6 2.2 +16% (4%) Crude proc
Slide 22: LNG trading volumes increased by 15% YoY
LNG trading volumes increased by 15% YoY Main G&P data ▪ LNG trading volumes 1Q13 1Q12 YoY QoQ accounted for c.40% of volumes sold NG supply total sales volumes mm3 1,721 1,725 (0%) +10% Sales to direct clients mm3 1,075 1,165 (8%) +8% Electrical mm3 199 368 (46%) (21%) ▪ Leveraging strong LNG deman
Slide 23: Around 80% of total capex allocated to E&P activities in 1Q13
Around 80% of total capex allocated to E&P activities in 1Q13 Capital expenditure (€ m) ▪ Exploration activities responsible for c.30% of G&P upstream capex R&M E&P - Production ▪ Lula project responsible for the E&P - Exploration 306 majority of E&P development capex 189 187 ▪ Downstream and gas ca
Slide 24: Extending debt maturities in line with financing strategy
Extending debt maturities in line with financing strategy M/L-term debt reimbursement profile2 (€ m) 1,200 ▪ Addressing refinancing needs with c.€1.3 bn already secured 1,000 in 2013 800 600 400 ▪ Net debt to Ebitda of 0.9x, if 200 loan to Sinopec were 0 considered as cash and 2013 2014 2015 2016 20
Slide 25: Disclaimer
Disclaimer RCA figures except otherwise noted. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “will,” “may,” "co
Slide 26: Investor Relations contact
Investor Relations team Tiago Villas-Boas, Head Cátia Lopes Inês Santos Maria Borrega Pedro Pinto +351 21 724 08 66 Investor.relations@galpenergia.com For further information on Galp Energia, please go to: www.galpenergia.com Results & presentation weblink www.galpenergia.com/en/investidor/Relatori