Var Energi Asa · OSL:VAR
Var Energi Asa — Q2 2023 Earnings Presentation
24 slides from Var Energi Asa's earnings presentation, Jul 25, 2023
Slide 1: Second quarter and first six months 2023
Second quarter and first six months 2023 Results presentation | 25 July 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 Vår Energi presenters
Today’s Vår Energi presenters Torger Rød Stefano Pujatti Ida Marie Fjellheim CEO CFO Head of Investor Relations 3
Slide 4: Second quarter 2023 highlights
Second quarter 2023 highlights Solid performance on operated assets ▪ 88% production efficiency on operated fields and improved drilling performance ▪ Production impacted by maintenance, turnarounds and unplanned downtime at partner-operated fields Continued high gas price realisation ▪ Gas sales st
Slide 5: Neptune acquisition summary
Neptune acquisition summary Neptune Norway’s high-quality NCS assets located near existing hub areas The Barents Sea Operator of Goliat and partner in Key terms and conditions the Johan Castberg development ▪ Vår Energi to acquire 100% of the shares of Neptune Energy Norge AS Snøhvit Highly strategi
Slide 6: Key performance indicators
Key performance indicators Q2 2023 vs. Q1 2023 Actual serious incidents frequency1 Production Cash flow from operations 0.0 202 kboepd USD 231m (0.0) (214) (1 358) CO2 emissions intensity Production cost per boe Dividend for the quarter 11.5 kg/boe USD 15.5 USD 270m (13.0) (13.1) (270) 6 1. 12 month
Slide 7: Operational review
ar energi Pe V. Operational review
Slide 8: Continuous work on safe and responsible operations
Continuous work on safe and responsible operations SIF1 and TRIF2 18 CO2 emission intensity for operated assets kg CO2/boe 16 3.8 14 13.0 12 11.5 2.7 2.8 10 8.6 8 1.4 6 4 0.5 0.6 2 0 Q2 2022 Q1 2023 Q2 2023 Q2 2022 Q1 2023 Q2 2023 SIF TRIF ▪ No serious incidents in the quarter ▪ Reduced emission int
Slide 9: Turnarounds and seasonal maintenance in the quarter
Turnarounds and seasonal maintenance in the quarter Production, production efficiency1 and product mix kboepd 1,0 ▪ Developments coming on stream 89% 88% ▪ Hyme, Bauge and Fenja on stream in April 85% 0,9 ▪ Volumes lower than expected due to start-up 0,8 challenges at the Njord host 0,7 214 214 210
Slide 10: Solid performance on operated assets
Solid performance on operated assets Goliat ▪ Continued stable performance on Goliat with 93% production efficiency ▪ Three-day planned maintenance stop completed on plan Balder/Ringhorne ▪ Production efficiency of 83% with planned maintenance in the quarter ▪ Restart of the riser at Ringhorne in Ma
Slide 11: Quarterly production cost impacted by seasonal maintenance
Quarterly production cost impacted by seasonal maintenance Production cost per boe produced1 USD per boe 18 17 16 15.5 15.5 ▪ Impact from lower production, higher maintenance activity 15 14.1 14.3 2023 guidance and currency effects 14 13.1 13.3 14.5 13 12 11 ▪ Full-year 2023 opex per boe guidance ma
Slide 12: Jotun FPSO refloated and turret successfully installed
Jotun FPSO refloated and turret successfully installed Key milestones met: Drilling and SPS/SURF progressing well: On critical path, key focus areas: Major heavy-lift installations completed Seven of 15 producing wells completed Increase productivity High construction activity Front-loading subsea c
Slide 13: Project portfolio progressing according to schedule
Project portfolio progressing according to schedule Existing production and sanctioned developments Breidablikk First oil field extension First oil new field development Started production ▪ The High Activity Period (HAP) on Grane topside has been completed and flotel demobilised Hub areas Operator
Slide 14: Updated 2023 exploration campaign
Updated 2023 exploration High-value exploration near existing hubs campaign Venus – (2024) Countach - Q1 Discovery Est. recoverable resources: Pre-drill unrisked mmboe1,2: 94 3-13 mmboe Vår Pre-drill Pre-drill License Prospect Operator Energi unrisked unrisked Status share mmboe mmboe VE PL 229 Coun
Slide 15: Financial review
Financial review
Slide 16: Key financials
Key financials USD million Q2 2023 Q1 2023 Q2 2022 1H 2023 1H 2022 Petroleum revenues 1 432 2 089 2 423 3 521 4 906 EBIT 778 1 432 1 725 2 210 3 475 Profit before taxes 701 1 276 1 265 1 977 2 992 Production cost (USD/boe) 15.5 13.1 14.7 14.3 13.3 Operating CF before tax 1 285 1 935 1 864 3 220 4 24
Slide 17: Continued high realised gas price
Continued high realised gas price Total petroleum revenues Q2 2023 gas revenues USD million 4 906 Oil Gas NGL ▪ Month and day ahead sales weighted towards France and Germany with ~36% of volumes exposed to high Month ahead prices 2 484 3 522 ▪ Fixed price sales included contracts with Gas Year Ahead
Slide 18: High cash tax payments in Q2 related to 2022 results
High cash tax payments in Q2 related to 2022 results CFFO and capex Income tax paid USD million 1 000 USD million 3.5 3 735 500 3.0 0 2.5 ~(250) 2.0 (329) -500 ~(500) (512) (577) 1 589 1.5 1 535 1 358 1 330 -1 000 1 195 (1 054) 1.0 642 687 573 -1 500 0.5 231 (1 631) 0.0 -2 000 Q2 2022 Q1 2023 Q2 202
Slide 19: Continued strong liquidity position
Continued strong liquidity position Cash flow development Q2 2023 Available liquidity USD million USD million 28 195 26 24 22 20 18 1 090 3 000 16 14 (1 054) 12 769 231 3 000 10 8 73 6 4 (696) 4 111 769 2 (270) 111 0 Cash at end- CFFO Working Taxes paid CFFO after tax Cash flow Net financing Dividen
Slide 20: Optimising the long-term financing structure
Optimising the long-term financing structure Net interest-bearing debt and leverage ratio1 Maturity profile USD billion USD million EUR 600 million bond issue in April 13 1.0 2023 to refinance the remaining USD 0.8 500 million bridge-to-bond 12 0.4x 0.4x 0.6 11 0.3x 0.4 10 0.2 0.0 9 1 500 1 500 8.1
Slide 21: Maintaining attractive and resilient distributions
Maintaining attractive and resilient distributions Dividends USD million ▪ Dividend guiding for Q3 2023 of USD 270 million (~0.11 USD per share) 300 290 270 270 270 ▪ Expected dividend for 2023 of approximately 30% of CFFO after tax ▪ Dividend for Q2 2023 of USD ~0.11 per share to be paid 14 August
Slide 22: Guidance for 2023 maintained
Guidance for 2023 maintained 2023 outlook Actual 1H 2023 Production 210-230 kboepd 208 kboepd Production cost USD 14.5-15.5 per boe USD 14.3 per boe USD 2.4-2.7 billion excl. exploration and abandonment USD 1.3 billion Capex Exploration USD ~200 million Exploration USD 95 million Abandonment USD ~50
Slide 23: Summary
Summary Solid performance on operated assets Continued high price realisation Project portfolio progressing per schedule Accelerating growth and value creation 23
Slide 24: Second quarter and first six months 2023
Second quarter and first six months 2023 Results presentation | 25 July 2023