Var Energi Asa · OSL:VAR

Var Energi Asa — Q3 2022 Earnings Presentation

27 slides from Var Energi Asa's earnings presentation, Oct 25, 2022

  1. Slide 1: Third quarter 2022

    Third quarter 2022 Results presentation | 25 October 2022

  2. 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

  3. 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

  4. Slide 4: Security situation

    Security situation  Safety and security of our employees always the first priority  Heightened security level after Nord Stream leakages  Close collaboration with the Norwegian authorities and within the industry  Increased awareness and attention on all facilities  Main focus on safe and secur

  5. Slide 5: Third quarter 2022 highlights

    Third quarter 2022 highlights Maintaining safe and reliable supply of oil and gas  Production increased from Q2 on less turnaround and maintenance activity  Continued material gas production  Full-year 2022 production guidance revised to 220-225 kboepd Strong cash generation from operations  Ave

  6. Slide 6: Key performance indicators

    Key performance indicators Q3 2022 vs. Q2 2022 Actual serious incidents frequency1 Production Cash flow from operations 0.1 215 kboepd USD 1 503m (0.1) (210) (1 535) CO2 emissions intensity Production cost per boe Dividend for the quarter 10.4 kg/boe USD 13.4 USD 290m (8.6) (14.7) (260) 6 1 12 month

  7. Slide 7: Operational review

    Operational fe, Var energi

  8. Slide 8: Maintained focus on implementation of safety initiatives

    Maintained focus on implementation of safety initiatives TRIF1 and SIF2 CO2 emission intensity for operated assets kg CO2/boe 18 16 3.7 14 3.2 12 10.4 2.7 10 8.7 8.6 8 1.3 1.4 1.3 6 4 2 0 FY 2021 Q2 2022 Q3 2022 FY 2021 Q2 2022 Q3 2022 TRIF SIF  No serious incidents in the quarter  Increase in CO2

  9. Slide 9: Reduced impact from turnarounds, continued material gas share

    Reduced impact from turnarounds, continued material gas share Production, production efficiency operated assets and product mix kboepd 1,0 0,9  Increased production from Grane, Ekofisk 82% 82% and Statfjord B following completion of 73% 0,8 turnarounds in Q2 0,7 247  Turnaround on Balder/Ringhorne

  10. Slide 10: Operational update on operated assets

    Operational update on operated assets Goliat Strong operational performance  Q3 production of 19.2 kboepd, in line with previous quarter  Production efficiency of 88% in Q3 Balder/Ringhorne Successfully executed turnaround  Production of 12.2 kboepd, down 5 kboepd from previous quarter  Producti

  11. Slide 11: Unit production cost improved on higher production

    Unit production cost improved on higher production Production cost per boe produced1 USD/boe  Reduction due to less turnaround and maintenance activity combined with exchange rate effects 16 14.7 15  Full year 2022 opex per boe guidance maintained 13.5 14 13.4 13.3 at USD 12.5 to 13.5 13 Guidance

  12. Slide 12: Balder X project update

    Balder X project update  Revised cost estimate and more robust schedule targeting first oil in Q3 2024  Progress impacted by supply chain disturbances and additional scope of work on Jotun FPSO  Faster ramp-up of production in 2024  Valuable project set to extend production in the Balder hub for

  13. Slide 13: Remaining project portfolio progressing according to plan

    Remaining project portfolio progressing according to plan Existing production and sanctioned developments to Johan Castberg deliver >350 kboepd by end-2025  Heavy lift campaign completed 2P  Subsea and marine campaign close to Key Areas Op. 2023 2024 2025 mmboe completion Balder 216 Balder X  Pro

  14. Slide 14: High year-end exploration activity

    High year-end exploration activity 2022 work programme Continued hub-focused exploration Pre-drill Snøfonn Vår Pre-drill 2022 campaign unrisked Adjacent to Johan 30-50 License Prospect Operator Energi unrisked Timing Status mmboe Discovery Castberg share mmboe VE Dry well Skavl Stø Statfjord PL 057

  15. Slide 15: Financial review

    Financial review fe, Var energi

  16. Slide 16: Key financials

    Key financials USD million Q3 2022 Q2 2022 Q3 2021 YtD 2022 YtD 2021 Petroleum revenues 2 520 2 423 1 615 7 426 3 761 EBIT 1 454 1 674 824 4 846 1 762 Profit before taxes 1 161 1 214 640 4 071 1 461 Production cost (USD/boe) 13.4 14.7 11.6 13.3 11.5 Operating CF before tax 2 027 1 864 1 332 6 275 2

  17. Slide 17: Gas representing 53% of revenues in Q3

    Gas representing 53% of revenues in Q3 Total petroleum revenues Sold volumes Over-/(underlift) USDm mmboe 7 426 22.9 0.2 19.5 18.1 58.4 63.1 0.4 3 577 (2.2) (2.8) (1.6) Q3 2021 Q2 2022 Q3 2022 YtD 2022 YtD 2021 3 761 Realised prices USD/boe 2 520 250 YtD YtD 2 423 2 458 204 2022 2021 200 1 092 3 540

  18. Slide 18: Q3 gas price realisation and future gas sales portfolio

    Q3 gas price realisation and future gas sales portfolio Q3 2022 gas revenues Forward-looking gas sale  Month and day ahead weighted towards France and  Robust sales portfolio, access to several markets Germany primarily  Month (MA) and day ahead (DA) weighted towards France and  Fixed price sale

  19. Slide 19: Over/Underlift adjustments impacting production cost

    Over/Underlift adjustments impacting production cost Production cost (sold volumes) USDm  Change in over/underlift in Q3 of USD 165 million positively 378 360 impacting production cost (15)  Impact from allocation of liftings on fields/products and timing of liftings  Overlift positions valued at

  20. Slide 20: Continued strong cash flow generation

    Continued strong cash flow generation CFFO and CAPEX Income tax received / (paid) USDm USDm 1 000 3.5 800 737 3.5 5 239 600 3.0 3.0 400 200 18 2.5 3 625 2.5 0 -200 2.0 2.0 1 535 1 503 -400 (329) 1 350 -600 (524) 1.5 1.5 1 875 -800 1 794 -1 000 1.0 729 1.0 (1 036) 573 599 -1 200 -1 400 0.5 0.5 -1 600

  21. Slide 21: Significant cash build in the quarter

    Significant cash build in the quarter Cash flow development Q3 2022 Available liquidity USDm USDm 28 5 099 26 (288) 4 492 24 22 (524) 20 2 316 18 3 600 16 1 535 (603) (50) 16 1 499 3 600 14 (260) 12 10 892 8 6 1 499 4 892 2 0 Cash at CFFO Working Taxes paid CFFO Cash flow Net Dividends FX Cash at Q2

  22. Slide 22: Improved financial position

    Improved financial position Net interest-bearing debt and leverage ratio1 USDbn 1.0x  Committed to maintaining an Investment Grade rating – Target of 1.3x NIBD/EBITDAX maintained 0.4x 0.2x 8 483 7 336 4 581 4 592 2 692 2 056 Q3 2021 Q2 2022 Q3 2022 NIBD EBITDAX NIBD/EBITDAX 22 1 Net interest-bearin

  23. Slide 23: Dividend guidance

    Dividend guidance Dividend distribution USDm  Dividend for Q3 2022 of USD ~0.12 per share to be paid 9 November 2022 – Paid in NOK at exchange rate of NOK/USD 10.55 1 075  Dividend guiding for Q4 of USD FY ‘22 300 million (~0.12 USD per share)  Dividend expectation of USD 1.075 billion full-year

  24. Slide 24: Outlook

    Outlook Production  Production target in 2022 revised to 220-225 kboepd  Targeting USD 12.5 - USD 13.5 in 2022 Production cost  Expected to improve over the medium term towards USD 8/boe as new projects come onstream and improvement program is progressing  2022 capex guidance of USD 2.3 – 2.6 bi

  25. Slide 25: Concluding remarks

    Concluding remarks Ld fe, Var energi

  26. Slide 26: Summary

    Summary  Maintaining safe and reliable operations  Strong cash generation from operations  Improved financial position  Progressing towards end-2025 production target 26

  27. Slide 27: Third quarter 2022

    Third quarter 2022 Results presentation | 25 October 2022

Vår Energi — Q3 2022 Earnings Presentation on 6ix