Ithaca Energy Plc · LSE:ITH

Ithaca Energy — Investor Presentation (July 2021)

29 slides from Ithaca Energy's investor presentation, July 2021

  1. Slide 1: Ithaca Energy Management Presentation

    Ithaca Energy Management Presentation July 2021

  2. Slide 2: Agenda

    Agenda Ithaca Energy overview Key highlights Financial review 1

  3. Slide 3: Ithaca Energy overview

    SECTION 1 Ithaca Energy overview

  4. Slide 4: Introduction to Ithaca Energy

    Introduction to Ithaca Energy • North Sea oil and gas company operating exclusively on the UK Continental Shelf • Focused on low-risk, operated production and development-led growth where Ithaca can manage the nature, timing and quantum of expenditure Ithaca Energy • Interests in 17 producing fields

  5. Slide 5: Continued value-focused growth and deleveraging

    Continued value-focused growth and deleveraging Historical EBITDAX evolution 1 ($ MM) ~2x • The company has increased its EBITDAX by ~2x through value-accretive organic and inorganic opportunities, including the acquisition of UK North Sea 756 assets from Chevron and Captain EOR Phase I 745 • Optimi

  6. Slide 6: Established North Sea operator with diversified high quality asset base

    Established North Sea operator with diversified high quality asset base Key operational highlights1 Key financial highlights 65 kboe/d production in Q1 2021 $756 MM EBITDAX 4 c.76% Operated portfolio 2 c.75% of remaining 2021 production hedged 196 mmboe 2P reserves $499 MM Liquidity headroom Captain

  7. Slide 7: Ithaca strategy: create value through distinctive operations and growth

    Ithaca strategy: create value through distinctive operations and growth 1 Adjusted opex reduction 20201 ($MM) ($87 MM)  Lean operator mentality Outstanding (18%)  Extensive use of digital operations to link onshore operations 476 389 and offshore 277 199  Various opex reduction initiatives 2019 2

  8. Slide 8: Predominantly operated portfolio with well understood performance characteristics

    Predominantly operated portfolio1 with well understood performance characteristics 1 Q1 2021 Production – ~65 kboe/d Captain Captain 20.0 kboe/d Interest: 85.0% 2P Reserves: 89 mmboe 2020 Production: 22 kboe/d Greater Stella Area 12.0 kboe/d % Liquids reserves: 100% Britannia and Satellites 12.9 kbo

  9. Slide 9: Captain: flagship asset with high potential

    1 Captain: flagship asset with high potential Asset Highlights Material resource base Increased resource Long-life asset Approximately 1.1 Bn bbls recovery Expected reserves life of of oil-initially –in-place with Projects sustaining and 11 Years1 ~30% recovery to date increasing production Links to

  10. Slide 10: GSA: value maximising hub and spoke strategy

    2 GSA: value maximising “hub and spoke” strategy Asset Highlights Prime location Full control Recent discoveries Central Graben Area of Partner interests acquired Isabella HPHT in 2020 Central North Sea in 20181 Material resource base Low risk development With 2P of 31 mmboe and With central infrast

  11. Slide 11: Diversified asset base with further optionality

    Diversified asset base with further optionality 2020 Working 2P Reserves2 % Liquids3 Field Operator Production interest (mmboe) reserves start-up (kboe/d) Britannia & Satellites  5 field production hub, including Alder subsea tieback  Additional upside cost and reserves potential – operatorship Va

  12. Slide 12: Key highlights

    SECTION 2 Key highlights

  13. Slide 13: Key highlights

    Key highlights High quality 1 Diversified portfolio of high quality assets in a well established jurisdiction Operatorship 2 Majority operated portfolio, where Ithaca controls destiny to drive operational efficiency Prudent 3 Robust balance sheet and prudent financial framework Strong cash flow 4 St

  14. Slide 14: Diversified portfolio of high quality assets in a well established jurisdiction

    1 Diversified portfolio of high quality assets in a well established jurisdiction …and diversified asset base with Leading UK independent E&P …with oil weighted portfolio… well-known performance company… characteristics Top UK North Sea producers by 2020 production Oil and gas split by reserves 1 Re

  15. Slide 15: Majority operated portfolio, where Ithaca controls destiny

    2 Majority operated portfolio, where Ithaca controls destiny to drive operational efficiency …leading to low breakeven Majority-operated assets enabling …and stringent cost control… providing resilience to lower value focus… commodity prices Operated vs. non-operated asset base1 Adjusted opex per bb

  16. Slide 16: Robust balance sheet and prudent financial framework

    3 Robust balance sheet and prudent financial framework Low leverage High liquidity Capital discipline Net debt / EBITDAX Liquidity2 Capital allocation priorities3 (x) ($MM) 2019 45 4.1x 499 2020 120 335 2.5x 349 1.6x Q1 2021 1.4x 150 Total 120 530 2018 2019 2020 LTM 2020 Q1 2021 Dividend Payments RB

  17. Slide 17: Strong free cash flow generation through the cycle

    4 Strong free cash flow generation through the cycle …supported by robust hedging Significant cash flow generation… book providing downside …and material tax shield protection… Net cash flow from operating activities1 % Production hedging strategy2 UK tax allowance ($MM) (mmboe) ($Bn) 817 821 1.7 75

  18. Slide 18: Low-risk and value-accretive growth outlook

    5 Low-risk and value-accretive growth outlook Infill drilling Hub development Near field exploration Accretive M&A Short infill drilling investment Exploration portfolio Disciplined approach to M&A Low-risk hub-focused growth repayment period 12 new exploration licenses Chevron UK portfolio acquired

  19. Slide 19: Sustainability well-integrated into company strategy with clear ambitions and targets

    6 Sustainability well-integrated into company strategy with clear ambitions and targets Ambitions Impact • Trajectory to reduce emissions by Emission 25% by 2025 management • Carbon intensity down 7% vs. AFFORDABLE AND • Clear line-of-sight to reduce emissions CLEAN ENERGY 2019 through 17 initiative

  20. Slide 20: Experienced management with proven track record

    7 Experienced management with proven track record Strong Executive Management and Board… Bill Dunnett Dave Crawford Gilad Myerson • Strong management team with an average CEO CFO Executive Chairman and 25 years of Interim CEO Petroleum Engineer Chartered Accountant experience 35 34 20 • Extensive ex

  21. Slide 21: COVID-19

    The business displayed resilience even under the challenging conditions resulting from COVID-19 COVID-19 Business’ response… …resulted in safe operations with minimal operational impact  Developed relevant policies and rules aimed at maximising health and safety of employees Offshore operations rem

  22. Slide 22: Financial review

    SECTION 3 Financial review

  23. Slide 23: Substantial growth in production, revenue and EBITDAX

    Company has experienced substantial growth in production, revenue and EBITDAX Average daily production1 Revenue1 (kboe/d) Production decline ($MM) as a result of COVID-19 75 66 65 1,176 582 29 326 348 345 16 2018 2019 2020 Q1 2020 Q1 2021 2018 2019 2020 Q1 2020 Q1 2021 EBITDAX1 Net CFFO1 ($MM) ($MM)

  24. Slide 24: Increase in EBITDAX has supported deleveraging

    Increase in EBITDAX has supported deleveraging with ~$530 MM debt repaid since 2019 Issuance of RBL Summary consolidated balance sheet 1 Net debt / EBITDAX 2 and HY bond as ($MM) (x) part of Chevron UK portfolio Current Assets 243 4.1x acquisition Non Current Assets 3,948 Company re-paid ~$530 MM of

  25. Slide 25: Supplementary materials

    SECTION 4 Supplementary materials

  26. Slide 26: $817 MM Cash flow in 2020 with strong Q1 2021 performance

    $817 MM Cash flow in 2020 with strong Q1 2021 performance Summary income statement Summary statement of cash flow ($MM) 2018A 2019A 2020A Q1 2021A ($MM) 2018A 2019A 2020A Q1 2021A Revenue 325.6 582.2 1,176.1 344.7 (Loss) / Profit Before Tax 34.0 (139.0) (560.8) 61.5 Cost of Sales (267.9) (437.5) (79

  27. Slide 27: Clear line-of-sight to emission reduction trajectory of 25% by 2025

    Clear line-of-sight to emission reduction trajectory of 25% by 2025: 8 of 17 initiatives already underway Emissions reduction initiatives (ktCO2e reduction from 2019 baseline1) Initiatives underway -110kt Majority are policy, SOP and process changes (20%) ~550 ~440 Target: -25% reduction trajectory

  28. Slide 28: Investment Programmes Outlook

    Investment Programmes Outlook 2020 2021 2022 2023 2024 2025 Captain EOR Expansion 1 2x EOR Ph.I / 3 LCS 2x LCS / 2x LCS East Stage 1 – Platform Wells* FID 2x Prod. / 6x Inj. 1x Prod. Stage 2 – Subsea Wells* Short Cycle, Infill Drilling 2 Elgin / Franklin FID EIG EIH FIE WFF Callanish F5 Britannia Sa

  29. Slide 29: E WN E& RE GS Y&

    E WN E& RE GS Y&

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