Slide 1: Presentation of second quarter 2020
Presentation of second quarter 2020 OKEA ASA 14 July 2020
Slide 2: General and disclaimer
General and disclaimer This presentation is prepared solely for information purposes, and does not constitute or form part of, and is not prepared or made in connection with, an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities. Investors and p
Slide 3: Highlights 2nd quarter 2020
Highlights 2nd quarter 2020 Operations • No serious incidents • Production of 16,047 boepd • High availability and regularity at Draugen and Gjøa • Production restrictions managed Financial • Revenues from oil and gas of NOK 259 million • EBITDA of NOK 210 million • Non-cash effects of NOK 298 milli
Slide 4: Financials
Financials Birte Norheim, CFO
Slide 5: Oil and gas production, sales and revenues
Oil and gas production, sales and revenues Revenue decrease mainly due to fewer liftings on Draugen and significantly lower market prices Oil and gas volume (boepd) Realised prices (USD/boe) Petroleum revenues (NOK million) Production Sales Liquids Natural gas -44% -59% -75% -20% 25 910 60,7 -69% 1
Slide 6: Income statement
Income statement Q2 comments 2nd quarter H1 Income: Figures in NOK million 2020 2019 2020 2019 • One lifting at Draugen vs two last year Total operating income 275 1 039 825 1 804 • Significantly lower oil and gas prices compared to last year Production expenses -186 -186 -353 -330 Production expens
Slide 7: Impairment
Impairment NOK million -298 4 997 5 000 54 54 190 4 699 Impairment indicators Q2 4 500 -244 • Strengthened NOK against USD in the quarter 4 000 • Production start at Yme delayed with associated 3 500 capex increase • Revised project development concept at Gjøa P1 3 000 from 3 to 2 wells and reduced
Slide 8: Cash development Q2 2020
Cash development Q2 2020 NOK million 1 500 1 300 96 99 1 100 256 83 900 700 1 259 500 917 300 100 -100 Cash 31.03.20 Operating activities Taxes paid Investment activities Interest paid Cash 30.06.20 8
Slide 9: Temporary tax changes
Temporary tax changes Key changes • Direct expensing of capex with effect for the 56% special tax basis and uplift of 24% • For investments made in 2020 and 2021 and until planned production start for projects where a PDO is filed by the end of 2022 and approved prior to the end of 2023 • Refund of
Slide 10: Improved robustness and flexibility
Improved robustness and flexibility Bond amendment successfully concluded • Projected breach of bond covenants during 2020 following market turmoil • Appointed DNB as financial advisor and approached bondholders to seek a waiver • Process concluded at bondholder meetings in June; 75.5% support in OK
Slide 11: Operations and assets
OK¢ Operations and assets =A
Slide 12: Production volumes Q2
Production volumes Q2 Covid-19 managed, stable production from both Draugen and Gjøa Daily average production (boepd) Draugen (op) 25 000 • No incidents • High availability and regularity 20 045 • Production somewhat lower than Q1 due to 7 20 000 19 099 days shutdown in the end of June (start of 18
Slide 13: Yme
Yme Expected production start postponed to H1 2021 Status • Progress on modification of Maersk Inspirer has been lower than planned. Restrictions due to Covid-19 situation has further reduced yard progress • Covid-19 restrictions are being reduced and availability of Yard manning is gradually increa
Slide 14: Development Projects
Development Projects P1/Gjøa (Neptune op.) Grevling/Storskrymten Hasselmus Grevling • Costly appraisal well, improved • PL973 exploration wells to be • The temporary changes to the understanding of resevoir drilled in 2021 tax regime has been a key • Reduced scope from 3 to 2 • Substantial reduction
Slide 15: Outlook & concluding remarks
Outlook & concluding remarks
Slide 16: Outlook
Outlook Reassessing growth opportunities • Restart of profitable projects • Potential new projects • APA 2020 • Continue seeking inorganic growth opportunities Maintaining financial robustness • Bond amendment process concluded • Continued focus on reducing cost No change in guidance for 2020 • Prod
Slide 17: ax
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