Norsk Hydro ASA · OSL:NHY
Norsk Hydro ASA — Investor Day (December 2005)
28 slides from Norsk Hydro ASA's investor day presentation, December 2005
Slide 1: Forward-looking statements / use of non-GAAP financial measures
Forward-looking statements/ use of non-GAAP financial measures In order to utilize the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, Hydro is providing the following cautionary statement: This presentation contains certain forward-looking statements
Slide 2: Cautionary note
Cautionary note The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under exist
Slide 3: Exploration
Exploration Erik Finnstrøm Area Manager Americas Oil & Energy
Slide 4: Exploration success – 14 discoveries in 2005
Exploration success – 14* discoveries in 2005 Russia Norway Canada Iran GoM Libya Angola *Exclusive Spinnaker results 4
Slide 5: Exploration success – 14 discoveries in 2005
Exploration success – 14* discoveries in 2005 Norway 7 discoveries z Astero z Troll Brent z M5 z Peon z Oseberg B Sør Russia z Oseberg J z Stetind Norway Denmark Canada 1 discovery Iran z Hejre 1 discovery z Azar Iran GoM Libya GoM Libya 7 discoveries 3 discoveries (Spinnaker Expl.) z ThunderHawk 2
Slide 6: Exploration focus – unlocking our potential
Exploration focus – unlocking our potential Oslo z Technical personnel concentrated in one group – Global Exploration Calgary z Develop - Common Work processes Houston - Quality Control procedures - Standardized risk-volume analysis methodology - Global basin, prospect and well candidate ranking - G
Slide 7: Global Exploration work processes
Global Exploration work processes Focus on the subsurface QC Business unit Business project + decision unit plan Global Exploration result budget O&E management n r i o r itizatio P Decision gate Decision gate Prospects Volume-risk analysis Play analysis Exploration strategy 7
Slide 8: Global Exploration work processes
Global Exploration work processes NCS Barents Sea/ Russia Americas Africa/Middle East Core exploration area Frontier exploration area 8
Slide 9: Global Exploration work processes
Global Exploration work processes Focus on predictability QC/Peer review/ Management review Prospect generation Drill Feedback Statistical basis Post well analysis 9
Slide 10: Global Exploration work processes
Global Exploration work processes Focus on predictability Review performance in choosing all risk and volume parameters % All targets / Pc*: Number of discoveries % Result Net reservoir prognosis vs result 100 25 140 90 80 20 120 70 100 60 15 80 50 40 10 60 30 40 20 5 20 10 0 0 0 1 3 5 7 9 11 13 15
Slide 11: Global Exploration work processes: basin ranking
Global Exploration work processes Global basin ranking z 182 basins reviewed and ranked on sub-surface criteria (weighted numerical basis) z Creates a level playing field for our resource allocation z Reveals new basins for future focus and a better ranking of current focus areas Confidence 3 2 1 11
Slide 12: Global Exploration work processes: basin prioritization
Global Exploration work processes Global basin prioritization low Infrastructure led exploration Growth Risk Exit Frontier Confidence high medium low high low Volume high 12
Slide 13: Global Exploration work processes: basin prioritization
Global Exploration work processes Global basin prioritization low Infrastructure led exploration Growth Risk Exit Frontier Confidence high medium low high low Volume high 13
Slide 14: Global Exploration work processes: basin prioritization
Global Exploration work processes Global basin prioritization low Infrastructure led exploration Growth Risk Exit Frontier Confidence high medium low high low Volume high 14
Slide 15: Global Exploration work processes: basin prioritization
Global Exploration work processes Global basin prioritization low Infrastructure led exploration Growth Risk Exit Frontier Confidence high medium low high low Volume high 15
Slide 16: Global Exploration work processes: basin prioritization
Global Exploration work processes Global basin prioritization low Infrastructure led exploration Growth Risk Exit Frontier Seismic USD Confidence high medium low high low Volume high 16
Slide 17: Drill candidate ranking – subsurface criteria
Global Exploration work processes Drill candidate ranking – subsurface criteria Decreasing NCS Frontier priority NCS Frontier Recommended risk threshold NCS Frontier Intern. ILX Evaluations being finalized : NCS ILX z 18 NCS ILX prospects e NCS ILX m z 3 International ILX prospects lu vo NCS ILX z 1
Slide 18: Focus on critical competence and technologies
Focus on critical competence and technologies Seismic imaging <-> PSDM* z Integration of interpretation and processing prioritized z Currently building an internal organization and hardware resources z Will have the capacity to complete 10 projects/year * PSDM = Pre-stack depth migration 18
Slide 19: Focus on critical competence and technologies
Focus on critical competence and technologies Carbonate geology z Hiring campaign directed at world-class expertise z Carbonate research program – increased resources z Tighter integration of research competence and technology with operational projects 19
Slide 20: Exploration success – Azar discovery, Iran
Exploration success – Azar discovery, Iran z Azar-2 proved in excess of 1 billion barrels oil in place z An extensive test program produced excellent results z Significant additional upside potential 20
Slide 21: Exploration success – Azar discovery, Iran
Exploration success – Azar discovery, Iran z 1 000 km 2D seismic acquired in extremely rugged terrain z Little to no infrastructure in area, previous war frontier - Helicopter supported, dynamite sourced - No serious injuries - Good quality data achieved - Very high daily production relative to prev
Slide 22: Exploration success – Azar discovery, Iran
Exploration success – Azar discovery, Iran z Geologic field work performed to understand: - structural development - reservoir variation – fracturing - drilling and logging challenges - future appraisal locations 22
Slide 23: 2006 highlights: Changuleh west well, Iran
2006 highlights Changuleh west well - Iran z Follow-up to Azar on separate structure z Capitalize on - geological understanding - drilling experience 23
Slide 24: 2006 highlights: Spinnaker portfolio, Gulf of Mexico
2006 highlights Spinnaker portfolio – Gulf of Mexico z Deep portfolio of prospects and leads - Now hold a complete portfolio spanning ILX to Growth to Frontier plays in GoM z Relatively early in the life of most license terms z Integration of databases and knowledge will significantly strengthen our
Slide 25: 2006 highlights: Paleogene trend, Gulf of Mexico
2006 highlights Paleogene trend – Gulf of Mexico z Hydro exploration acreage is well positioned in the trend z Currently working to mature prospects in Hydro blocks with high equity - Significant industry interest in Hydro position 25
Slide 26: 2006 highlights: Strong NCS infrastructure drilling program
2006 highlights Strong NCS infrastructure drilling program z Troll Future development - Low risk prospects expected to prove additional resources to strengthen development z Oseberg Area - Low risk prospects expected to prove oil reserves to fill available production capacity 26
Slide 27: 2007 and onwards ...
2007 and onwards ... z Continued focus on - Play analysis - Aggressive acquisition of data and acreage in high-graded areas - Defining high impact prospects - Continual improvement z High impact prospects being matured in - NCS - Libya - GoM - Iran 27
Slide 28: Global Exploration – summary
Global Exploration – summary z Exploration ‘turn-around’ successful - Unified exploration work processes firmly in place - Global prioritization scheme implemented - Predictable prospect analysis implemented z 2005 a good year at the drill bit - Azar the world’s largest oil discovery in 2005 - About