Slide 1: Presentation of second quarter 2022
Presentation of second quarter 2022 OKEA ASA 13 July 2022
Slide 2: Cautionary statement
Cautionary statement • This presentation contains forward looking information • Forward looking information is based on management assumptions and analysis • Actual experience may differ, and those differences may be material • Forward looking information is subject to significant uncertainties and
Slide 3: OKEA second quarter 2022 results
OKEA second quarter 2022 results Highlights Operations • Production 16,039 boepd • Solid production performance from Draugen and Gjøa in the quarter • Planned shut-down for tie-ins/maintenance at Gjøa completed in April • Ramp up of production plant and start-up of new wells at Yme progressing at sl
Slide 4: Turmoil in European gas markets
Turmoil in European gas markets Growing difference between UK and European continental gas prices Actuals (day-ahead) 2022 Forwards (as per close 8 July 22) • Since the beginning of the quarter NBP (UK) prices been sold to discount compared to TTF (Netherlands) o Appears to be driven by LNG import c
Slide 5: Production volumes and reliability
Production volumes and reliability Strong performance from Draugen and Gjøa Production (boepd) 20 000 Draugen 16 316 14 908 Gjøa 16 038 16 039 208 Ivar Aasen 15 000 13 210 Yme 6 735 7 231 7 060 6 877 10 000 7 128 Gas 32% 5 000 9 348 7 107 8 367 6 478 60% 5 828 8% Oil 550 NGL 217 1 345 1 322 0 254 23
Slide 6: Safety and emissions
Safety and emissions Serious incident frequency (SIF) – per million work-hours* Total recordable injury frequency (TRIF) – per million work-hours 6.2 5.3 5.3 4.8 4.7 4.8 4.5 4.2 3.4 3.6 3.5 3.3 1.8 1.8 1.6 1.6 1.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2
Slide 7: Draugen – WI 44.56%
Draugen – WI 44.56% Production Reserves* 7,060 boepd 27.9 mmboe • Net production 7,060 boepd and production reliability 99%; solid performance resulting in increased production • LWI campaign to prepare for plug and abandonment of two subsea wells successfully completed • Hasselmus project progressi
Slide 8: Gjøa – WI 12%
Gjøa – WI 12% Production Reserves* 7,107 boepd 7.5 mmboe • Net production 7,107 boepd and production reliability 97%; solid performance resulting in increased production • Planned shut-down successfully completed on 8 April; mainly relating to tie-in work for Nova, Duva and Vega for which Gjøa will
Slide 9: Yme – WI 15%
Yme – WI 15% Production Reserves* 1,322 boepd 10.7 mmboe • Net production 1,322 boepd; ramp up process progressing slower than plan due to production interruptions relating to commissioning and the minor leak reported during Easter • Production from four available wells in the quarter; re-completion
Slide 10: Ivar Aasen – WI 2.777%
Ivar Aasen – WI 2.777% Production Reserves* 550 boepd 2.1 mmboe • Net production 550 boepd and production availability of 99% • Acquisition of 2.223% working interest in the Ivar Aasen field from Neptune Energy Norge AS completed on 31 March 2022 • Shut down on 27 March due to power supply disruptio
Slide 11: Delivering on growth strategy
Delivering on growth strategy Finding value with complementary Wintershall Dea assets 35.2% operated working interest (WI) in Brage; Partner-operated 6.4615% WI in Ivar Aasen and 6.0% WI in Nova Fixed consideration of USD 117.5 million with additional contingent payment structure subject to oil pric
Slide 12: Attractive growth characteristics
Attractive growth characteristics Significant increase in production, reserves and resource base Change Step change in asset base # of fields producing and cash flow or under dev. 4 2 +50% Fully financed by existing Production 21,000 7,000 cash +33% 2022E exit rate boepd boepd New operatorship in Br
Slide 13: Solid strategic fit
Solid strategic fit OKEA - a leading mid- to late-life NCS operator TRANSACTION CONTRIBUTIONS STRATEGY Scale and diversification Near term value An organisation fit A larger and more creation focus for growth robust portfolio Focus on shareholder Capitalising on existing Strengthening resource value
Slide 14: Financials
Financials
Slide 15: Oil and gas production, sales and revenues - per asset
Oil and gas production, sales and revenues - per asset Production (boepd) Sold volumes (boepd) 20 000 20 000 Draugen 18 102 Draugen Gjøa 16 979 Gjøa - tie ins 16 316 16 038 14 908 16 039 15 957 15 444 Ivar Aasen Gjøa 15 000 15 000 6 870 13 210 208 Yme 13 048 Ivar Aasen 6 548 6 735 7 231 7 060 6 949
Slide 16: Realised liquids prices
Realised liquids prices Volatile liquids prices at high levels Lifted volumes vs Dated Brent – Q2 2021/2022e Realised liquids prices vs Dated Brent – Q2 22 USD/bbl kbbl USD/bbl 140 950 120 115 113.9 0.3 Q2 Q3 Q4 Q1 Q2 900 1.3 135 110 12.1 850 103.4 130 105 3.1 100.3 800 100 125 750 95 120 90 700 85
Slide 17: Gas market prices and sold volumes
Gas market prices and sold volumes Volatile gas prices continues in second quarter Sold volumes vs average NBP gas market prices – Q2 2021/2022e USD/boe Q2 Q4 Q2 kboe 240 240 230 215 227 230 220 220 210 208 210 200 195 200 190 190 190 190 180 176 173 180 170 170 158 160 160 160 150 150 143 150 140 1
Slide 18: Income statement
Income statement Q2 22 comments Operating income: • Lower realised gas prices, partly offset by higher sold volumes Figures in NOK million Q2 22 Q1 22 Q2 21 • Net gain from hedging of gas price NOK 41 million Total operating income 1 332 1 513 607 Production expenses -381 -287 -213 Production expens
Slide 19: Statement of financial position
Statement of financial position Figures in NOK million Assets 30.06.2022 31.03.2022 31.12.2021 Q2 22 comments Goodwill 801 805 769 Oil and gas properties 5 129 5 191 4 685 • Total liquidity of NOK 2 968 million Asset retirement reimbursement right 2 572 2 833 3 108 o Cash and cash equivalents NOK 2
Slide 20: Cash development Q2
Cash development Q2 22 NOK million 5 000 4 500 4 000 3 500 386 1 085 304 +289 10 9 2 968 3 000 76 7 93 89 210 2 679 2 500 209 2 000 1 500 2 758 2 470 1 000 500 0 Total liquidity Operating Taxes paid Investment Bond buy-back Payment of Interest paid Payments of Dividend FX effect on Total liquidity 3
Slide 21: Cash development YTD
Cash development YTD 22 NOK million 5 000 4 500 580 4 000 590 3 500 2 351 299 19 105 2 968 3 000 14 93 69 210 2 500 +720 2 249 210 2 000 1 500 2 758 1 000 2 039 500 0 Total liquidity Operating Taxes paid Investment Bond buy-back Payment of Interest paid Payments of Dividend FX effect on Total liquid
Slide 22: New tax regime enacted by Parliament on 17 June
New tax regime enacted by Parliament on 17 June Effective from 1 January 2022 Neutral cash flow tax in the special petroleum tax Illustrative example based on NOK 100m expense Key features • Investments immediately deductible in the special petroleum tax (SPT) o Replaces six years’ depreciation and
Slide 23: Production guiding for 2022 revised down; for 2023 revised up
Production guiding for 2022 revised down; for 2023 revised up Due to deferral of Yme production and volumes of Wintershall Dea transaction*** Production – thousand boepd Capex* – NOK million 28 Gjøa accelerated compensation 1 200 950 – 1 150 26 25 – 27 24 1 100 22 1 000 20 0.9 – 1.2 900 18.5 – 20 0.
Slide 24: Dividend of NOK 1.00 per share and early redemption of OKEA02
Dividend of NOK 1.00 per share and early redemption of OKEA02 Distributing to shareholders and reducing financial expense 2022 dividend • Cash dividend of NOK 93.5m (NOK 0.90 per share) was paid in June NOK 0.90/share NOK 1.00/share NOK 1.00/share • Distribution of NOK 103.9m (NOK 1.00 per share) in
Slide 25: Summary and outlook
Summary and outlook
Slide 26: Summary
Summary Delivering on growth strategy by material acquisition from Wintershall Dea fully funded by existing cash resources Continued solid performance at Draugen and Gjøa operations Organic projects progressing well; Hasselmus and Power from shore at Draugen according to plan Yme ramp up slower than
Slide 27: Q&A
Q&A Growth Value creation Capital discipline
Slide 28: 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