Eni S.p.a. · MIL:ENI
Eni — Investor Day (March 2017)
28 slides from Eni's investor day presentation, Mar 15, 2017
Slide 1: Investor Day – Milano
15th March 2017 Investor Day – Milano
Slide 2: Mozambique: a transformational deal to empower the project
Mozambique: a transformational deal to empower the project Area 4 (85 Tcf GOIP) 25% farm down to Exxon for $ 2.8 bln Drilling and subsea completion leadership Mamba LNG execution OPERATORSHIP ON: capabilities Coral South FLNG and Offshore upstream OPERATORSHIP ON: Onshore LNG facilities 2 Joint
Slide 3: Dual exploration model is delivering upfront cash generation
Dual exploration model is delivering upfront cash generation 10/2011 2013 08/2015 11/2016 12/2016 03/2017 12/2017 2022 DISCOVERY Mozambique DISCOVERY Zohr Zohr Mozambique START UP START UP Mamba Zohr Zohr Mozambique 1st well 1st well Projects milestones 20% farm in 25% farm in 10% 30% Dual explorati
Slide 4: Exploration successes fuelling future production
Exploration successes fuelling future production Cumulative discovered resources 2014‐2016| bln boe 2016 RRR | % 4 200 193* 3.4 180 3 2016 Short cycles 160 P2/P3 + 30% 140 assets 50% contingent 120 2 2015 100 80 Disposed/ 70% Long life 25% under production 60 1 disposal assets 30 40 2014 FID/ 25% Un
Slide 5: An outstanding result in 2016
An outstanding result in 2016 2016 leverage and change vs 2013 45 Peers adopting scrip dividend 40 Change since 2013 (% points) 35 30 25 20 CFFO = CAPEX 15 $ 46 /bbl 10 Today <20% 5 24 vs targets $ 50 /bbl 0 Eni 20 30 40 50 60 70 ‐5 2016 Leverage [%] LOWERING CASH NEUTRALITY AND LEVERAGE SINCE 2013
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Slide 7: Strategy 2017-2020
2017-2020 Strategy FPSO Angola 7
Slide 8: Exploration and long term organic growth are the engine of our strategy
Exploration and long term organic growth are the engine of our strategy Resources Operations Value High impact and conventional High level of operatorship Upstream and G&P integration exploration Design to cost Enhancement in the downstream Long term organic growth Fast track Active
Slide 9: 2017-2020 targets
Best positioned to capture upside Upstream 70 70 Production growth CAGR 3% Exploration resources 2‐3 bln boe 2017‐2020 targets Mid downstream G&P breakeven in 2017 4YP avg Refining breakeven at $3/bbl margin in 2018 capex cash neutrality* < $ 45 /bbl Free cash Efficiency flow Capex vs prev
Slide 10: A rich set of exploration opportunities
A rich set of exploration opportunities Organic growth and replacement Flexibility and low break‐even EXPLORATION Gas – 55% Early monetization Oil – 45% 2‐3 BLN BOE EQUITY RESOURCES 10
Slide 11: A large portfolio for the long term
A large portfolio for the long term New EXPLORATION successes… Bouri ph2 Nyonie Evan Shoal FID before 2020 Mamba T3‐4 IDD FID 2020+ Eldfisk ph2 Coral ph2 Bonga North Kashagan ph2 Karachaganak EP Etan &Zabazaba A&E structures Libya Bonga SW Perla Ph.2 MambaT1‐2 Loango Kashagan CC01 Merakes Argo clust
Slide 12: 2017 start ups ahead of schedule
2017 start ups ahead of schedule East Hub – Angola OCTP – Ghana JANGKRIK ‐ Indonesia IN PRODUCTION 8th February 2017 Execution Time 39 months Execution Time 30 months Execution Time 42 months FID FID FID FID 100% Start‐up FID 85% Start‐up FID 95% Start‐up June 2017 June 2017 Project details Project
Slide 13: Zohr: countdown to first gas
Zohr: countdown to first gas December Aug. 2015 Feb. 2017 Feb. 2016 2017 FIRST Discovery FID 2.3 years from discovery GAS Zohr 1 Zohr 2 Zohr 3 Zohr 4 Zohr 5 Zohr 6 Zohr 7 Exploration & development Reservoir studies Engineering & Proc. Long Lead Items Onshore Construction & Installation Site Start St
Slide 14: An unrivalled inventory
An unrivalled inventory Libya Kazakhstan Italy Norway - Kashagan CC01 Bahr Essalam Ph.2 Johan Castberg Argo Cluster - Karachaganak Ph. 3 A&E structures CAGR 2020-2025 3% CAGR 2016-2020 3% 2016 2017 2020 2025 New projects/ramp ups Indonesia Egypt Jangkrik Ghana Congo Angola Mozambique Merakes Venezue
Slide 15: High quality long term cash flow
High quality long term cash flow Cash flow per barrel| $/boe 4YP start up 4YP 29 $/boe 30 start up 27 $/boe 25 20 20 15 15 Legacy 11 16 $/boe 10 Legacy 12 $/boe 5 2016 2017‐18 2019‐20 Brent $/Bl 43.7 57.5 67.5 15
Slide 16: Gas demand continuous growth and market rebalancing
Gas demand continuous growth and market rebalancing Supply/Demand LNG |Mtpa International prices|$/MMbtu ~ 135 Mtpa 14 500 ~ 55 Mtpa (30‐40 LNG trains) (12‐15 LNG trains) 12 400 10 300 8 200 6 4 100 2 0 2015 2020 2025 2030 0 2017 2018 2019 2020 2025 2030 Spot or renewals of existing contracts Contra
Slide 17: A turning point for G&P
A turning point for G&P Ebit adj| € mln 4YP Action plan > 600 Gas supply contracts aligned to the market Logistic costs reduction ~300 Equity gas/LNG monetization avg 2017‐18 avg 2019‐20 2025 CUMULATIVE CFFO € 2.6 BLN IN THE 4YP 17
Slide 18: Extracting value from integration
Extracting value from integration Upstream gas productions Midstream Positions Focus on LNG sales | Mtpa Targets 10 Maximizing value of equity gas Developing a competitive LNG portfolio 3,5 Leadership position in European and emerging markets 2017 2025 A PORTFOLIO PLAYER INTEGRATED WITH UPSTRE
Slide 19: Downstream: building on the restructuring
Downstream: building on the restructuring Refining & Marketing EBIT Chemicals | € Mln Breakeven Refining margin | $/bl 300 300 7.5 EBIT +€ 300 Mln EBIT 2020 4.2 self help € 900 Mln 600 3 300 2016 2020 Scenario @ constant scenario upside 2013 2016 2018 2016 4YP avg onwards SERM 4.2 5.5 4YP CUMULATIVE
Slide 20: New energy solutions
New energy solutions 2017‐2030 Guidelines Significant growth of installed capacity Technology neutral, with focus on hybrid projects Technological and geographical synergy with other Eni business lines MW 500 400 300 200 100 0 2017 2018 2019 2020 Energy Solutions installed capacity 20
Slide 21: Capex plan
Capex plan Capex allocation 2017‐20 € Bln ‐8% 34.4* IRR (%) 35 Other 31.6 Mid‐downstream 30 Other ≈10 + New energies 25 Upstream Production optimization > 20 ‐13% Mandatory 20 E&P** 15 E&P Development of new 15‐20 10 production 5 Exploration 0 plan 2016‐2019 plan 2017‐2020 average 2017‐20 CAPEX 2017
Slide 22: Our enhanced disposal programme
Our enhanced disposal programme Disposal| € bln 30 40% Zohr Proved successful portfolio mgmt 25 5‐7 Dual exploration model 2.6 E&P portfolio rationalization 20 2 Further financial flexibility 15 25% Mozambique 10 18 ~50% of our 4YP target 5 already achieved 0 2013‐16 2017‐20 22
Slide 23: Cash Flow plan
Cash Flow plan € Bln 16,0 14,0 scenario disposal Growth & efficiency other 12,0 disposal 10,0 other 8,0 CAPEX 6,0 E&P E&P 4,0 2,0 0,0 avg 17‐18 avg 19‐20 Brent $/Bl 57 67 23
Slide 24: Remuneration - dividend policy confirmed
Remuneration ‐ dividend policy confirmed Competitive distribution policy progressive with underlying earnings growth and scenario Floor dividend cash sustainability Cash neutrality $50/bbl including disposals in 2016 $60/bbl organic in 2017 <$60/bbl organic 2018‐20 Additional financial flexibi
Slide 25: Our pathway to long term value
Our pathway to long term value Unrivalled exploration Fast cash generation Low breakeven portfolio Highly leveraged to oil price Strong balance sheet
Slide 26: BACK UP
BACK UP 26
Slide 27: Assumptions and sensitivity
Assumptions and sensitivity 4YP Scenario 2017 2018 2019 2020 Brent dated ($/bl) 55 60 65 70 FX avg (€/$) 1.08 1.13 1.15 1.20 Std. Eni Refining Margin ($/bl) 4.0 4.0 4.3 5.5 NBP ($/mmbtu) 5.2 5.3 5.5 5.5 Cracker Contribution Margin (€/ton) 270 260 254 255 4YP sensitivity* Ebit adj (bln €) Net adj (bl
Slide 28: Main start ups
Main start ups Equity peak in 4 YP Working Liquids/Gas Main start ups 2017-2018 country op start up (kboed) Interest Nenè Ph.2A Congo yes Achieved 20 65% Liquids Block 15-16 East Hub Angola yes Achieved 20 37% Liquids OCTP Oil Ghana yes 1H17 20 56% Liquids Jangkrik Indonesia yes 2H17 45 55% Gas Zohr