Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — Q2 2014 Earnings Presentation
28 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Jul 28, 2014
Slide 1: Results Second Quarter 2014
28 July 2014 Results SECOND QUARTER 2014 An integrated energy player focused on exploration and production
Slide 2: Disclaimer
Disclaimer RCA figures except otherwise noted. By attending or reading this presentation, you acknowledge and agree to be bound by the following limitations and restrictions. This presentation has been prepared by GALP Energia, SGPS, S.A. (“GALP Energia” or the “Company”) and may be amended and supp
Slide 3: Key highlights
Key highlights Execution update Financial overview Concluding remarks Appendix 3 Second quarter 2014 results
Slide 4: Key highlights
Key highlights ▪ 2Q14 Ebitda of €271 m, down 11% YoY due to weak international refining environment and Sines refinery maintenance ▪ Focus on Lula/Iracema project execution, with FPSO #2 ramping up to full capacity and FPSO #3 on track to first oil in 4Q14 ▪ 2014 drilling programme focused on de-ris
Slide 5: Execution update
Key highlights Execution update Financial overview Concluding remarks Appendix 5 Second quarter 2014 results
Slide 6: FPSO Cid. Paraty (#2) to reach full capacity in 4Q14 as planned
FPSO Cid. Paraty (#2) to reach full capacity in 4Q14 as planned Lula NE milestones Guidance Status ▪ Two wells producing c.30 kbopd Delivery of FPSO Cidade Paraty May-13 each Start of production Jun-13 Connection of injector well Aug-13 ▪ Gas export started on June 24 Connection of producer well1 4Q
Slide 7: FPSO Cid. Mangaratiba (#3) on track to start production in 4Q14
FPSO Cid. Mangaratiba (#3) on track to start production in 4Q14 FPSO Cidade de Mangaratiba Iracema South wells (#) Drilled Planned 8 8 6 6 Producers Injectors FPSO execution rate >95% Development wells being drilled and sail away from shipyard soon prior to FPSO arrival 7 Second quarter 2014 results
Slide 8: Ongoing appraisal further de-risks Iara ahead of DoC by YE
Ongoing appraisal further de-risks Iara ahead of DoC by YE Iara, Block BM-S-11 ▪ EWT in Iara West-2 with high initial flow rate (∼29 kbopd) ▪ First RDA proved excellent reservoir characteristics and productivity ▪ Drilling second RDA well (close to Iara Entorno) ▪ First oil expected in 2017 8 Second
Slide 9: Appraisal activities underway in block BM-S-24
Appraisal activities underway in block BM-S-24 Block BM-S-24 ▪ Apollonia well spudded on June 9, and rig secured to drill Bracuhy NE appraisal well in 4Q14 ▪ First two DST expected to be performed in 2H14 ▪ First oil expected in 2019 9 Second quarter 2014 results
Slide 10: Ongoing developments for both offshore and onshore solutions in Area 4
Ongoing developments for both offshore and onshore solutions in Area 4 Rovuma basin in Mozambique ▪ Tender for Coral FLNG solution (FEED and EPC) already launched ▪ LNG onshore EPC invitation to tender in 3Q14 ▪ Process for approval of the enabling law progressing ▪ Ongoing discussions with potentia
Slide 11: 2014 drilling campaign focused on appraisal activities
2014 drilling campaign focused on appraisal activities Galp Energia 2014 drilling schedule 1 Spud Duration Well Area Target Interest E/A date (# days) status 2 Brazil BM-S-8 Ca rca rá (extens i on) 14% A 4Q14 120 - 3 BM-S-24 Apol l oni a 20% A Jun-14 120 In progres s BM-S-24 Bra cuhy NE 20% A 4Q14 1
Slide 12: First offshore well operated by Galp Energia, TAO-1, spudded on June 26
First offshore well operated by Galp Energia, TAO-1, spudded on June 26 Tarfaya Offshore Area in Morocco ▪ TAO-1 well targeting primarily Trident, with 450 mbbl unrisked potential and PoS of 21% ▪ Well progressing according to plan with no major operational constrains 12 Second quarter 2014 results
Slide 13: Continuing difficult refining environment
Continuing difficult refining environment Benchmark refining margin evolution ($/bbl) ▪ Refining performance impacted by European unbalanced market 12.0 10.0 ▪ Recent refining performance 8.0 worsened by planned 6.0 maintenance at Sines refinery, 4.0 including product availability 2.0 0.0 ▪ Stable c
Slide 14: Sustained contribution from G&P businesses
Sustained contribution from G&P businesses Supply & Trading volumes sold (Mm3) ▪ Supply & Trading contribution suported by ML/T contracts in 1,971 1,941 2,078 place since 2013 1,826 1,721 1,457 ▪ Exploring LNG trading opportunities in the international market, with strong demand from LatAm and Asia
Slide 15: Financial overview
Key highlights Execution update Financial overview Concluding remarks Appendix 15 Second quarter 2014 results
Slide 16: 2Q14 Ebitda down 11% YoY on weak refining performance
2Q14 Ebitda down 11% YoY on weak refining performance Profit & Loss (€ m) ▪ Performance from E&P and G&P businesses offset by refining 2Q14 2Q13 YoY 1H14 YoY environment and Sines refinery Turnover 4,615 4,624 (0%) 8,740 (4%) planned maintenance in R&M Ebitda 271 304 (11%) 537 (4%) E&P 107 85 25% 21
Slide 17: Maintaining a robust balance sheet
Maintaining a robust balance sheet Balance sheet (€ m)1 ▪ Working capital impacted by stocks following refinery outage, Jun.2014 Mar.2014 Jun-Mar Dec.2013 Jun - Dec and by cargoes sold at the end of Fixed and LT assets 7,219 7,014 +204 6,883 +336 the quarter Working capital 1,459 1,405 +55 1,294 +16
Slide 18: Capex mainly allocated to development of Lula/Iracema project
Capex mainly allocated to development of Lula/Iracema project Capital expenditure (€ m) ▪ Activities in BM-S-11 accounted G&P R&M for c.85% of E&P capex E&P – D&P E&P – E&A ▪ Exploration and appraisal capex 474 463 mainly allocated to Iara and BM- S-24, and also to Morocco and Mozambique 286 266 ▪ 1
Slide 19: Average debt maturities further extended
Average debt maturities further extended Debt reimbursement profile1 (€ m) 1000 ▪ Gross debt of €3.4 bn with 800 average maturity of 3.7y and average interest rate of 4.5%1 600 @30 June 2014 400 @31 March 2014 ▪ Liquidity of €2.91 bn: Cash and 200 equivalents of €0.9 bn; loan to 0 Sinopec of €0.8 bn
Slide 20: Short term outlook
Short term outlook ▪ 3Q14 WI production expected at c.30 kboepd, supported by Lula NE production ramp-up and Iara EWT ▪ Volumes of crude processed are expected to increase QoQ, following the end of planned maintenance at Sines refinery ▪ Iberian oil products volumes expected to be up YoY, following
Slide 21: Sale of underground NG storage facilities
Sale of underground NG storage facilities NG storage facilities in Portugal ▪ Transfer of the regulated NG underground storage concession to REN ▪ Value for the transaction: c.€72 m, in line with RAB ▪ Ebitda of c. €5.5 m 21 Second quarter 2014 results
Slide 22: Concluding remarks
Key highlights Execution update Strategy overview Concluding remarks Appendix 22 Second quarter 2014 results
Slide 23: Concluding remarks
Concluding remarks ▪ Lula/Iracema project on track, with FPSO #2 ramping up to full capacity and FPSO #3 with first oil in 4Q14 ▪ Intensive appraisal to optimise Iara development plan and improve reservoir knowledge of Júpiter ▪ Ongoing onshore and offshore solutions to develop Area 4, in the Rovuma
Slide 24: Appendix
Key highlights Execution update Financial overview Concluding remarks Appendix 24 Second quarter 2014 results
Slide 25: E&P: Production increased 10% YoY driven by Lula NE and EWT in Lula
E&P: Production increased 10% YoY driven by Lula NE and EWT in Lula Main E&P data ▪ Higher Brazil production YoY, due to FPSO #2 ramp-up and to EWT 2Q14 2Q13 YoY 1H14 YoY in Lula Central and Iara areas Working interest production kboepd 25.7 23.4 +10% 26.9 +14% Oil production kbopd 24.5 21.5 +14% 25
Slide 26: R&M: Ebitda impacted by refinery maintenance and international margins
R&M: Ebitda impacted by refinery maintenance and international margins Main R&M data ▪ Sines refinery general outage impacted both crude processed 2Q14 2Q13 YoY 1H14 YoY and cash costs Galp Energia refining margin USD/bbl (0.3) 3.4 n.m. 0.4 (85%) Refining cash cost USD/bbl 3.2 2.6 +24% 3.4 +30% ▪ Sa
Slide 27: G&P: Higher traded LNG volumes leading Ebitda increase
G&P: Higher traded LNG volumes leading Ebitda increase Main G&P data ▪ Sustaining LNG supply & trading activity, with 12 cargoes traded in 2Q14 2Q13 YoY 1H14 YoY the international markets, vs 6 in NG supply total sales volumes mm3 1,826 1,457 +25% 3,904 +23% 2Q13 Sales to direct clients mm3 814 892
Slide 28: Results & presentation weblink
Investor Relations team Pedro Dias, Head Otelo Ruivo, IRO Catarina Aguiar Branco Cátia Lopes Maria Borrega Pedro Pinto +351 21 724 08 66 Investor.relations@galpenergia.com For further information on Galp Energia, please go to: www.galpenergia.com Results & presentation weblink www.galpenergia.com/en