North Energy Asa · OSL:NORTH
North Energy Asa — Q1 2010 Earnings Presentation
24 slides from North Energy Asa's earnings presentation, May 12, 2010
Slide 1: North Energy Q1 2010
North Energy Q1 2010 12 May 2010
Slide 2: Important information
Important information This presentation and its appendices (together the “Presentation”) have been prepared and delivered by North Energy ASA (“North Energy” or the “Company”). The Presentation is prepared for information purposes only, and is not to be used for any other purpose. The Presentation d
Slide 3: Agenda
Agenda • Q1 highlights • Main events after Q1 • Next wells • Financials • Outlook North Energy ASA, Markedsgata 3, Alta, Norway. 3 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no
Slide 4: Q1 highlights
Q1 highlights Three new licenses in APA 2009 • 30% interest in PL 518B in the Barents Sea • 20% interest in PL 564 in the Barents sea • 10% interest in PL 562 in the Norwegian Sea IPO and listing on Oslo Axess • Equity strengthened by NOK 400 million • Exploration program of eight wells fully funded
Slide 5: Agenda
Agenda • Q1 highlights • Main events after Q1 • The Fogelberg discovery • NPD report on Lofoten and Vesterålen • Barents Sea agreement • Licenses to be drilled • Financials • Outlook North Energy ASA, Markedsgata 3, Alta, Norway. 5 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@nor
Slide 6: Fogelberg – Discovery in first well
Fogelberg – Discovery in first well The Fogelberg discovery • In March, North Energy struck gas/ condensate in PL 433 (12%) in the Norwegian Sea • Preliminary resource estimate is between 19 and 94 million boe, according to the NPD • The discovery is within tie-back distance to the Åsgard installati
Slide 7: Fogelberg – Pre-drill resource estimate
Fogelberg – Pre-drill resource estimate Stacked reservoir model Anticipated model before drilling • Stacked reservoirs are common in the area; • Morvin • Kristin • Smørbukk • Smørbukk satellites • Fogelberg was seen as a justified case for stacked reservoirs • Based on the upside in a stacked reserv
Slide 8: Fogelberg – Post-drill resource estimate
Fogelberg – Post-drill resource estimate Tank reservoir model Interpreted model after drilling • Based on well data, the discovery is interpreted to be a tank reservoir • North Energy’s own analysis based on Fogelberg being a tank reservoir supports the NPD estimate: • P90: 19 mmboe • P10: 94 mmboe
Slide 9: Discoveries in mature areas last 10 years
9 MBOE 10 20 30 40 50 60 70 80 90 0 100 110 120 130 140 150 Victoria 259 MBOE Onyx 216 MBOE Luno Peon Source: NPD / Centrica Grosbeak Afrodite Draupne Morvin Jordbær Grevling URD Vilje Fogelberg 19-94 MBOE Beta Noatun Obesum Nona Cyclops Gimle Dompapp Rev Marihøne 25/2-17 Fulla Gygrid North Energy A
Slide 10: Fogelberg – key findings and next steps
Fogelberg – key findings and next steps Preliminary conclusions Key uncertainties and next steps • Discovery of hydrocarbons, most • Uncertainties expected to be clarified probably gas and condensate in ongoing lab analysis: • Gas/liquids (condensate) ratio • Location and size point to a potential •
Slide 11: Lofoten – Study confirming upside
Lofoten – Study confirming upside NPD resource estimate • Based on seismic acquired outside Lofoten and Vesterålen, the NPD has made a resource estimate for the area: • 1,3 billion boe with an uncertainty span from 0,5 to 2.4 billion boe • 64% oil and 36% • 50 prospects identified • Nordland VI is t
Slide 12: Barents Sea – Boundary agreement with Russia
Barents Sea – Boundary agreement with Russia • In April this year, Norway and Russia agreed on the boundary line in the Barents Sea • The disputed zone is split in two approximately equally large parts • Norway’s original claim was based on the midline principle, whereas Russia made its claim based
Slide 13: Barents Sea – Implications for North Energy
Barents Sea – Implications for North Energy • The industry believes that the area hides vast volumes of hydrocarbons – most likely gas • Huge structures have been identified • However, significant geological risk • North Energy is an arctic player positioned to participate in this area once opened b
Slide 14: Barents Sea – The formerly disputed area is part of our long term strategy
Barents Sea – The formerly disputed area is part of our long term strategy Phase 1 • Acreage positions in known play models close to infrastructure in the Norwegian Sea and the Barents Sea • High rate of discovery • Short lead time to production • Low financial exposure 3 Phase 2 • Secure acreage in
Slide 15: Agenda
Agenda • Q1 highlights • Main events after Q1 • Licenses to be drilled • Financials • Outlook North Energy ASA, Markedsgata 3, Alta, Norway. 15 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no
Slide 16: Exploration program
Exploration program Operational targets North Energy’s exploration program • North Energy is fully funded to drill an Well Prospect Licence Interest 2010 2011 2012 eight well exploration program in the 1 Fogelberg PL 433 12 % February 2010 Rig: West Alpha period 2010-2012 2 Farm-in X n/a n/a Q4 • As
Slide 17: Trap models in the North Energy license portfolio
Trap models in the North Energy license portfolio License Equity Prospect/lead Trap model Reservoirs PL 385 15 % Jette Stacked 4 PL 498 25 % Skagen Tank 1 PL 503 25 % Valberget Tank 1 PL 510 20 % Toto/Dorothy Stacked 4 PL 518 30 % Tana Tank 1 PL 518B 30 % Omega W Lead 1 PL 526 40 % Vågar Tank 1 PL 5
Slide 18: Jette – second firm well in 2010
Jette – second firm well in 2010 PL 385 in the Norwegian Sea Acquired 2009 Main prospect Jette Operator Statoil (45%) Hydrocarbons Gas Cond. Partners North Energy (15%) Expected drilling Q4 2010 Wintershall (20%) Prob. of success 37% Noreco (20%) Gross mean 95 mmboe unrisked Net mean unrisked 14 mmb
Slide 19: Agenda
Agenda • Q1 highlights • Main events after Q1 • Licenses to be drilled • Financials • Outlook North Energy ASA, Markedsgata 3, Alta, Norway. 19 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no
Slide 20: Profit & loss
Profit & loss 1Q 4Q 1Q Year MNOK 2010 2009 2009 2009 Payroll 17,4 17,7 11,5 62,4 No increase in manyears vs 4Q/2009 Depreciation 0,9 1,9 0,5 3,4 Exploration expenses 13,5 24,1 11,4 113,1 Drilling costs PL433 capitalised Other operating expenses 12,1 7,9 8,5 28,8 Increase due to listing process Opera
Slide 21: Balance sheet
Balance sheet 31.mar 31.mar 31.des MNOK 2010 2009 2009 Assets Fixed Assets 161,3 43,0 32,6 Capitalised drilling PL433 of 52 MNOK Receivables 182,3 79,2 164,0 Acc tax receivables of 233 MNOK Cash and cash equivalents 289,1 63,1 45,7 Total Assets 632,7 185,3 242,3 Equity and liabilities Total equity 5
Slide 22: Solid financial situation
Solid financial situation • Cash balance of NOK 289 million • Expected tax reimbursement of NOK 233 million • No interest bearing debt • NOK 300 million exploration loan facility with SEB available • Net cash position of NOK 522 million North Energy ASA, Markedsgata 3, Alta, Norway. 22 Phone: (+47)
Slide 23: Agenda
Agenda • Q1 highlights • Main events after Q1 • Licenses to be drilled • Financials • Outlook North Energy ASA, Markedsgata 3, Alta, Norway. 23 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no
Slide 24: Outlook
Outlook • Near term • Preparing license applications for the 21st round and APA 2009 • Pursuing farm-in opportunities to secure third well in 2010 • Evaluating results from the Fogelberg discovery to determine next steps • Preparing for the Statoil operated Jette well to be drilled in Q4 2010 • 14 m