Aker Bp Asa · OSL:AKRBP
Aker Bp Asa — Investor Presentation (April 2024)
63 slides from Aker Bp Asa's investor presentation, April 2024
Slide 1: Investor presentation April 2024
Investor presentation April 2024 Aker BP ASA
Slide 2: Disclaimer
Disclaimer This Document includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Document are based on current expectations, estimates and projections about globa
Slide 3: Contents
Contents Page 4 Company overview Page 9 Oil & gas will remain a crucial part of the energy mix Page 12 Our strategic priorities Page 13 Operate safely and efficiently Page 21 Decarbonise our business Page 26 Deliver high return projects on quality, time and cost Page 39 Establish the next wave of pr
Slide 4: Aker BP’s investment proposition
Aker BP’s investment proposition The E&P company of the future ✓ World-class assets with high efficiency and low cost ✓ Low emissions and clear pathway to net zero ✓ Driving transformation through digital and alliances ✓ Profitable growth from unique resource base ✓ Financial strength & growing divi
Slide 5: World-class oil and gas portfolio
World-class oil and gas portfolio Large scale, low risk assets on the Norwegian Continental Shelf 2P reserves1 2C resources1 Production2 arstad 1.72bn 0.81bn 457 boe boe mboepd Sandnessj en Skarv Trondheim Johan Sverdrup Edvard Grieg / Ivar Aasen Valhall area Partner, 31.6% Operator, ~35-65% Operato
Slide 6: Growth through M&A and projects
Growth through M&A and projects Transactions + 18 organic development projects 500 000 457k 400 000 300 000 200 000 100 000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 6
Slide 7: Reserves and resources
Reserves and resources Year-end 2023 2P oil and gas reserves 2C contingent resources Skarv Alvheim Area Discoveries Area 5% 15% Non-op 8% 26% Johan Sverdrup Grieg/Aasen 33% Area 11% Alvheim Area 1,716 mmboe 7% 809 mmboe Grieg/Aasen Area Yggdrasil 8% 21% Valhall Area Yggdrasil 25% Valhall Area 22% 13
Slide 8: Large value creation to shareholders
Large value creation to shareholders Index 1000 900 >600% shareholder 800 return last 10 years 700 600 ~22% annual 500 investor return 400 Index of US oil companies 300 200 100 Index of European oil companies 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Feb-24 Source: Bloomberg, Total Shareho
Slide 9: Oil & gas will remain a crucial part of the energy mix
Oil & gas will remain a crucial part of the energy mix Total energy supply (IEA WEO 2022) Stated policies scenario Announced pledges scenario Net zero emissions by 2050 scenario 2010 2020 2030 2040 2010 2020 2030 2040 2010 2020 2030 2040 Oil Natural gas Coal Nuclear Renewables Oil Natural gas Coal N
Slide 10: Our contribution as a pure play E&P company
Our contribution as a pure play E&P company Maximize Minimize Share technology value emissions and knowledge for shareholders and the society from our operations to enable new industries while producing the energy the world needs 10
Slide 11: Aker BP’s improvement programme
Aker BP’s improvement programme Strategic alliances Lean operations Flexible business models Digitalisation One-team culture with our main Framework for developing Re-thinking how we structure our Essential enabler suppliers based on common goals more efficient interactions with suppliers and for bu
Slide 12: Our strategic priorities
Our strategic priorities Ambition to lead the industry transformation as the E&P company of the future Deliver high return Establish the next Operate safely Decarbonise projects on quality, wave of profitable and efficiently our business time and cost growth options Return maximum value to our share
Slide 13: Operate safely and efficiently
Operate safely and efficiently 13
Slide 14: Safety
Safety Injury frequency (TRIF)1 Serious incident frequency (SIF)1 3.7 2.6 2.5 2.4 2.0 1.7 0.7 0.7 0.4 0.3 0.3 0 2019 2020 2021 2022 2023 Q1-24 2019 2020 2021 2022 2023 Q1-24 1) TRIF and SIF in prior years have been restated to reflect a more accurate methodology for measurement of exposure hours. Se
Slide 15: Production
Production Oil & gas production per area 1,000 mboepd 481 453 450 444 448 432 Ula area 412 Alvheim area Skarv area Valhall area Grieg/Aasen 208 181 Johan Sverdrup Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Lundin portfolio included from Q3-22 15
Slide 16: Johan Sverdrup
Johan Sverdrup A giant field with excellent reservoir properties ▪ Excellent operational performance ▪ Stable production at elevated capacity level ▪ Continuously working to optimise production Daily oil production since start-up 755 mbblpd Aker BP holds 31.6% ownership in the Johan Sverdrup partner
Slide 17: Production efficiency
Production efficiency High production uptime1 95% 96% 97% 94% 94% 93% 94% 90% 84% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 1) Total portfolio per quarter (operated and non-operated) 17
Slide 18: Low-cost operations
Low-cost operations Total operational cost1 USD per boe, 2023e 20 15 10 5 0 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1) Source Wood Mackenzie. Companies included: Aker BP, BP, Chevron, ConocoPhillips, Diamondback Energy, DNO, Eni, EOG Resources, 18 Equinor, ExxonMobil, , Galp Energia, Harbou
Slide 19: Production cost
Production cost USD per boe 7.2 7.2 1.3 1.2 6.2 6.1 6.0 5.6 0.7 0.9 0.8 0.9 1.0 0.9 0.5 0.4 0.7 0.3 1.6 1.7 1.5 1.4 1.6 1.6 3.5 3.3 3.3 3.2 3.3 2.7 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Base opex Tariff & transport Projects Power & environment tax 19
Slide 20: Future operations – modernising and digitalising the way we work
Future operations – modernising and digitalising the way we work Integration of Integrated New cooperation Remote operations new concepts Operation Centres models and maintenance New ways of Data-driven Increased digital Automation working decisions competence for all 20
Slide 21: Decarbonise our business
& AkerBP Decarbonise our business
Slide 22: Aker BP’s decarbonisation strategy
Aker BP’s decarbonisation strategy Reducing absolute scope 1&2 GHG emissions before neutralising residual emissions Scope 1&2 Scope 3 Aker BP’s targets 1. Reduce operated scope 1&2 Avoid Reduce Neutralise Upstream scope 3 GHG emissions with 50% by reduction through procurement 2030 and ~100% by 2050
Slide 23: Aker BP – a global leader in low CO2 emissions
Aker 140 BP – a global leader in low CO2 emissions 120 Net emission intensity 2023 kg CO2e per boe, equity share 100 80 60 40 20 0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 285 largest producing upstream companies Source: Wood Mackenzie– Global upstream CO2 emissions 23
Slide 24: Staying below our strict GHG and methane targets
Staying below our strict GHG and methane targets GHG intensity Methane intensity Kg CO2e/boe, total equity share of scope 1&2 emissions % methane in saleable gas, operated gross volume 10 0.12% 8 0.10% 6 0.08% Our target: Our target: <0.05% <4 kg CO2e/boe 0.06% (Industry average* is 0.20%) 4 0.04% 2
Slide 25: Targeting net zero scope 1&2 emissions by 2030
Targeting net zero scope 1&2 emissions by 2030 Aker BP to offset all our remaining emissions using high-quality carbon removal projects Total estimated equity share scope 1&2 emissions Our approach 1 000 tonnes CO2e 800 Avoid Thousands New assets with power from shore 600 Target 100% electrification
Slide 26: Deliver high-return projects on quality, time and cost
Deliver high-return projects on quality, time and cost 26
Slide 27: Aker BP project overview
Aker BP project overview 800 mmboe net oil and gas volume at net capex of around USD 3 billion after tax Aker BP Production Asset area Field development Gross/net volume Net capex estimate PDO submission ownership start Frosk 80.0% 10/8 mmboe USD 0.2bn 2021 2023 Alvheim Kobra East & Gekko 80.0% 50/4
Slide 28: Our key principles for successful project execution
Our key principles for successful project execution Partnerships Standardisation Frontloading ✓ Competence and learning ✓ Well designs and equipment ✓ Early planning and maturation ✓ Continuity ✓ Topside and subsea equipment ✓ Supplier involvement ✓ Common goals and incentives ✓ Facilitate efficient
Slide 29: Alliances with leading suppliers – with proven track record
Alliances with leading suppliers – with proven track record The cornerstone of project planning and execution Alliances established with leading suppliers ▪ Covering majority of capital spend ▪ Subsea, Fixed Facilities, Modifications and Drilling ▪ One team - Common goals - Shared incentives Organis
Slide 30: Project execution progressing according to plan
Project execution progressing according to plan Moving from engineering and procurement phase to construction ✓ Key milestones achieved and main contracts placed ✓ Fabrication well underway ✓ Sub-sea and drilling progressing well ✓ Capex estimate in line with plans ✓ Tyrving start-up accelerated to
Slide 31: Developments to drive growth and value creation
Developments to drive growth and value creation Planning to produce around 525 mboepd in 2028 Production outlook Our project portfolio mboepd ~525 ▪ Net resources of 800 mmboe 410-440 ▪ The projects lift Aker BP’s production by 250-300 mboepd in 2028 ▪ Low CO2 emission intensity ▪ Full-cycle portfol
Slide 32: Yggdrasil
Yggdrasil New North Sea area hub by joining forces across licences Aker BP Hugin: 87.7% Gas ~40% of (operator) Munin: 50.0% estimated volumes Fulla: 47.7% Partners Equinor and Power supply PGNiG Upstream Norway from shore Munin Unmanned production platform Volume estimate 700 mmboe (gross) / A new d
Slide 33: Valhall PWP-Fenris
Valhall PWP-Fenris Unlocks new volumes and secures life-time extension on Valhall PWP WP/IP PH Aker BP Valhall: 90.0% Establishes Valhall (operator) Fenris: 77.8% as area gas-hub Partners PGNiG Upstream Norway Power supply and Pandion from shore Valhall Volume estimate 230 mmboe (gross) / Minimal em
Slide 34: Skarv Satellites
Skarv Satellites Investments in future flexibility enabling further area development Aker BP Alve North: 68.1% Gas ~70% of (operator) Idun North: 23.8% estimated volumes Ørn: 30.0% Partners Equinor, Wintershall DEA Low operational and PGNiG Upstream cost Norway Volume estimate 119 mmboe (gross) / Lo
Slide 35: Utsira High projects
Utsira High projects Increased capacity utilisation at Ivar Aasen and Edvard Grieg platforms Aker BP Solveig Ph. II: 65.0% Adds low-cost (operator) Symra: 50.0% production Hanz: 35.0% Partners Equinor, OMV, Unlocks potential Wintershall Dea and future developments Sval Energi Solveig Volume estimate
Slide 36: Alvheim projects
Alvheim projects Unlocks new volumes, reduces unit cost and secures life-time extension on Alvheim Aker BP Frosk: 80.0% Tie-backs to existing (operator) KEG: 80.0% infrastructure Tyrving: 61.3% Accounts for ca. 50% Partners Vår Energy, of net Alvheim ConocoPhillips, Petoro, volumes in 2024/25 PGNiG
Slide 37: Execution through alliances and incentive-based contracts
Execution through alliances and incentive-based contracts Capacity secured with alliance partners The PDOs …with the majority of work performed …and compensation formats that incentivise in December… by the alliance partners… productivity and cost reductions 100% Skarv satellites Other facilities, L
Slide 38: Signed contracts with all major yards in Norway
Signed contracts with all major yards in Norway Close and early collaboration to ensure capacity, construction quality and efficiency Aker Solutions Stord Aker Solutions Verdal Aker Solutions Egersund Aker Solutions Sandnessjøen ▪ PWP Topside Fabrication/Integration ▪ Fenris Topside and Jacket ▪ Hug
Slide 39: Establish the next wave of profitable growth options
Establish the next wave of profitable growth options 39
Slide 40: Our exploration strategy
Our exploration strategy Aker BP operator Aker BP partner Uniquely positioned on the NCS ▪ 2nd largest in Norway with over 200 licences ▪ Operator of ~70% ▪ 27 licences awarded in APA 2023 – all-time high Targeting net 250 mmboe from 2022 to 2027 ▪ Drill 10-15 exploration wells per year ▪ 80% near-f
Slide 41: 2023 – another year of successful exploration
2023 – another year of successful exploration Significant oil discovery in the Yggdrasil area Discovery at Frigg East ▪ Current volume estimate of 53-90 mmboe gross ▪ Increases the resource base for Yggdrasil ▪ Highly profitable with break-even well below $20/bbl Partner in several other discoveries
Slide 42: 2024 exploration program
Ferdinand Hassel 2024 exploration program Aker BP operator Aker BP partner Licence Prospect Operator Aker BP Pre-drill Status share mmboe Elgol PL102G Trell North* Aker BP 61% 3-12 mmboe PL1138 Ametyst Harbour Energy 30% 6-19 mmboe PL956 Ringhorne North Vår Energi 20% 13-23 mmboe PL211CS Adriana* Wi
Slide 43: Significant upside potential around existing assets
Significant upside potential around existing assets Reserves and resources billion boe 4.0 ▪ Skarv: Infill drilling, exploration and ILX potential, development of tight reservoirs net risked ▪ Edvard Grieg/Ivar Aasen: Infill drilling, 3.0 exploration and basement upside 3P reserves ▪ Johan Sverdrup:
Slide 44: Return maximum value to shareholders and society
Return maximum value to shareholders and society 44
Slide 45: Capital allocation priorities
Capital allocation priorities Aker BP’s financial frame – designed to drive value creation and shareholder return 1 Financial capacity 2 Profitable growth 3 Return value Maintain financial flexibility and Invest in robust projects Resilient dividend growth in line investment grade credit rating with
Slide 46: Continuously optimising our capital structure
Continuously optimising our capital structure Financing transactions in 2023 Bond maturities USD/EUR billion USD 1,500 million in new Senior Notes issued 1.75 ▪ USD 500 million Notes due in 2028 ▪ USD 1,000 million Notes due in 2033 USD ~1,000 million in existing bonds repurchased 0.66 1.00 1.00 ▪ 2
Slide 47: Maintaining financial flexibility
Maintaining financial flexibility Net interest-bearing debt Leverage ratio1 Liquidity available2 Excl. leases, USD billion Targeting below 1.5 over time USD billion 4 6.7 6.8 6.8 3.1 6.6 3 6.1 2.6 3 2.4 2.4 2.0 1.2 2 2 0.9 1 0.6 0.5 3.3 3.4 3.4 3.2 0.3 2.7 1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0 Q1-23 Q
Slide 48: Investing in robust and profitable projects
Investing in robust and profitable projects In an investment-friendly tax system Aker BP est. capex before and after tax USD billion 6 ▪ Total capex estimate 2023-2028 in line with 5 plans presented one year ago 4 ▪ Minor adjustments to capex phasing between years 3 2 ▪ ~85% of the planned capex is
Slide 49: Near-term tax payments
Near-term tax payments Sensitivity for H2-2024 USD million 2 500 Tax instalments for fiscal year 2023 ▪ Tax for the year is paid in six bimonthly instalments with six months delay 2 000 ▪ Q2-24 instalments now fixed based on full-year 2023 performance 1 500 $100/bbl 1 000 April Assumptions for H2-24
Slide 50: Strong and resilient cash flow as basis for dividend growth
Strong and resilient cash flow as basis for dividend growth Aker BP value creation plan 2023-2028 Dividends USD billion, accumulated USD per share 2.40 2.20 2.08 ▪ Low-cost production gives 20 2.00 resilient dividend capacity $90/bbl 15 ▪ Distributions shall reflect the Dividend 1.35 capacity throug
Slide 51: First quarter 2024
First quarter 2024 24 April 2024 Aker BP ASA
Slide 52: Highlights
Highlights First quarter 2024 High operational performance ▪ Production as planned ▪ Low cost and low emissions Development projects on track ▪ Hanz in production ▪ Accelerated start-up for Tyrving Strong financial position ▪ Stable underlying cash flow ▪ Full-year guiding unchanged 52
Slide 53: Sales of oil and gas
Sales of oil and gas Volume sold Realised prices Total income mboepd USD/boe USD million 477 467 450 450 69 429 99 59 66 60 64 88 84 83 3 513 3 556 77 3 310 3 291 336 398 3 078 78 582 399 301 74 64 60 409 390 408 384 51 364 3 140 3 140 2 712 2 858 2 748 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q1-23 Q2-23 Q3-2
Slide 54: Income statement
Income statement USD million Q1 2024 Q4 2023 429 mboepd (467) Before Actual impairment Impairments Actual Oil and gas sales Total income 3 078 3 556 3 556 Production costs 211 298 298 Other operating expenses 11 17 17 $78 per boe (82) EBITDAX 2 855 3 241 3 241 Net realised price Exploration expenses
Slide 55: Cash flow
Cash flow USD million $0.34 bn (0.5) Q1-24 Q4-23 Q3-23 Q2-23 Op. CF before tax and WC changes 2 986 3 204 3 235 2 731 Taxes paid (1 054) (2 207) (862) (2 817) Free cash flow (FCF) Changes in working capital1 (476) 506 (272) 207 Cash flow – operations 1 456 1 503 2 101 121 $0.54 (0.73) Cash flow – in
Slide 56: Balance sheet
Balance sheet USD million Assets 31.03.24 31.12.23 31.03.23 PP&E 17 819 17 450 16 220 $6.6 bn ($6.8) Goodwill 13 143 13 143 13 636 Total available liquidity Other non-current assets 3 207 3 314 3 122 Cash and equivalent 3 215 3 388 3 280 Other current assets 2 053 1 751 1 671 32% (32%) Total Assets
Slide 57: Near-term tax payments
Near-term tax payments Sensitivity for H2-2024 USD million 2 500 Tax instalments for fiscal year 2023 ▪ Tax for the year is paid in six bimonthly instalments with six months delay 2 000 ▪ Q2-24 instalments now fixed based on full-year 2023 performance 1 500 $100/bbl Assumptions for H2-24 sensitivity
Slide 58: 2024 guidance
2024 guidance Q1-24 2024 actuals guidance Production (mboped) 448 410-440 Opex (USD/boe) 6.1 ~7.0 Capex (USDbn) 1.0 ~5.0 Expex (USDbn) 0.08 ~0.50 Abex (USDbn) 0.06 ~0.25 58
Slide 59: The Norwegian petroleum tax system
The Norwegian petroleum tax system
Slide 60: The Norwegian petroleum tax system
The Norwegian petroleum tax system An overview ▪ Stable 78% tax rate, consisting of corporate tax (CT) and special petroleum tax (SPT) Ordinary tax system ▪ Cash flow-based tax system from 2022 ▪ Immediate deductions for offshore investments in SPT and refund of tax losses ▪ An additional 12.4 % ded
Slide 61: The tax system is highly supportive for investments
The tax system is highly supportive for investments In the investment phase, taxes paid are significantly lower than tax expense in the P&L Illustrative1 tax calculations Aker BP 2023 - 2028 USD billion 10 ▪ Relatively low tax payments in periods with 8 high investments ▪ Especially prominent in low
Slide 62: Overview of calculation of current tax (cash tax)
Overview of calculation of current tax (cash tax) Analyst information EBITDAX Exploration spend Abandonment spend EBITDA EBITDA Corporate tax depreciation Special tax depreciation** Tax EBIT x 22% Corporate tax deductible in special tax Net financial expense Uplift Corporate tax base* Special tax ba
Slide 63: www.akerbp.com
AkerBP www.akerbp.com