76 slides from Mol Hungarian Oil & Gas Plc Class A's investor presentation, May 2014
Slide 1: Investor Presentation May 2014
INVESTOR PRESENTATION May 2014
Slide 2: Content
CONTENT I. EXECUTIVE SUMMARY II. UPSTREAM OPERATION III. DOWNSTREAM OPERATION IV. FINANCIALS V. APPENDIX – KEY UPSTREAM PROJECTS 2
Slide 3: Executive Summary
1. EXECUTIVE SUMMARY > MOLGROUP
Slide 4: Key goals and messages
KEY GOALS AND MESSAGES CURRENT PORTFOLIO* TO DELIVER 125 – 135 MBOEPD W. IMPROVING UNIT EBITDA UPSTREAM OVER USD 1BN CAPEX SPENDING P.A. TO DERISK AND DEVELOP 1.5 BBOE TOTAL RESERVE AND RESOURCE POTENTIALS ACTIVE M&A TO STEP INTO A NEW LEAGUE CREATING NEW HUBS AND EXTEND KNOW-HOW PROFITABILITY INCRE
Slide 5: Upstream-driven, integrated company
UPSTREAM-DRIVEN, INTEGRATED COMPANY REGION EBITDA 2013 KEY DATA GROWTH DRIVERS & COMPETITIVE ADVANTAGE ► 576 MMboe SPE 2P reserves1 ► Around 10% production increase by 2015 ► 960 MMboe Recoverable ► Organic production may increase by 30% in UPSTREAM Resource Potential2 5 years with improving unit pr
Slide 6: Organic production may increase by 30% in years
ORGANIC* PRODUCTION MAY INCREASE BY 30% IN 5 YEARS with major contributions from Middle East and North Sea areas with high unit EBITDA PRODUCTION OUTLOOK* (RISKED, ENTITLEMENT BASED) BY 2015 AROUND 10% PRODUCTION GROWTH* 140 ~30% Accelerated field development projects in 120 CEE with growth in CRO 1
Slide 7: Active M&A to step into a new league
ACTIVE M&A TO STEP INTO A NEW LEAGUE Focusing on value creation over volume growth NORTH SEA Enhance shallow offshore experience and create a new hub Decreasing average political risk KEY PRINCIPLES AND GOALS profile of MOL Group’s upstream portfolio Access to upcoming UK Exploration RIGOROUS CAPITA
Slide 8: Kurdistan R.I.: accelerated development to enhance cash generation
KURDISTAN R.I.: ACCELERATED DEVELOPMENT TO ENHANCE CASH GENERATION Export started from Shaikan, Commercial production to start on Akri-Bijeel by H2 KURDISTAN REGION OF IRAQ Commercial discoveries (Bijell, Bakrman, Shaikan) Accelerated work programs to enhance cash-flow generation as soon as possible
Slide 9: Akri-Bijeel: phased, 4+1 rig field development program
AKRI-BIJEEL: PHASED, 4+1 RIG FIELD DEVELOPMENT PROGRAM To keep pace and flexibility parallel 2014 2015 2016 - 2017 FDP Phase I implementation FDP revision Phase I operation Phase II definition Phase II implementation Finishing Bijell-1B, 2, 4, 6 appraisal wells Revision of Field Development Plan bas
Slide 10: North Sea: a strategic step to create new hub
NORTH SEA: A STRATEGIC STEP TO CREATE NEW HUB Entering an attractive new region with stability and economic incentives STRATEGIC CONSIDERATIONS 1st strategic step to enhance offshore experience and create a new hub Shifting average political risk profile of MOL Group’s upstream portfolio in a favora
Slide 11: Sizeable short/mid-term production with above avg unit profitability
SIZEABLE SHORT/MID-TERM PRODUCTION WITH ABOVE AVG UNIT PROFITABILITY Project has >10% IRR with expected peak production of 16-18 mboepd in 2018-2019 NORTH SEA (28 MMboe*) OVERVIEW OF MAIN PRODUCING ASSETS Majority of asset portfolio already in development or production phase Block W.I. Operating Oth
Slide 12: MOL delivers top quartile performance in tough environment
MOL DELIVERS TOP QUARTILE PERFORMANCE IN TOUGH ENVIRONMENT However, still significant gap to pre-crisis level profitability, less efficient units below break even REFINERY MARGIN (URAL-MED, USD/BBL) CLEAN CCS-BASED DS EBITDA ( MN USD) 12 10 8 +4% 6 -60% 4 2 0 2008 2009 2010 2011 2012 2013 2014 CLEAN
Slide 13: USD 400mn efficiency improvement delivered by 2013
USD 400MN EFFICIENCY IMPROVEMENT WAS DELIVERED BY 2013 >USD 100mn is still due in 2014 NDSP BREAKDOWN BY YEARS (MN USD) NDSP BREAKDOWN BY CATEGORIES (%) 600 Σ USD 500-550mn SCM-driven 500 8% improvement Revenue increase 19% Sales strategy USD 130-150mn Σ USD 400mn 400 Other costs 21% 300 Production
Slide 14: Continuously strengthening financial position
CONTINUOUSLY STRENGTHENING FINANCIAL POSITION Indebtedness indicators at a 6-year low NET DEBT TO EBITDA (X) GEARING (%) 3,5 50 Limit of net debt to EBITDA 45 3 40 36 2,5 35 33 31 1,96 30 28 2 1,72 25 1,66 1,44 1,38 25 1,5 20 16 1 0,79 15 10 0,5 5 0 0 2008 2009 2010 2011 2012 2013 2008 2009 2010 201
Slide 15: USD 1.6-1.9bn capex planned for 2014 with upstream focus
USD 1.6-1.9BN CAPEX PLANNED FOR 2014 WITH UPSTREAM FOCUS Downstream spending to peak in 2014-15 due to ongoing growth projects Upstream Downstream Balance between early Strict control on sustain CAPEX cash generation… 43% Selective profitable growth CEE investments (50%) CAPEX and creation of mid-lo
Slide 16: Management has proven track record in transformation
MANAGEMENT HAS PROVEN TRACK RECORD IN TRANSFORMATION Continuity and experience are top priorities Stable, proved executive management team difficult portfolio and cost management decisions (Gas business, CAPEX cuts in 2009) execution of challenging integrations (Slovnaft, TVK and INA). good track re
Slide 17: Management incentive programs
MANAGEMENT INCENTIVE PROGRAMS On the top level around 70% of the compensation is variable Annual target setting and evaluation based on corporate, organizational and individual SHORT TERM INCENTIVES targets to focus managerial performance strongly on company indicators Quantitative goals based on ke
Slide 18: Upstream Operation
oo UPSTREAM OPERATION > MOLGROUP
Slide 19: Upstream: speed up organic developments and renew the asset base
UPSTREAM: SPEED UP ORGANIC DEVELOPMENTS AND RENEW THE ASSET BASE CURRENT PORTFOLIO* TO DELIVER AROUND 125-135 MBOEPD AT PEAK WITH IMPROVING UNIT EBITDA ABOVE 100% RESERVE REPLACEMENT RATIO IS TARGETED ON 3 YEARS AVERAGE INORGANIC GROWTH FOCUSED ON DELIVERING A BALANCED PORTFOLIO – NORTH SEA, CIS & P
Slide 20: Production activities in countries
PRODUCTION ACTIVITIES IN 8 COUNTRIES Provide a good basis for the next years Production*, Q1 2014: CEE total Russia 96 mboepd Croatia, Hungary Reserves**: 576 MMboe Reserves**: 130 MMboe Reserves: 348 MMboe Production*: 7 mboepd Production: 77 mboepd Kazakhstan Reserves: 37 MMboe o/w CEE offshore Re
Slide 21: Exploration potential of current assets
960 MMBOE* EXPLORATION POTENTIAL OF CURRENT ASSETS to secure organic mid-term growth CEE onshore & offshore Russia 140 150 Matjushkinsky, Baitugan**, Hungary, Croatia, Romania Yerilkinskiy** Kazakhstan 135 Fedorovskoye, North Karpovsky Kurdistan Region of Iraq Pakistan 250 70 Akri-Bijeel, Shaikan Bl
Slide 22: Organic production may increase by 30% in years
ORGANIC* PRODUCTION MAY INCREASE BY 30% IN 5 YEARS with major contributions from Middle East and North Sea areas with high unit EBITDA PRODUCTION OUTLOOK* (RISKED, ENTITLEMENT BASED) BY 2015 AROUND 10% PRODUCTION GROWTH* 140 ~30% Accelerated field development projects in 120 CEE with growth in CRO 1
Slide 23: Over USD 1bn organic capex spending targeted p.a.
OVER USD 1BN ORGANIC CAPEX SPENDING TARGETED P.A. to derisk and develop 1.5 BBoe total reserve and resource potentials GEOGRAPHICAL BREAKDOWN OF CAPEX SPENDING KEY INTERNATIONAL PROJECTS OF THE COMING YEARS Unrisked RRP Working Country Assets MMboe + POS Interest 2P reserves Kurdistan Akri-Bijeel 80
Slide 24: Kurdistan R.I.: accelerated development to enhance cash generation
KURDISTAN R.I.: ACCELERATED DEVELOPMENT TO ENHANCE CASH GENERATION Export started from Shaikan, Commercial production to start on Akri-Bijeel by H2 KURDISTAN REGION OF IRAQ Commercial discoveries (Bijell, Bakrman, Shaikan) Accelerated work programs to enhance cash-flow generation as soon as possible
Slide 25: First visible barrels stabilize group production level
FIRST VISIBLE BARRELS STABILIZE GROUP PRODUCTION LEVEL Unit profitability of export will be above group level due to PSC Shaikan: Export quality production with 20- 40 mboepd capacity in 2014 Bijell EWT to deliver first barrels in Q2 14, after completing on Bijell-1B Average unit profit of export ba
Slide 26: North Sea: a strategic step to create new hub
NORTH SEA: A STRATEGIC STEP TO CREATE NEW HUB Entering an attractive new region with stability and economic incentives STRATEGIC CONSIDERATIONS 1st strategic step to enhance offshore experience and create a new hub Shifting average political risk profile of MOL Group’s upstream portfolio in a favora
Slide 27: Sizeable short/mid-term production with above avg unit profitability
SIZEABLE SHORT/MID-TERM PRODUCTION WITH ABOVE AVG UNIT PROFITABILITY Project has >10% IRR with expected peak production of 16-18 mboepd in 2018-2019 NORTH SEA (28 MMboe*) OVERVIEW OF MAIN PRODUCING ASSETS Majority of asset portfolio already in development or production phase Block W.I. Operating Oth
Slide 28: CEE: minimalize decline rate to low single digit level
CEE: MINIMALIZE DECLINE RATE TO LOW SINGLE DIGIT LEVEL Croatia: Back to production growth by 2015 HUNGARY+CROATIA (349 MMboe*) - PRODUCTION OUTLOOK 80 POS Unique know-how and infrastructure high 60 Several ongoing development projects to mboepd 40 mitigate production decline as much as possible 20 A
Slide 29: Hungary: mitigate the decline to 5% from existing fields
HUNGARY: MITIGATE THE DECLINE TO 5% FROM EXISTING FIELDS Along with several efficiency improvement measures to maximize cash-flow HUNGARY (140 MMboe) 75 years E&P experience with more than 40 years EOR/EGR technological knowledge Extensive surface infrastructure Fast development provides quick cash
Slide 30: Kazakhstan: entering field development phase in 2014
KAZAKHSTAN: ENTERING FIELD DEVELOPMENT PHASE IN 2014 Start of early production is expected in 2H 2016 KAZAKHSTAN (37 MMboe) FED: Significant discoveries on a ~200 MMboe* reserve field To enter in development phase in 2014 after 7 successful well tests in row NK: Ongoing exploration program targeting
Slide 31: Russia: still a core country after portfolio restructuring
RUSSIA: STILL A CORE COUNTRY AFTER PORTFOLIO RESTRUCTURING Intensive work program continues on existing fields RUSSIA (130 MMboe*) Portfolio restructured after monetizing ZMB field and 49% in Baitugan and Yerilkinsky Baitugan block under development with gradually increasing production Matjushkinsky
Slide 32: Pakistan: increasing profitability by improving liquid to gas ratio
PAKISTAN: INCREASING PROFITABILITY BY IMPROVING LIQUID TO GAS RATIO More focus on condensate rich exploration blocks with higher interests PAKISTAN (18 MMboe) 15 years of operatorship experience on 100 mboepd potential (100%) TAL block Improving liquid to gas ratio after recent discoveries in TAL (M
Slide 33: Active M&A to step into a new league
ACTIVE M&A TO STEP INTO A NEW LEAGUE Focusing on value creation over volume growth NORTH SEA Enhance shallow offshore experience and create a new hub Decreasing average political risk KEY PRINCIPLES AND GOALS profile of MOL Group’s upstream portfolio Access to upcoming UK Exploration RIGOROUS CAPITA
Slide 34: Downstream Operation
III. DOWNSTREAM OPERATION 34
Slide 35: Downstream: maximize free cash generation with CEE Citadel model
DOWNSTREAM: MAXIMIZE FREE CASH GENRATION WITH ’CEE CITADEL’ MODEL FOCUSED, INTEGRATED PORTFOLIO ON THE LANDLOCKED CEE MARKET WITH TWO LARGEST ASSETS AMONG THE MOST COMPLEX IN EUROPE PROFITABILITY INCREASED IN 2013 IN A MUCH WORSE ENVIRONMENT CONTINUOUS EFFICIENCY IMPROVEMENT IN THE FOCUS: USD 400MN
Slide 36: Two largest assets among the best in Europe
TWO LARGEST ASSETS AMONG THE BESTS IN EUROPE Integrated operation in adjacent markets KEY STRENGTH Complex, diesel geared refineries Integrated petrochemical units to handle surplus gasoline/naphtha pool Bratislava Strong land-locked market presence – 20% motor fuel market share in the CEE; market l
Slide 37: MOL delivers top quartile performance in tough environment
MOL DELIVERS TOP QUARTILE PERFORMANCE IN TOUGH ENVIRONMENT However, still significant gap to pre-crisis level profitability, less efficient units below break even REFINERY MARGIN (URAL-MED, USD/BBL) CLEAN CCS-BASED DS EBITDA ( MN USD) 12 10 8 +4% 6 -60% 4 2 0 2008 2009 2010 2011 2012 2013 2014 CLEAN
Slide 38: USD 400mn efficiency improvement delivered by 2013
USD 400MN EFFICIENCY IMPROVEMENT WAS DELIVERED BY 2013 >USD 100mn is still due in 2014 NDSP BREAKDOWN BY YEARS (MN USD) NDSP BREAKDOWN BY CATEGORIES (%) 600 Σ 500-550 mn USD SCM-driven 500 8% improvement Revenue increase 19% Sales strategy $ 130-150 mn Σ 400 mn USD 400 Other costs 21% 300 Production
Slide 39: 2013: improved performance despite worsening conditions
2013: IMPROVED PERFORMANCE DESPITE WORSENING CONDITIONS A clear evidence to the success of our efficiency improvement program NDSP DELIVERY 2012 VS 2013 (MN USD) +15 -235 +250 670 Brent-Ural spread: -0.4 USD /bbl 700 Gasoline & gasoil crack: -14% Petchem margin: +22% Shrinking CEE market size: -2% 2
Slide 40: Continuation of modest demand increase expected in 2014
CONTINUATION OF MODEST DEMAND INCREASE IS EXPECTED IN 2014 …as the regional economic recovery continues REGIONAL MOTOR FUEL DEMAND (YOY CHANGE %) GDP AND MOTOR FUEL GROWTH (2014E, YOY CHANGE %) 6% 2,5% 2.0 3.9 2.0 3% Market (mn kt) 0% 1,5% -3% 0,5% -6% -9% 1 -0,5% GDP GDP Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 201
Slide 41: Downstream integration for captive market extension
DOWNSTREAM INTEGRATION FOR CAPTIVE MARKET EXTENSION …could be supported by inorganic retail growth CHANGE OF RETAIL OUTLET SIZE (%, 2013 VS 2010) PETCHEM INVESTMENTS Butadiene 400%< 130 ktpa unit is under construction to off-take TVK’s C4 production 100%< Investment need is ~EUR 100mn, commercial 17
Slide 42: Sizeable retail acquisition reinforces competitive position
SIZEABLE RETAIL ACQUISITION REINFORCES OUR COMPETITVE POSITION WITHIN THE DOWNSTREAM SUPPLY RADIUS DOWNSTREAM SUPPLY RADIUS ACQUISITION HIGHLIGHTS Premium network of 125 AGIP stations incl. 40+ MOL purchases 208 service stations from S.stations next to Extension of strong local eni in the Czech Repu
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Slide 44: Financial Overview
FINANCIAL OVERVIEW. , > GROUP 44
Slide 45: Strong balance sheet has top priority
STRONG BALANCE SHEET HAS TOP PRIORITY CONSERVATIVE FINANCIAL POLICY: CAPEX SHOULD BE FINANCED FROM OPERATING CASH FLOW 16% NET GEARING & 0.8 NET DEBT TO EBITDA RATIO ARE AT A 5-YEAR LOW (YEAR-END 2013) USD 1.6-1.9BN CAPEX (2014) WITH UPSTREAM FOCUS EUR 4.0BN AVAILABLE LIQUIDITY FROM DIVERSIFIED SOUR
Slide 46: Conservative financial policy
CONSERVATIVE FINANCIAL POLICY CAPEX should be financed from operating cash flow OPERATING CASH-FLOW VS CAPEX (MN USD) 4 000 3 500 3 000 INA 2 500 2 000 Pearl 1 500 1 000 Financials 500 0 2008 2009 2010 2011 2012 2013 Organic Inorganic Operating CF 46
Slide 47: Continuously strengthening financial position
CONTINUOUSLY STRENGTHENING FINANCIAL POSITION Indebtedness indicators at a 6-year low NET DEBT TO EBITDA (X) GEARING (%) 3,5 50 Limit of net debt to EBITDA 45 3 40 36 2,5 35 33 31 1,96 30 28 2 1,72 25 1,66 1,44 1,38 25 1,5 20 16 1 0,79 15 10 0,5 5 0 0 2008 2009 2010 2011 2012 2013 2008 2009 2010 201
Slide 48: USD 1.6-1.9bn capex planned for 2014 with upstream focus
USD 1.6-1.9BN CAPEX PLANNED FOR 2014 WITH UPSTREAM FOCUS Downstream spending to peak in 2014-15 due to ongoing growth projects Upstream Downstream Balance between early Strict control on sustain CAPEX cash generation… 43% Selective profitable growth CEE investments (50%) CAPEX and creation of mid-lo
Slide 49: MOL has sufficient liquidity for acquisitions
MOL HAS SUFFICIENT LIQUIDITY FOR ACQUISITIONS… EUR 4 bn total available liquidity as of Q1 2014 DRAWN VERSUS UNDRAWN FACILITIES (EUR MILLION) TOTAL AVAILABLE LIQUIDITY (EUR MILLION) Financials
Slide 50: From diversified funding sources
…FROM DIVERSIFIED FUNDING SOURCES Cost rationalization keeping diversification in mind RECENT EVENTS MID- AND LONG-TERM COMMITTED FUNDING PORTFOLIO USD 545m Revolving Credit Facility extended from 2016 to 2017 MOL prepaid the EIB project loan (value USD 158m) taken in 2010. MOL prepaid the EBRD loan
Slide 51: Average maturity of 2.6 years
AVERAGE MATURITY OF 2.6 YEARS* No concentrated refinancing needed 2 500 2 000 1 500 EUR M 1 000 514 34 96 1 489 991 500 750 750 475 460 363 0 19 39 39 39 Reported 2014 2015 2016 2017 2018 2019 2020 cash&cash equivalents Financials Reported cash&cash equivalents Long term loan (multilaterals) Senior
Slide 52: Credit rating above sovereign rating at Fitch, in line with S&P
CREDIT RATING ABOVE SOVEREIGN RATING AT FITCH, IN LINE WITH THAT AT S&P FFO/NET DEBT* HISTORICAL FOREIGN LONG TERM RATINGS 50,00% MOL S&P Hungary S&P MOL Fitch Hungary Fitch 45,00% 40,00% 35,00% 30,00% 25,00% 20,00% 15,00% 10,00% 5,00% 0,00% 2008 2009 2010 2011 2012 2013 *Funds from operation, adjus
Slide 53: Key items of taxation
KEY ITEMS OF TAXATION Positive effect vs. 2012 level HUNGARY Revenue based ’Crisis tax’ abolished from 2013 – ~HUF 30bn negative effect p.a. in 2010-12 Profit based ’Robin Hood’ nominal tax rate is 31% only energy related part of the profit affected (~70%), thus implied RH tax rate is cca. 22% only
Slide 54: Dividend policy
DIVIDEND POLICY Conservative, predictable payouts with balance sheet stability in focus 80 KEY PRINCIPLES 70 Pay out dividend to shareholders in parallel maintaining adequate financial 60 stability 50 Balance sheet has top priority Net gearing and net debt to HUF bn 40 EBITDA ratio targets are consi
Slide 55: Shareholder structure
SHAREHOLDER STRUCTURE As of 31 March 2014 DIVERSIFIED SHAREHOLDER STRUCTURE Foreign investors (mainly institutional) 25.3% Hungarian State 24.7% CEZ MH B.V. 7.3% OmanOil (Budapest) Limited 7.0% OTP Bank Plc. 5.4% Magnolia Finance Limited 5.7% ING Bank N.V. 5.0% Crescent Petroleum 3.0% Dana Gas PJSC
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Slide 57: Appendix: Key Upstream Projects
V. APPENDIX KEY UPSTREAM PROJECTS 57
Slide 58: Kurdistan Region of Iraq
KURDISTAN REGION OF IRAQ World class discoveries in row, already in the spotlight of majors Oil reserves potential around 45 Bboe* Kurdistan Region of Iraq Gas and associated gas reserves potential up to 6 Tcm (38 Bboe)* Production Sharing Contracts awarded for 62 licences** High (~70%) discovery ra
Slide 59: Overview of MOL's assets in Kurdistan Region of Iraq
OVERVIEW OF MOL’S ASSETS IN KURDISTAN REGION OF IRAQ Harvesting on first mover’s advantage – entry in 2007 amongst the first ones ENTERING THE KURDISTAN REGION OF IRAQ IN 2007 Kurdistan Region of Iraq MOL has interest in four blocks 3 discoveries in recent years INTENSIVE APPRAISAL PROGRAM TO EXPLOR
Slide 60: Akri-Bijeel: commerciality declared
AKRI-BIJEEL: COMMERCIALITY DECLARED Accelerated field development work program with 4+1 rigs Kurdistan Region of Iraq Key Upstream projects 2 successful oil discoveries: Bijell-1 & Bakrman-1 Bijell EPF facility ready for operation on Bijell-1 site, with 10 mboepd gross nameplate capacity, 30 mboe st
Slide 61: Work program 2014-2015
WORK PROGRAM 2014-2015 to derisk the significant petroleum original oil in place Kurdistan Region of Iraq Key Upstream projects E - expected spud - expected well test * Conditional, not fixed yet, dependant on FDP approval. 61
Slide 62: Shaikan: commercial production started, first export cargo delivered
SHAIKAN: COMMERCIAL PRODUCTION STARTED, FIRST EXPORT CARGO DELIVERED IN JAN Gross production and sales of 20-40 mboepd in 2014 Kurdistan Region of Iraq Key Upstream projects Successful discovery and completion of five well appraisal program, crude from 16 to 52 API 7.5 billion barrels STOIIP estimat
Slide 63: Structure of our production sharing contracts
STRUCTURE OF OUR PRODUCTION SHARING CONTRACTS SCHEMATIC OF PRODUCTION SHARING AT AKRI-BIJEEL BLOCK SCHEMATIC OF PRODUCTION SHARING AT SHAIKAN BLOCK Kurdistan Region of Iraq Oil produced Oil produced Royalty Oil Royalty Oil 10% of total Crude oil 10% of total Crude oil 43% Available crude Oil 40% Ava
Slide 64: Catcher area
CATCHER AREA One of the largest discoveries in the UK in the last 5 years 3 main discoveries: Catcher (2010), Varadero (2011), Burgman (2011) 2 additional small recent discoveries: Carnaby (2012) and Bonneville (2013) North Sea Stratigraphic traps in the Lower Eocene Tay turbidite sandstone reservoi
Slide 65: MOL has 20% in the recently sanctioned Catcher project
MOL HAS 20% IN THE RECENTLY SANCTIONED CATCHER PROJECT One of the largest ongoing North Sea development project KEY METRICS (100%, GROSS PROJECT) CATCHER AREA – DEVELOPMENT SCHEME Gross capex $2.25 bn ($1.6 bn to first oil) 2P reserves of 96 MMboe - additional potential upside of approximately 50 MM
Slide 66: Scolty & Crathes
SCOLTY & CRATHES with further MOL estimated 7 MMboe fully derisked 2C reserve Two small discoveries: Scolty (2007) and Crathes (2011) Stratigraphically defined fields in Paleocene sandstone with good reservoir North Sea properties Operator started the concept selection for development Project sancti
Slide 67: Derisked assets with sizeable short-mid term production
DERISKED ASSETS WITH SIZEABLE SHORT-MID TERM PRODUCTION Two blocks contribute with ~5 mboepd already in 2015 BROOM FACTSHEET BROOM First discovery 1976 Two separately developed compartmentalized oil Type Oil accumulations, North Terrace and West Heather North Sea MOL's share 29% Producing since 2004
Slide 68: Hungary: mitigate the decline to 5% from existing fields
HUNGARY: MITIGATE THE DECLINE TO 5% FROM EXISTING FIELDS Along with several efficiency improvement measures to maximize cash-flow PRODUCTION AND FIELD DEVELOPMENT Central Eastern Europe ~130 producing fields Accelerated development projects More than USD 300mn planned to spend on field development b
Slide 69: Croatia: back to the growth path by 2015
CROATIA: BACK TO THE GROWTH PATH BY 2015 with significant efforts in field development PRODUCTION AND FIELD DEVELOPMENT Central Eastern Europe Close to 60 producing fields Deliver new volumes from ongoing development projects to turn back prodution to growth path by 2015 EOR project implementa
Slide 70: Kazakhstan: entering field development phase in 2014
KAZAKHSTAN: ENTERING FIELD DEVELOPMENT PHASE IN 2014 Likely upward revision of reserves on FED block after 7 succesful wells in row FEDOROVSKOYE FIELD – MAJOR DISCOVERIES 7 successful well tests in row 3.900 boepd average flow rate with ~55% condensate content Kazakhstan Wells proven multiple gas an
Slide 71: Start of early production is expected by 2016
START OF EARLY PRODUCTION IS EXPECTED BY 2016 In the first phase of the field development focusing on early value generation FEDOROVSKOYE FIELD Finishing appraisal campaign with 1 well test left as well as update reserve estimates Early cash generation program – building a simple gas-condenate separ
Slide 72: Russia: a core country amid portfolio restructuring
RUSSIA: A CORE COUNTRY AMID PORTFOLIO RESTRUCTURING Intensive work program continues on existing fields EXPERIENCES Primary target region: Volga-Ural, Western Siberia Over 10 years experience ensures technical capability in Russia field development-rejuvenation and exploration THREE BLOCKS IN DIFFER
Slide 73: Matjushinsky block and Baitugan block
MATJUSHINSKY BLOCK BAITUGAN BLOCK Russia Key Upstream projects Operator: MOL, 100% Operator : MOL, 100% 2P reserves: 22 MMbbl (2013) 2P reserves: 108 MMbbl (2013) Oil quality: 34 0 API Oil quality: 26 0 API Area: Western Siberia, with sizable acreage (3.200 km 2) Area: Volga-Ural region (70 km2) 73
Slide 74: Pakistan: increasing profitability by improving liquid oil to gas ratio
PAKISTAN: INCREASING PROFITABILITY BY IMPROVING LIQUID OIL TO GAS RATIO More focus on condensate rich exploration blocks with higher interest HIGHLIGHTS 6+1 significant discoveries since 1999 Present in 5 blocks, in 3 as operator Pakistan Noticeable operation experience, local and technical knowledg
Slide 75: Years of operator experience with discoveries in TAL block
15 YEARS OF OPERATOR EXPERIENCE WITH 6 DISCOVERIES IN TAL BLOCK Accelerated work programs in other blocks in early phases TAL BLOCK Operated since 1999, 6 discoveries made by now Reserve base further increased with net 11 MMboe (discoveries – revisions) reserve booking in 2013 Pakistan Continue deve
Slide 76: Disclaimer
DISCLAIMER "This presentation and the associated slides and discussion contain forward-looking statements. These statements are naturally subject to uncertainty and changes in circumstances. Those forward-looking statements may include, but are not limited to, those regarding capital employed, capit