Var Energi Asa · OSL:VAR
Var Energi Asa — Q1 2024 Earnings Presentation
26 slides from Var Energi Asa's earnings presentation, Apr 23, 2024
Slide 1: First quarter 2024 results presentation
First quarter 2024 Results presentation 23 April 2024
Slide 2: Today's presenters
Today’s presenters Nick Walker Stefano Pujatti Ida Marie Fjellheim CEO CFO Head of Investor Relations
Slide 3: First quarter 2024 highlights
First quarter Good operational performance • Record production up 33% from previous quarter 2024 highlights • Breidablikk producing at plateau in first quarter • Neptune Energy Norge included from 1 January 2024 Strong financial results Production Production cost • Achieved realised gas price of USD
Slide 4: Fastest growing E&P
Fastest growing E&P Barents Sea 3rd largest oil and gas producer in Norway ~200 Hammerfest Diversified asset base licenses 68 operated Interests in >50% of all producing assets on the NCS 2nd largest exporter of gas from Norway 47 fields Norwegian Sea Neptune a perfect fit 7 operated Adds scale, div
Slide 5: Strong operational performance
Strong operational performance Gas share Q1 Production Efficiency Q1 Production guidance 2024 37% 93%3 280-300¹ kboepd kboepd 2024 key priorities 299² Upper range • Deliver key projects Lower range • Integrate Neptune • >90% production efficiency • Infill well deliveries YTD February2 Q1 24 Q2 24 Q3
Slide 6: Growth towards 2025 and unlocking future value
Growth towards 2025 and unlocking future value kboepd ~400 8 new Sustaining 350-400 kboepd projects towards 2030 299 280-300 • Maximise recovery and infill drilling • High value early phase projects Base • Near field and high impact production exploration Q1 2024 2024 guiding End-2025E Gas share 37%
Slide 7: Safe and responsible
Safe and responsible Safety performance Emissions intensity 3 0.1 actual SIF1, 2 10.0 kg CO2/boe² Methane emissions near zero <0.02 % share of gas sales4 Member of OGMP 2.05 Inclusion in the ESG index Top 5% A+ B OSEBX ESG, Oslo Stock Exchange in the industry1 Top 100 Oslo Børs2 rating3 1. Per March
Slide 8: Unit opex better than guidance
Unit opex better than guidance USD/boe Reducing opex by end-2025 13.5-14.5 14.1 12.0 • Sanctioned projects averaging ~10 USD ~4 per boe • Integrating lower-cost Neptune assets • High-grading the portfolio • Realising cost synergies and improvements 2023 2024 guiding Q1 2024 End-2025 target1 7 1. Equ
Slide 9: Creating value and growth
Creating value and growth Reserves1 Contingent resources2 Prospective resources3 1.24 billion boe 0.75 billion boe >1 billion boe >3 billion boe 10 projects coming >20 early phase ~60 exploration on stream and high projects wells next four years quality assets 1. 2023 Annual statement of reserves -
Slide 10: Projects in execution
Delivering growth Projects in execution Barents Sea Johan Castberg Snøhvit Future 10 projects developing >400 mmboe1 Norwegian Sea Smørbukk North Kristin South Halten East Ormen Lange Ph.3 Åsgard LPP3 Verdande USD ~35 per boe ~2 years Breakeven Pay-back Balder Area Balder X >25% >50% complete IRR ac
Slide 11: Balder X progressing towards first oil
Balder X progressing towards first oil Production for decades in the Balder area ~80 kboepd at peak production¹, gross Targeted start-up Q4 2024 ~150 mmboe 2P reserves¹, gross Extending lifetime to 2045+ ~5 USD/bbl production cost SPS/SURF2 >85% complete Jotun FPSO ~95% complete Drilling >85% comple
Slide 12: Johan Castberg on track
Capturing long term value Johan Castberg on track from the prolific Barents Sea 190 kboepd vessel capacity production¹,², gross Progressing towards 450-650 mmboe first oil in Q4 2024 recoverable resources¹,², gross ~4 USD/bbl production cost 1. Operator’s estimate 11 2. 30% working interest
Slide 13: Continued exploration success
Continued exploration success Barents Sea 5 wells Ringhorne North oil discovery 13-23 mmboe Estimated gross recoverable resources Norwegian Sea 1 well Doubling number of wells in 2024 ~150 mmboe ~300 USD million 13 of 16 North Sea 7 wells net risked resources exploration spend1 wells left to drill B
Slide 14: Financial highlights
Financial highlights 75 USD/boe USD 1 009 million weighted average realised price CFFO after tax 0.7x USD 2.3 billion NIBD / EBITDAX Available liquidity1 USD 270 million Dividend Q1 2024 and Q2 2024 guidance 13 1. Cash, cash equivalents and undrawn facilities
Slide 15: Good realised gas price
Good realised gas price Realised gas price above spot price year-to-date1 Total petroleum revenues USD million ~14 USD/boe 2 089 Indicative gas sales portfolio2 1 949 1 679 Gas sales split (%) 881 1 222 100% 1 078 UK 1 161 4 543 616 75% Q1 2023 Q4 2023 Q1 2024 France Oil Gas NGL 50% Germany and Neth
Slide 16: High cash flow generation
High cash flow CFFO and capex generation USD million 3.5 3.0 2.5 1 358 USD 1 billion 2.0 Q1 2024 Cash flow from operations (CFFO) 1 009 975 857 1.5 687 661 694 642 650 1.5x 1.0 Q1 2024 capex coverage 0.5 231 0.0 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 CFFO Capex 15
Slide 17: Strong liquidity position following Neptune acquisition
Strong liquidity position following Neptune acquisition Cash flow development Q1 2024 Available liquidity USD million USD million 28 3 735 26 24 22 (51) 20 18 2 322 3 000 16 (468) 1 528 14 1 009 12 1 304 1 600 10 735 722 8 (270) (18) 6 4 735 722 2 0 Q4 2023 Q1 2024 (2 038) Cash at end- CFFO before W
Slide 18: Continued strong financial position
Continued strong financial position Net interest-bearing debt and leverage ratio1 Maturity profile USD billion USD million 13 1.0 0.7x 0.8 12 0.5x 0.6 First Reset Date 15 11 0.3x 0.4 February 2029 10 0.2 0.0 9 8.1 -0.2 1 500 8 -0.4 7 -0.6 5.6 -0.8 6 5.3 -1.0 5 -1.2 3.9 -1.4 4 1 000 1 000 -1.6 ~8002
Slide 19: Cash tax sensitivities
Cash tax sensitivities Tax payments – sensitivities for 2H 20241 USD million 1 400 1 200 NOK ~10 billion Q2 2024 tax payments (USD ~1 billion)1 1 000 800 $90/90 boe oil/gas price Taxes paid in 1H 2024 related $80/80 boe oil/gas price to 2023 results $70/70 boe oil/gas price 600 400 200 0 Q1 2024 Q2
Slide 20: Attractive and predictable dividends
Attractive and predictable dividends Dividends USD million Dividend guidance Planned dividend Q2 2024 for 2024 270 270 270 270 270 20-30% of CFFO (after tax)1 270 ~30% USD million of CFFO after tax Dividend for Q1 2024 of USD ~0.11 per share to be paid 8 May 2024 Paid in NOK at exchange rate of USD/
Slide 21: Guidance and outlook
Guidance and outlook 2024 Longer-term End-2025: ~400 kboepd Production 280-300 kboepd 2025-2030: 350-400 kboepd Production cost USD 13.5-14.5 per boe End-2025: USD ~10 per boe2 2025-28: USD 2.7-2.9 billion excl. exploration and abandonment USD 1.5-2.5 billion excl. exploration and abandonment p.a. C
Slide 22: Delivering growth and value
Delivering growth and value Good operational performance Strong financial results Growth towards 2025 and unlocking future beyond Continued attractive and predictable dividends 21
Slide 23: Q&A
Q&A 22
Slide 24: Appendix
Appendix
Slide 25: Exploration program 2024
Exploration program 2024 Barents Sea Vår Pre-drill Estimated Energi unrisked recoverable License Prospect Operator Status share resources resources % mmboe1 mmboe1 PL 917 Hubert Vår Energi 40 % Dry PL 917 Magellan Vår Energi 40 % Dry PL 956 Ringhorne North Vår Energi 50 % 13-23 Discovery PL 636 Ceri
Slide 26: Disclaimer
Disclaimer The Materials speak only as of their date, and the views expressed are subject to change based on a number of factors, including, without limitation, macroeconomic and market conditions, investor attitude and demand, the business prospects of the Group and other issues. The Materials and