Okea Asa · OSL:OKEA
Okea Asa — Debt Investor Presentation (August 2023)
44 slides from Okea Asa's debt investor presentation, August 2023
Slide 1: OKEA ASA Credit investor update August 2023
OKEA ASA Credit investor update August 2023
Slide 2: Forward-looking information
Forward-looking information This presentation contains certain statements and information that constitutes "forward-looking information” and relates to future events, including the Company’s future performance, business prospects or opportunities. Forward-looking information is generally identifiabl
Slide 3: Table of contents
Table of contents 1 Company and business 2 Financials 3 Appendix 3
Slide 4: OKEA at a glance
OKEA at a glance A leading independent E&P company operating on the Norwegian Continental Shelf Introduction Key figures Core assets • Founded in 2015 and listed on the Oslo Stock Exchange since June 2019 Production H1 20231 • Repeating and successful HY bond issuer 32.7 kboepd 10 since 2017 Product
Slide 5: Delivering in line with growth strategy
Delivering in line with growth strategy More than doubling production volumes since new strategy launch in 2021 Net pro forma production (kboepd)1 +40 33-382 22.4 21.0 18.7 16.1 15.5 0.3 0.0 2016 2017 2018 2019 2020 2021 2022 2023E 2024E 2016 2016 2017 2018 End-2021 2022 2022 2023 Yme Ivar Aasen Yme
Slide 6: Strategic pillars
Strategic pillars The leading mid to late-life operator on the NCS Profitable Value Capital growth creation discipline Pursuing accretive organic and Continuously working for value Maintaining financial flexibility and inorganic growth initiatives maximisation in existing portfolio robust balance sh
Slide 7: Management with broad operational and financial expertise
Management with broad operational and financial expertise Team with extensive track record and varied experience on the NCS Svein J. Liknes | CEO Birte Norheim | CFO ▪ >25 years' experience from the oil and offshore industry ▪ >20 years' experience from the oil and gas sector ▪ Served as acting CEO
Slide 8: Operator strategy underpinning value creation
Operator strategy underpinning value creation Fully-fledged operator organisation with long track record of operational excellence Demonstrated strong organisational capabilities Full-cycle competence • 22 Grå bakgrunn her • Highly capable operator organisation built on Gross operated Shell and Wint
Slide 9: Creating value through active ownership
Creating value through active ownership Mid to late-life operating expertise translated into tangible results at Draugen and Brage Draugen thriving under OKEA operatorship Revitalisation underway at Brage • Operated by OKEA since December 2018 • Operatorship transferred to OKEA in November 2022 • Wi
Slide 10: Step-change in size and diversification through strategic M&A
Step-change in size and diversification through strategic M&A Two material, strategic acquisitions following updated strategy in 2021, while reducing leverage in the period 2021 2022: 2023: Today Wintershall Dea assets PL037 (Statfjord Area) acquisition acquisition >40 Production 16 2024E +150% (kbo
Slide 11: Statfjord – transformational acquisition of 28% WI in a proven giant
Statfjord – transformational acquisition of 28% WI in a proven giant Advancing OKEA to a higher league of producers with more than 40,000 barrels per day in 2024E Acquiring 28% WI in PL037 (Statfjord Area)1 •Strategic partnership with Equinor FLX unit •Production numbers • One of the most prolific a
Slide 12: Material and diversified portfolio of producing assets
Material and diversified portfolio of producing assets Production spread across ten individual fields, with presence across the North Sea and Norwegian Sea • Annual pro forma production (kboepd)1 • Overview of asset portfolio and 2P reserves3 Statfjord Area2 32.7 Draugen Ivar Aasen Existing portfoli
Slide 13: Continuous value-enhancing activity across the portfolio
Continuous value-enhancing activity across the portfolio Core focus on incremental development to maximise value of the asset base Asset/Area Operator 2023 2024 2025 Power from shore (start-up in 2027) Hasselmus Draugen Draugen startup • Development of Hasselmus tie-back increases value, reduces cos
Slide 14: Production outlook and key growth initiatives
Production outlook and key growth initiatives Simultaneously working three growth levers to deliver profitable and robust growth Key growth levers Production outlook from current portfolio (kboepd)1 Base production >40 Actively pursue further value creation in producing assets and maximising potenti
Slide 15: Target 30% CO2 emission reductions by 2030
Target 30% CO2 emission reductions by 2030 Firm and ambitious ESG strategy with Draugen electrification project leading the way 2022 performance highlights Case study: 95% reduction in CO2 intensity from Draugen by 2027 vs 2019 baseline A+ Key considerations Overview of development solution for elec
Slide 16: Table of contents
Table of contents 1 Company and business 2 Financials 3 Appendix 16
Slide 17: Financial strategy and capital allocation framework
Financial strategy and capital allocation framework Capital discipline – Robust growth – Returns Conservative Balanced Financial Robust financial capital flexibility portfolio management allocation ▪ Moderate debt to equity mix ▪ Maintain sufficient liquidity at all ▪ Disciplined growth with focus o
Slide 18: Strong financial position – snapshot per H1 2023
Strong financial position – snapshot per H1 2023 Reported numbers excluding effects of Statfjord acquisition Production OPEX/boe EBITDA Free cash flow (H1 2023) (H1 2023)1 (H1 2023) (H1 2023)2 22 kboepd USD 22/boe NOK 2.8bn NOK 1.8bn Market cap Cash position Net debt Leverage Ratio (22 August 2023)
Slide 19: Sustained track record of robust financial performance
Sustained track record of robust financial performance Reported numbers excluding effects of Statfjord acquisition Reported production (kboepd) EBITDA (NOKm) 22.2 4 793 21.0 18.7 16.1 15.5 2 607 2 759 1 636 867 2019 2020 2021 2022 H1’23 2019 2020 2021 2022 H1’23 Free cash flow (NOKm)1 Reported inter
Slide 20: Consistent deleveraging in recent years
Consistent deleveraging in recent years Substantially growing the portfolio whilst reducing leverage Conservative approach to financing and liquidity management Leverage ratio development2 • Demonstrated consistent track record of deleveraging in recent years 3,0 Net tax payable (NOKbn) • Strong cas
Slide 21: Strong cash flow generation driving further deleveraging
Strong cash flow generation driving further deleveraging Forecast post-tax free cash flow covers all financing costs at oil prices well below USD 50/bbl Strong cash flow generation (2023E-26E) Conservative leverage profile NOKbn 5 Illustrative Leverage Ratio1 development on forward prices USD 70/bbl
Slide 22: Summary of outlook & guidance
Summary of outlook & guidance Production guidance of 22–25 kboepd in 2023 (excluding effect of Statfjord Acquisition) • Draugen turnaround completed in Q2 Production • Maintenance at Gjøa with expected downtime of 4-6 days and 7 days shut-in of the subsea wells (reduces production by ~50% during shu
Slide 23: Table of contents
Table of contents 1 Company and business 2 Financials 3 Appendix 23
Slide 24: Income statement
Income statement Q2 2023 comments Operating income • Revenue from sales of petroleum products of NOK 1,641m; includes realised gain on forward gas contracts of NOK 137m • Other income of NOK 66m Figures in NOKm Q2 23 Q1 23 Q2 22 H1 2023 H1 2022 Total operating income 1,707 2,954 1,332 4,661 2,845 Pr
Slide 25: Statement of financial position
Statement of financial position Figures in NOKm Assets 30.06.2023 31.03.2023 31.12.2022 Q2 2023 comments Goodwill 1,292 1,292 1,297 Oil and gas properties 6,416 6,496 6,556 • Goodwill of NOK 1,292m Asset retirement reimbursement right 3,486 3,760 3,662 Trade and other receivables 1,362 1,793 1,744 •
Slide 26: Cash development YTD per Q2 2023
Cash development YTD per Q2 2023 NOKm 4,500 +1,439 4,000 499 3,500 925 3,000 3 219 297 23 79 2,500 17 59 208 2,000 +1,231 1,500 2 543 2 335 1,000 500 1 104 0 Total liquidity Operating Taxes Investment Business Other Interest Lease debt FX effect on Total liquidity Dividend Total liquidity 31.12.22 a
Slide 27: Key transactions, deferred and contingent payments
Key transactions, deferred and contingent payments Statfjord acquisition – Key terms Brage acquisition – Contingent payment • SPA for acquisition of 28.00% WI in PL037 Statfjord Area from Equinor Energy AS entered • OKEA ASA completed the transaction with Wintershall Dea Norge AS 31 October 2022, in
Slide 28: Asset retirement obligations
Asset retirement obligations Draugen and Gjøa (Norske Shell transaction) PL037 Statfjord Area (Equinor transaction) • Seller covers abandonment and removal cost for equipment installed as of • Seller retains responsibility for decommissioning/removal of the Statfjord A completion of the transaction
Slide 29: Overview of material contracts and agreements
Overview of material contracts and agreements Oil and gas sales Other material contracts, legal disputes • Crude Oil is sold on term contracts (yearly and multi-year) where underlying • Joint Operating Agreement (JOA) benchmark is Dated Brent – The Company has several production licences on the NCS
Slide 30: Draugen (44.56% WI, operator)
Draugen (44.56% WI, operator) Material, long-lived oil producer Asset description Asset overview • Located on the southeast edge of Haltenbanken in the Norwegian Sea, 140 km northwest of Licence PL 093 Kristiansund, in water depths of 250 metres 2P reserves (gross) YE’22 71.5 mmboe • The platform is
Slide 31: Brage (35.20% WI, operator)
Brage (35.20% WI, operator) Proven asset with high reliability Asset description Asset overview • Brage is located closed to the Oseberg Area in the northern North Sea, 125 km west of Licence PL 055 Bergen, in water depths of 137 metres 2P reserves (gross) YE’22 10.8 mmboe • Developed as a fixed int
Slide 32: Gjøa (12.00% WI)
Gjøa (12.00% WI) Gas producer with low emissions intensity and tie-in hub in prolific area Asset description Asset overview • The Gjøa field is located in the northern part of the North Sea, 50 km northeast of the Troll Licence PL 153 field, in water depths of 360 metres 2P reserves (gross) YE’22 41
Slide 33: Ivar Aasen (9.2385% WI)
Ivar Aasen (9.2385% WI) Digital oilfield pilot with low emissions and high production efficiency Asset description Asset overview • Located in the northern part of the North Sea, 30 km south of the Grane and Balder fields, in Licence PL 338 BS water depths of 110 metres 2P reserves (gross) YE’22 64.
Slide 34: Nova (6.00% WI)
Nova (6.00% WI) Low-cost subsea tie-back to Gjøa Asset description Asset overview • Oil and associated gas producer located 120 km northwest of Bergen and 17 km southwest Licence PL 418 of Gjøa, in water depths of around 370 meters 2P reserves (gross) YE’22 91.4 mmboe • The field consists of two sub
Slide 35: Yme (15.00% WI)
Yme (15.00% WI) Decommissioning project redeveloped into a producing asset Asset description Asset overview • Located in the southeastern part of the Norwegian sector of the North Sea, 130 km northeast Licence PL 316 of the Ula field, in water depths of 100 metres 2P reserves (gross) YE’22 50.3 mmbo
Slide 36: Statfjord Unit (23.93123% WI)
Statfjord Unit (23.93123%1 WI) Legacy oil giant with substantial remaining running room Asset description Asset overview • Located in the Tampen area in the northern part of the North Sea, straddling the border Licence PL 037 between the Norwegian and UK sectors, in water depths of 150 metres. The N
Slide 37: Statfjord Satellites (various WI)
Statfjord Satellites (various WI) Three late-life subsea tie-backs to Statfjord Asset description Asset overview Statfjord Nord Statfjord Nord Statfjord Øst Sygna • Located 17 km north of the Statfjord field, in water depths of 250-290 metres Licence PL 037 PL 037 PL 037 • Two production templates a
Slide 38: Summary of reserves and resources per YE 2022
Summary of reserves and resources per YE 2022 Net 1P and 2P reserves (mmboe) 1P/P90 (Low estimate) 2P/P50 (Base estimate) Asset / Project OKEA WI (%) Gross Oil Gross NGL Gross Gas Net OE Gross Oil Gross NGL Gross Gas Net OE Reserves - On Production Draugen 44.6 % 38.0 0.0 0.0 17.0 41.9 0.0 0.0 18.7
Slide 39: Licence overview
Licence overview Producing assets Pre-production or exploration phase Licence Field Operator OKEA WI Licence Field/prospect Operator OKEA WI PL 053 B Brage OKEA 35.20 % PL 093 B Hasselmus OKEA 44.56 % PL 055 Brage OKEA 35.20 % PL 158 Hasselmus OKEA 44.56 % PL 055 B Brage OKEA 35.20 % PL 195 Aurora O
Slide 40: Introduction to the Norwegian petroleum tax system
Introduction to the Norwegian petroleum tax system 78% total cost recovery on investments with majority recouped in year of investment Summary of the Norwegian petroleum tax system Tax balances and values net to OKEA Remaining tax balances 01.01.2023 – corporate tax basis 22% • NCS petroleum taxatio
Slide 41: Board of directors
Board of directors Mike Fischer Rune Olav Pedersen Nicola Gordon Finn Haugan Jon Arnt Jacobsen Vice chair Board member Board member Board member Board member Non-executive Independent, non-executive Independent, non-executive Independent, non-executive Independent, non-executive ▪ Nearly 40 years ex
Slide 42: OKEA's ESG approach and strategic targets
OKEA’s ESG approach and strategic targets 1 2 3 4 5 6 Sustainable development Environment Our people Our partners Our stakeholders Our communities Committed to engage with We have identified potential The protection of biodiversity Working actively to identify stakeholders and to foster Committed to
Slide 43: Top 20 shareholders
Top 20 shareholders Rank Investor Geography Type % Shares 1 BCPR PTE. LTD. Thailand Ordinary 45.44 % 47,218,098 2 THE BANK OF NEW YORK MELLON USA Nominee 3.33 % 3,461,605 3 CLEARSTREAM BANKING S.A. UK Nominee 2.95 % 3,063,503 4 MORGAN STANLEY & CO. LLC USA Nominee 2.45 % 2,547,797 5 SALT VALUE AS No
Slide 44: www.okea.no
www.okea.no