Bluenord Asa · OSL:BNOR
Bluenord Asa — Norwegian Energy Company ASA (Noreco) — Q2 2022 Earnings Presentation
30 slides from Bluenord Asa's earnings presentation, Jul 12, 2022
Slide 1: Focused on Delivery
Focused on Delivery Results Presentation: Q2 2022 12 July 2022
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION (THE “INFORMATION MATERIAL”) HAS BEEN PRODUCED AND PARTY SOURCES ARE SOLELY OPINIONS AND FORECASTS WHICH ARE SUBJECT DELIVERED BY NORWEGIAN ENERGY COMPANY ASA (THE “COMPANY”). THIS TO RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL INFORMATION MATERIAL DOES
Slide 3: Important Information
Important Information AN INVESTMENT IN THE COMPANY INVOLVES RISK, AND SEVERAL FACTORS DOMESTIC AND FOREIGN LAWS AND REGULATIONS, TAXES, CHANGES IN COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF COMPETITION AND PRICING ENVIRONMENTS, FLUCTUATIONS IN CURRENCY THE COMPANY TO BE MATERIALL
Slide 4: Focused on Delivery
Focused on Delivery 4 Maximising Value and Ensuring Energy Security: Today and Tomorrow Maximise Production from our operational hubs We Are Delivering Minimise Costs to support overall profitability Operationally Reduce Emissions through targeted interventions Unlocks > 1 Tcfe(1) supporting long-te
Slide 5: Delivering in Today's Context: Energy Security
Delivering in Today’s Context: Energy Security 5 DUC is a key contributor to EU’s Energy Security given its direct export routes to Continental Europe Key Observations Connected to the European Gas Network 1 Liquids pipeline to Fredericia ▪ Recent structural change in the EU energy 2 Gas pipeline to
Slide 6: Delivering Operationally
Delivering Operationally 6 Strong Performance Driven by Active and Targeted Approach Net production mboe/d EBITDA generation USD million ▪ Strong, stable operational performance ▪ Supported by operational performance and favourable pricing ▪ Full-year guidance for 2022 of 24.5-26.5mboe/d ▪ H1 2022 E
Slide 7: Delivering Tyra
Delivering Tyra 7 Step-Change in Production and Cashflow from 2023 Net production mboe/d Expected free cashflow generation(1) USD million 2 000 2021 2023+ c. 50mboe/d Total FCF(1) in 2023-27: USD 2.9 billion(2) 25% 45% 1 600 Pre-Tax Operating Cashflow(2) Gas Gas Investing Cashflow(2) 1 200 ~1,000 Ta
Slide 8: Delivering Our Potential
Delivering Our Potential 8 Disciplined Capital Allocation Will Define Actionable Opportunity Set Shareholder Returns Significant Deleveraging With Tyra onstream Prioritised Target through-cycle Sustainable, long-term leverage: < 2.0x dividend profile supported by our balance sheet (Net Debt / EBITDA
Slide 9: We Are Delivering Operationally
We Are Delivering Operationally
Slide 10: Noreco's Asset Portfolio: Diversified, Balanced
Noreco’s Asset Portfolio: Diversified, Balanced 10 Noreco Holds a 36.8% Working Interest in the DUC, Operated by TotalEnergies Key Highlights Portfolio of Four Hubs in the Danish North Sea DUC Partner Interest ▪ 36.8% WI in the Danish Underground Consortium (“DUC”) TotalEnergies 43.2%, op. – 15 fiel
Slide 11: Operations: Strong Performance and Positive Outlook
Operations: Strong Performance and Positive Outlook 11 Production in Q2 at Top End of Annual Guidance; Full-Year Guidance Reaffirmed 2022: Strong YTD Performance and Positive Outlook Daily Net Production: Actual and Expected Outlookmboe/d 30 Q3 reflects Annual 28,5 planned NOGAT Guidance ▪✓ Continue
Slide 12: Strong Base for Continued Delivery into 2023+
Strong Base for Continued Delivery into 2023+ 12 Seven Infill Well Opportunities Identified by the Operator, with FIDs in 2022/23 Net Volumes Capex Project 2022 2023 2024 2025 (mmboe) ($/boe) Ongoing Activity (Interventions, workovers, stimulation, n/a n/a integrity and reinstatement) Sanctioned WRO
Slide 13: We Are Delivering Tyra
We Are Delivering Tyra
Slide 14: Tyra: Game-Changing Gas Producer
Tyra: Game-Changing Gas Producer 14 Step-Change Project, Strongly Supporting Danish Energy Security Reserves Unlocks Substantial Gas-Weighted Volumes +200mmboe(1) Production Significant Production Potential from 2023 Onwards +60mboe/d(2) Commodity Mix Materially Re-Weights Noreco’s Production Toward
Slide 15: Tyra: Seven out of Eight Platforms in Place
Tyra: Seven out of Eight Platforms in Place 15 Yard Fabrication Phase to be Concluded in Q3 2022 2017 2019 2020 2021 2022 2023 First Gas (Q2-2023) Project Start Production Shut-In Construction Sail-Aways Sail-Aways & HUC ✓ FID taken ✓ Production ✓ Construction of modules onshore ✓ TEH and TW-WHRPs i
Slide 16: Tyra: Remaining Focus on TEG and HUC
Tyra: Remaining Focus on TEG and HUC TEG Sail-Away in Q3-2022 Followed by Offshore Lift and Installation and HUC Completion Processing Module: TEG Gross Expenditure DKK billion ▪ Sail-away from Batam, Indonesia in Q3 2022 ▪ Noreco total project cost estimate: DKK 22 billion ▪ Offshore lift and insta
Slide 17: We Are Delivering Our Potential
We Are Delivering Our Potential
Slide 18: Energy Security in the Context of Noreco's Portfolio
Energy Security in the Context of Noreco’s Portfolio 18 Strategically Important Given Potential to Maintain Plateau of c. 50mboe/d for 2023+ Noreco’s Approach to Energy Security and the Energy Transition in the Current Context ▪ Denmark is at the forefront of the Energy Transition, highlighted by se
Slide 19: Portfolio Supports Long-Term Energy Security
Portfolio Supports Long-Term Energy Security 19 Low-Cost Volumes to Support a Sustainable, Long-Term Cashflow Profile Development Project and Key Highlights Development Concept ▪ Draft Development Plan submitted Adda ▪ Seven wells, unmanned 4-leg jacket ▪ One year maturation pre-FID Gas-weighted ▪ P
Slide 20: CCS Project Bifrost
CCS Project Bifrost 20 Project Bifrost aims at providing a long-term solution for CO2 storage in the Danish North Sea with an expected start-up capacity of 3 million metric tons of CO2 per year (m/tpa) The Bifrost EUDP project (2022-2023) will perform all the groundwork necessary for CO2 transportat
Slide 21: CCS Project Bifrost
CCS Project Bifrost High Scalability and Significant Long-Term Storage Capacity as Key Differentiators 2022 2023 2024 2025 2025 2027 Timeframe until the beginning of CCS operations in Harald reservoirs: Prelim. Concept FEED FID Execution Operation Study select Innovation height Progress H1 2022 • De
Slide 22: Financial Overview
Financial Overview
Slide 23: Financial Summary: Q2 2022
Financial Summary: Q2 2022 23 Positive Financial Result Driven by Continuing Strong Production and Commodity Prices Revenue USD million Opex USD / boe ▪ Revenue up 48% vs. Q1-22 265 ▪ Opex down 7% since Q3-21 30,8 175 179 28,5 150 27,0 27,6 Q3-21 Q4-21 Q1-22 Q2-22 Q3-21 Q4-21 Q1-22 Q2-22 EBITDA USD
Slide 24: Growing Exposure to TTF Post-Tyra
Growing Exposure to TTF Post-Tyra Noreco, with TTF-linked gas exposure, is well positioned from a commodity perspective ▪ TTF has traded c. 80% higher than Brent on an equivalency basis over the last year ▪ Dynamic expected to continue in the medium-term based on current forward curve pricing Brent
Slide 25: Hedges Provide Cashflow Visibility
Hedges Provide Cashflow Visibility Additional gas hedging put in place during Q2-22 given price environment 2022 2023 2024 % of 2022 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Production(1) 000bbls 958 900 1,200 1,200 840 840 900 900 300 300 Volume Oil ~55% Price mboe/d 10.4 9.8 13.3 13.2 9.1 9.1 10.0 9.9 3.3 3.
Slide 26: Strong Capital Structure and Liquidity Position
Strong Capital Structure and Liquidity Position Fully-Funded to Deliver the Tyra Redevelopment Project Robust Capital Structure USD million Strong Liquidity Position USD million Stable with No Principal Maturities Pre-Tyra Fully-Funded to Tyra First Gas 161 25 1 261 (242) 100 342 175 1 075 1 019 900
Slide 27: Robust Financial Outlook: Illustrative Forecasts
Robust Financial Outlook: Illustrative Forecasts Fully-funded to deliver the Tyra project Liquidity (Cash and Undrawn RBL(1,2)) USD million Leverage Ratio (Net Debt / EBITDAX(1,2)) x 1500 8 Maximum Leverage: 7.0x Forward Curve (Jul-22) 1250 +/– 25% Forward Curve (Jul-22) 6 6.0x 1000 – 50% Forward Cu
Slide 28: Closing Remarks
Closing Remarks
Slide 29: Focused on Delivery
Focused on Delivery 29 Maximising Value and Ensuring Energy Security: Today and Tomorrow Maximise Production from our operational hubs We Are Delivering Minimise Costs to support overall profitability Operationally Reduce Emissions through targeted interventions Unlocks > 1 Tcfe(1) supporting long-t
Slide 30: Contact: ir@noreco.com
Contact: ir@noreco.com 12 July 2022
Norwegian Energy Company ASA (Noreco) — Q2 2022 Earnings Presentation on 6ix