Slide 1: Second quarter 2020
Second quarter 2020 Aker BP ASA 14 July 2020
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: Building momentum
Q2-2020 | AKER BP Building momentum Stable operations despite COVID-19 and volatile markets Tax changes unlocking new profitable investments PDO submitted for Hod – commercial agreement in place for NOAKA 2019 2020 Image source: United Nations Chart data: Platts Brent Dated (source: Bloomberg)
Slide 4: Efficient management of the COVID-19 situation
Q2-2020 | STABLE OPERATIONS IN CHALLENGING TIMES Efficient management of the COVID-19 situation Protecting our people and maintaining full production Production Production efficiency (mboepd) Aker BP operated assets (percent) 93 96 96 93 92 208 210 84 191 159 146 127 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2
Slide 5: Continued strong operational performance
Q2-2020 | STABLE OPERATIONS IN CHALLENGING TIMES Continued strong operational performance SAFETY RECORD LOW HIGH LOW FIRST PRODUCTION COST EFFICIENCY EMISSIONS 1 209.8 $9.1 92% <5kg Serious thousand barrels of Production cost Production CO2 emissions incident oil equivalents per day per boe produced
Slide 6: Value creation across the portfolio
Q2-2020 | STABLE OPERATIONS IN CHALLENGING TIMES Value creation across the portfolio Skogul on production Drilling campaign completed Kameleon infill underway Planned maintenance Alvheim area Frosk test production Ula area Operator, ~65% Operator, 15-80% Increasing water injection Flan
Slide 7: Tax changes support further value creation
Q2-2020 | TEMPORARY CHANGES IN PETROLEUM TAX INTRODUCED Tax changes support further value creation Accelerate cash flow and stimulate investments through the cycle Crucial to maintaining competence and jobs in the Norwegian oil & gas industry Increased value creation for all stakeholders Celeb
Slide 8: PDO submitted for Hod
Q2-2020 | SEIZING NEW OPPORTUNITIES PDO submitted for Hod Building on the successful Valhall Flank West project RESERVES CAPEX BREAK-EVEN >40 ~600 <25 mmboe gross1) USD million gross USD per barrel2) 2020 | 2021 | 2022 Construction Installation Drilling Production 1) Gross reserves including additio
Slide 9: Commercial agreement paves way for NOAKA area development
Q2-2020 | SEIZING NEW OPPORTUNITIES Commercial agreement paves way for NOAKA area development Lang- Krafla Askja Fulla Frigg GD Rind Frøy fjellet Gas export to Statpipe Oil export Central UPP – to GOP with power PDQ platform – from shore with power from shore Illustration: Equinor License partners:
Slide 10: Key features of the NOAKA development
Q2-2020 | SEIZING NEW OPPORTUNITIES Key features of the NOAKA development Field of the future Creating value for the society Digital operations model 50,000 FTEs in development phase Minimal CO2 emissions Strengthens the Norwegian supply industry Capacity for future discoveries Significa
Slide 11: Financial review
Financial review 11
Slide 12: Oil and gas sales
Q2-2020 | FINANCIAL REVIEW Oil and gas sales Volume (mboepd) Realised prices (USD/boe) Total income (USDm) Other operating income Production Sales Liquids Natural gas Petroleum revenues +12% -33% -32% +1% 232.0 44.7 872 208.1 209.8 207.5 29.9 590 -40% 21.9 779 13.2 584 Q1-20 Q2-20 Q1-20 Q2-20 Q1-20
Slide 13: Lifted volumes and realised prices
Q2-2020 | FINANCIAL REVIEW Lifted volumes and realised prices Crude oil liftings H1-20201) Breakdown of realised liquids prices in Q2 mmbbl USD/bbl Brent Dated Brent active contract 6.6 11.0 40.9 6.4 6.3 6.0 3.1 30.9 29.6 29.9 -1.8 4.4 -1.0 2.6 Jan Feb Mar Apr May Jun Brent Timing Avg. Realised NGL
Slide 14: Summary of tax changes
Q2-2020 | FINANCIAL REVIEW Summary of tax changes Ordinary tax system Temporary tax system Capex depreciated Corporate tax (22%) over 6 years No change Capex depreciated Immediate Special tax (56%) over 6 years depreciation 20.8% 24% Uplift on capex over 4 years in year 1 All capex 2020-21 Time limi
Slide 15: Income statement
Q2-2020 | FINANCIAL REVIEW Income statement USD million Q2 2020 Q1 2020 Q2 2019 Total income 590 872 785 Production costs 196 156 198 Other operating expenses 15 - 4 EBITDAX 379 716 583 Exploration expenses 50 50 60 EBITDA 329 666 522 Depreciation 286 277 168 Impairments (136) 654 - Operating profit
Slide 16: Tax effects in the financial statements
Q2-2020 | FINANCIAL REVIEW Tax effects in the financial statements Effective tax Q2-2020 Tax movements in balance sheet 81 260 -33 Uplift in Q2 would have 371 69 been USD 33 million without 356 the temporary tax changes 118 USD 340 million shifted 2,471 from deferred tax asset to 2,153 tax receivabl
Slide 17: Statement of financial position
Q2-2020 | FINANCIAL REVIEW Statement of financial position USD million Assets 30.06.20 31.03.20 31.12.19 Equity and liabilities 30.06.20 31.03.20 31.12.19 Goodwill 1,647 1,647 1,713 Equity 1,912 1,813 2,368 Other provisions for liabilities Other intangible assets 2,054 2,001 2,537 2,655 2,699 2,645
Slide 18: Cash flow
Q2-2020 | FINANCIAL REVIEW Cash flow USD million -81 CF Operations CF Financing 243 CF Investing 55 -360 98 323 -378 -19 -15 -13 -71 142 Opening Net debt Asset Operations Tax paid Capex & Expex Abex Other Dividends Closing balance drawn sales before tax Leases balance 18
Slide 19: Maintaining financial strength
Q2-2020 | FINANCIAL REVIEW Maintaining financial strength Recent developments Debt and liquidity (USD billion) Issued new bonds for USD 1.5 bn (January) 3.7 7.3 3) RCF maturity extended by one year to 2025 (April) Leverage ratio ~1.2 ~1.5 Credit ratings maintained – outlook raised back to ‘sta
Slide 20: Tax changes improve liquidity and robustness
Q2-2020 | FINANCIAL REVIEW Tax changes improve liquidity and robustness Lower break-even oil prices Accelerated tax deductions Improved cash flow profile Average break-even oil price for Aker BP’s 2020 capex guidance, USD million Illustrative company cumulative cash flow projects with CAPEX in 2020-
Slide 21: Expecting tax refund for fiscal year 2020
Q2-2020 | FINANCIAL REVIEW Expecting tax refund for fiscal year 2020 Tax payments (USD million) For fiscal year 2018 For fiscal year 2019 Sensitivity for fiscal year 20201) 340 208 212 163 340 $50 106 106 208 212 81 163 48 $50 106 106 81 48 $40 $40 -100 $30 -200 $30 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-
Slide 22: Guidance for 2020
Q2-2020 | FINANCIAL REVIEW Guidance for 2020 Production Capital spend Production cost Dividend mboepd USD billion USD/boe USD million Abex Exploration Capex -50% No change 850 -14% -25% 205-220 205-220 2,200 ~10 200 1,900 500 200 7-8 350 425 1,500 1,350 Feb-20 Jul-20 Feb-20 Jul-20 Feb-20 Jul-20 Feb-
Slide 23: Summary
Q2-2020 | AKER BP Summary Challenging business environment Responding quickly Seizing new opportunities COVID-19 and oil price collapse Flexible portfolio and organisation Supported by tax changes Capex outlook from CMU 2020 2018 2019 2020 23
Slide 24: Appendix
Appendix 24
Slide 25: Updated 2020 exploration programme
Q2-2020 | APPENDIX 2 Updated 2020 exploration programme 3 Four wells postponed – spend reduced to USD 350 (500) million License Prospect Operator Aker BP Pre-drill Status share mmboe PL1008 Nidhogg 1 Aker BP 60 % 37 - 96 Discovery 6-15 mmboe PL719 Sandia 2 Spirit 20 % 23 - 527 Dry PL533 Bask 3 Lundi
Slide 26: Summary of temporary changes to petroleum taxation
Q2-2020 | APPENDIX Summary of temporary changes to petroleum taxation Elements Ordinary tax system Temporary tax system Tax rate: 22% Tax rate: 22% Corporate tax Tax elements 6 years straight line depreciation 6 years straight line depreciation Special tax rate: 56% Tax rate: 56% Special tax 6 years
Slide 27: Guidance summary
Q2-2020 | APPENDIX Guidance summary 2020 guidance1) 2020-6M actual Comments Production 205-220 mboepd 209 mboepd Net production excl. over/underlift USD ~1.35 billion2) Excl. capitalized interest Capex USD 732 million (previously USD ~1.2 billion) Incl. share of lease payments Exploration spend USD
Slide 28: Aker BP
& AkerBP www.akerbp.com