North Energy Asa · OSL:NORTH

North Energy Asa — Q2 2014 Earnings Presentation

34 slides from North Energy Asa's earnings presentation, Aug 28, 2014

  1. Slide 1: North Energy Q2 2014

    North Energy Q2 2014 Increased focus on new exploration strategy 28 August 2014

  2. Slide 2: Important information

    Important information This presentation and its appendices (together the “Presentation”) have been prepared and delivered by North Energy ASA (“North Energy” or the “Company”). The Presentation is prepared for information purposes only, and is not to be used for any other purpose. The Presentation d

  3. Slide 3: Agenda

    Agenda  Highlights Q2 and later events  Result of Lupus well in PL 507  Upcoming Pingvin well in PL 713  Well programme  Financials  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  4. Slide 4: Highlights Q2 and later events

    Highlights Q2 and later events  Dry well in PL 507  Spud 18 August on Pingvin well in PL 713 in the Barents Sea  Acquisition of seismic data, EM and RVD as basis for focusing portfolio by farm-in and 23R. Example is farming into PL 484.  New geophysical unit as part of enhanced exploration strat

  5. Slide 5: Agenda

    Agenda  Highlights Q2 and later events  Result of Lupus well in PL 507  Upcoming Pingvin well in PL 713  Portfolio and upcoming well programme  Financials  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  6. Slide 6: PL 507 Lupus well

    PL 507 Lupus well  Farm-in from Tullow (operator)  Impressive geophysical work  Potential high value due to size (200- 1000 mmboe) and location close to Oseberg South  Driven by strong seismic support for (amplitudes) combined with positive EM indications and huge upside potential in reservoir t

  7. Slide 7: PL 507 Lupus – dry well

    PL 507 Lupus – dry well  Checklist North Energy  Geological model OK  Seismic definition OK  Amplitudes OK  EM OK  AVO 50/50, but could be explained EM  VD 50/50 patchy, but could be explained  Chance of success (POS) set at 33%  If there is anything to learn it is to focus even more on the

  8. Slide 8: Agenda

    Agenda  Highlights Q2 and later events  Result of Lupus well in PL 507  Upcoming Pingvin well in PL 713  Portfolio and well programme  Financials  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  9. Slide 9: Ongoing well PL 713 Pingvin 7319/12-1

    Ongoing well PL 713 Pingvin 7319/12-1  Testing sandstone prospect with same HC source as Johan Castberg  2-300 million barrels OE potential  High POS (46%) for HC in anomaly  Major uncertanties Well location  Reservoir quality  HC phase  Low well location  POS for HC in well location 20% Fre

  10. Slide 10: Media comments

    Media comments GEO 365  Well location outside EM anomaly used as evidence for dry well  Hesthammer, CEO of Atlantic Petroleum and professor at University of Bergen is convinced  Reality is more complicated  Location chosen to test for commercial HC and maximum G&G information  If shows of HC in

  11. Slide 11: Different HC scenarios

    Different HC scenarios Well Well Gas over Oil Gas over Water + A B Oil over Water Gas over Residual gas - C D North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  12. Slide 12: North has used the complete toolbox on Pingvin

    North has used the complete toolbox on Pingvin  EM  Low Frequency analyses  RVD (Rex Virtual Drilling)  NELFA (Internal North)  ADF (Apex Houston)  All studies indicates HCs and low well location EM anomaly RVD and Nelfa anomaly ADF anomaly Well location Well location Well location North Energ

  13. Slide 13: Pingvin Summary

    Pingvin Summary  Well aim at testing maximum ADF anomaly potential  Oil in this location means high probability of commercial discovery  North believes traces of HC and/or less than average reservoir is most likely  Still possibly commercial HC Well location updip in second well  Norths preferr

  14. Slide 14: Agenda

    Agenda  Highlights Q2 and later events  Result of Lupus well in PL 507  Upcoming Pingvin well in PL 713  Portfolio and well programme  Financials  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  15. Slide 15: Licence Portfolio

    Licence Portfolio  In total 28 licences  8 in the Barents Sea  11 in the Norwegian Sea  9 licences in the North Sea (5 active) * Farm-in pending government approval ** Exit of license pending government approval North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  16. Slide 16: Find commercial oil early

    Find commercial oil early  Maintain unique Barents Sea position  Main exploration focus is the Barents based on unique G&G know how  Explore where competitive edge is sharpest  EM and Geophysical competence to play in tune with existing G&G capacity  Focus where the toolbox is most competitive

  17. Slide 17: Firm wells

    Firm wells 2014 2015 Prospect WI Operator Q3 Q4 Q1 Q2 Q3 Q4 PL 713 20 % Statoil PL 708 10 % Lundin PL 510 20 % Maersk PL 591 15 % Tullow Oil PL 616 5% Edison Gas/Condensate  PL 713: 250 mmboe POS 46% (20% at well)  PL 708: 300 mmboe POS 46%  PL 510: 3-4 prosp. 50-100 mmboe POS 40% (operator 70%)

  18. Slide 18: PL 708 Ørnen

    PL 708 Ørnen PL 708 in the Barents Sea Awarded 22. round Main prospect Seiland East/Ørnen North Operator Lundin (40%) Hydrocarbons Oil Partners North Energy (10%) Expected drilling Q1 2015 Edison (20%) Reservoir Upper Permian Lukoil (20%) Prob. of success 46% (Operator) Lime (10%) Gross mean 316 mmb

  19. Slide 19: PL 708 - RVD response and seismic data

    PL 708 - RVD response and seismic data TIME MAP MSEC North Energy ASA, Markveien 38b, Postboks 1243,9504 Alta, Norway. Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

  20. Slide 20: PL 510 – Gas prospect from the “old portfolio”

    PL 510 – Gas prospect from the “old portfolio” PL 510 in the Norwegian Sea Awarded APA 2008 Main prospect Tvillingen South Operator Maersk (50%) Hydrocarbons Gas Condensate Partners North Energy (20%) Expected drilling Q1 2015 Edison (30%) Reservoir Lower to Middle Jurassic Prob. of success 40% Gros

  21. Slide 21: PL 510 Likely drilling sequence

    PL 510 Likely drilling sequence  Tvillingen Sør  Tvillingen Nord + test  Breitind + test  Phase 1 Development  Botnkrona (or other) + test  Add to existing development Recoverable resources, mmboe and POS by operator Ranking Prospect POS P90 Mean P10 1 Tvillingen S 37 109 197 0,73 2 Tvillingen

  22. Slide 22: PL 510 Area solution

    PL 510 Area solution  Joint development with close reserves  Shared facilities cost (i.e. pipelines)  Coordinated tie in negotiations  Nearby discoveries and prospects Imsa 510  Linnorm:157 Mboe (NPD 2013)  Noatun:18 Mboe (NPD 2013)  Imsa: >50 Mboe (gas/cond), High POS Tvillingen Sør  Risked

  23. Slide 23: PL 591 – Farm-in well next to Heidrun

    PL 591 – Farm-in well next to Heidrun PL 591 in the Norwegian Sea Awarded APA 2011 Main prospect Zumba Operator Tullow (80%) Hydrocarbons Oil (volumer beregnet som gas) Partners North Energy (15%) Expected drilling Q1 2015 Lime Petroleum (5%) Reservoir Rogn Prob. of success 27% (Operator) Gross mean

  24. Slide 24: PL 616 Haribo – well close to Hod

    PL 616 Haribo – well close to Hod PL 616 in the North Sea Awarded APA 2011 Main prospect Haribo Operator Edison (25%) Hydrocarbons Oil Partners Concedo (20%) Expected drilling Q4 2015 Noreco (30%) Reservoir Narve Skagen44 (15%) Prob. of success 25% (Operator) North Energy (5%) Gross mean 103 mmboe i

  25. Slide 25: Drill or drop decision point schedule

    Drill or drop decision point schedule Drill or Drop licenses DoD Deadline Licence Prospect Interest Operator Location Rig 2014 2015 PL 503 Valberget 12,5% Lotos North Sea N/A Q1 PL 503 C Valberget 12,5% Lotos North Sea N/A Q1 PL 587 Rype 40% Edison Norwegian Sea N/A Q1 PL 595 Jaktfalk 40% Edison Bar

  26. Slide 26: Drilling & decision point schedule

    Drilling & decision point schedule Drill or Drop licenses DoD Deadline Licence Prospect Interest Operator Location Rig 2015 2016 PL 590 Sierra 30% North Energy Norwegian Sea N/A Q1 PL 769 Grid 20% OMV Barents Sea N/A Q1 PL 770 Saarikoski 20% Edison Barents Sea N/A Q1 PL 693 Eagle 15% OMV Norwegian S

  27. Slide 27: Agenda

    Agenda  Highlights Q2 and later events  Result of Lupus well in PL 507  Upcoming Pingvin well in PL 713  Portfolio and well programme  Financials  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  28. Slide 28: Profit & Loss Q2 2014

    Profit & Loss Q2 2014 NOK Million Q2 2014 Q1 2014 Q2 2013 2013 Profit 2,6 0,7 66,1 98,6 Exploration expenses (84,8) (98,9) (163,9) (696,6) Data purchase for APA'14 and 23R Payroll (11,2) (9,8) (12,2) (51,0) Other operating expenses (10,3) (10,2) (8,3) (33,4) EBITDA (103,7) (118,1) (118,3) (682,4) De

  29. Slide 29: Balance sheet 30th of June 2014

    Balance sheet 30th of June 2014 NOK Million 30.06.2014 31.03.2014 31.12.2013 Assets Fixed Assets 155,3 152,1 145,7 Deferred tax asset and cap. drilling cost Long term receicables 179,4 94,4 - Tax receivable refund (Dec. 2015) Short term receivables 402,6 403,5 368,5 Tax receivable refund (Dec. 2014)

  30. Slide 30: Fully funded drilling campaign

    Fully funded drilling campaign Net cash* position Q2 2014  Q2 2014 net cash 700 position of NOK 357 9 million 600  Unused convertible 500 179 145 loan facility of NOK 400 75 278 million 56 300  Unused exploration loan facility NOK 805 200 354 285 357 million 100 53 0 Cash 2014 tax 2015 tax Net Ex

  31. Slide 31: EMGS conversion secures financing of additional wells

    EMGS conversion secures financing of additional wells  EMGS became a larger Well Timing Status shareholder with 9,9% ownership Well 1-5 2014-15 Firm wells Financed  Converted NOK 28,4 million DoD/Farm into 6.851.463 shares at Well 6-8 2015-16 ins Financed share price of NOK 4,1451 DoD/Farm  Remai

  32. Slide 32: Agenda

    Agenda  Highlights Q2 and later events  Result of Lupus well in PL 507  Upcoming Pingvin well in PL 713  Portfolio and well programme  Financials  Outlook North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

  33. Slide 33: Outlook

    Outlook  3 months  Exploration well on PL 713  Define new blocks for EM acquisition  12 new RVD evaluations  Apply for blocks in APA 2014  12 months  Exploration well on PL 708  Exploration well on PL 510  Exploration well on PL 591/591B  6-8 DoD decisions  Awards APA 2014  40 new RVD ev

  34. Slide 34: Q&A

    Q&A North Energy ASA · post@northenergy.no · (+47) 78 60 79 50 · www.northenergy.no

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