Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — Q2 2013 Earnings Presentation
31 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Jul 29, 2013
Slide 1: Results: Second Quarter and First Half 2013
29 July 2013 Results SECOND QUARTER AND FIRST HALF 2013 An integrated energy player focused on exploration and production
Slide 2: Disclaimer
Disclaimer RCA figures except otherwise noted. By attending or reading this presentation, you acknowledge and agree to be bound by the following limitations and restrictions. This presentation has been prepared by GALP Energia, SGPS, S.A. (“GALP Energia” or the “Company”) and may be amended and supp
Slide 3: Key highlights, strategy execution update, business overview
Key highlights Strategy execution update Business overview Final remarks Appendix 3 Second quarter and first half 2013 results
Slide 4: Key highlights
Key highlights ▪ E&P drilling campaign ongoing, with Iara West revealing excellent results ▪ FPSO Cidade de Paraty production started in early June with full ramp-up expected in 18 months ▪ Hydrocracker running at full capacity and contributing steadily to earnings ▪ Ebitda in 2Q13 of €304 m, up 7%
Slide 5: Strategy execution update
Key highlights Strategy execution update Business overview Final remarks Appendix 5 Second quarter and first half 2013 results
Slide 6: Drilling Tango after a working hydrocarbon system was proved in the basin
Drilling Tango after a working hydrocarbon system was proved in the basin Potiguar basin ▪ 10 prospects identified in a predominantly stratigraphic setting (Cretaceous clastics) ▪ 1st exploration well, Araraúna, proved the presence of a working hydrocarbon system in the basin ▪ Tango well spudded in
Slide 7: Drilling campaign in Walvis basin revealed non commercial volumes
Drilling campaign in Walvis basin revealed non commercial volumes Galp Energia acreage in Namibia ▪ Wingat proved the presence of two source rocks in Walvis basin, both within the oil window ▪ Murombe target revealed non-reservoir facies with low porosity ▪ Moosehead prospect in Orange basin will ta
Slide 8: Mozambique: testing oil potential in Area 4 with ongoing Agulha-1 well
Mozambique: testing oil potential in Area 4 with ongoing Agulha-1 well Area 4 ▪ Agulha-1 (former K Bulge) prospect testing Paleocene and Cretaceous age targets ▪ Appraisal campaign to be resumed in Mamba complex with the drilling of Mamba NE-2 well in 3Q13 ▪ Mamba NE-2 targets the reservoir level no
Slide 9: Assessing Bracuhy potential in BM-S-24
Assessing Bracuhy potential in BM-S-24 Geological cross-section at BM-S-24 ▪ Bracuhy well already being drilled since July ▪ Bracuhy is an already well defined structure that could be an important satellite to Júpiter development ▪ Results expected before the year end ▪ Development options for Júpit
Slide 10: Iara: Intensive appraisal campaign being conducted to de-risk development
Iara: Intensive appraisal campaign being conducted to de-risk development Iara: Structural map ▪ Iara West-2 found good quality oil carbonate reservoirs in regard to the porosity and permeability levels ▪ DST in Iara West-2 already concluded revealing excellent reservoir productivity ▪ Iara High Ang
Slide 11: Intensive exploration and appraisal drilling campaign underway
Intensive exploration and appraisal drilling campaign underway Galp Energia 2013 drilling schedule Spud Duration Well Area Target Interest E/ A date (# days) status Brazil Lula Lula West-2 10% A 4Q12 - Concluded Iara Iara West-2 10% A 4Q12 - Concluded Iara Iara HA 10% A Jun-13 120 In progress BM-S-8
Slide 12: Lula NE: Ramp-up period of 18 months, with full capacity during 2H14
Lula NE: Ramp-up period of 18 months, with full capacity during 2H14 FPSO Cidade de Paraty ▪ Committed to production ramp-up plan with mitigation measures taken by using flexible risers ▪ Production currently limited by gas flaring restrictions ▪ Next key milestones comprise the installation of BSR
Slide 13: Timely delivery of FPSOs is on track
Timely delivery of FPSOs is on track Installed capacity in Lula/Iracema (kbopd) Two FPSO contracted Four FPSO contracted, two of which chartered Itaguaí progressing in line with plan Mangaratiba 65% completed Paraty already producing Angra dos Reis first oil New installed Lula Lula Iracema Iracema L
Slide 14: WAG mechanism being tested in FPSO Cidade de Angra dos Reis
WAG mechanism being tested in FPSO Cidade de Angra dos Reis WAG mechanism ▪ Recovery factor in Lula/Iracema fields recently revised upwards from 23% to 28% ▪ Maximise oil recoverability through appraisal campaign and WAG test in 2013 ▪ WAG performance expected to improve reservoir management and fur
Slide 15: Unlocking development of the new world-class natural province in Mozambique
Unlocking development of the new world-class natural province in Mozambique Mozambique: LNG possible routes ▪ HoA between Eni and Anadarko, mainly regarding joint development of LNG liquefaction facilities, supports fast development ▪ FEEDs being performed according to plan through a competitive bid
Slide 16: Upgrade project fully operational and generating return
Upgrade project fully operational and generating return New units at Sines refinery ▪ Average utilisation rate of the hydrocracker of c.96% in 2Q13 ▪ Utilisation rate of refining system expected at mid-80%, with hydrocracker operating at full capacity ▪ Incremental refining Ebitda estimated to range
Slide 17: Oil marketing business: squeezing the orange
Oil marketing business: squeezing the orange Service station in Lisbon ▪ Optimising our network to better align it with current market dynamics ▪ Intensifying focus on cost optimisation across the business ▪ Regaining market share through implementation of new loyalty programmes ▪ Increasing efficie
Slide 18: Leveraging LNG momentum in high value markets
Leveraging LNG momentum in high value markets Price evolution of NBP vs LNG in Japan (USD/mmbtu) ▪ Robust trading activity with 14 cargoes sold in 2013 despite force majeure in Nigeria 20 18 ▪ 3.4 bcm of LNG contracted with 16 14 12 10 Nigeria, supporting trading activity in 8 the long run 6 4 2 0 ▪
Slide 19: Business overview
Key highlights Strategy execution update Business overview Final remarks Appendix 19 Second quarter and first half 2013 results
Slide 20: Q2 Ebitda of €304 m, up 7% YoY
Q2 Ebitda of €304 m, up 7% YoY Profit & Loss (€ m) ▪ Ebitda increase driven mainly by 2Q13 2Q12 YoY QoQ 1H13 YoY the positive contribution of the hydrocracker and LNG trading Turnover 4,624 4,556 +2% +3% 9,095 (3%) activities Ebitda 304 285 +7% +20% 557 +14% E&P 85 99 (14%) (7%) 176 (6%) R&M 115 107
Slide 21: Maintaining a robust financial position
Maintaining a robust financial position Balance sheet (€ m) ▪ DD&A, impairments and currency exchange impacts led Jun.2013 Mar.2013 Jun - Mar Dec.2012 Jun - Dec to a decrease of fixed assets in Fixed assets 6,843 6,862 (19) 6,599 +244 the period Work in progress 1,377 2,803 (1,426) 2,655 (1,278) Oth
Slide 22: Short term outlook
Short term outlook ▪ 3Q13 working interest production targeted at c.27 kboepd, as FPSO Cidade Angra dos Reis resumes normal operations and FPSO Cidade Paraty ramps up ▪ Refining margin continuing to be positively impacted by the upgrade project, as the hydrocracking complex operates at full capacity
Slide 23: Final remarks
Key highlights Strategy execution update Business overview Final remarks Appendix 23 Second quarter and first half 2013 results
Slide 24: Final remarks
Final remarks ▪ Exploration campaign being conducted with expected newsflow during 2H13 ▪ Lula development project successfully executed with two FPSO already producing and mitigation risk measures being taken ▪ Testing upside potential in Lula through WAG system and ongoing RDA campaign ▪ Continuin
Slide 25: Appendix
Key highlights Strategy execution update Business overview Final remarks Appendix 25 Second quarter and first half 2013 results
Slide 26: Production increased 3% YoY in 2Q13 despite maintenance activities in Lula
Production increased 3% YoY in 2Q13 despite maintenance activities in Lula Main E&P data ▪ Lula field with an average production of 10.4 kboepd, 2Q13 2Q12 YoY QoQ 1H13 YoY despite maintenance activities in the FPSO Working interest production kboepd 23.4 25.8 (9%) (1%) 23.5 (3%) Net entitlement prod
Slide 27: Refining activity was the driver of the Ebitda increase
Refining activity was the driver of the Ebitda increase Main R&M data ▪ The R&M business benefited from the hydrocracker stable operations and refinery related 2Q13 2Q12 YoY QoQ 1H13 YoY supply activites Galp Energia refining margin USD/bbl 3.4 2.5 +38% +88% 2.7 +60% Refining cash cost USD/bbl 2.6 2
Slide 28: Ebitda up 24% YoY on the back of continued strong LNG trading performance
Ebitda up 24% YoY on the back of continued strong LNG trading performance Main G&P data ▪ Robust LNG trading activity, despite force majeure in Nigeria 2Q13 2Q12 YoY QoQ 1H13 YoY during the second quarter NG supply total sales volumes mm3 1,457 1,500 (3%) (15%) 3,178 (1%) Sales to direct clients mm3
Slide 29: Around 70% of total capex allocated to E&P activities in 2Q13
Around 70% of total capex allocated to E&P activities in 2Q13 Capital expenditure (€ m) ▪ Exploration activities responsible for c.40% of E&P G&P capex in 2Q13, namely in Brazil R&M and Namibia E&P - Production E&P - Exploration 474 354 ▪ Lula project responsible for the 286 majority of E&P developm
Slide 30: Putting in place the financing strategy by extending debt maturities
Puting in place the financing strategy by extending debt maturities M/L-term debt reimbursement profile (€ m) 800 ▪ c.€1.5 bn in long term facilities already signed in 2013 600 400 ▪ Net debt to Ebitda of 1.1x, 200 considering loan to Sinopec as cash and equivalents 0 2013 2014 2015 2016 2017 2018 +
Slide 31: For further information on Galp Energia
Investor Relations team Tiago Villas-Boas, Head Cátia Lopes Inês Santos Maria Borrega Pedro Pinto +351 21 724 08 66 Investor.relations@galpenergia.com For further information on Galp Energia, please go to: www.galpenergia.com Results & presentation weblink www.galpenergia.com/en/investidor/Relatorio