Bluenord Asa · OSL:BNOR
Bluenord Asa — Noreco — Q3 2022 Earnings Presentation
31 slides from Bluenord Asa's earnings presentation, Oct 26, 2022
Slide 1: Focused on Delivery – Results Presentation Q3 2022
Focused on Delivery Results Presentation: Q3 2022 26 October 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: A Significant Oil & Gas Producer in the EU
A Significant Oil & Gas Producer in the EU... 4 Diversified, Balanced portfolio with a 36.8% WI in the TotalEnergies Operated DUC 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 f
Slide 5: With A Strategically Important Asset Base
… With A Strategically Important Asset Base 5 DUC a key contributor to EU Energy Security with 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 Nybro supply
Slide 6: Continued Progress During 2022
Continued Progress During 2022 6 Noreco is delivering and remains well positioned to continue doing so Maximise Production: 25.1mboe/d in Q3, above guidance of 24-25mboe/d We Are Delivering Significant Free Cashflow: $131mm in Q3(1), compared to $95mm in Q2 Operationally Meaningful Liquidity: $473mm
Slide 7: Delivering Operationally
Delivering Operationally 7 Today’s strong performance creates significant value from existing operations Net Production: No Decline Y-o-Y mboe/d EBITDA Generation: Substantial Increase USD million ▪ Strong overall portfolio performance ▪ Favourable pricing combined with strong operations ▪ Successfu
Slide 8: Delivering Tyra
Delivering Tyra 8 Step change in production and cashflow generation post Winter 2023/24 restart A More Than Doubling of Production… mboe/d … With Lower Opex and Emissions $/boe Kg CO2 / boe ~23 ~30 c. 50mboe/d 45% Gas 26,7 ~30% <$13/boe Reduction Gas Oil 2022 YTD 2023+ 2022 YTD 2023+ 2022 YTD 2023+
Slide 9: Delivering Our Potential
Delivering Our Potential 9 Framework will prioritise capital returns and allow measured organic investment Robust Capital Allocation Framework… … With Measured, Long-Term Organic Growth Capital Returns Well / ▪ Potential to have material impact with De-leveraging Reservoir limited expenditure requir
Slide 10: We are Delivering Operationally Today
We are Delivering Operationally Today
Slide 11: Operations: Strong Performance and Positive Outlook
Operations: Strong Performance and Positive Outlook 11 Q3 Production Exceeds Guidance & Increase of Q4 Guidance & Full Year Guidance 2022: Strong YTD Performance and Positive Outlook ▪ Continued Excellent Operational Performance: ✓ ▪ Clear Focus to Maintain Strong Performance: ✓ – HCA restimulation
Slide 12: Optimisation Activities: Halfdan Well Restimulations
Optimisation Activites: Halfdan Well Restimulations 12 Gas production net to Noreco ~10mmcf/d (~2mboe/d) higher in Jul-Aug 2022 Commentary DUC Daily Gas Export: Net to Noreco DUC gas export net to Noreco 45 (mmcf/d, net) ▪ Significant increase in gas production was c. 10mmcf/d (c. 2mboe/d) higher in
Slide 13: Strong Base for Continued Delivery into 2023+
Strong Base for Continued Delivery into 2023+ 13 Seven Infill Well Opportunities Identified by the Operator, with FIDs in 2022/23, drilling rig secured until March 2025 Net Volumes Capex Project 2022 2023 2024 2025 (mmboe) ($/boe) Ongoing Activity (Interventions, workovers, stimulation, n/a n/a inte
Slide 14: We Are Delivering Tyra
We Are Delivering Tyra
Slide 15: Tyra: a Game-Changing EU Gas Producer
Tyra: a Game-Changing EU Gas Producer 15 Step-Change Project, Strongly Supporting Danish Energy Security Tyra: Strategically Important Noreco’s Production to Grow Significantly mboe/d Reserves Unlocks substantial gas-weighted volumes +200 2021 2023+ mmboe(1) c. 50mboe/d Production Significant produc
Slide 16: Tyra: Offshore Installation Completed in Oct 2022
Tyra: Offshore Installation Completed in Oct 2022 16 Installation of process module delivered ahead of schedule TEG Sail-Away: 1 Sep 2022 TEG Arrival: 3 Oct 2022 Arrival 3. Oct 2022 Departure 1. Sept 2022 TEG Module Lifted and Installed: 4 Oct 2022 Installation Complete: 9 Oct 2022 16
Slide 17: Outlook for Offshore HUC
Outlook for Offshore HUC 17 Remaining work scope to first gas of ~800,000 productive manhours, requiring maximum manpower of ~460 (during Feb-Aug 2023) with more than 500 available beds offshore(1) TEG Carry-Over HUC Status ▪ Strong McDermott performance prior to TEG sail-away ▪ TEH accommodation mo
Slide 18: Tyra: Schedule and Cost to First Gas
Tyra: Schedule and Cost to First Gas 18 Remaining net capex of ~$235mm to reach first gas in Dec-23 on a P50 Basis Remaining P50 Capex (Net): ~$325mm First Gas Range: Winter 2023/24 (USD million) 90 325 P10 P50 P90 300 65 Oct-23 Dec-23 Mar-24 235 Remaining Q3 2022 Remaining Post Total (Pre-First Gas
Slide 19: Tyra II: Hook-Up & Commissioning Milestones
Tyra II: Hook-Up & Commissioning Milestones 19 Offshore Installation Campaign and TEH Habitation completed ahead of revised schedule Aug-22 Oct-22 TEH fire / Summer 2024 TW-WHRP TEG Leak Gas in Tyra South TEH Living Offshore water Gas lift Plateau stand alone Testing from East on Quarter in Installa
Slide 20: We Are Delivering Our Potential
We Are Delivering Our Potential
Slide 21: Delivering Our Potential
Delivering Our Potential 21 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 / EBITD
Slide 22: Portfolio Supports Long-Term Energy Security
Portfolio Supports Long-Term Energy Security 22 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 23: Emissions Reductions: A Dedicated & Integrated Approach
Emissions Reductions: A Dedicated & Integrated Approach Ongoing focus on incremental emissions reduction to minimise environmental footprint Highlights Forecast Emissions Intensity Profile 40 CO2 Emissions: Scope 1 and 2 (Kg/boe) ▪ Noreco and the DUC committed to reducing 35 operational emissions by
Slide 24: Financial Overview
Financial Overview
Slide 25: Financial Summary
Financial Summary: Q2 2022 25 Cash Generative Result Driven by Continuing Strong Performance of Producing Assets Revenue USD million EBITDA USD million 737 471 294 198 265 167 175 179 107 97 Q4-21 Q1-22 Q2-22 Q3-22 2022 YTD Q4-21 Q1-22 Q2-22 Q3-22 2022 YTD Operational Cashflow USD million Free Cashf
Slide 26: Commodity Price Hedges Provide Cashflow Visibility
Commodity Price Hedges Provide Cashflow Visibility Additional gas hedging put in place during Q3-22 given price environment26 Q3-22 Gas Hedges Added Current Hedging Portfolio 2022 2023 2024 ▪ Winter 2022/23: 180,000 MWh Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 – 90,000MWh(1) at EUR 270/MWh 000bbls 958 900 1,20
Slide 27: Interest Rate Hedge Provides Stability
Interest Rate Hedge Provides Stability RBL floating interest rate exposure fixed to Jun-24 at c. 40bps 27 Interest Rate Hedging Fixed Floating Interest Rate Exposure at c. 40bps 4,5% ▪ Noreco currently has no floating SOFR Rate (3 Month Compounded) interest rate exposure Spot 3M SOFR Rate(1): 4.0455
Slide 28: 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 200 473 165 25 1 165 (273) 175 975 892 800 273
Slide 29: Closing Remarks
Closing Remarks
Slide 30: Focused on Delivery
Focused on Delivery 30 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 31: Q & A
26 October 2022 es er