Eni S.p.a. · MIL:ENI
Eni — Investor Day (December 2016)
24 slides from Eni's investor day presentation, Dec 13, 2016
Slide 1: Investor Day: Fit for complexity
13 DECEMBER 2016 Investor Day Fit for complexity
Slide 2: Eni's unique business model
Eni’s unique business model 2
Slide 3: Fit for complexity: 2014-2016 strategy execution
Fit for complexity 2014-2016 STRATEGY EXECUTION A DISTINCTIVE MODEL FOR VALUE GENERATION FOCUS ON NEW PROJECTS
Slide 4: FPSO ready to sail off for Block 15/06
FPSO ready to sail off for Block 15/06
Slide 5: A challenging scenario
A challenging scenario Brent | $/bl EU gas demand | bcm OECD EU refining 550 17 8 515 -16% 16 -60% 15,5 6 500 Mboe/d 15 $/bbl 4 14 13,9 450 433 2 13 400 12 0 2008 2016 2008 2016 Hub 25% 74%* Oil demand Refining margin volumes * Jan-Oct 2016 5
Slide 6: Strategy execution and main milestones
Strategy execution and main milestones Transformation Restructuring into a fully integrated O&G Upstream enhancement mid-downstream Cost efficiency Reduced Zohr FID Mid- Kashagan Refining and Chemicals Galp and Snam Gas Take-or-pay refining downstream start-up back to EBIT breakeven disposals Saipem
Slide 7: Transformation into a fully integrated O&G company
Transformation into a fully integrated O&G company Eni 2014 Eni 2016 Consolidated companies On equity accounting Consolidated company On Equity accounting Saipem 43% 8.5% Snam Versalis 100% 30.5% Saipem Versalis 100% 16% Galp CORPORATE HOLDING SUPPORT FUNCTIONS Exploration & Production Gas & Power R
Slide 8: Restructuring mid-downstream
Restructuring mid-downstream Gas & Power Refining Chemicals ToP recovery | € bln Break-even margin EBIT adj | $/bl EBIT result | € bln 2 7.5 1,5 0,3 0.3 1 -0,4 0,5 4.2 ToP Recovery Make-up gas 0 2013 2014 - 2016 2013 2016 exp. 2013 2016 exp. 8
Slide 9: Cash flow generated by mid-downstream restructuring
Cash flow generated by mid-downstream restructuring € bln 3,1 >2 -0,3 -0,2 -0,4 -3 2011 2012 2013 2014 2015 2016 exp ∆ CFFO 2014-2016 VS 2011-2013: ~€ 9 Bln 9
Slide 10: Delivering on upstream enhancement
Delivering on upstream enhancement Production | kboed Operating Cash Flow | € bln Cash flow per barrel | $/boe 1900 16 >30% 1850 @ 109 $/bl +15% 1800 12 30 1750 +20% 1700 8 25 1650 1600 1550 4 20 1500 1450 0 2013 2016 exp. 2016 2013 2016 exp. 2013 2016 exp. exit volume HISTORICAL RECORD OF PRODUCTIO
Slide 11: Improving portfolio cost structure
Improving portfolio cost structure New projects breakeven | $/boe Technical costs | $/boe 30 50 -30% 25 45 40 20 35 15 OPEX 30 10 Development 25 5 20 0 Exploration 2013 2014 2015 2016 2014 2016 11
Slide 12: Cost optimization
Cost optimization Group Capex | € bln Upstream Opex | $/boe G&A costs | € bln 14 2,5 12 -33% 12 Majors 11 2 -33% 10 10 1,5 8 9 6 1 8 4 0,5 7 2 0 6 0 2014 2016 exp. 2014 2015 2016 exp. 2014 2016 exp. CUMULATIVE COST SAVING € 10 Bln 12
Slide 13: An effective strategy to halve cash neutrality
An effective strategy to halve cash neutrality Price of cash neutrality* | $/boe Cumulative Operating Cash Flow | € bln 140 Brent / $/bl 37 127 Snam 34 140 120 120 -60% 100 100 80 80 60 40 60 50 20 0 40 2013 2014 2015 2016 exp. 2011-13 2014-16 Avg. Brent 110 $/bl 64 $/bl * Organic coverage of Capex
Slide 14: A distinctive model for value generation
A distinctive model-for value generation Noroos, Egypt
Slide 15: A distinctive strategy on exploration
A distinctive strategy on exploration Our people Main drivers of exploration strategy Thinking out of the box Unconventional Focus On Conventional plays Ownership and high stake Early mover approach Risk diversification on Technology and Big Data multiple plays Rapid Resource conversion 15
Slide 16: Key metrics of our success
Key metrics of our success Accelerating conversion to reserves and Cumulative discovered resources | bln boe economic value | bln boe 14 13 14 13 12 12 10 10 8 3P or under study 8 6 6 4 FID 4 2 under disposal 2 0 disposed 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 1 Cumulative Yearly additions 1
Slide 17: Map of exploration discoveries since 2008
Map of exploration discoveries since 2008 Johan Castberg Zohr Great Hadrian/Lucius Nooros Perla Nyonie Deep Sankofa Merakes Oglan Marine XII Jangkrik 15/06 Coral/Mamba Oil Gas 17
Slide 18: Designing to cost from exploration to development
“Designing to cost” from exploration to development Eni phased / fast track project schedule Strong integration from exploration to start-up thanks to leading edge technology exploration exploration FID From a sequential to a parallel approach reservoir studies reservoir studies Project phasin
Slide 19: Ultra fast-tracking Zohr
Ultra fast-tracking Zohr Aug. 2016 Feb. December 2017 2015 2016 April June August October Today (accelerated start-up) Discovery front end loading FID execution 2.3 years Zohr 2 on 2017 plan: re-entry & Zohr 1 Zohr 3 Zohr 4 Zohr 5 Zohr 6 Zohr 7 completion of first 6 wells 0.3 years 2 years ACCELERAT
Slide 20: Time-to-market of recent and ongoing main projects
Time-to-market of recent and ongoing main projects 2009 2010 2011 2012 2013 2014 2015 2016 2017 Project Progress Block 15/06 - West Hub 88% Angola Block 15/06 - East Hub Angola 87% Jangkrik Indonesia 90% Perla 100% Venezuela OCTP 60% Ghana Legenda Marine XII - Nenè Congo Discovery 65% FID (Final Inv
Slide 21: Contribution to growth and cash flow
Contribution to growth and cash flow kboed CFFO € 4.3 bln in 2018 600 @ $60/bl 500 400 300 200 100 0 2016 2017 2018 Brent 43,5 50 60 $/bl 2016-2018 CUMULATED CFFO € 7.7 BLN 21 Contribution from Block 15/06, Jangkrik, Perla ,OCTP, Marine XII, Great Noroos, Zohr, Goliat and Kashagan
Slide 22: Increased upstream capital efficiency
Increased upstream capital efficiency E&P Capex* vs production Reserve Replacement Ratio | % € bln kboed 1900 150 10 1800 100 Majors Max 131% 1700 Min -12% 50 8 1600 0 2013 2014 2015 6 1500 2013 2016 2017 -50 E&P CAPEX Production * Before disposal 22
Slide 23: Our strategy to unlock portfolio value
Our strategy to unlock portfolio value bln € 20 Further disposals 15 Disposed 20% Mozambique (2013) 3.4 € bln stakes 40% Zohr (2016) 2 € bln 10 Galp, Snam, other 5 Saipem 0 Transformation Dual exploration model 23
Slide 24: Conclusion
Conclusion 2013 TODAY Production (Mb/d) 1.6 >1.85 UPSTREAM Projects breakeven ($/boe) 45 27 Inactive capital (bln €) 24 16 LT contracts G&P 80% oil >70% hub MID- Refining breakeven ($/bl) >8 4.2 DOWNSTREAM Chemicals ebit FCF and EBIT Structural break-even negative and self-financing Organization Div