Equinor ASA · OSL:EQNR
Equinor ASA — Statoil — FY2012 Earnings Presentation
39 slides from Equinor ASA's earnings presentation, Feb 7, 2013
Slide 1: Capital Markets Update
Capital Markets Update London, 7 February, 2013 London Stock Exchange
Slide 2: 4th quarter and full year 2012 Strategy update
4th quarter and full year 2012 Strategy update London, 7 February, 2013 Torgrim Reitan, CFO
Slide 3: A decade of transformation
A decade of transformation • The merger Norwegian • International Globally competitive Scale NOC operatorships oil and gas company Integrated • Active portfolio Focus management Technology focused oil & gas upstream company • Strategy reset • Diverse Resource Growing resource base, unconventional Fu
Slide 4: Strong delivery across the business
Strong delivery across the business Earnings Strong earnings Financials Record cash flow generation Production 8% growth Reserves Organic RRR = 1.1 Resources 1.5 bn boe added from exploration Dividend Proposed increase to NOK 6.75 4
Slide 5: Strong earnings
Strong earnings Full year 2012 Fourth quarter 2012 NOK bn NOK bn 69.5 206.6 13.4 193.2 (138.1) 55.1 13.0 45.8 2.5 48.3 (33.2) 15.1 -11% -2% +7% +9% -49% -25% +5% +4% Net income Reported Adjustments Adjusted Tax on adj. Adjusted Net income Reported Adjustments Adjusted Tax on adj. Adjusted NOI earnin
Slide 6: Solid performance across all business areas
Solid performance across all business areas NOK bn 4Q 2012 4Q 2011 2012 2011 Adjusted Adjusted Adjusted Adjusted earnings earnings earnings earnings Pre After Pre After Pre After Pre After Business area tax tax tax tax tax tax tax tax D&P Norway 37.5 9.2 38.2 9.3 154.8 38.6 150.4 37.2 International
Slide 7: 8% production growth in 2012
8% production growth in 2012 Equity production • 3% CAGR 2010 - 2012 mboe/d • Start-up of six new fields 1850 1975 2193 1980 1811 2032 2004 • Strong international growth • High gas sales 732 826 984 822 753 910 867 1118 1149 1209 1158 1058 1122 1137 Full 4Q 1Q 2Q 3Q 4Q Full year 2011 2012 2012 2012
Slide 8: Strong cash flow from underlying operations
Strong cash flow from underlying operations 2012 NOK bn Cash flow from underlying operations Taxes paid 251* (120) Cash flow Cash flow from sale of to organic Acquisitions assets investments 30** (6)*** (108) Dividend paid (21) Net 26 * Income before tax (207) + Non cash adjustments (44) ** Includin
Slide 9: 2012 strategic execution
2012 strategic execution • Operational stability • Long term growth • Six projects sanctioned, • Influence and control adding 220 mboe/d of new • Portfolio high-grading Continue capacity portfolio Revitalise NCS and financial flexibility • Appraising Johan Sverdrup, management to with high enhance v
Slide 10: Robust and flexible growth
Robust and flexible growth USD bn USD bn • Strong cash flow to fund capex 100 100 • Firm dividend policy 80 • Flexible capex program 80 • New projects with attractive economics 60 60 • Continued portfolio management 40 40 • Net debt reduced from 27% to 12% (2009 – 2012) 20 20 • Maintain strong credi
Slide 11: Re-investing into high quality growth
Re-investing into high quality growth USD bn USD bn • 2013 : ~ USD 19 bn organic capex 25 25 • 2013-2016: ~ USD 21 bn organic capex 20 20 • Producing portfolio 15 15 - 2012 : USD 10 bn in free cash flow before growth 10 10 - Company value paid back in 2020 5 5 - Top quartile RoACE ** 0 0 2012* Avera
Slide 12: NCS tax system promotes efficient investments
NCS tax system promotes efficient investments Efficient cash recovery of capex • Features − ~ 40% of capex 2013 – 2016 on NCS 100% − No asset ring-fencing − 130% of NCS capex depreciated over 75% six years • Implications 50% − Tax payable reduced by 93% of capex − Incentivises profitable investments
Slide 13: On track for production growth
On track for production growth Sanctioned Non-sanctioned START-UP 2011-2012 START-UP 2013-2016 START-UP 2017-2020 First growth wave Second growth wave Growth to accelerate towards 2020 underpinned by ramp-ups and start-ups ~400 ~900 ~1000 mboe/d installed capacity* mboe/d installed capacity* mboe/d
Slide 14: On track for 2.5 mmboe/d in 2020
On track for 2.5 mmboe/d in 2020 mmboe/d 3.0 ~ 3-4% • CAGR of ~ 2-3% from 2012-16 CAGR • CAGR of ~ 3-4% from 2016-20 2.5 2.5 ~ 2-3% CAGR 2.0 • Production 2013 estimated to be lower than 2012 due to: 1.5 - Divestments - US onshore gas 1.0 - Gas flexibility - In Amenas uncertainty 0.5 0.0 2012 2013 20
Slide 15: Growth characteristics
Growth characteristics Potential above 2.5 mmboe/d Increasing oil share Growing in all segments mmboe/d mmboe/d mmboe/d 3 3 3 2 Growth Growth 2 2 Gas Gas Gas INT INT INT 1 1 1 Producing Producing Producing Oil Oil Oil NCS NCS NCS 0 0 0 2012 2016 2020 2012 2016 2020 2012 2016 2020 • Significant growt
Slide 16: Replacing reserves in 2012
Replacing reserves in 2012 bn boe • Organic RRR 1.1 1.2 − Total RRR 1.0 23 (0.7) 22 (1.2) − RRR for oil 1.3 • Replacing production and divestments − Project sanctions − Increased oil recovery • More than 22 bn boe of discovered 0.7 resources 5.4 5.4 (0.7) (0.1) 2011 Production Exits Discoveries 2012
Slide 17: 1.5 bn boe added from exploration in 2012
1.5 bn boe added from exploration in 2012 2013-2015: planned areas with high impact wells Tanzania: three successes in one year Basin/area with high impact wells Lavani • ~ 20 high impact wells 2013-2015 • 7-9 Tcf discovered recoverable resources in Block 2 • ~ USD 3.5 billion on exploration activit
Slide 18: Firm financial framework
Firm financial framework Net debt reduced from 27% to 12% Strong operating cash flow * Underpins future growth and robustness Funds profitable growth 30 % 30 Net debt ratio USD bn 20 % 20 27 % 25 % ~ 24 10 % 21 % 10 23 23 ~ 20 12 % ~ 15 % 16 12 0% 0 2009 2010 2011 2012 2013E 2009 2010 2011 2012 2013
Slide 19: Outlook
Outlook • 2013 - Organic capex ~ USD 19 billion - Exploration activity ~ USD 3.5 billion - ~ 50 exploration wells, high appraisal activity - Lower production than 2012 • Beyond 2013 - ~20 high impact exploration wells 2013-2015 - Production CAGR of ~ 2-3% from 2012-2016 - Ambition of > 2.5 mmboe/d i
Slide 20: Forward-looking statements
FORWARD-LOOKING STATEMENTS This presentation contains certain forward-looking statements that involve risks and uncertainties. In These forward-looking statements reflect current views about future events and are, by their nature, some cases, we use words such as "ambition", "continue", "could", "es
Slide 21: Thank you
Thank you
Slide 22: Supplementary information - Contents
Supplementary information - Contents Items impacting net operating income 4Q 3 Statoil production per field –International E&P 4Q 2012 11/12 Items impacting net operating income full year 4 Exploration Statoil group 13 Tax rate reconciliation 4Q 5 MPR– margins & methanol prices 14 Net financial item
Slide 23: Items impacting net operating income Q4
Items impacting net operating income Q4 4Q 2012 4Q 2011 (NOK billion) Before tax After tax Before tax After tax Impairments (Net of reversal) 0.3 0.2 (1.0) (1.0) DPI 0.0 0.0 (1.2) (1.1) MPR 0.3 0.2 0.2 0.1 Derivatives IAS 39 0.8 0.0 (5.1) (1.8) DPN 0.6 0.1 (1.2) (0.2) DPI (0.1) (0.1) 0.0 0.0 MPR 0.3
Slide 24: Items impacting net operating income YTD
Items impacting net operating income YTD YTD 2012 YTD 2011 (NOK billion) Before tax After tax Before tax After tax Impairments (Net of reversal) 1.0 0.4 0.9 0.2 DPN 0.6 0.1 0.0 0.0 DPI 0.0 0.0 (2.5) (2.4) MPR 0.4 0.3 3.3 2.6 Derivatives IAS 39 3.6 1.1 (12.0) (4.1) DPN 1.5 0.4 (5.2) (1.0) DPI 0.0 0.0
Slide 25: Tax rate reconciliation 4Q 2012
Tax rate reconciliation 4Q 2012 Tax on adjusted Composition of tax expense and effective tax rate Adjusted earnings earnings Tax rate D&P Norway 37.5 (28.3) 75% D&P International 5.8 (1.7) 29% Marketing, Processing & Renewable energy 5.1 (3.5) 69% Other (0.1) 0.3 306% Total adjusted earnings 48.3 (3
Slide 26: Net Financial Items
Net Financial Items YTD 2012 Net foreign Interest and exchange other net finance Interest income gains/losses expenses and other financial items 0.8 Gains/losses derivative 1.8 financial Net financial items instruments YTD 12 NOK bn (5.5) 0.2 3.0 6
Slide 27: Development in net debt to capital employed
Development in net debt to capital employed Net financial liabilities Net debt to capital employed* NOK bn 90.0 30 % 28 % 76.5 77.4 76.0 26 % 60.0 20 % 21 % 8.3** 43.5 10.3** 45.1 2%** 41.7 13 % 13 % 3%** 12 % 30.0 34.3 10 % 10 % 0.0 0% 2009 2010 2011 1Q 12 2Q 12 3Q 12 4Q 12 2009 2010 2011 1Q 12 2Q
Slide 28: Long term debt portfolio
Long term debt portfolio Redemption profile 31.12.2012 12% * 10% 8% 6% 4% 2% 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 8 * USD 0.5 bn maturing in 2014 will be bought back January 2013 (highlight
Slide 29: MPR Adjusted Earnings - Break-down
MPR Adjusted Earnings - Break-down 5.5 5.1 0.8 6.0 NOK bn 4.3 Other Crude oil processing, marketing and trading Natural gas processing, marketing and trading -0.5 4Q 2012 4Q 2011 9
Slide 30: Statoil production per field – NCS 4Q 2012
DPN 4Q 2012 Statoil production per field – NCS 4Q 2012 *1 Statoil share in Heidrun 38.56% in January. 13.27% share for oil production in period February. New owner share from 01 June 13,11%. Make-up period start 01 july with ownershare 0%, no Statoil production rest of the year. *2. Statoil share of
Slide 31: DPI equity production per field
DPI equity production per field 4Q 2012 Development and Production International (DPI) Produced equity volumes - Statoil share 1000 boed Statoil share Liquids Gas Total ACG 8,56 % 51,9 51,9 Agbami 20,21 % 47,1 47,1 Alba 17,00 % 3,3 3,3 Dalia 23,33 % 50,4 50,4 Gimboa 20,00 % 1,9 1,9 Girassol 23,33 %
Slide 32: Statoil DPNA Equity Production by Field
Statoil DPNA Equity Production by Field 4Q 2012 DPNA Produced equity volumes - Statoil share 1000 boed Statoil share Liquids Gas Total Marcellus* Varies 0.4 74.7 75.1 Bakken* Varies 43.4 3.3 46.7 Tahiti 25.00% 21.4 0.4 21.8 Eagle Ford* Varies 9.6 8.6 18.2 Caesar Tonga 23.55% 9.5 1.3 10.8 Leismer Dem
Slide 33: Exploration
Exploration Exploration Expenses Fourth quarter For the year ended Exploration 2012 YTD (in NOK billion) 2012 2011 2012 5.9 Exploration Expenditure (Activity) 4,9 5,5 20,9 2.7 0.2 Capitalized Exploration -0,6 -1,0 -5,9 Expensed from Previous Years 0,3 1,0 2,7 15.8 Impairment / Reversal of Impairment
Slide 34: MPR - Refining margin and methanol price
MPR - Refining margin and methanol price Refining margins USD/bbl Methanol contract price EUR/ton 9.0 350 8.0 Reference Margin 7.0 6.0 300 5.0 4.0 3.0 250 2.0 1.0 0.0 200 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 J F M A M J J A S O N D 2013 2012 2011 14
Slide 35: Indicative PSA effects
Indicative PSA effects Indicative PSA effect • PSA effects in 2013 is expected to be mmboe/d somewhat lower than in 2012 for Assumed oil price 2013 comparable prices $110 • Around 61% of the international equity production in 2013 is expected to be $80 subject to PSA 0.0 0.1 0.2 15
Slide 36: Investing for profitable growth
Investing for profitable growth Capital expenditures outlook 2013-2016 • 2013: ~ USD 19 bn organic capex 100 % Exploration IOR MPR and Other MPR and Other • 2013-2016: ~ USD 21 bn organic capex Modification 80 % Rest Wells Gas • 40% at NCS with significant tax deductions of world New assets E&P INT
Slide 37: Reconciliation of adjusted earnings to net operating income – 4Q and YTD 2012
Reconciliation of adjusted earnings to net operating income – 4Q and YTD 2012 1) Other adjustments in 2012 include NOK 3.7 billion (Operating expenses) and NOK 0.6 billion (Selling, general administrative expenses) related to the reversal of a provision related to the discontinued part of the early
Slide 38: Forward-looking statements
FORWARD-LOOKING STATEMENTS This presentation contains certain forward-looking statements that involve risks and uncertainties. In These forward-looking statements reflect current views about future events and are, by their nature, some cases, we use words such as "ambition", "continue", "could", "es
Slide 39: Investor Relations in Statoil
Investor Relations in Statoil Investor relations Europe Hilde Merete Nafstad Senior Vice President hnaf@statoil.com +47 95 78 39 11 Lars Valdresbråten IR Officer lava@statoil.com +47 40 28 17 89 Jesper Børs-Lind IR Officer jebl@statoil.com +47 91 75 64 64 Erik Gonder IR Officer ergon@statoil.com +47