Galp Energia, Sgps S.a. Class B · EURONEXT:GALP
Galp Energia, Sgps S.a. Class B — Galp Energia — Q3 2014 Earnings Presentation
27 slides from Galp Energia, Sgps S.a. Class B's earnings presentation, Oct 27, 2014
Slide 1: Results Third Quarter 2014
27 October 2014 Results THIRD QUARTER 2014 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
Key highlights Execution update Financial overview Concluding remarks Appendix 3 Third quarter 2014 results
Slide 4: Key highlights
Key highlights ▪ 3Q14 Ebitda of €379 m, up 21% YoY due to higher production in Brazil and to improved refining margins ▪ Production up QoQ, reaching 31.8 kboepd supported by high well productivity in Brazil ▪ Lula/Iracema FPSO #1 and #2 at full capacity and FPSO #3 first oil in mid- October ▪ Execut
Slide 5: Execution update
Key highlights Execution update Financial overview Concluding remarks Appendix 5 Third quarter 2014 results
Slide 6: FPSO #2 (Paraty) reached full capacity ahead of plan
FPSO #2 (Paraty) reached full capacity ahead of plan Lula NE milestones Guidance Status ▪ Full ramp-up achieved in 15 Delivery of FPSO Cidade Paraty May-13 months vs. initial plan of 18 Start of production Jun-13 months Connection of injector well Aug-13 Connection of producer well1 4Q13 ▪ Average f
Slide 7: FPSO #3 (Mangaratiba) started operations in mid October at Iracema
FPSO #3 (Mangaratiba) started operations in mid October at Iracema ▪ 1st producer well with a potential of 30 kbopd, although restricted until injector well is connected in December ▪ Plateau production expected by 1H2016 Technical specifications: • 150 kbopd • 8 mmscmd ▪ A total of eight producer a
Slide 8: Performing appraisal activities in Iara, ahead of DoC by YE
Performing appraisal activities in Iara, ahead of DoC by YE Iara, Block BM-S-11 ▪ EWT in Iara West 2 with an average flow rate of c.29 kbopd and to last until year end ▪ Iara RDA 2 well (close to Iara Entorno) to be concluded during 4Q14 ▪ Unitisation discussions with Iara Entorno area have started
Slide 9: Appraisal campaign in BM-S-24
Appraisal campaign in BM-S-24 Block BM-S-24 ▪ Apollonia well confirmed the extension of Júpiter discovery and the same hydrocarbons mix ▪ DST being performed in Bracuhy ▪ Elida appraisal well to be spud in 4Q14 9 Third quarter 2014 results
Slide 10: Carcará Extension appraisal well spudded in September
Carcará Extension appraisal well spudded in September Block BM-S-8 ▪ Carcará Extension well being drilled in two phases ▪ Second phase to be drilled by a rig with MPD equipment in 2H15 ▪ DST expected to be performed in 2015 10 Third quarter 2014 results
Slide 11: Mozambique: Progressing with Area 4 project development
Mozambique: Progressing with Area 4 project development Rovuma basin ▪ Appraisal campaign concluded in 3Q14 with Coral-4 well, which confirmed reservoir quality ▪ Enabling Law approved and Decree Law expected to be approved by year-end ▪ Competitive FEED plus EPC process being developed for the Cora
Slide 12: Downstream and gas performance leveraging market dynamics
Downstream and gas performance leveraging market dynamics Galp Energia benchmark margin evolution LNG trading volumes (mm3) $/bbl 5.0 1Q14 2Q14 3Q14 3,034 4.0 Average Average Average 716 $(0.6)/bbl $(0.2)/bbl $2.3/bbl 3.0 2,080 2.0 1.0 0.0 -1.0 -2.0 2013 1H14 3Q14 Galp Energia benchmark margin 3Q14
Slide 13: Financial overview
Key highlights Execution update Financial overview Concluding remarks Appendix 13 Third quarter 2014 results
Slide 14: 3Q14 Ebitda up 21% YoY
3Q14 Ebitda up 21% YoY Profit & Loss (€ m) ▪ Ebitda benefited from higher 3Q14 3Q13 YoY 9M14 YoY production in Brazil and Turnover 4,693 5,808 (19%) 13,434 (10%) improved European refining Ebitda 379 312 +21% 915 +5% margins E&P 131 110 19% 342 +19% R&M 144 76 +90% 221 (11%) ▪ Lower DD&A, abandonmen
Slide 15: Maintaining a robust balance sheet
Maintaining a robust balance sheet Balance sheet (€ m)1 ▪ Working capital normalised post increase in June Sep.2014 Jun.2014 Sep-Jun Dec.2013 Sep - Dec Fixed and LT assets 7,413 7,219 +194 6,883 +530 ▪ Net debt stable at €2.4 bn, Work in progress 1,767 1,645 +122 1,303 +464 despite interim dividend
Slide 16: Capex mainly allocated to development of Lula/Iracema
Capex mainly allocated to development of Lula/Iracema Capital expenditure (€ m) ▪ 9M14 capex of €776 m, mainly allocated to development activities in Lula/Iracema 776 G&P 728 R&M ▪ Activities in BM-S-11 accounted for c.70% of E&P development capex E&P D&P 314 253 ▪ Exploration and appraisal capex E&
Slide 17: Robust cash flow from operations in 3Q14
Robust cash flow from operations in 3Q14 Cash Flow (€ m)1 3Q14 3Q13 9M14 9M13 Ebit IFRS 115 166 346 285 Dividends from associates 27 9 55 44 DD&A 189 164 451 448 Change in working capital 175 64 10 (79) Cash flow from operations 507 402 863 697 Net capex2 (314) (143) (776) (608) Net financial expens
Slide 18: Average debt maturity further extended
Average debt maturity further extended Debt reimbursement profile1 (€ m) 1,000 ▪ Gross debt of €3.9 bn with @30 Sept 2014 @30 June 2014 average maturity of 3.8 yr and 800 average interest rate of 4.3%1 600 400 ▪ €500 m bond issued in July (6.5 200 yr) placed with a YTM of 3.125% 0 2014 2015 2016 201
Slide 19: 4Q14 outlook
4Q14 outlook ▪ 4Q14 WI production expected at c.35 kboepd, mainly supported by FPSO #2 at full capacity in Lula NE and contribution from FPSO #3 ▪ Iberian oil products volume sales expected to remain stable YoY ▪ NG volumes in line QoQ, with steady LNG trading volumes 19 Third quarter 2014 results
Slide 20: Concluding remarks
Key highlights Execution update Strategy overview Concluding remarks Appendix 20 Third quarter 2014 results
Slide 21: Concluding remarks
Concluding remarks ▪ Lula/Iracema project delivering according to plan, with FPSO #1 and #2 at full capacity and FPSO #3 ramping-up ▪ Ongoing appraisal and pre-development activities to support the definition of Iara development plan ▪ De-risking development of Júpiter and Carcará ▪ Mozambique’s app
Slide 22: Save the date: Capital Markets Day 2015
SAVE THE DATE Capital Markets Day 2015 London, 10 March 2015
Slide 23: Appendix
Key highlights Execution update Financial overview Concluding remarks Appendix 23 Third quarter 2014 results
Slide 24: E&P: Production increased 23% YoY driven by Lula NE and Iara EWT
E&P: Production increased 23% YoY driven by Lula NE and Iara EWT Main E&P data ▪ Higher production in Brazil, due to ramp-up of FPSO #2 to full 3Q14 3Q13 YoY 9M14 YoY capacity and to EWT in Iara area Working interest production kboepd 31.8 25.8 +23% 28.5 +18% Oil production kbopd 29.7 24.3 +23% 27.1
Slide 25: R&M: Refining margins driving Ebitda increase
R&M: Refining margins driving Ebitda increase Main R&M data ▪ Premium to benchmark positively impacted by sourcing 3Q14 3Q13 YoY 9M14 YoY optimisation Galp Energia refining margin USD/bbl 5.6 1.7 n.m. 2.4 +4% Refining cash cost USD/bbl 2.8 2.7 +5% 3.1 +18% ▪ Stable sales to direct clients YoY Crude
Slide 26: G&P: Fewer trading opportunities driving Ebitda decrease
G&P: Fewer trading opportunities driving Ebitda decrease Main G&P data ▪ LNG supply & trading activity impacted by less favourable 3Q14 3Q13 YoY 9M14 YoY market dynamics NG supply total sales volumes mm3 1,682 1,971 (15%) 5,586 +8% Sales to direct clients mm3 966 958 +1% 2,791 (5%) ▪ Stable sales to
Slide 27: Investor Relations contact
Investor Relations team Pedro Dias, Head Otelo Ruivo, IRO Cátia Lopes Joana Pereira Marta Silva 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