Aker Bp Asa · OSL:AKRBP

Aker Bp Asa — Q1 2020 Earnings Presentation

26 slides from Aker Bp Asa's earnings presentation, May 6, 2020

  1. Slide 1: First quarter 2020

    First quarter 2020 Aker BP ASA 6 May 2020

  2. Slide 2: Disclaimer

    AKER BP – FIRST QUARTER 2020 Disclaimer This Document includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Document are based on current expectations, estimate

  3. Slide 3: Q1-2020 | Unprecedented challenges

    AKER BP Q1-2020 | Unprecedented challenges  COVID-19 pandemic and oil price collapse  Aker BP demonstrating its strength and flexibility  Opportunity to build an even stronger company Illustration: United Nations 3

  4. Slide 4: Well positioned to tackle the crisis

    Well positioned to tackle the crisis Improvement focus Flexible portfolio Financially robust Industrial owners 4

  5. Slide 5: Efficient management of the COVID-19 risk

    STRONG PERFORMANCE IN CHALLENGING TIMES Efficient management of the COVID-19 risk Production maintained at full capacity  Top priority: • Safeguarding our people • Maintaining production  Mitigating actions: • Reduced activity and manning offshore • Travel restrictions and home office  Way forwar

  6. Slide 6: Q1-2020 | Best operational performance ever for Aker BP

    STRONG PERFORMANCE IN CHALLENGING TIMES Q1-2020 | Best operational performance ever for Aker BP SAFETY RECORD LOWER HIGH LOW FIRST PRODUCTION COST EFFICIENCY EMISSIONS 0 208.1 $8.7 95.7% 4.8kg Serious thousand barrels of Production cost Production CO2 emissions incidents oil equivalents per day per

  7. Slide 7: All three operated PDO projects now on stream

    STRONG PERFORMANCE IN CHALLENGING TIMES All three operated PDO projects now on stream Valhall Flank West Ærfugl Skogul  Wellhead platform at Valhall  Subsea tieback to Skarv  Subsea tieback to Alvheim  First oil achieved in December 2019  Production started in April 2020  Production started in

  8. Slide 8: Handling the crisis with determination and action

    DEMONSTRATING STRENGTH AND FLEXIBILITY Handling the crisis with determination and action Postponing investments Reducing opex $1.2bn $7-8/boe Capex planned for 2020 Production cost 2020 ~20% reduced ~25% reduced compared to CMU compared to CMU Reducing exploration activity Adjusting the organisation

  9. Slide 9: Utilizing the flexibility of our portfolio

    DEMONSTRATING STRENGTH AND FLEXIBILITY Utilizing the flexibility of our portfolio Moving to a sanctioned-only scenario – maintaining optionality for future growth Production sustained at ~200kbd Limited capex needed in sanctioned-only mboepd USD billion 500 3.0 400 NOAKA 300 2.0 NOAKA 1.7 Non-sancti

  10. Slide 10: Government initiatives to support the industry

    TEMPORARY CHANGES TO REGULATORY FRAME Government initiatives to support the industry What does this mean for Aker BP?  Industry wide production cuts communicated • ~7% reduction in H2-2020 - distribution by field not concluded • Pro rata impact on Aker BP’s 2020 production 5-10 mboepd  Temporary c

  11. Slide 11: Adjusting the dividend to retain financial flexibility

    BUILDING AN EVEN STRONGER COMPANY Adjusting the dividend to retain financial flexibility 2020 dividend ambition (USDm)  Overall ambition: Attractive cash dividends  Old dividend plan cancelled • Preserving financial flexibility 213 • Positioning for future growth opportunities  Quarterly dividend

  12. Slide 12: Financial review

    Financial review 12

  13. Slide 13: Oil and gas sales

    FINANCIAL REVIEW Oil and gas sales Volume (mboepd) Realised prices (USD/boe) Total income (USDm) Other operating income Production Sales Liquids Natural gas Petroleum Revenues +12% -30% +9% -13% 208.1 207.5 64.2 1,003 191.1 184.5 872 44.7 -17% 26.3 980 21.9 779 Q4- Q1- Q4- Q1- Q4- Q1- Q4- Q1- Q4-201

  14. Slide 14: Timing of liftings impacted realized liquids prices

    FINANCIAL REVIEW Timing of liftings impacted realized liquids prices Liftings Q1-2020 Realized liquids prices vs benchmark ($/bbl) 68.9 69.3 6.6 6.4 62.0 62.0 63.1 64.2 50.1 44.7 2.6 Q2-19 Q3-19 Q4-19 Q1-20 January 01.2020 February 02.03.2020March 02.02.2020 Aker BP liftings, mmbbl Brent Dated Brent

  15. Slide 15: Navigating volatile oil markets

    FINANCIAL REVIEW Navigating volatile oil markets Breakdown of realized liquids prices in Q1 ($/bbl) Benefiting from collaboration with BP  Marketing & offtake agreement with BP 50.1  Aker BP crude treated as BP “equity oil” 47.9 6.7 1.9 45.3 0.6 44.7 3.2  Benefits from BPs downstream network and

  16. Slide 16: Income statement

    FINANCIAL REVIEW Income statement USD million Q1 2020 Q4 2019 Q1 2019 Total income 872 1,003 836 Production costs 156 154 200 Other operating expenses - 19 7 EBITDAX 716 830 629 Exploration expenses 50 85 90 EBITDA 666 745 539 Depreciation 277 255 183 Impairment losses 654 (1) 69 Operating profit (E

  17. Slide 17: Statement of financial position

    FINANCIAL REVIEW Statement of financial position USD million Assets 31.03.20 31.12.19 31.03.19 Equity and liabilities 31.03.20 31.12.19 31.03.19 Goodwill 1,647 1,713 1,791 Equity 1,813 2,368 2,799 Other provisions for liabilities Other intangible assets 2,001 2,537 2,483 2,699 2,645 2,503 incl. P&A

  18. Slide 18: Cash flow – first quarter 2020

    FINANCIAL REVIEW Cash flow – first quarter 2020 USD million 48 27 CF Operations CF Financing CF Investing 343 572 31 21 12 213 337 107 323 Opening Net debt Operations Tax paid Capex & Expex Abex Other Dividends Closing balance drawn before tax Leases balance 18

  19. Slide 19: Financial capacity further improved

    BUILDING AN EVEN STRONGER COMPANY Financial capacity further improved Debt and liquidity (USD billion) 2019 April - Replaced RBL with $4bn unsecured RCF with no redetermination risk 4 7.3 June - Assigned BBB- by Fitch Leverage ratio - $0.75bn 5-year notes at 4.75% ~1.2 ~1.2 November - Assigned BBB-

  20. Slide 20: Rebalancing our financial priorities

    BUILDING AN EVEN STRONGER COMPANY Rebalancing our financial priorities Capital allocation priorities 2020 liquidity improvements (USD million) Invest in 425 ~2,500 profitable growth 1,500 Maintain sufficient Return ~600 financial capacity value creation 20

  21. Slide 21: Guidance for 2020

    BUILDING AN EVEN STRONGER COMPANY Guidance for 2020 Production Capital spend Production cost Dividend mboepd USD billion USD/boe USD million Abex Exploration Capex +36% 850 -23% -40% 205-220 205-220 2,280 12.4 750 2,200 200 ~10 156 1,750 500 200 7-8 350 425 1,500 1,200 2019 2020 CMU 2020 new 2019 20

  22. Slide 22: Positioning Aker BP to be the leading E&P company

    BUILDING AN EVEN STRONGER COMPANY Positioning Aker BP to be the leading E&P company Execute Improve Grow Efficient operations New operating model Financial flexibility 22

  23. Slide 23: Appendix

    Appendix

  24. Slide 24: Updated 2020 exploration programme

    APPENDIX 2 Updated 2020 exploration programme 3 Four wells postponed – spend reduced to USD 350 (500) million License Prospect Operator Aker BP Pre-drill Status share mmboe PL1008 Nidhogg 1 Aker BP 60 % 37 - 96 Discovery 6-15 mmboe PL719 Sandia 2 Spirit 20 % 23 - 527 PL533 Bask 3 Lundin 35 % 14 - 58

  25. Slide 25: Guidance summary

    APPENDIX Guidance summary 2020 guidance 2020-3M actual Comments Production 205-220 mboepd 208.1 mboepd Net production excl. over/underlift Excl. capitalized interest Capex USD ~1.2 billion USD 360 million Incl. share of lease payments Exploration spend USD ~350 million USD 53 million Incl. share of

  26. Slide 26: Aker BP

    & AkerBP www.akerbp.com

Aker BP — Q1 2020 Earnings Presentation on 6ix