Okea Asa · OSL:OKEA
Okea Asa — Debt Investor Presentation (April 2024)
37 slides from Okea Asa's debt investor presentation, Apr 25, 2024
Slide 1: OKEA ASA Credit investor update
OKEA ASA Credit investor update 25 April 2024
Slide 2: Forward looking information
Forward looking information This presentation contains certain statements and information that constitutes "forward-looking information” and relates to future events, including the Company’s future performance, business prospects or opportunities. Forward-looking information is generally identifiabl
Slide 3: Table of contents
Table of contents 1 Company and business 2 Financials 3 Appendix 3
Slide 4: OKEA at a glance
OKEA at a glance A leading independent E&P company operating on the Norwegian continental shelf Introduction Key figures Core assets • Founded in 2015 and listed on the Oslo Stock Exchange since June 2019 Production Q1 2024 • Repeat and successful bond issuer since 2017 42.1 kboepd 10 2.8 Production
Slide 5: Several milestones reached since last bond issue
Several milestones reached since last bond issue Further increased diversification of portfolio following completion of Statfjord area acquisition from Equinor – OKEA currently has 10 producing assets Continued increase in production, with total production in Q1’24 of 42.1 kboepd1, up from 22.3 kboe
Slide 6: Delivering in line with growth strategy
Delivering in line with growth strategy More than doubling production volumes since 2021 while deleveraging 45 .0 2.5 x 1 35-40 Production Leverage Ratio 2 40 .0 35.4 35 .0 2.0x 2.0 x 30 .0 1.5 x 25 .0 21.0 20 .0 16.1 15.5 1.0 x 15 .0 0.5x 10 .0 0.5 x 5.0 0.3x 0.2x 0.0 0.0 x 2020 2021 2022 2023 2024
Slide 7: Strategic pillars
Strategic pillars The leading mid- to late-life operator on the NCS Profitable Value Capital growth creation discipline Pursuing accretive organic and Continuously working for value Maintaining financial flexibility and inorganic growth initiatives maximisation in existing portfolio robust balance s
Slide 8: Management with broad operational and financial expertise
Management with broad operational and financial expertise Team with extensive track record and varied experience on the NCS Svein J. Liknes | CEO Birte Norheim | CFO ▪ >25 years' experience from the oil and offshore industry ▪ >20 years' experience from the oil and gas sector ▪ Served as acting CEO
Slide 9: Material and diversified portfolio of producing assets
Material and diversified portfolio of producing assets Production spread across ten individual fields, with footprint covering the North Sea and Norwegian Sea • Annual pro forma production (kboepd)1 • Overview of asset portfolio and 2P reserves2 Draugen Gjøa Nova 42.1 Brage Yme Statfjord area 35.4 B
Slide 10: Creating value through active operatorship – Draugen case study
Creating value through active operatorship – Draugen case study Efficiency improved and production at highest level in since Q3’19 Draugen thriving under OKEA operatorship Draugen gross production • Draugen was winner of previous operator Shell’s CEO HSSE & SP Award kboepd OKEA operator Previous ope
Slide 11: Creating value through active operatorship – Brage case study
Creating value through active operatorship – Brage case study Increasing production through infill drilling, increased reliability and Bestla development Revitalisation of Brage area Brage gross production • Since becoming operator in November 2022, OKEA has increased kboepd OKEA operator Previous o
Slide 12: Bestla – attractive subsea tie-back to Brage
Bestla – attractive subsea tie-back to Brage Summary of Bestla Field overview (gross) • Bestla (previously Brasse) will be developed as a two well subsea tie-back • Partners: OKEA (op., 39.2788%), • 2P reserves: 24 mmboe (76% liquids) to the Brage platform, 13km to the North, which will function as
Slide 13: Focus on unlocking value potential in the Statfjord area
Focus on unlocking value potential in the Statfjord area Transaction closed YE 2023 Acquired 28% in WI Statfjord area •Transaction close and improvement program •Overview • One of the most prolific areas on the NCS with • RNB 20242 numbers from the operator four producing fields, a solid track recor
Slide 14: Continuous value-enhancing activities across the portfolio
Continuous value-enhancing activities across the portfolio Core focus on incremental development to maximise value of the asset base Asset/Area Operator 2023 2024 2025 2026 2027 Hasselmus production start Draugen New subsea • Hasselmus tie-back completed on budget and ahead of Lifetime / license ext
Slide 15: Production outlook and key growth initiatives
Production outlook and key growth initiatives Simultaneously working three growth levers to deliver profitable and robust growth Key growth levers Net production outlook from current portfolio (kboepd)1 Base production Actively pursue further value creation in producing assets and maximising potenti
Slide 16: Table of contents
Table of contents 1 Company and business 2 Financials 3 Appendix 16
Slide 17: Financial strategy and capital allocation framework
Financial strategy and capital allocation framework Capital discipline – Robust growth – Returns Conservative Balanced Financial Robust financial capital flexibility portfolio management allocation • Prudent leverage through the • Maintain robust liquidity at all • Diversification across assets, • T
Slide 18: Strong financial position – snapshot per Q1 2024
Strong financial position – snapshot per Q1 2024 Production OPEX/boe EBITDA Free cash flow (Q1 2024) (Q1 2024)1 (LTM per 31 March 2024)2 (LTM per 31 March 2024)2,3 42.1 kboepd USD 19/boe NOK 7.7bn NOK 2.8bn Market cap Cash position Net debt Leverage Ratio (22 April 2024) (31 March 2024) (incl. tax p
Slide 19: Sustained track record of robust financial performance
Sustained track record of robust financial performance Reported production (kboepd) EBITDA (NOKm) 42.1 7 680 5 756 4 793 24.6 21.0 18.7 16.1 15.5 2 607 1 636 867 2019 2020 2021 2022 2023 Q1’24 2019 2020 2021 2022 2023 LTM Q1’24 1 Free cash flow (NOKm)2 Reported interest-bearing debt less cash (NOKm)
Slide 20: Consistent deleveraging in recent years
Consistent deleveraging in recent years Substantially growing the portfolio whilst reducing leverage Conservative approach to financing and liquidity management Leverage ratio development2 • Demonstrated consistent track record of deleveraging in recent years Net tax payable (NOKbn) 3.0 Statfjord •
Slide 21: Summary of outlook and guidance
Summary of outlook and guidance Production guidance for 2024 of 35–40 kboepd • Guidance remains unchanged Production • Planned turnaround at Statfjord A with expected downtime of 5 weeks in Q2 • Other major turnarounds planned: Brage – 3 weeks Q3; Ivar Aasen – 3 weeks Q3 Capex guidance for 2024 upda
Slide 22: Table of contents
Table of contents 1 Company and business 2 Financials 3 Appendix 22
Slide 23: Income statement
Income statement The first quarter with Statfjord activities included in income statement Q1 2024 figures Q1 2024 comments Figures in NOK million Q1 24 Q4 23 Q1 23 2023 Total operating income 3,474 2,118 2,954 8,885 • Operating income of NOK 3,474 million of which NOK 3,421 million from sale of petr
Slide 24: Statement of financial position
Statement of financial position Q1 2024 figures Q1 2024 comments Figures in NOK million Assets 31.03.2024 31.12.2023 31.03.2023 • Goodwill of NOK 2,049 million of which NOK 756 million related to Statfjord asset Goodw ill 2,049 2,295 1,292 • Oil & gas properties of NOK 7,130 million Oil and gas prop
Slide 25: Cash development Q1 2024
Cash development Q1 2024 NOK million 5 500 5 000 4 500 -171 4 000 709 3 500 2 002 802 3 000 2 500 627 12 72 57 2 000 8 1 500 2 301 1 000 2 130 500 0 Total liquidity Operating Taxes Investment Business Other liabilities Interest Leases FX effect on Total liquidity 31.12.23 activities activities combi
Slide 26: Key transactions, deferred and contingent payments
Key transactions, deferred and contingent payments Statfjord acquisition – Key terms Brage acquisition – Contingent payment • OKEA acquired a 28.00% WI in PL037 Statfjord area from Equinor Energy AS (SPA signed 19 • OKEA ASA completed the transaction with Wintershall Dea Norge AS 31 October 2022, Ma
Slide 27: Asset retirement obligations
Asset retirement obligations Abandonment spending is fully tax deductible against corporate tax and special petroleum tax Draugen and Gjøa (Norske Shell transaction, Nov 2018) PL037 Statfjord area (Equinor transaction, Dec 2023) • Seller covers abandonment and removal cost for equipment installed as
Slide 28: Overview of material contracts and agreements
Overview of material contracts and agreements Oil and gas sales Other material contracts, legal disputes • Crude Oil is sold on term contracts (yearly and multi-year) where underlying benchmark is • Joint Operating Agreement (JOA): The Company has several production licences on the Dated Brent NCS i
Slide 29: Operator strategy underpinning value creation
Operator strategy underpinning value creation Fully-fledged operator organisation with long track record of operational excellence Demonstrated strong organisational capabilities Full-cycle competence • 45.4 Grå bakgrunn her • Highly capable operator organisation built on Gross operated Shell and Wi
Slide 30: Target 30% CO2 emission reductions by 2030
Target 30% CO2 emission reductions by 2030 Firm and ambitious ESG strategy with Draugen electrification project leading the way 2023 performance highlights Case study: 95% reduction in CO2 intensity from Draugen by 2027 vs 2019 baseline A+ Key considerations Overview of development solution for elec
Slide 31: OKEA's ESG approach and strategic targets
OKEA’s ESG approach and strategic targets 1 2 3 4 5 6 Sustainable development Environment Our people Our partners Our stakeholders Our communities Committed to engage with We have identified potential The protection of biodiversity Working actively to identify stakeholders and to foster Committed to
Slide 32: Summary of reserves and resources per YE 2023
Summary of reserves and resources per YE 2023 1P/P90 (Low estimate, mmboe) 2P/P50 (Base estimate, mmboe) Asset/Project OKEA WI Gross Oil Gross NGL Gross Gas Net OE Gross Oil Gross NGL Gross Gas Net OE Reserves – On Production Brage 35.20 % 2.0 0.2 0.6 1.0 4.5 0.7 1.9 2.5 Draugen 44.56 % 37.5 1.8 7.1
Slide 33: Licence overview
Licence overview Producing assets Pre-production or exploration phase Licence Field Operator OKEA WI Licence Field/prospect Operator OKEA WI PL 037 Statfjord Equinor 28.00 % PL 195 Aurora OKEA 65.00 % PL 053 B Brage OKEA 35.20 % PL 195 B Aurora OKEA 65.00 % PL 055 Brage OKEA 35.20 % PL 938 Calypso V
Slide 34: Introduction to the Norwegian petroleum tax system
Introduction to the Norwegian petroleum tax system 78% total cost recovery on investments with majority recouped in year of investment Summary of the Norwegian petroleum tax system Tax balances and values net to OKEA (note: preliminary) Remaining tax balances 01.01.2024 – corporate tax basis 22% • N
Slide 35: Board of directors
Board of directors Mike Fischer Rune Olav Pedersen Nicola Gordon Finn Haugan Jon Arnt Jacobsen Vice chair Board member Board member Board member Board member Non-executive Independent, non-executive Independent, non-executive Independent, non-executive Independent, non-executive Chaiwat Kovavisarach
Slide 36: Top 20 shareholders
Top 20 shareholders Rank Investor Geography Type % Shares 1 BCPR PTE. LTD. Thailand Ordinary 45.58% 47,362,377 2 CLEARSTREAM BANKING S.A. Luxembourg Nominee 3.84% 3,987,941 3 SALT VALUE AS Norway Ordinary 2.61% 2,713,034 4 TINDRA EIENDOM AS Norwayway Ordinary 1.46% 1,512,496 5 SJÆKERHATTEN AS Norway
Slide 37: www.okea.no
www.okea.no