CORRAL PETROLEUM HOLDINGS AB Q1 2019 June 3, 2019
Presenters Peder Zetterberg Petter Holland CFO (acting) CEO 2
Disclaimer This presentation has been prepared by Corral Petroleum Holdings AB (publ) and/or its subsidiaries and affiliates (“Corral”) . The information contained in this presentation is for information purposes only. Among other things, this presentation is intended to be used in connection with a scheduled international conference call for investors and analysts to be held on June 3, 2019 at 3:00 pm CET. The dial-in number is for Standard International Access +44 (0) 20 3003 2666, Stockholm +46 (0) 8 50520424, New York +1 212 999 6659. The meeting code is Corral Q1. The conference call will also be available for replay for a limited time beginning on June 4, 2019 with access information to be posted via the "Press and Notices" heading of the Corral investors section of Preem's website at https://www.preem.se/en/in-english/investors/corral/results-and-reporting2/. 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Certain financial data included in the presentation are “non -IFRS financial measures. ” These non-IFRS financial measures may not be comparable to similarly titled measures presented by other entities, nor should they be construed as an alternative to other financial measures determined in accordance with International Financial Reporting Standards (“IFRS”) . Although Corral believes these non-IFRS financial measures provide useful information to users in measuring the financial performance and condition of its business, users are cautioned not to place undue reliance on any non-IFRS financial measures and ratios included in this presentation. This presentation contains forward-looking statements. Examples of these forward-looking statements include, but are not limited to statements of plans, objectives or goals and statements of assumptions underlying those statements. 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MARKET AND MARKET OUTLOOK 4
Crude 1Q’19 Source: Pira ▪ After the sharp price drop at the end of December 2018, the prices immediately started to increase when trading started in 2019. o Reduced production from OPEC and others gave a signal that the balance would tighten going forward and speculative money went back into the oil market, pushing prices higher again. o The worrying geopolitical situation also helped push prices upward. January trading started at 54 $/bbl, with prices strengthening during the quarter and ending the first quarter at 68 $/bbl. ▪ The average price of Dated Brent in the first quarter of 2019 was 63 $/bbl, compared to an average price of 69 $/bbl in the fourth quarter of 2018. In the first quarter of 2018 the average price was 67 $/bbl. 5
+0.7 3 Source: Pira
Source: Pira 4
Products ▪ The average diesel margin versus Dated Brent weakened to around 16 $/bbl in the first quarter, compared to 18 $/bbl in the fourth quarter of 2018. In the first quarter of 2018 the average diesel margin was 13 $/bbl. The supply increased more than demand during the first quarter and made the market softer as we are moving towards the summer season when inventories tend to build. However, the diesel margin is well above historical levels (dotted line), and continue to trade at healthy levels. The average gasoline margin versus Dated Brent weakened to slightly below 4 $/bbl in the first quarter (to be compared with 10 $/bbl in 1 st quarter 2018), similar to the 4 $/bbl level in the fourth ▪ quarter. Inventory levels on both sides of the Atlantic were on the high side, and demand statistics and forecasts were not optimistic. At the end of March 2019 when gasoline of summer quality started trading, the gasoline margin strengthened and reached levels around 10 $/bbl. This is partly due to the fact that summer quality gasoline is more expensive to produce as the yield from every barrel of crude oil is lower. Even some unplanned events in US refineries contributed to the strengthening of the gasoline margin at the end of March. ▪ The average margin for high sulphur fuel oil versus Dated Brent strengthened to the extremely high level of -3 $/bbl in the first quarter, compared to -5 $/bbl in the fourth quarter. In the first quarter of 2018 the average margin for high sulphur fuel oil was -11 $/bbl. The record levels for high sulphur fuel oil margins are due to limited supply from refineries, a good demand from the shipping industry for bunker fuel, and low inventory levels in the important Asian market. This will certainly change when we move towards the change of bunker specification to 0.5 % sulphur in 2020, which will most likely start already in 4 th quarter this year. 8
Preem Refining Margins Lysekil Refinery Gothenburg Refinery $/bbl $/bbl 10 10 8 8 6 6 4 4 2 2 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -2 -2 5 yr Range (2014-2018) 2018 5 yr Range (2014-2018) 2018 2019 5 yr Average (2014-2018) 2019 5 yr Average (2014-2018) ▪ European refining margins were on average generally slightly weaker during the first quarter of 2019 than during the fourth quarter of 2018. o The gasoline and diesel margins weakened, while the fuel oil margin strengthened. Lysekil margin was also impacted by the Iso-Cracker shut down due to a power failure on Dec 26 th that caused damage to one of its reactors. The reactors was repaired and o the unit was successfully restarted during the quarter. Total financial impact of lost of Iso-Cracker production estimated to be around -36 MUSD / -1.4 $/bbl. 9
5 Source: Pira
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