The New generation NCS operator January 2020
OKEA – an independent E&P company on the NCS Production HQ Development (Trondheim) Draugen (44.56% WI, op.) 19,200 boepd Gjøa Operations PRODUCTION 1 NCS ONLY (12% WI) ( Kristiansund ) Ivar Aasen (0.554% WI) 88 mmboe USD 11.1/boe Grevling / Storskrymten (35% / 60% WI, op.) 2P+2C OPEX 1 Yme (15% WI) (1) 2019 year to date (Q1-Q3), offtake cost and insurance not included. Converted at the official Norges Bank USD-NOK exchange rate 2
5 licenses awarded in APA 2019 – strengthen OKEAs position in core areas Draugen/Mistral area Grevling Area PL1003 B Licence Block(s) Operator OKEA share PL1060 6407/8,9 Equinor Energy AS 40% PL1034 15/12 Chrysaor Norge AS 40% PL093 F 6407/9 OKEA ASA 44.56% PL1060 PL1003 B 6406/3,6 OKEA ASA 60% PL973 B PL973 B 15/12 Chrysaor Norge AS 30% PL1034 PL093 F 3
OKEA is a responsible and value focused E&P company Continuously improving Safe and responsible Value driven M&A Financial flexibility and operations operations robustness $ A NCS focused E&P Improvement and Target value Prudent financial company digitalization enhancing growth strategy “The OKEA way” is a safe and responsible approach to all we do 4
Safe and responsible operations Proven operational capabilities on Draugen • No incidents or leakages in 2019 • Strong production in 2019, 5% above target • Average 90.8% reliability last 3 years, 94% in 2019 • Unique knowledge of Draugen upside potential • Positive production outlook to 2040 • Several maintain integrity projects executed • Operating cost reduced by more than 200 MNOK (1) Draugen 100% 5
Improvement and digitalization Improving Draugen operational efficiency • Optimised decision processes have reduced lead time • Mapping of governing documents, removing redundancy • Software applications down by 33% • Using industry standards for development projects • Revised roles and responsibilities • Revitalising earlier stranded projects • New digital platform in cooperation with ABB and HP 6
Draugen drilling 2019 No major accidents Fast and effective operation (finish the well in less than 7 days) Drilling Infill Ø drilled in 5.38 dry hole days • targets and Skumnisse drilled in 7,17 days • results Rate of penetration (ROP): 100 M/HR IN 12 ¼’’ SECTION: 200-300 M/HR • 200 M/HR IN 8 ½’’ SECTION: 410 M/HR (peak) • Fit for purpose 2-strings well design OKEA way with performance midset Success Involvment of OKEA key personell criteria Good rig in Deapsea Nordkapp Excellent mud, cement and drilling tools 7
OKEA is committed to operate safely and responsibly Safety Environment Energy efficient production with focus on reducing Safe and sustainable business with zero harm to people environmental footprint or assets • Serious incident frequency (SIF) for Draugen on “0” for 2019 (as for 2018 and Draugen – Targeting lower emissions 2017) Despite the “nature” working against late life producers – OKEA aim to improve ‒ Liquid fuel will be replaced with gas in 2020 ‒ Environmental strategy & management plan implemented ‒ New environmental projects initiated in 2019 ‒ Lifetime extension ‒ Draugen as area hub Gjøa – Industry leading low emission asset ‒ Gas supplier to UK – substituting coal ‒ Electrified with power from shore, reducing direct emissions Ivar Aasen – Power from shore sanctioned ‒ Sanctioned investment to electrify in 2022 with renewable power from shore 8
Value driven M&A Target the right deals • Target value enhancing M&A on NCS • Emphasising portfolio fit to enable synergies • The right deals more important than timing • Desire operatorships ‒ producing assets and developments up to 100 mmboe • Funding through operating cash flow and owner support • Proven industry leading onboarding process of new assets 9
Financial flexibility and robustness Strong financial performance EBITDA 1 (NOKm) Cash position 2 (NOKm) Production (kboepd) Q3 2019 Q3 2019 Q3 2019 Previous Previous Previous 2 # of Draugen liftings 1 1 1 799 594 22,4 20,0 19,5 1 329 18,1 413 404 586 133 395 42 0.4 57 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 120MUSD bond issue in Q4 2019 gives financial flexibility going forward (1) APM: EBITDA is defined as earnings before interest, taxes, depreciation, depletion, amortisation and impairments. Net debt is defined as interest bearing debt less cash & cash equivalents (2) Excluding restricted cash 10
Outlook High level of activity in coming years Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Target further debottlenecking and cost reductions Draugen Appraisal well BOK/BOV 1 Hasselmus FID Hasselmus Progressing redevelopment of Gjøa P1 towards first oil late 2020 Gjøa P1 production start Gjøa Progress and de-risk Yme towards first oil mid 2020 1st oil Yme Yme IOR well programme – two wells per year 2020-21 Ivar Aasen Progress Utsira High Area power grid project – Power from shore from 2022 Gjøa Hamlet prospect planned well in 2020 E&A and other prospects BOK/BOV 1 Mistral North appraisal and PL973 exploration drilling Grevling/Storskrymten Pursue further M&A – both bolt-on acquisitions and larger transformational deals Business development APA 2019 APA 2020 APA 2020 awards applications awards Note: Indicative timeline. Milestones may be subject to approval by the Ministry of Petroleum and Energy and licence decisions (1) BOK = Concretisation decision, BOV = Decision to continue, BOG = Decision to implement 11
OKEA investment highlights • NCS-focused E&P company with strong cash flow from ca. 20 000 boed in net production Safe and responsible • A responsible operator focusing on safety and lowest possible environmental footprint operations on NCS • Proven value creation in 2019 as operator of the Draugen field • Improvement programme utilize innovative tools to increase operational efficiency Operational • A step-wise approach to digitalization of operation on the operated Draugen field improvement & digtialization • Actively targeting value enhancing growth through M&A, across production and developments up to 100 million boe Value driven M&A growth • Experienced operational organization suited for new operatorships and capturing synergies • Financial flexibility through new bond issue (RBL can replace OKEA 03 if OKEA decides – Prudent financial preapproved of bond holders) strategy 12
okea.no Ståle Myhre VP IR 13
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