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Q1 2011 EARNINGS CALL – Noreco

Noreco · May 5, 2011 · 45 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q1 2011 EARNINGS CALL – Noreco – slide 1
    Noreco Q1 2011 5 May 2011
  2. Q1 2011 EARNINGS CALL – Noreco – slide 2
    Important information This company presentation (the Presentation) has been prepared by Norwegian Energy Company ASA (Noreco or the Company). The Presentation has not been reviewed or registered with, or approved by, any public authority,…
  3. Q1 2011 EARNINGS CALL – Noreco – slide 3
    Highlights first quarter 2011 Stable production Field developments on track Disappointing exploration results Strategic review completed Management changes 3
  4. Q1 2011 EARNINGS CALL – Noreco – slide 4
    Oil & gas production boe/day net 15 000 Lulita 12 500 Cecilie 10 000 Nini East Nini 7 500 Siri 5 000 South Arne 2 500 Enoch Brage 0 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 April Volume 11 375 13 125 10 225 10 365 10 355 11 575…
  5. Q1 2011 EARNINGS CALL – Noreco – slide 5
    Siri area Siri 50%, Nini East 30%, Nini 30%, Cecilie 61% Gross production Siri area Improved production boe/day Gas compressor 25 000 upgraded in January New injection well and 20 000 workover on Nini East SCB-1 still shut in 15…
  6. Q1 2011 EARNINGS CALL – Noreco – slide 6
    Brage Noreco 12.26-13.2% Gross production Brage Stable operations boe/day 10 days of deferred 40 000 production in Q1 due to 30 000 flare pipe repairs 20 000 10 000 Well A-14 still underway 0 Oct-10 Jan-11 Apr-11 Arran…
  7. Q1 2011 EARNINGS CALL – Noreco – slide 7
    South Arne Noreco 6.56% Gross production South Arne boe/day Good production performance 40 000 Contribution from new wells 30 000 Continued well interventions 20 000 10 000 Phase III development on track 0 Oct-10 Jan-11…
  8. Q1 2011 EARNINGS CALL – Noreco – slide 8
    Q1 exploration activity Svanegle exploration well non-commercial oil discovery Ronaldo exploration well dry Awarded two licenses in 21st NCS licensing round Planning for next Noreco operated well Luna in Denmark 8
  9. Q1 2011 EARNINGS CALL – Noreco – slide 9
    0 20 40 60 80 100 Rau Huntington Palaeo Huntington Jurassic Yoda Galtvort N Pre Drill Cum Syd Tor Pod Post Drill Cum Talisker Stat. Knokandoo Brent Ipswich Siri West Gita U Jura Gita M Jura Hyme Gygrid Grosbeak…
  10. Q1 2011 EARNINGS CALL – Noreco – slide 10
    Financial review
  11. Q1 2011 EARNINGS CALL – Noreco – slide 11
    Income statement First quarter 2011 NOK million Q1-11 Q4-10 Q1-10 Total revenues 547 474 481 Production expenses 1) 154 143 121 Exploration and evaluation expenses 2) 203 303 123 Payroll and other operating expenses 92 95 68 EBITDA 97…
  12. Q1 2011 EARNINGS CALL – Noreco – slide 12
    Balance sheet 31 March 2011 NOK million 31.03.11 31.12.10 31.03.10 Assets Fixed assets 10 400 9 611 10 148 Receivables 1 581 2 109 1 551 Cash 490 892 409 Total assets 12 471 12 613 12 108 Equity and liabilities Total equity 3 335 3 675…
  13. Q1 2011 EARNINGS CALL – Noreco – slide 13
    Financial position NOK million Debt/equity 5 000 2,5 4 500 4 000 2,0 3 500 3 000 1,5 2 500 2 000 1,0 1 500 1 000 0,5 500 0 0,0 Q1-2010 Q2-2010 Q3-2010 Q4-2010 Q1-2011 Q4-2007 Q1-2008 Q2-2008 Q3-2008 Q4-2008…
  14. Q1 2011 EARNINGS CALL – Noreco – slide 14
    Outlook
  15. Q1 2011 EARNINGS CALL – Noreco – slide 15
    Norecos strategic focus MONETIZE VALUES THROUGH CREATE VALUE WITH DEVELOPMENTS AND OPTIMIZE VALUE IN PRODUCTION EXPLORATION TRANSACTIONS Exploration success Grosbeak deal economics Production mmboe USD million 1,000 boe/day 70 50…
  16. Q1 2011 EARNINGS CALL – Noreco – slide 16
    Upcoming exploration wells Prospect License Noreco Chance of Volume 1) Drilling share success potential start (est.) Chamonix PL471 30% 19% 65-170 Q3-11 Luna DK 1/11 47% 14% 196-490 Q3-11 Kalvklumpen PL414 20% 35% 36-110 Q4-11 2)…
  17. Q1 2011 EARNINGS CALL – Noreco – slide 17
    50 0 100 150 200 250 7/06 Rau P1114 Huntington Palaeo P1114 Huntington Jurassic PL271 Yoda PL348 Galtvort N 7/89 Syd Tor Pod Pre Drill P10 Pre Drill P90 Pre Drill P50 Pre Drill Cum Post Drill Cum PL055…
  18. Q1 2011 EARNINGS CALL – Noreco – slide 18
    Hyme Developments Three developments underway Oselvar Huntington South Arne phase III Developments coming up Hyme (ex-Gygrid) Nemo Huntington Flyndre Nemo Capex plan 2011: NOK 1.15 bn Oselvar Developments NOK 0.5 bn Existing…
  19. Q1 2011 EARNINGS CALL – Noreco – slide 19
    Huntington Forties Noreco 20% Huntington project schedule Project status Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Subsea template installed FDP Approval Drilling started in April Engineering FPSO modifications ongoing…
  20. Q1 2011 EARNINGS CALL – Noreco – slide 20
    Oselvar Noreco 15% Oselvar project schedule Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Sale to Marubeni cancelled PDO Buyer not qualified on NCS Engineering Increased value of field Procurement Construction…
  21. Q1 2011 EARNINGS CALL – Noreco – slide 21
    Way forward High exploration activity 10 wells in 2011, similar level in 2012 Renew and strengthen production base Oselvar, Huntington and South Arne phase III underway Mature Hyme, Nemo, Flyndre, Gita, Huntington deep Conclude on…
  22. Q1 2011 EARNINGS CALL – Noreco – slide 22
  23. Q1 2011 EARNINGS CALL – Noreco – slide 23
    Noreco today Activities in Norway, Denmark and UK 100 employees Production from eight fields Brage and Enoch in Norway Siri fairway, South Arne and Lulita in Denmark Three development projects ongoing Oselvar, Huntington and…
  24. Q1 2011 EARNINGS CALL – Noreco – slide 24
    Strong growth in reserves Development in 2P reserves 2P reserves estimate end 2010: mmboe 50 45.8 mmboe 40 million boe 30 Reserve replacement ratio: 20 2010: 300% 10 2009: 222% 0 2007 2008 2009 2010 2008: 145% Reserves…
  25. Q1 2011 EARNINGS CALL – Noreco – slide 25
    Reserves As of 31.12.2010 Total reserves 1P 2P Liquids Gas Gross Interest Net Liquids Gas Gross Interest Net (mill bbl) (bscf) mill boe % mill boe (mill bbl) (bscf) mill boe % mill boe Siri 6.1 - 6.1 50 3.0 11.5 - 11.5 50 5.8 Nini 3.8…
  26. Q1 2011 EARNINGS CALL – Noreco – slide 26
    Positioned for production growth Significant production growth to Production outlook existing portfolio come from ongoing developments boe/day Huntington, Oselvar, 25 000 South Arne phase III 8-9,000 boe/day of additional 20 000…
  27. Q1 2011 EARNINGS CALL – Noreco – slide 27
    Interest bearing debt & equity NOK million Q1-2011 Q4-2010 Q3-2010 Q2-2010 Q1-2010 Bonds 2,662 2,812 2,270 2,267 2,314 NOR03, NOR04, NOR05, ALXO02 Reserve Based Loan 1,157 1,226 1,331 1,500 1,379 320m facility 216 216 235 235…
  28. Q1 2011 EARNINGS CALL – Noreco – slide 28
    Interest-bearing debt overview Bond loan fixed Bond loan floating Senior unsecured Bond loan floating Bond loan Reserve-based Exploration loan (NOR04) (NOR03) convertible bond (NOR05) fixed/floating bank facility Name of issuer Noreco…
  29. Q1 2011 EARNINGS CALL – Noreco – slide 29
    Dynamic hedging programme Put options Noreco is using put 1,000 barrels options to protect 300 cash flow from oil 250 price downside 200 24 months rolling 150 forward programme 100 50 Asian type puts based on monthly 0 Q2…
  30. Q1 2011 EARNINGS CALL – Noreco – slide 30
    Noreco production per field boe/day Field Noreco ownership Q1-2011 Q4-2010 2010 2009 Brage 12.26/13.2% 2 818 3 150 3 750 4 100 Siri 50% 1 937 1 875 2 475 2 750 Nini East 30% 1 853 1 875 1 800 South Arne 6.56% 1 644 1 725 1 450 1 575…
  31. Q1 2011 EARNINGS CALL – Noreco – slide 31
    P&L analysis Q1-2011 Q4-2010 Q3-2010 Q2-2010 Q1-2010 Production (boe/day) 10,355 10,365 10,225 13,125 11,375 Realised price (/boe) 103.0 83.9 74.4 75.4 74.0 Realised price (NOK/boe) 587 497 459 469 434 Production cost (/boe)…
  32. Q1 2011 EARNINGS CALL – Noreco – slide 32
    Exploration and investment activity NOK million Q1-2011 Q4-2010 Q3-2010 Q2-2010 Q1-2010 Exploration expenses 203 303 90 100 123 Exploration capitalized 28 -50 124 41 15 Investments in fields 240 113 173 138 198 Total 471 366 387…
  33. Q1 2011 EARNINGS CALL – Noreco – slide 33
    Exploration success the key to long-term growth Discovered volumes have been in Norecos exploration activity line with risked pre-drill estimates mmboe 85 mmboe discovered through 100 the years 2007-2010 90 80 2011 program 70…
  34. Q1 2011 EARNINGS CALL – Noreco – slide 34
    10 exploration wells in 2011 Total exploration budget NOK 1.0-1.1 billion Albert Arran Kalvklumpen Lupin Clapton Luna 34
  35. Q1 2011 EARNINGS CALL – Noreco – slide 35
    PL471 Chamonix Noreco 30% OMV operated Amplitude supported stratigraphic trap, in emerging hydrocarbon province: Cretaceous Lysing sandstone. West of Mikkel Additional prospectivity also targeted in deeper horizons (Jurassic) 19%…
  36. Q1 2011 EARNINGS CALL – Noreco – slide 36
    DK 1/11 Luna Noreco 47% Noreco operated Frontier play prospect, targeting Rotliegendes sands, requiring long range migration from Central Graben: Play opener and will de-risk larger Rocky prospect 14% CoS Primary risk element: Trap…
  37. Q1 2011 EARNINGS CALL – Noreco – slide 37
    PL414 Kalvklumpen Noreco 20% Det Norske operated Simple anticline trap in mature Central Graben play (Palaeocene) east of Fry discovery 35% CoS Primary risk element: Charge 36 110 mmboe (gross) Expected spud Oct 2011 with Songa…
  38. Q1 2011 EARNINGS CALL – Noreco – slide 38
    PL519 Albert Noreco 20% Lundin operated The well will target a major fault bound high north of Tampen Spur hydrocarbon province (Statfjord, Snorre etc) Jurassic/Triassic target in emerging play, trap in close vicinity to discovery…
  39. Q1 2011 EARNINGS CALL – Noreco – slide 39
    PL435 Zidane 2 Noreco 20% RWE Dea operated Analogue prospect to the 2010 Zidane 1 discovery Low risk prospect in mature play that will considerably enhance the commerciality of the Zidane 1 discovery and may facilitate improved gas…
  40. Q1 2011 EARNINGS CALL – Noreco – slide 40
    PL360 Lupin Noreco 15% Statoil operated Large fault bound structure in Ling Graben, gas prospect, target reservoir is the Rotliegendes sands, few wells in North Sea have targeted this frontier play 10% CoS - Primary risk element:…
  41. Q1 2011 EARNINGS CALL – Noreco – slide 41
    PL440S Clapton Noreco 12% Faroe Petroleum operated Chalk reservoir around the flanks of major salt diapir Located in Central Graben in mature play 25% CoS Primary risk element: Trap 76 194 mmboe Clapton Luna Expected spud late…
  42. Q1 2011 EARNINGS CALL – Noreco – slide 42
    PL385 Jette/Sprott Noreco 20% Statoil operated Dual target well, testing two separate prospects in both Jurassic and Cretaceous intervals Jurassic target (Jette), trap in mature play, considerable follow-on potential if success 50%…
  43. Q1 2011 EARNINGS CALL – Noreco – slide 43
    Noreco management Einar Gjelsvik Rebekka Glasser Herlofsen CEO CFO Gjelsvik joined Noreco in 2006. Has Herlofsen joined Noreco as CFO in 2011. Has more than ten years experience from previously been member of Norecos board for two…
  44. Q1 2011 EARNINGS CALL – Noreco – slide 44
    Noreco management Lars Fosvold Thor Arne Olsen Vice President Exploration Vice President Commercial Joined Noreco in December 2005. Vice President Commercial, since Has more than 22 years experience January 2006. Holds over 28 years…
  45. Q1 2011 EARNINGS CALL – Noreco – slide 45
    Shareholders Top 20 shareholders as of 2 May 2011 S hareholders S hares % of top 20 % of total BNY MELLON INTERNATIONAL BANK LTD 29 215 997 20,0 % 12,0 % LYSE ENERGI AS 23 647 460 16,2 % 9,7 % IKM INDUSTRI-INVEST AS 14 586 584 10,0 %…

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