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3Q 2015 Financial Results – LUKOIL

LUKOIL · Nov 30, 2015 · 44 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. 3Q 2015 Financial Results – LUKOIL – slide 1
    3Q 2015 Financial Results (US GAAP) Member of the Board of Senior Vice-President, Finance Directors, Vice-President for Strategic Development Leonid Fedun Alexander Matytsyn , 28 2015 Moscow, 30 November 2015
  2. 3Q 2015 Financial Results – LUKOIL – slide 2
    Main Events in 9 2015 Liquid hydrocarbon production growth + 3,9% Executing plans for the project West Qurna-2 The amount of compensation in 9M2015 was 2,3 bln Discovery of a deep-water offshore gas field in Romania Successful…
  3. 3Q 2015 Financial Results – LUKOIL – slide 3
    9 2015 Financial Highlights mln Net income 2 318 Adjusted* net income 2 769 EBITDA 10 025 Adjusted* EBITDA 10 476 Net debt 9 011 Free cash flow 2 040 Sale of subsidiaries and equity method affiliates** 1 260 Free cash flow and…
  4. 3Q 2015 Financial Results – LUKOIL – slide 4
    Dividend Growth Rates 180 Dividend per ordinary share of LUKOIL, RUB 154 150 120 CAGR 110 15%E 90 90 75 59 60 30 60 65 50 40 0 2010 2011 2012 2013 2014 2015 E Interim dividends Level that corresponds to 15%…
  5. 3Q 2015 Financial Results – LUKOIL – slide 5
    Macroeconomic and Tax Environment Tariff calculation is presented on the basis of transportation expenses related to crude oil and refined products deliveries to various export destinations, weighted by volumes transported 6
  6. 3Q 2015 Financial Results – LUKOIL – slide 6
    Rivalry Between OPEC and Independent Producers Continues Changes in oil production since the beginning of 2015, Mb/d 800 OPEC: Independent producers: +1 MMb/d - 0,9 MMb/d 600 400 200 Russia USA Canada North Sea Mexico 0…
  7. 3Q 2015 Financial Results – LUKOIL – slide 7
    Rivalry Between OPEC and Independent Producers Continues Changes in oil production since the beginning of 2015, Mb/d 800 OPEC: Independent producers: +0.9 MMb/d - 0,1 MMb/d 600 400 200 Russia Other North Sea USA Canada…
  8. 3Q 2015 Financial Results – LUKOIL – slide 8
    U.S. E&P Companies Suffer from Heavy Financial Distress Changes in debt and free cash flow for a sample of U.S. E&P U.S. onshore oil producers debt service companies*, bln USD as a share of operating cash flow**,% 100 Debt change…
  9. 3Q 2015 Financial Results – LUKOIL – slide 9
    Positive Effects from Hedging will Decrease in 2016 Changes in hedging activity for a sample of U.S. E&P companies* 85 2015 80 (52; 82) Weighted average hedge price, /bbl 75 70 2016 65 (35; 67) 60 55 50 20…
  10. 3Q 2015 Financial Results – LUKOIL – slide 10
    Main Operating Results * * * * Including our share in equity affiliates 11
  11. 3Q 2015 Financial Results – LUKOIL – slide 11
    Sustainable Production Growth Oil production, million barrels 9M 2014 9M 2015 Russia International LUKOIL group production for 9M 2015 increased by 3.9*%: Increase in international production volumes +43% * Including…
  12. 3Q 2015 Financial Results – LUKOIL – slide 12
    Oil Production in Russia Oil production in Russia and net price * Natural oil production decline in Western Siberia is compensated by introduction of new capacities and prospective fields in traditional (Urals, Timan Pechora)…
  13. 3Q 2015 Financial Results – LUKOIL – slide 13
    Oil Price Dynamics and Financial Indicators - LUKOIL Compared with the International Majors Dynamics of financial indicators, % (9M 2015/9 2014) LUKOILs financial results dynamics are stronger than those of the majors in the face…
  14. 3Q 2015 Financial Results – LUKOIL – slide 14
    High Free Cash Flow per Barrel Free Cash Flow LUKOIL vs the majors FCF* per boe FCF* per boe, 9M 2015 International oil majors LUKOIL FCF per boe produced for LUKOIL is at the top of the range of international energy…
  15. 3Q 2015 Financial Results – LUKOIL – slide 15
    Operating Expenses 3q 2015 q-o-q * mln 9M 2015 y-o-y 1 887 -9% Total operating expenses 5 758 -24% 883 -12% Hydrocarbon extraction expenses 2 767 -22% 364 -5% Own refining expenses 1 081 -30% 56 17% Refining expenses at…
  16. 3Q 2015 Financial Results – LUKOIL – slide 16
    Effective Cost Control Ruble depreciation significantly reduced lifting costs in Russia: in 9M 2015 lifting costs decreased by 35% along with 40.3% drop in RUB/USD exchange rate Source: Companies financial statements. Majors…
  17. 3Q 2015 Financial Results – LUKOIL – slide 17
    SG&A and Transportation Expenses 3q 2015 q-o-q * mln 9M 2015 y-o-y 1 170 -11% Transportation expenses 3 783 -18% 640 -17% Selling, general and administrative expenses 2 075 -28% 1 810 -13% Total 5 858 -22% * 3Q 2015…
  18. 3Q 2015 Financial Results – LUKOIL – slide 18
    CAPEX* Structure 3q 2015 q-o-q ** mln 9M 2015 y-o-y 2 140 -26% Total capital expenditures 7 460 -36% 1 789 -23% Exploration and production 6 095 -34% 949 -30% Russia 3 472 -47% 840 -14% International 2 623 0% 297 -37%…
  19. 3Q 2015 Financial Results – LUKOIL – slide 19
    Capital Expenditures* Capital expenditures structure in 9M 2015 *including non-cash transactions and prepayments 20
  20. 3Q 2015 Financial Results – LUKOIL – slide 20
    Financial Results 3q 2015 q-o-q * mln 9M 2015 y-o-y 23 418 -17% Sales 74 712 -34% 1 887 -9% OPEX 5 758 -24% 4 600 -8% Taxes other than income tax, excise, export tariffs 14 745 -45% 1 272 -20% Income from operating…
  21. 3Q 2015 Financial Results – LUKOIL – slide 21
    9M 2015 Net Income Reconciliation 22
  22. 3Q 2015 Financial Results – LUKOIL – slide 22
    9M 2015 Cash Flow Reconciliation * *Net of cash disposed 23
  23. 3Q 2015 Financial Results – LUKOIL – slide 23
    Robust Financial Position LUKOIL effectively manages liquidity under limited access to capital markets Source: Companies financial statements. Majors average includes : ExxonMobil, Royal Dutch Shell, Chevron, ConocoPhillips,…
  24. 3Q 2015 Financial Results – LUKOIL – slide 24
    Detail Field Appraisal Success: Rakushechnoe Field (Northern Caspian) * * 9-bis Well 9 bis Rakushechnaya Well Rakushechnoe-9 Rakushechnoe-1 Transfer of all oil reserves in Oil discovery, 2014 Gas discovery, the…
  25. 3Q 2015 Financial Results – LUKOIL – slide 25
    Tsentralnaya Structure (Northern Caspian) Presidents of Russia and Kazakhstan Vladimir Putin and Nursultan Nazarbaev signed a protocol with changes to the agreement on delimitation of the floor of the northern part of the Caspian…
  26. 3Q 2015 Financial Results – LUKOIL – slide 26
    Sucsessful Exploration Alabushina Field (LUKOIL-Komi) In May 2014 within the Denisovsky license area prospective drilling on Severo-Ipatskaya structure confirmed the oil saturation of the reservoir with high productive qualities. A…
  27. 3Q 2015 Financial Results – LUKOIL – slide 27
    Pyakyahinsky Field VOSTOCHNO-MESSOYAKHSKY Gazprom Neft-Razvitie Degree of completion of the facilities: Purification facilities 90% completed CS YAMBURGSKAYA NAKHODKINSKOYE PYAKYAHINSKY YUZHNO- FIELD VANKOR FIELD Intagrated…
  28. 3Q 2015 Financial Results – LUKOIL – slide 28
    Cooperation with Bashneft in Timan-Pechora Oil Province Varandey oil export terminal Trebs and Titov field (Joint venture Bashneft-Polyus, LUKOIL 25,1%) demonstrated record high production in 3Q2015 (29 000 bbl/day) LUKOIL and…
  29. 3Q 2015 Financial Results – LUKOIL – slide 29
    Imilor Field Production, Kbpd 9M 2014 9M 2015 Newly acquired Russian asset Imilor Field demonstrates positive dynamics of production 30
  30. 3Q 2015 Financial Results – LUKOIL – slide 30
    Kama-Oil Production, Kbpd 9M 2014 9M 2015 Newly acquired Russian asset Kama-Oil demonstrates positive dynamics of production 31
  31. 3Q 2015 Financial Results – LUKOIL – slide 31
    Vostochno-Lambeyshorskoe Field Production, Kbpd 9M 2014 9M 2015 Vostochno-Lambeyshorskoe LUKOIL field in Russia demonstrates positive dynamics of production 32
  32. 3Q 2015 Financial Results – LUKOIL – slide 32
    Korchagin Field Production, Kbpd 9M 2014 9M 2015 LUKOIL Korchagin field in Russia demonstrates positive dynamics of production 33
  33. 3Q 2015 Financial Results – LUKOIL – slide 33
    Gas Discovery Offshore Romania Romania The Helena-1X well was Rapsodia drilled in 2014-2015 dry hole with traces of gas Marie The Daria-1X well was Helena Trident drilled in May-August Constana 2015 . some gas shows Lira…
  34. 3Q 2015 Financial Results – LUKOIL – slide 34
    West Qurna-2 Development Oil shipped mln bbl (2015 cumulative) Source: Bloomberg In 9M 2015 we shipped 31 tankers with 49,6 mln bbl of compensation oil (Europe, including ISAB 39%) LUKOILs focus on secure market access also…
  35. 3Q 2015 Financial Results – LUKOIL – slide 35
    Uzbekistan Aral Khauzak- Kandym Shady Gissar Natural gas production in Uzbekistan, Kboepd The increase in Uzbek gas production was achieved as a result of the 3 month ahead-of-schedule commissioning of the Kandym early…
  36. 3Q 2015 Financial Results – LUKOIL – slide 36
    In 2015 LUKOIL Will Complete Large Oil and Gas Refining Projects Nizhny Novgorod Perm Catalytic cracking - 2 Coker Capacity: 2.1 mln t/year Capacity: 2.0 mln t/year LAUNCH LAUNCH 2-nd line of LTCR unit Capacity: 0.7 mln t/year…
  37. 3Q 2015 Financial Results – LUKOIL – slide 37
    Downstream Segment Demonstrates Stable Operating Income in 2015 Operating Income * of Downstream**, bln 9M 2014 9M 2015 Despite a decrease in oil prices of almost 50% in 9M 2015, the Downstream business segment demonstrated…
  38. 3Q 2015 Financial Results – LUKOIL – slide 38
    International Downstream* Contributed Significantly to LUKOIL EBITDA in 2015 Average refining margin for 9M 2015 Operational highlights (9M 2015) (MED), per bbl Volume of refined products produced, mln t 16,5 Retail sales**, mln…
  39. 3Q 2015 Financial Results – LUKOIL – slide 39
    Nizhny Novgorod Refinery Catalytic cracking-2 was launched in October 2015 CapEx 1 bln Capacity mln t / year Catalytic cracking unit 2.0 Alkylation unit 0.33 Gasoline hydrotreating unit 1.1 Effect mln t / year Motor gasoline…
  40. 3Q 2015 Financial Results – LUKOIL – slide 40
    Perm Refinery Residue refining facility was launched in November 2015 CapEx 1.1 bln Capacity mln t / year Delayed coking unit 2.1 Middle distillates hydrotreating unit 1.5 Hydrogen production unit 0.03 Effect mln t / year…
  41. 3Q 2015 Financial Results – LUKOIL – slide 41
    Development of Cooperation with Gazprom LUKOIL: Bolshekhetskaya Depression Additional agreement to the gas-supply contract from LUKOIL fields was signed. The amounts of gas for 2017-2024 were fields defined. LUKOIL: Effects:…
  42. 3Q 2015 Financial Results – LUKOIL – slide 42
    LUKOIL Achievements in Corporate Governance LUKOIL is the leader in corporate governance In 2015 LUKOIL received the prize from World Finance magazine for best corporate governance in Russia 43
  43. 3Q 2015 Financial Results – LUKOIL – slide 43
    Environmental Safety is a LUKOIL Priority In April 2015 LUKOIL and World Wide Fund for Nature (WWF) signed a cooperation agreement The agreement provides for bilateral consultations, working meetings, exchange of information and…
  44. 3Q 2015 Financial Results – LUKOIL – slide 44
    Conclusions Keeping a high level of dividend payments Growth of Group production, stabilization of production in Russia Realization of incurred cost compensation plan on West Qurna-2 project Running efficient projects in…

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