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Capital Markets Day 2017 London – Galp Energia

Galp Energia · Feb 21, 2017 · 69 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. Capital Markets Day 2017 London – Galp Energia – slide 1
    CAPITAL MARKETS DAY 2017 L o n d o n , Fe b r u a r y 2 1 1 Capital Markets Day February 21, 2017
  2. Capital Markets Day 2017 London – Galp Energia – slide 2
    STRATEGY OVERVIEW
  3. Capital Markets Day 2017 London – Galp Energia – slide 3
    Key takeaways Competitive Unique growth Strong financial Building Commitment world-class profile within position entering optionality and to shareholder assets the industry a new cash cycle flexibility in an value creation…
  4. Capital Markets Day 2017 London – Galp Energia – slide 4
    Growth momentum building up Execute and extract focus Explore and build optionality Concluding remarks 5 Capital Markets Day February 21, 2017
  5. Capital Markets Day 2017 London – Galp Energia – slide 5
    2016: A year of strong execution Operational Financial Portfolio Partnership Performance Performance Management Development Solid upstream Benefiting from Sale of stake Petrobras strategic delivery integrated profile in gas…
  6. Capital Markets Day 2017 London – Galp Energia – slide 6
    Delivering on our commitments WI production (kboepd) Ebitda RCA (m) Capex (m) Net debt to Ebitda CMD 2016 guidance 2016 actual 68 1,411 1,300 2.0x 1,218 1.0x 1,300 64 62 1,200 1,100 7 Capital Markets Day February…
  7. Capital Markets Day 2017 London – Galp Energia – slide 7
    Galps 3Es approach Execute Extract Explore Focus Unlock more Screen new on delivery value from opportunities and and returns current portfolio portfolio management 8 Capital Markets Day February 21, 2017
  8. Capital Markets Day 2017 London – Galp Energia – slide 8
    Growth momentum building up Execute and extract focus Explore and build optionality Concluding remarks 9 Capital Markets Day February 21, 2017
  9. Capital Markets Day 2017 London – Galp Energia – slide 9
    Supportive outlook for oil and LNG Liquids supply gap (mmbpd) LNG supply gap (mtpa) 120 500 0 0 Demand Producing Under Supply gap Demand Onstream Under Supply gap 2025 fields development 2025 2025 projects construction 2025…
  10. Capital Markets Day 2017 London – Galp Energia – slide 10
    World-class upstream portfolio Upstream ROIC vs. portfolio breakeven (%, /bbl) Average Peer company…
  11. Capital Markets Day 2017 London – Galp Energia – slide 11
    Focus on current portfolio execution 6 Lula/Iracema 3 Lula/Iracema Coral / Mamba Lula West 2 Block 14/14k 2 Block 32 Atapu 2 2 Berbigo, Atapu 1 Carcar 1 Spia Jpiter In Production 2017-21 Deployment 2021+ Deployment Ensure…
  12. Capital Markets Day 2017 London – Galp Energia – slide 12
    Delivering and improving Lula/Iracema project Seven installed FPSOs, five in plateau Solid Overall project capex c.70% realised execution 2016 exit production of c.80 kboepd Economics Significant reduction in D&C time…
  13. Capital Markets Day 2017 London – Galp Energia – slide 13
    Mozambique: One of the most competitive LNG regions LNG net present landed cost to Asia (/ton)1 Quality and scalability 2,200 U.S. of resource base Favourable time to market to meet LNG demand 1,600 Mozambique Increase…
  14. Capital Markets Day 2017 London – Galp Energia – slide 14
    Delivering growth from execution and extraction Working interest production from current portfolio (kboepd) 15-20% 2016-21 CAGR 23% 2010-16 CAGR 68 20 2010 2016 2021 2021+ 15 Capital Markets Day February 21,…
  15. Capital Markets Day 2017 London – Galp Energia – slide 15
    Challenging times for the European refining industry European refining capacity (mmbpd, %) Crude runs Excess capacity Utilisation rate (RHS) 18 90% Global demand growth shift to Asia/LatAm/Africa Lighter crude and 12 60%…
  16. Capital Markets Day 2017 London – Galp Energia – slide 16
    Solid contribution expected from downstream businesses Refining & Marketing Gas & Power Ensure high reliability Build up NG & LNG supply portfolio of refining system Downstream Ebitda target Focus on higher efficiency Increase…
  17. Capital Markets Day 2017 London – Galp Energia – slide 17
    New cash cycle provides future optionality Free cash flow and cash breakeven (m, /bbl) Free cash flow Avg. cash breakeven (RHS) 1,000 100 2016-18 65/bbl 500 50…
  18. Capital Markets Day 2017 London – Galp Energia – slide 18
    Growth momentum building up Execute and extract focus Explore and build optionality Concluding remarks 19 Capital Markets Day February 21, 2017
  19. Capital Markets Day 2017 London – Galp Energia – slide 19
    Key takeaways from scenario planning Oil & Gas Transition to a Energy demand Smart and Technology Increasing maintaining low carbon growth in Africa, connected innovation and electrification important role, economy LatAm and Asia…
  20. Capital Markets Day 2017 London – Galp Energia – slide 20
    Resilience in a complex and uncertain world Maintaining Adapt and integrate Innovative New culture: a competitive downstream and differentiated Adapt to a upstream portfolio businesses business new normal Feed upstream funnel New…
  21. Capital Markets Day 2017 London – Galp Energia – slide 21
    Growth momentum building up Execute and extract focus Explore and build optionality Concluding remarks 22 Capital Markets Day February 21, 2017
  22. Capital Markets Day 2017 London – Galp Energia – slide 22
    Focus on capital allocation diversification and competitive TSR Long-term capital allocation New business models and low carbon solutions Oil & Gas businesses to remain core activities Oil & Gas businesses Start…
  23. Capital Markets Day 2017 London – Galp Energia – slide 23
    Positioned to capture future growth opportunities Growth & value story Optionality & flexibility Financial priorities 15-20% Production CAGR 2016-21 FCF0 During 2018 55/bbl Disciplined Capex allocation 20% Ebitda CAGR 2016-21…
  24. Capital Markets Day 2017 London – Galp Energia – slide 24
    FINANCIAL OUTLOOK
  25. Capital Markets Day 2017 London – Galp Energia – slide 25
    2016 in review Executing a disciplined growth plan Concluding remarks 26 Capital Markets Day February 21, 2017
  26. Capital Markets Day 2017 London – Galp Energia – slide 26
    Strengthening financial position 2016 Change in net debt (m) 1,500 21 243 1,000 389 1,449 387 500 449 773 806 0 (357) 134 -500 Ebit (IFRS) Working Net interest Pre-expansion Dividends Pre-expansion Expansion FCF…
  27. Capital Markets Day 2017 London – Galp Energia – slide 27
    2016 results supported by strong upstream performance Profit & Loss RCA (m) Balance Sheet (m) 2016 YoY 2016 YoY Turnover 13,119 (15%) Net fixed assets 7,721 (171) Ebitda 1,411 (8%) Work in progress 2,650 573 E&P 494 40% R&M 576…
  28. Capital Markets Day 2017 London – Galp Energia – slide 28
    2016 in review Executing a disciplined growth plan Concluding remarks 29 Capital Markets Day February 21, 2017
  29. Capital Markets Day 2017 London – Galp Energia – slide 29
    Macro assumptions Brent price (/bbl) Benchmark refining margin (/bbl) 2016-20 plan 2017-21 plan 70 55 65 50 60 3.1 44 2.5 2.4 2.4 2.3 2.2 2016 2017E 2018E 2019E 2020E 2021E 2016 2017E 2018E 2019E 2020E 2021E 30…
  30. Capital Markets Day 2017 London – Galp Energia – slide 30
    Disciplined capital allocation Annual average capex (bn) Upstream Downstream c.(20%) 1.1 bn 0.8-1.0 bn Last 5 years 2017-21 plan 2017 Capex guidance: 1.0-1.2 bn 31 Capital Markets Day February 21, 2017
  31. Capital Markets Day 2017 London – Galp Energia – slide 31
    Project roll-over and efficiencies to reduce upstream capex Change in upstream capex (bn) Upstream 2017-21 capex breakdown Brazil Mozambique Angola E&A c.(30%) c.5 bn c.60% committed 2016-20 Efficiency + Project…
  32. Capital Markets Day 2017 London – Galp Energia – slide 32
    Sustainable growth with Group Ebitda CAGR 2016-21 of c.20% Contribution per business RCA (m) Upstream Ebitda Downstream Ebitda Associates 3,500 Upstream technical costs expected to be below 20/boe after 2020 Spread over…
  33. Capital Markets Day 2017 London – Galp Energia – slide 33
    2018+: Entering a new cash cycle Post dividend free cash flow1 (m) Brent flat 55/bbl 1,500 Assumes a 0.50/sh flat dividend during the period 500 FCF positive during 2018 at 55/bbl, with Brazil turning positive during 2017…
  34. Capital Markets Day 2017 London – Galp Energia – slide 34
    2016 in review Executing a disciplined growth plan Concluding remarks 35 Capital Markets Day February 21, 2017
  35. Capital Markets Day 2017 London – Galp Energia – slide 35
    Ensuring growth while maintaining a strong balance sheet Solid financial Optimising cost Significant Continue Cash flow position structure and growth from disciplined inflection supported by improving profitable capital allocation…
  36. Capital Markets Day 2017 London – Galp Energia – slide 36
    UPSTREAM GROWTH
  37. Capital Markets Day 2017 London – Galp Energia – slide 37
    A clear upstream strategy Upstream strategy Execute Extract Explore Build operating capabilities R&D to promote upstream growth People Stakeholder management 38 Capital Markets Day February 21, 2017
  38. Capital Markets Day 2017 London – Galp Energia – slide 38
    2016 key achievements Focus on execution and value extraction Selective exploration strategy Sustaining profitable growth 39 Capital Markets Day February 21, 2017
  39. Capital Markets Day 2017 London – Galp Energia – slide 39
    Key 2016 milestones achieved Production 48% higher YoY Production growth Two new FPSOs deployed in Brazil 26 wells drilled Cost 23% decrease YoY in D&C average time reduction Normalised unit opex at 6.3/boe, lower 14% YoY…
  40. Capital Markets Day 2017 London – Galp Energia – slide 40
    Delivering transformational growth TODAY 90 11 129 2281 WI production Sanctioned Net installed Upstream (kboepd) projects capacity (kbpd) staff 2007 17 3 29 62 41 Capital Markets Day February 21, 2017 1Plus c.150 corporate…
  41. Capital Markets Day 2017 London – Galp Energia – slide 41
    2016 key achievements Focus on execution and value extraction Selective exploration strategy Sustaining profitable growth 42 Capital Markets Day February 21, 2017
  42. Capital Markets Day 2017 London – Galp Energia – slide 42
    Expected production growth based on robust resource base 2016 2P reserves (mmboe) 2016 2C resources (mmboe) Angola Brazil Mozambique 673 1,320 43 Capital Markets Day February 21, 2017 Source: All figures are based on DeGolyer…
  43. Capital Markets Day 2017 London – Galp Energia – slide 43
    Projects execution on track Iracema Jpiter N. (2015) SOUTH AMERICA Iracema Carcar S. (2014) Lula NE Lula Lula Berbigo/ Atapu 2 (2013) Central North Sururu Lula Pilot Lula Lula Lula Ext. Atapu 1 Spia Lula (2010) Alto South…
  44. Capital Markets Day 2017 London – Galp Energia – slide 44
    De-risking replicant FPSO execution Hulls Topsides & Integration Construction works partially Leveraging best performing transferred to Asia shipyards in Brazil Maintaining estimated Consortium assuming direct Partial scope of…
  45. Capital Markets Day 2017 London – Galp Energia – slide 45
    Lula/Iracema: Strong productivity supporting project ramp-up Average production per well (kboepd)1 FPSO ramp-up period ( months) 18 30 15 23 13 13 10 Brazilian pre-salt Lula/Iracema FPSO1 FPSO2 FPSO3 FPSO4 FPSO5…
  46. Capital Markets Day 2017 London – Galp Energia – slide 46
    Lula/Iracema: Increasing operational efficiency to maximise returns D&C average time ( days) D&C spread rate (m/day) Plateau period ( years) (64%) c.(15%) 7 239 1.00 0.85 c.20% 3 85 75 2010 2016 LT ambition Current…
  47. Capital Markets Day 2017 London – Galp Energia – slide 47
    Lula/Iracema: Working towards 40% recovery factor Expected oil recovery factor (%) 40% Reservoir Infill drilling 30% 28% Seismic 4D WAG CO2 Subsea Separation Boosting Seawater treatment Topsides CO2 handling Processing…
  48. Capital Markets Day 2017 London – Galp Energia – slide 48
    Greater Iara: Enhancing development of key pre-salt project BM-S-11 Berbigo/Sururu/Atapu Optimising PoD for three different accumulations Unitisation negotiations ongoing Production to start in 2018 Further appraisal in Sururu…
  49. Capital Markets Day 2017 London – Galp Energia – slide 49
    Preparing next wave of pre-salt developments BM-S-8 Carcar BM-S-24 Spia East/Jpiter Statoil as new operator of the block Spia unitisation agreement expected to be submitted in 2017 Bid round for open area expected during 2017…
  50. Capital Markets Day 2017 London – Galp Energia – slide 50
    Mozambique: A large scale integrated project Mamba onshore Coral offshore 2x5 mtpa LNG trains (1st phase) 1 FLNG (3.3 mtpa) World-class LNG project due to quality Accelerating time to market and scalability of resource base…
  51. Capital Markets Day 2017 London – Galp Energia – slide 51
    Angola: Production increase with Kaombo start-up Block 32 and Block 14/14k Two FPSOs expected to start production in 2018 Drilling campaign proceeding in Kaombo, Block 32, with 14 out of 59 wells drilled Kaombo start-up more…
  52. Capital Markets Day 2017 London – Galp Energia – slide 52
    2016 key achievements Focus on execution and value extraction Selective exploration strategy Sustaining profitable growth 53 Capital Markets Day February 21, 2017
  53. Capital Markets Day 2017 London – Galp Energia – slide 53
    Regional focused exploration strategy Galp current exploration projects PORTUGAL 7 Atlantic margin focus S. TOM AND PRNCIPE 4 Leverage competitive 2 NAMIBIA advantages and synergies with current portfolio BRAZIL 16 5…
  54. Capital Markets Day 2017 London – Galp Energia – slide 54
    Planned exploration activities Alentejo basin Potiguar basin BM-S-8 Blocks 5, 6, 11, 12 (Portugal) (Brazil) (Brazil) (So Tom and Prncipe) First ever deepwater well Broadband 3D seismic Guanxuma to Expanded presence to be drilled…
  55. Capital Markets Day 2017 London – Galp Energia – slide 55
    2016 key achievements Focus on execution and value extraction Selective exploration strategy Sustaining profitable growth 56 Capital Markets Day February 21, 2017
  56. Capital Markets Day 2017 London – Galp Energia – slide 56
    3Es strategy paying off Working interest production (kboepd) CAGR 2016-21 15%-20% (sanctioned projects) 48% 90-95 68 46 17 2007 2015 2016 Net incremental Maintenance 2017E 2021E production activities Note:…
  57. Capital Markets Day 2017 London – Galp Energia – slide 57
    Key levers for profitability Delivering production CAGR 2016-21 of 15%-20% from BM-S-11 and Block 32 Execute Developing Coral and maturing Mamba and Carcar for FID Enhance project development through operational and cost…
  58. Capital Markets Day 2017 London – Galp Energia – slide 58
    CLOSING REMARKS
  59. Capital Markets Day 2017 London – Galp Energia – slide 59
    Positioned to capture future growth opportunities Growth & value story Optionality & flexibility Financial priorities 15-20% Production CAGR 2016-21 FCF0 During 2018 55/bbl Disciplined Capex allocation 20% Ebitda CAGR 2016-21…
  60. Capital Markets Day 2017 London – Galp Energia – slide 60
    APPENDIX
  61. Capital Markets Day 2017 London – Galp Energia – slide 61
    Ebitda sensitivity to macro variables Galp assumptions 2017E 2018E 2019E 2020E 2021E Brent price (/bbl) 50 55 60 65 70 Benchmark refining margin (/bbl)1 2.5 2.4 2.4 2.3 2.2 EUR:USD 1.10 1.10 1.10 1.10 1.10 Ebitda…
  62. Capital Markets Day 2017 London – Galp Energia – slide 62
    Key indicators on Galps debt Debt indicators Debt reimbursement (m) Profile YE2016 Profile YE2015 2015 2016 900 Gross debt 3.6 bn 2.9 bn c.70% Cash and equivalents 1.1 bn 1.0 bn Net debt 2.4 bn 1.9 bn 600 Net debt considering…
  63. Capital Markets Day 2017 London – Galp Energia – slide 63
    Galps reserves and resources Reserves and resources (mmboe)1 Reserves 2015 2016 % Chg. 1P 276 274 (1%) 2P 701 673 (4%) 3P 960 927 (3%) Contingent resources 2015 2016 % Chg. 1C 307 300 (2%) 2C 1,342 1,320 (2%) 3C 3,025…
  64. Capital Markets Day 2017 London – Galp Energia – slide 64
    Galps shareholding structure Free Float Amorim Energia Parpblica North America RoW Europe 33% 40% FREE FLOAT 53% 60% 7% 7% 65 Capital Markets Day February 21, 2017 Note: Parpblicas 7% stake placed through exchangeable…
  65. Capital Markets Day 2017 London – Galp Energia – slide 65
    A committed and experienced team Chief Executive Officer Carlos Gomes da Silva Over 21 years of experience in Oil & Gas. Board executive for more than 12 years in the beverage and energy industries. Galp Board member since…
  66. Capital Markets Day 2017 London – Galp Energia – slide 66
    Galps corporate sustainability internationally recognised 67 Capital Markets Day February 21, 2017
  67. Capital Markets Day 2017 London – Galp Energia – slide 67
    Acronyms Number Chg. Change mmbpd Million barrels of oil per day (or USD) Dollar CMD Capital Markets Day MoU Memorandum of Understanding % Percentage CO2 Carbon dioxide mtpa Million tonnes per annum & And COO Chief Operating Officer…
  68. Capital Markets Day 2017 London – Galp Energia – slide 68
    69 Capital Markets Day February 21, 2017
  69. Capital Markets Day 2017 London – Galp Energia – slide 69
    www.galp.com investor.relationsgalp.com 70 Capital Markets Day February 21, 2017

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