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Capital Markets Day 2018 – Aker BP

Aker BP · Jan 16, 2018 · 82 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 2018 – Aker BP – slide 1
    CAPITAL MARKETS DAY 2018 AKER BP ASA 15 January 2018
  2. Capital Markets Day 2018 – Aker BP – slide 2
    CAPITAL MARKETS DAY 2018 Agenda Session 1: 13:00 14:30 Corporate strategy - Karl Johnny Hersvik, Chief Executive Officer Execute - Karl Johnny Hersvik, Chief Executive Officer Improve Per Harald Kongelf, SVP Improvement Q&A Coffee…
  3. Capital Markets Day 2018 – Aker BP – slide 3
    CAPITAL MARKETS DAY 2018 Todays speakers Karl Johnny Hersvik, Chief Executive Officer Per Harald Kongelf, SVP Improvement Karl Johnny Hersvik (born 1972) has been CEO of Aker BP since May 2014. Prior to joining Aker BP, he served as Per…
  4. Capital Markets Day 2018 – Aker BP – slide 4
    AKER BP ASA 2017 achievements Hess Norge AS acquisition Building on successful M&A track record Farm-down 10% in Valhall/Hod to Pandion Energy Added 134 mmboe in new reserves Delivered three PDOs to the authorities CAPEX…
  5. Capital Markets Day 2018 – Aker BP – slide 5
    AKER BP ASA Aker BP investment case Well positioned to be profitable across the market cycles Purely operating on the NCS: Low political risk and attractive fiscal regime Strong balance sheet and capital flexibility: USD 2.9 billion…
  6. Capital Markets Day 2018 – Aker BP – slide 6
    Corporate strategy Karl Johnny Hersvik Chief Executive Officer 7
  7. Capital Markets Day 2018 – Aker BP – slide 7
    SHAPING THE STRATEGY Oil market volatility calls for resilient strategy Steady growth in oil demand Cyclicality is the name of the game World oil demand Oil market balance OECD demand Non-OECD demand 2.5 Oversupply Undersupply Brent…
  8. Capital Markets Day 2018 – Aker BP – slide 8
    SHAPING THE STRATEGY NCS remains an attractive place to be 50% of oil & gas remains to be produced on the NCS CO2 emissions per unit oil & gas produced 206 16 Undiscovered resources Contingent resources 201 Reserves Sold and…
  9. Capital Markets Day 2018 – Aker BP – slide 9
    STRATEGIC AMBITION Create the leading offshore independent E&P company Safety Focused Cost leading Maximise shareholder value Growth Robust Entrepreneurial and flexible 10
  10. Capital Markets Day 2018 – Aker BP – slide 10
    CORPORATE STRATEGY Strategic toolbox Execute Reorganising the value chain Be at the forefront for with strategic partnerships and alliances digitizing E&P Safety Improve Value chain based on a shared Flexible business…
  11. Capital Markets Day 2018 – Aker BP – slide 11
    Safety CORPORATE STRATEGY Always prioritise safety 2018 HSSE forward agenda Safety is our number 1 priority Maintain safe and reliable operations with zero HSSE incidents and no cyber attacks with significant impact on performance…
  12. Capital Markets Day 2018 – Aker BP – slide 12
    Cost CORPORATE STRATEGY leading Targeting significant efficiency improvements Great savings possible requires new way of thinking Illustrative project economics (USD/boe) Development cost1 (USDbn) Break-even (USD/boe) Strategic 20…
  13. Capital Markets Day 2018 – Aker BP – slide 13
    Cost CORPORATE STRATEGY leading Improvement program showing tangible results rfugl Valhall Flank West Skogul Volume 197 56 10 (mmboe) +40% +7% -5% gross 275 60 10 CAPEX 10.6 7.2 1.6 (NOKbn) -20% -24% -3% gross 8.5 5.5…
  14. Capital Markets Day 2018 – Aker BP – slide 14
    Robust CORPORATE STRATEGY Robust balance sheet and strong dividend capacity Rapid deleveraging over the past two years 3x dividend cover last four quarters Leverage ratio (Net debt / EBITDAX) Dividend coverage 3.0x 2.8x 500 2.6x…
  15. Capital Markets Day 2018 – Aker BP – slide 15
    Robust CORPORATE STRATEGY Ambition to increase dividends in the coming years Rationale Aker BP ambition for dividend payments (USDm) Robust balance sheet and strong cash flow generation The Board proposes that annual dividend increases…
  16. Capital Markets Day 2018 – Aker BP – slide 16
    Flexible CORPORATE STRATEGY Efficient decision making and execution Enabled by an entrepreneurial and flexible organization From farm-down decision at 1 month Valhall/Hod to signed agreement From Skarv well shut-in due to 3…
  17. Capital Markets Day 2018 – Aker BP – slide 17
    Growth CORPORATE STRATEGY Profitable growth from existing portfolio 2018 CMD illustrative production potential, mboepd net Strong production base of operated assets 350 80% liquids / 20% gas 300 Reserves and resources Development…
  18. Capital Markets Day 2018 – Aker BP – slide 18
    Growth CORPORATE STRATEGY Year-end 2017 preliminary 2P reserves of 913 mmboe Development in 2P reserves (mmboe) Proven & probable reserves (2P), end 2017* Other Alvheim area 134 -58 1 7 126 111 Johan Sverdrup Skarv area 300 114…
  19. Capital Markets Day 2018 – Aker BP – slide 19
    Growth CORPORATE STRATEGY More than 300 mmboe added to the resource hopper in 2017 Development in 2C contingent resources (mmboe) Preliminary year-end 2017 2C contingent resources* 160 Garantiana 279 Gohta 229 NOAKA 22 -134 25…
  20. Capital Markets Day 2018 – Aker BP – slide 20
    Growth CORPORATE STRATEGY Ambition to grow through further M&A Building on a strong M&A track record Targeting new opportunities: Acquisition of Norwegian Merger between Det Acquisition of Norwegian Financially accretive…
  21. Capital Markets Day 2018 – Aker BP – slide 21
    Focused CORPORATE STRATEGY A focused portfolio on the NCS Skarv / rfugl Solid base performance and area upside potential Alvheim area High production efficiency and low operating cost Ivar Aasen Skarv / rfugl Production…
  22. Capital Markets Day 2018 – Aker BP – slide 22
    Maximize shareholder CORPORATE STRATEGY value Delivered superior shareholder return* last three years 2015 2016 2017 AKERBP-NO 39 AKERBP-NO 183 AKERBP-NO 35 NFX-US 20 CLR-US 124 BRENT 21 LUPE-SE 9 TLW-GB 89 STL-NO 15 FP-FR 3…
  23. Capital Markets Day 2018 – Aker BP – slide 23
    Execute Karl Johnny Hersvik Chief Executive Officer 24
  24. Capital Markets Day 2018 – Aker BP – slide 24
    EXECUTE Alvheim Area status Operated, 65%* working interest 2017 production of 70.9 mboepd net to Aker BP Increased compared to previous year due to new wells at Viper-Kobra and Volund infills High operational efficiency with well…
  25. Capital Markets Day 2018 – Aker BP – slide 25
    EXECUTE The Alvheim FPSO production and Alvheim area reserves Alvheim FPSO historical production (mboepd gross) Reserves vs. PDO (2P gross), mmboe 160 400 140 350 120 Remaining reserves 300 Produced to end 2016 100 +123% Reserves…
  26. Capital Markets Day 2018 – Aker BP – slide 26
    EXECUTE Alvheim Maximizing area recovery Development of discoveries in the area Skogul (2020), Gekko/Kobra East (2021), Caterpillar (2021) Near-infrastructure exploration Frosk, Rumpetroll, Deep Alvheim New exploration prospects…
  27. Capital Markets Day 2018 – Aker BP – slide 27
    EXECUTE Valhall & Hod status Operated, 90% working interest 2017 performance Production 34.7 mboepd (net) Stable opex/boe due to cost reductions Driving improvement and growth Drilling new wells from IP platform Plugging abandoned…
  28. Capital Markets Day 2018 – Aker BP – slide 28
    EXECUTE Valhall Flank West PDO submitted Tie-back to Valhall field center Unmanned wellhead platform Six production wells Six additional well slots allowing for future expansion Robust economics 2P reserves 60 mmboe gross / 54…
  29. Capital Markets Day 2018 – Aker BP – slide 29
    EXECUTE Valhall & Hod outlook Valhall & Hod gross resource base (bn boe) Valhall is a giant oil field with huge potential Initial in-place volume (HCIIP) 4 billion boe 0.3 Produced 1 billion boe to date 0.4 Current 2P reserves…
  30. Capital Markets Day 2018 – Aker BP – slide 30
    EXECUTE Skarv Area status Operated, 23.84% working interest 2017 production of 26.7 mboepd (net) Skarv FPSO is anchored to the seabed and has one of the worlds largest gas processing plants offshore Field developed with subsea wells…
  31. Capital Markets Day 2018 – Aker BP – slide 31
    EXECUTE PDO submitted for rfugl Reserves gross mmboe Two phased subsea tie-back to Skarv FPSO +40% 275 mmboe gross reserves 275 Gross CAPEX of NOK 8.5 bn (NOK 4.5 bn for phase 1) 197 Phase 1: Three new wells tied into the Skarv A…
  32. Capital Markets Day 2018 – Aker BP – slide 32
    EXECUTE Skarv area outlook Focus areas Improvement program targeting Skarv FPSO production cost < 7 USD/boe when rfugl reaches plateau Step-up in exploration activity to appraise attractive area resource potential and utilize…
  33. Capital Markets Day 2018 – Aker BP – slide 33
    EXECUTE Ula / Tambar status Operated, 80%* working interest 2017 performance Production 8.4 mboepd (net) High unit production cost Ongoing activities to improve productivity and cost Drilling two new Tambar wells Oda development…
  34. Capital Markets Day 2018 – Aker BP – slide 34
    EXECUTE Ula / Tambar outlook Tambar (55%) re-development underway Two new production wells New gas lift module Drilling started in October 2017 first oil in 2018 Will improve understanding of the reservoir Oda (15%) development…
  35. Capital Markets Day 2018 – Aker BP – slide 35
    EXECUTE Ivar Aasen and Hanz status Operated, 35%* working interest 2017 production of 18.1 mboepd (net) First oil from Ivar Aasen on December 24, 2016 Successful start up with production according to agreed delivery commitment to…
  36. Capital Markets Day 2018 – Aker BP – slide 36
    EXECUTE Ivar Aasen outlook Aker BPs laboratory for operational improvements Drilling of two water injectors in 2018 Hanz appraisal well planned in 2018 Area infill drilling opportunities identified, first IOR/infill campaign planned…
  37. Capital Markets Day 2018 – Aker BP – slide 37
    EXECUTE MMO activity to prolong field life Ula Tambar Valhall & Hod Oda tie-in to Ula Ula Power Tambar Artificial Lift Topside modifications for tie-in of Flank West platform Ula lifeboat project Flank North water Injection…
  38. Capital Markets Day 2018 – Aker BP – slide 38
    EXECUTE 5 operated rigs in 2018 Rig Q1 Q2 Q3 Q4 Maersk Tambar Ivar Aasen Hanz Interceptor Sublet to Oda license (infill) (production wells) (appraisal) Transocean Frosk Raudsen Valhall Arctic (EXP) (EXP) (pilot) Valhall…
  39. Capital Markets Day 2018 – Aker BP – slide 39
    Improve Per Harald Kongelf SVP Improvement 40
  40. Capital Markets Day 2018 – Aker BP – slide 40
    IMPROVE Improvement is a strategic imperative Aker BP is running a comprehensive improvement program to maximise flow efficiency and remove waste Reorganising the value chain Be at the forefront for with strategic partnerships and…
  41. Capital Markets Day 2018 – Aker BP – slide 41
    IMPROVE The problems with traditional supplier relationships Alliance Traditional Time horizon Long-term From project to project No. of suppliers Minimum sufficient Several Risk sharing & Aligned incentives and shared upside and…
  42. Capital Markets Day 2018 – Aker BP – slide 42
    IMPROVE Alliance principles One integrated organization Incentives shared risk and reward Early involvement Aker BP Overrun Cap Most Likely Cost Overrun Overrun DG0 DG1 DG2 DG3 Contractor A Evaluate Select Concept Mature…
  43. Capital Markets Day 2018 – Aker BP – slide 43
    IMPROVE Alliance delivery: Volund infill project The first project completed by the subsea alliance delivered 30% below target -33% -30% Traditional Market effects Budget subsea Unrealised risk Budget subsea Alliance MLC + Cost…
  44. Capital Markets Day 2018 – Aker BP – slide 44
    IMPROVE The alliance model continues to deliver Selected projects currently being worked by the Subsea Alliance (subsea scope only) Valhall Flank West Skogul -30% -35% -20% -24% DG2 DG3 Facility AFE Revised Facility Subsea…
  45. Capital Markets Day 2018 – Aker BP – slide 45
    IMPROVE Digitalization opens up for massive improvements Big data & analytics Cloud computing/storage Collaborative technology Virtual reality platforms Instant analysis of large data Highly scalable, variable-cost Employee…
  46. Capital Markets Day 2018 – Aker BP – slide 46
    IMPROVE It all starts with data Aker BP has established a data platform in cooperation with Cognite Design criteria for the data platform Open architecture End-user Scaleable, flexible and robust applications Operational Operations…
  47. Capital Markets Day 2018 – Aker BP – slide 47
    IMPROVE Digitalization in Aker BP Developing use cases on the data platform and progressing key digital initiatives Insert Insert image as image as Remote operations Ivar Aasen End-user fill fill applications Operational Operations…
  48. Capital Markets Day 2018 – Aker BP – slide 48
    IMPROVE The Framo story Sharing operational data with equipment manufacturer Framo is a leading supplier of pumping systems Framo is using Ivar Aasen as a case for exploring remote operations with live data access (free of charge)…
  49. Capital Markets Day 2018 – Aker BP – slide 49
    IMPROVE Supporting offshore operations using tablets and AR Cognite Operations Support Current features Computer vision to read equipment tags Live sensor data feed Locate failing equipment in interactive 3D model Shows all relevant…
  50. Capital Markets Day 2018 – Aker BP – slide 50
    IMPROVE Ivar Aasen digital operations model Aker BPs laboratory for developing the digital oil field Digital twin based on live data from the Cognite data platform Digital tools, e.g. Cognite Operations Support Integrate OEMs in…
  51. Capital Markets Day 2018 – Aker BP – slide 51
    IMPROVE PUSH Digital project execution Joint collaboration between Aker Solutions and Aker BP where the objective is to radically improve the way Accellerating the transition to fully offshore projects are engineered digitized field…
  52. Capital Markets Day 2018 – Aker BP – slide 52
    IMPROVE Data liberation and sharing will improve NCS competitiveness Current state Desired state High degree of rework in subsurface projects and limited Faster maturation of subsurface projects and faster learning ability to…
  53. Capital Markets Day 2018 – Aker BP – slide 53
    IMPROVE Improvement is a strategic imperative Aker BP is running a comprehensive efficiency improvement program Reorganising the value chain Be at the forefront for with strategic partnerships and alliances digitizing E&P…
  54. Capital Markets Day 2018 – Aker BP – slide 54
    CAPITAL MARKETS DAY 2018 Q&A 55
  55. Capital Markets Day 2018 – Aker BP – slide 55
    Grow Karl Johnny Hersvik Chief Executive Officer Gro Gunleiksrud Haatvedt SVP Exploration 56
  56. Capital Markets Day 2018 – Aker BP – slide 56
    GROW Johan Sverdrup development on track Drilling platform heavy lift at Klosterfjorden Project progressing according to plan: Construction was close to 80% complete by end 2017 Drilling platform modules integrated on barge in Norway…
  57. Capital Markets Day 2018 – Aker BP – slide 57
    GROW Targeting an area solution for NOAKA Statoil, LOTOS and Aker BP have agreed to establish an area forum to evaluate a joint area development for North of Alvheim* and Krafla/Askja (NOAKA) Two area solutions to be evaluated; PQ…
  58. Capital Markets Day 2018 – Aker BP – slide 58
    GROW Aker BP assessment of NOAKA Maturing of selected concept towards DG2 should be based on concept that facilitates for highest area resource recovery The NOAKA area is prospective with a lot of possible future tie-ins from…
  59. Capital Markets Day 2018 – Aker BP – slide 59
    GROW Project inventory provides flexibility Plateau Aker BP Gross Est. first Project Operator production Equity mmboe oil/gas (gross) Valhall IP wells Aker BP 90.0% 54 12 mboepd 2018 Boa infills 2017 Aker BP 57.6% 15 8 mboepd 2018…
  60. Capital Markets Day 2018 – Aker BP – slide 60
    GROW EXPLORATION Creating the leading explorer ENSURE ESTABLISH DISCOVER CONTINUOUS IMPROVE long term reserve new core areas 250 mmboe net positioning for data quality and replacement and to Aker BP in significant technology to…
  61. Capital Markets Day 2018 – Aker BP – slide 61
    GROW EXPLORATION NCS production stable to 2025 then what Decline after 2025 possible to mitigate NCS robust in several demand scenarios Postponement to 2025 by upsides in fields and discoveries Offshore less hit by global peak demand…
  62. Capital Markets Day 2018 – Aker BP – slide 62
    GROW EXPLORATION Loppa North Exploration thriving Loppa South on the NCS Barents Sea SE Aker BP 2018 exploration campaign Skewed towards frontier prospects 12 exploration wells Risked pre drill estimates ranging from Norwegian Sea…
  63. Capital Markets Day 2018 – Aker BP – slide 63
    GROW EXPLORATION Barents Sea: A long term game Shenzhou Korpfjell Grspett Gemini N Disappointing exploration wells in 2017 Koigen Scarecrow WISTING Continued exploration on new Bone plays/areas in 2018 Brselv Stangnestind…
  64. Capital Markets Day 2018 – Aker BP – slide 64
    GROW EXPLORATION Northern areas Grspett Shenzhou Scarecrow - Exploration campaign 2018 Stangnestind Svanefjell Barents Sea Gjksen Stangnestind megaclosure, new play Svanefjell possible high-impact well Four partner wells,…
  65. Capital Markets Day 2018 – Aker BP – slide 65
    GROW EXPLORATION North Sea: Increasing value of producing assets - Establishing new fields Raudsen Twofold Exploration task: Deliver high value volumes to Aker BP 1 production hubs Alvheim Frosk Ula Valhall Hornet 2 Reveal…
  66. Capital Markets Day 2018 – Aker BP – slide 66
    GROW EXPLORATION The producing assets how to create high value Exploration within tie-in radius to producing assets Even small discoveries close to existing fields create large values ULA Require unified seismic data sets covering…
  67. Capital Markets Day 2018 – Aker BP – slide 67
    I K J GROW EXPLORATION E Summary 2018 exploration wells D H Aker BP Pre-drill License Prospect name Operator share mmboe* Time PL340 Frosk Aker BP 65 % 3 - 21 Q1 A PL790 Raudsen Aker BP 30 % 9 - 74 Q1 B PL839 Kvitungen…
  68. Capital Markets Day 2018 – Aker BP – slide 68
    Finance Alexander Krane Chief Financial Officer 69
  69. Capital Markets Day 2018 – Aker BP – slide 69
    FINANCE Funding our business Financial strengths Strong cash flow generation in the years to come USD 2.9 billion in liquidity provides capital flexibility Attractive organic reinvestment opportunities Ownership Cash flow…
  70. Capital Markets Day 2018 – Aker BP – slide 70
    FINANCE Debt structure Pro-forma Q4-17 debt capacity and drawings (USDm) Debt maturity profile (USDbn) 400 6 155 4.0 255 RBL - drawn (LIBOR + 2.0 - 3.0%) 1 500 Bank Term Loan (LIBOR + 1.5 - 2.0%) 2 670 US bond (6.0% fixed) 3.0…
  71. Capital Markets Day 2018 – Aker BP – slide 71
    FINANCE Tax regime supportive of growth NCS tax system and implications for Aker BP Tax-adjusted net debt (USDbn) prelim. end 2017 Key attractions of the NCS tax system 90% of investments recovered over 6 years 3.2 2.0 OPEX,…
  72. Capital Markets Day 2018 – Aker BP – slide 72
    FINANCE Financial risk management Hedging Overview of current commodity hedges Commodity Hedges 2018 2019 Hedging policies in place to mitigate foreign exchange and commodity risks % Hedged of total 20% - oil production Foreign…
  73. Capital Markets Day 2018 – Aker BP – slide 73
    FINANCE 2018 guidance Item 2018 guidance 2018 Production 155 160 mboepd 2018 Production cost USD 12 per boe 2018 CAPEX USD 1.3 billion 2018 EXPEX USD 350 million 2018 decommissioning USD 350 million expenditures Note:…
  74. Capital Markets Day 2018 – Aker BP – slide 74
    FINANCE 2018 guidance - production and production cost Key activities Comparison of operated hubs, 2018 vs 2017 (9m) 2018 production expected between 155 160 mboepd 80% liquids / 20% gas 40 2017 production cost expected to average 12…
  75. Capital Markets Day 2018 – Aker BP – slide 75
    FINANCE 2018 guidance - CAPEX Key activities Split by main project Alvheim area Drilling Kameleon infill South and Volund sidetrack North Alvheim area Skogul: Construction of subsea systems and flowlines Johan Sverdrup Valhall area…
  76. Capital Markets Day 2018 – Aker BP – slide 76
    FINANCE 2018 guidance EXPEX and Decommissioning Exploration expenditures Decommissioning expenditures Drilling of 12 exploration wells (7 operated) Continuous P&A activity on Valhall until 2020 Field evaluation costs (NOAKA, Hod…
  77. Capital Markets Day 2018 – Aker BP – slide 77
    FINANCE Cash flow outlook 2018 Illustrative 2018 break-even prices 2018 cash flow illustration based on mid-point of Realized Hydrocarbon Price (USD/boe) 50 60 70 80 production guidance range Production cost (USD/boe) (12) (12) (12)…
  78. Capital Markets Day 2018 – Aker BP – slide 78
    Concluding remarks Karl Johnny Hersvik Chief Executive Officer 79
  79. Capital Markets Day 2018 – Aker BP – slide 79
    CONCLUDING REMARKS Aker BP investment case Well positioned to be profitable across the market cycles Purely operating on the NCS: Low political risk and attractive fiscal regime Strong balance sheet and capital flexibility: USD 2.9…
  80. Capital Markets Day 2018 – Aker BP – slide 80
    CONCLUDING REMARKS Priorities going forward Safe and efficient operations Execute Excellent project delivery Relentless focus on cost reductions and Safety productivity gains Improve Mature projects to below 35 USD/boe…
  81. Capital Markets Day 2018 – Aker BP – slide 81
    CAPITAL MARKETS DAY 2018 Q&A 82
  82. Capital Markets Day 2018 – Aker BP – slide 82

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