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Capital Markets Day 2018 – Galp Energia

Galp Energia · Feb 20, 2018 · 47 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 – Galp Energia – slide 1
    1 Capital Markets Day February 20, 2018
  2. Capital Markets Day 2018 – Galp Energia – slide 2
  3. Capital Markets Day 2018 – Galp Energia – slide 3
    Key takeaways Solid financial Developing Working on the Commitment position entering a resilient next growth to shareholder into a new and competitive cycle (2020+) value creation cash cycle portfolio 4 Capital Markets Day…
  4. Capital Markets Day 2018 – Galp Energia – slide 4
    2017 commitments delivered WI production Record production (100 kboepd) c.93 kboepd Project Coral South FLNG FID execution Downstream oil and gas Strong downstream performance +4% volumes Ebitda Positive Group post-dividend…
  5. Capital Markets Day 2018 – Galp Energia – slide 5
    Oil & Gas to maintain a key role while renewables growing Total primary energy demand mix in 2040 by scenario (bn toe) Energy demand expected to grow under 19.9 19.3 any scenario 18.2 17.8 17.6 15.1 13.8 14.1 Galp developed…
  6. Capital Markets Day 2018 – Galp Energia – slide 6
    A clear strategy Promote transition to lower carbon businesses Optimise and Offer innovative expand presence and differentiating in the downstream solutions market Grow Technology a profitable Innovation and resilient…
  7. Capital Markets Day 2018 – Galp Energia – slide 7
    Top quartile upstream portfolio Portfolio breakeven (/bbl) 1ST QUARTILE 2ND QUARTILE 3RD QUARTILE 4TH QUARTILE Exposure to world-class assets c.25 /bbl Maintain portfolio resilience and competitiveness 45/bbl 55/bbl…
  8. Capital Markets Day 2018 – Galp Energia – slide 8
    Brazilian pre-salt: Cornerstone of future growth Focus on BM-S-11 De-risking Sizeable Fostering FPSO execution existing resources new and development high quality with low cost opportunities enhancement portfolio base 9…
  9. Capital Markets Day 2018 – Galp Energia – slide 9
    Mozambique: Developing a world-class LNG project Global LNG supply and demand (mtpa) Oversupplied Project sanctioning needed to LNG market meet LNG demand Time to market and scalability advantage 600 Coral South FLNG under…
  10. Capital Markets Day 2018 – Galp Energia – slide 10
    Grow a competitive and resilient upstream portfolio Working interest production (kboepd) Execute and extract focus / Accelerate de-risking phase 25 - 30 Gas weight (%) c.150 kboepd Balance exposure to gas Selectively…
  11. Capital Markets Day 2018 – Galp Energia – slide 11
    Adapting Refining & Marketing to market changes Refining Marketing Deliver efficiency and enhanced Reinforce market share conversion initiatives in Iberia Prepare for IMO global cap Improve convenience and customer experience…
  12. Capital Markets Day 2018 – Galp Energia – slide 12
    Developing a sustainable Gas & Power business NG & LNG portfolio Marketing offer Adapt supply basket to Increase market share market trends in Iberia Expand trading activities New business segments New market opportunities /…
  13. Capital Markets Day 2018 – Galp Energia – slide 13
    Building portfolio optionality Low carbon solutions New business models Innovation & digitalisation Develop a portfolio of renewable Enhance client centricity Promote digital mindset energy Focus on innovative technologies…
  14. Capital Markets Day 2018 – Galp Energia – slide 14
    Growing sustainably Eco-efficient and Climate integrated into safe operations strategy Promote safety above benchmark, Applying internal carbon price and 50% reduction target in 20181 (40/tCO2e) sensitivity Leading environmental…
  15. Capital Markets Day 2018 – Galp Energia – slide 15
    Turning into a sustainable FCF generator Financial outlook FCF growth from a highly competitive and resilient portfolio Ability to fund further profitable growth 1.6 bn 1.0 bn 0.6 bn 2017 2020E 2025+ Cash c.25…
  16. Capital Markets Day 2018 – Galp Energia – slide 16
    Disciplined capital allocation Dividends Prioritizing reinvestment in value accretive opportunities Oil & Gas +10% businesses 0.55/sh1 Oil & Gas to remain core and starting to develop low carbon Dividend now considered at…
  17. Capital Markets Day 2018 – Galp Energia – slide 17
    Positioned to deliver unique growth and value 1.0 bn c.25 /bbl 15% by 2020 2020+ target Organic FCF Group cash ROACE breakeven 2018-2020 milestones 2020+ goals Value proposition Execute/ From current portfolio Deliver Next…
  18. Capital Markets Day 2018 – Galp Energia – slide 18
  19. Capital Markets Day 2018 – Galp Energia – slide 19
    Beating our 2017 guidance Guidance Actual E&P 913 m CMD17 +85% YoY Higher production and oil price Ebitda 1.5 - 1.6 bn 1.9 bn R&M 785 m +36% YoY Capex 1.0 - 1.2 bn 1.0 bn Supportive refining margin and marketing Net…
  20. Capital Markets Day 2018 – Galp Energia – slide 20
    Positive post-dividend cash flow during 2017 2017 Cash flow (m) 72 449 231 2,078 2,078 754 1,326 423 572 149 Ebit (IFRS) + Working Capital Net interests Pre-expansion Pre-expansion FCF Expansion FCF Dividend…
  21. Capital Markets Day 2018 – Galp Energia – slide 21
    Organic growth to support CFFO CFFO (m) Group Ebitda expected 2,000 at c.1.8 1.9 bn in 2018 Upstream CFFO with CAGR 2017-20 of c.30% Downstream CFFO of 0.8 - 0.9 bn 0 during the period 2017 2018E 2020E Brent (/bbl) 54…
  22. Capital Markets Day 2018 – Galp Energia – slide 22
    Capex to average c.1 bn p.a. Annual average net capex (m) Upstream 2018-20 capex breakdown 1,500 750 0 Last 3 years 2018-20E Upstream Downstream Lower carbon Brazil Mozambique Angola Exploration & Appraisal 2018…
  23. Capital Markets Day 2018 – Galp Energia – slide 23
    Cash generation allowing for optionality Cash sources and uses (m) Post-dividend FCF2 (m) 5,000 500 Dividend1 CFFO net interests 0 minorities Capex 0 -500 Sources 2018-20E Uses 2018-20E 2017 2018E 2019E 2020E…
  24. Capital Markets Day 2018 – Galp Energia – slide 24
    Key takeaways Superior growth Disciplined capital Net debt to Ebitda Organic FCF 1 bn from competitive allocation
  25. Capital Markets Day 2018 – Galp Energia – slide 25
    26 Capital Markets Day February 20, 2018
  26. Capital Markets Day 2018 – Galp Energia – slide 26
    Delivering on commitments and strengthening portfolio 2017 WI production of 93 kboepd, up 38% YoY Execute Focus on delivery FID on Coral South project Unlock more Enhancing Lula and Iracema development Extract value from…
  27. Capital Markets Day 2018 – Galp Energia – slide 27
    Robust base of high quality resources 2P Reserves (mmboe) 2C Resources (mmboe) +2% 1,352 1,320 +11% 748 673 2016 Production Revision/Additions 2017 2016 Revision/Additions Revision/ Additions 2017 Brazil Angola…
  28. Capital Markets Day 2018 – Galp Energia – slide 28
    Unique growth from identified projects Working interest production (kboepd) Lula North (2018) Berbigo/Sururu (2018/19) 2018 - 2020 CAGR 8% Lula Ext. South (2018) Kaombo South (2019) Kaombo North (2018) Atapu 1 (2019)…
  29. Capital Markets Day 2018 – Galp Energia – slide 29
    Execution of Lula and Iracema on track Start-up of first replicant unit Current recovery factor of 31% 7 units producing, with 6 Expected avg. plateau period at plateau of 4 years 2 additional FPSOs to start-up in 2018…
  30. Capital Markets Day 2018 – Galp Energia – slide 30
    with increased focus on enhancing extraction Lula and Iracema recovery factor evolution Improved oil recovery 60% Infill drilling activities 50% Processing specifications Expected recovery factor Reservoir management 40%…
  31. Capital Markets Day 2018 – Galp Energia – slide 31
    The next pre-salt growth project Greater Iara FPSOs under construction with production to start at Berbigo Ongoing drilling campaign and optimising PoD for three different accumulations EWT and further appraisal in Sururu…
  32. Capital Markets Day 2018 – Galp Energia – slide 32
    Carcar: top tier project driving 2020+ growth Deepwater development projects competitiveness 45 Accessing Carcar North with a 20% interest and 40 increasing BM-S-8 stake to 17% 35 30 Technical Costs At least 2 bn bbl of…
  33. Capital Markets Day 2018 – Galp Energia – slide 33
    Further pre-salt contribution from identified projects BM-S-24 Spia East and Jpiter Unitisation process between Spia and Spia East expected to be concluded in 2018 Production from the unitised area to start in 2021, with FPSO…
  34. Capital Markets Day 2018 – Galp Energia – slide 34
    Mozambique: developing a world-class gas project Coral South Mamba onshore FLNG with 3.4 mtpa capacity, starting the Enhancing the development concept developments of Rovumas discoveries towards a robust and competitive solution…
  35. Capital Markets Day 2018 – Galp Energia – slide 35
    Optimising Angola projects Block 32 and block 14/14k Production from block 32 to start in 2018, offsetting decline from block 14 mature fields Drilling campaign in Kaombo proceeding according to plan Optimising development…
  36. Capital Markets Day 2018 – Galp Energia – slide 36
    Screening further opportunities Regional focused exploration strategy Leveraging presence in Brazilian pre-salt top tier acreage North New ventures to include Atlantic both selected DRO and Margin exploration areas…
  37. Capital Markets Day 2018 – Galp Energia – slide 37
    2018: Key milestones Two new replicants onstream in Lula and Kaombo start-up Maintain top production operational efficiency of FPSOs Execute Focus on delivery Lulas first infill well to start production Coral execution Mamba…
  38. Capital Markets Day 2018 – Galp Energia – slide 38
    39 Capital Markets Day February 20, 2018
  39. Capital Markets Day 2018 – Galp Energia – slide 39
    Positioned to deliver unique growth and value 1.0 bn c.25 /bbl 15% by 2020 2020+ target Organic FCF Group cash ROACE breakeven 2018-2020 milestones 2020+ goals Value proposition Execute/ From current portfolio Deliver Next…
  40. Capital Markets Day 2018 – Galp Energia – slide 40
  41. Capital Markets Day 2018 – Galp Energia – slide 41
    Sensitivity to macro environment volatility Galp assumptions 2018E 2019E 2020E Brent price (/bbl) 60 60 65 Benchmark refining margin1 3.5 3.2 4.3 EUR:USD 1.20 1.20 1.20 Ebitda FCF Sensitivities Change 2018E 2020E 2018E…
  42. Capital Markets Day 2018 – Galp Energia – slide 42
    Key indicators on Galps debt Debt indicators Debt reimbursement (m) 2016 2017 900 Gross debt 2.9 bn 3.1 bn 600 Cash and equivalents 1.0 bn 1.2 bn Net Debt 1.9 bn 1.9 bn 300 Net Debt to Ebitda 1.3x 1.0x Available…
  43. Capital Markets Day 2018 – Galp Energia – slide 43
    Galps reserves and resources Reserves and resources (mmboe) Reserves 2016 2017 % Chg. 1P 274 383 40% 2P 673 748 11% 3P 927 965 4% Contingent resources 2016 2017 % Chg. 1C 300 296 (1%) 2C 1,320 1,352 2% 3C 2,993 3,297…
  44. Capital Markets Day 2018 – Galp Energia – slide 44
    Galps shareholding structure Institutional investors account for 83% of Galps Free Float, o.w.: 51% Europe 44% North America 33.34% 5% Rest of the world 59.18% Free Float 7.48% 45 Capital Markets Day February 20, 2018
  45. Capital Markets Day 2018 – Galp Energia – slide 45
    A committed and experienced team Chief Executive Officer Carlos Gomes da Silva Over 22 years of experience in Oil & Gas and a Galp Board member since 2007. Former Board executive for more than 12 years in the energy and beverage…
  46. Capital Markets Day 2018 – Galp Energia – slide 46
    Acronyms (or USD) United States Dollar Chg. Change IMO International Maritime Organization % Percentage CMD17 Capital Markets Day 2017 Kboepd Thousand barrels of oil equivalent per day & And CO2 Carbon dioxide LNG Liquefied Natural…
  47. Capital Markets Day 2018 – Galp Energia – slide 47
    48 Capital Markets Day February 20, 2018

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