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Balancing Returns and Growth London – Statoil

Statoil · Feb 7, 2014 · 33 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. Balancing Returns and Growth London – Statoil – slide 1
    Balancing returns and growth London, 7 February 2014 Torgrim Reitan, Executive Vice President and Chief Financial Officer
  2. Balancing Returns and Growth London – Statoil – slide 2
    2013 Strategic progress, good operations Earnings Stable cost development, earnings impacted by divestments Production As expected Reserves 147% organic RRR Resources 1250 million boe added from exploration Projects On cost and schedule…
  3. Balancing Returns and Growth London – Statoil – slide 3
    Adjusted earnings Full year 2013 Fourth quarter 2013 NOK bn NOK bn 39.2 155.5 7.6 163.1 (116.7) 46.4 14.8 43.9 (1.6) 42.3 (31.3) 11.0 -44% -25% -16% -16% +14% -4% -12% -27% Net income Reported Adjustments Adjusted Tax on adj.…
  4. Balancing Returns and Growth London – Statoil – slide 4
    Strong cost focus across the business Statoil Group 1) D&P Norway D&P International MPR Strategic progress and Execution on track Record production, Continued strong world-class exploration impacted by US onshore gas results Bay…
  5. Balancing Returns and Growth London – Statoil – slide 5
    Production as expected Record international production Equity production mboe/d Impacted by divestments and 1945 2032 1940 2004 redetermination Unchanged decline at 5% 910 825 858 867 1087 1122 1115 1137 4Q2013 4Q2012…
  6. Balancing Returns and Growth London – Statoil – slide 6
    Cash flow 2013 NOK bn Cash flow from Impacted by lower operating volumes and Taxes paid activities 219 1) downstream margins (114) Tax payments affected Proceeds Cash flows from sale of to organic by 2012 earnings Dividend paid…
  7. Balancing Returns and Growth London – Statoil – slide 7
    Record reserve replacement Highest organic SEC RRR ever bn boe 1.3 22 (0.7) 22 147% organic RRR (0.5) 128% total RRR 119% three-year organic average RRR Added resources 2x production through 0.9 5.4 5.6 exploration and IOR…
  8. Balancing Returns and Growth London – Statoil – slide 8
    Capital markets update: Balancing returns and growth High value growth Increase efficiency Prioritise capital distribution Organic free cash flow to Expected annual savings of Competitive direct returns cover dividends from 2016 1)…
  9. Balancing Returns and Growth London – Statoil – slide 9
    High value growth High grading the portfolio Start-ups pre-2020 Optimising/future 1) Divested/reduced 1) High profitability Improvement potential Low strategic fit Strategic fit Return on capital Return on capital Market…
  10. Balancing Returns and Growth London – Statoil – slide 10
    High value growth Directing our capital to priority projects Strengthening profitability Investing in high value growth IRR 1) (USD 100/bbl / capex-weighted) Capex vs. IRR 24% 20 16% 15 Capital directed to high USD bn 10 value…
  11. Balancing Returns and Growth London – Statoil – slide 11
    High value growth Growth projects to deliver higher returns Moving from good profitability to performance well ahead of peers Projects under development Probable development projects 25 25 Average IRR % Average IRR % 20 20 15…
  12. Balancing Returns and Growth London – Statoil – slide 12
    Increase efficiency Reducing cost and improving efficiency Strong starting point with low Launching improvement initiatives with relative Unit Production Cost 1) expected annual savings of USD 1.3 bn from 2016 1.5 Delivering capex…
  13. Balancing Returns and Growth London – Statoil – slide 13
    Prioritise capital distribution Strong commitment to capital distribution Net debt reduced Firm dividend policy Firm financial framework from 27% to 15% with quarterly payouts Strong balance sheet will be maintained A-category…
  14. Balancing Returns and Growth London – Statoil – slide 14
    Prioritise capital distribution Organic FCF covers dividend from 2016 1) Strong expected average cash flow 2014-2016 Stable capital expenditure outlook USD bn 25 2014: USD 20 bn organic capex 22 20 2014-16: USD 20 bn organic capex 20…
  15. Balancing Returns and Growth London – Statoil – slide 15
    Balancing returns and growth Delivering 3% organic production CAGR 2013-16 Equity production 1) 2) (mmboed) 2100 New 2% increase in production from 2013 (rebased) to 2014 1900 1940 New 1850 3% production CAGR from Divestments/…
  16. Balancing Returns and Growth London – Statoil – slide 16
    Balancing returns and growth Maintaining returns from 2013 Strong performance on Stable returns at USD 100/bbl ROACE compared to peers 1) Adjusted ROACE 14% 11.8% 12% Top quartile on ROACE Statoil 10% Next wave of projects even 8%…
  17. Balancing Returns and Growth London – Statoil – slide 17
    Summary Balancing returns and growth 2014 2014-2016 Key message USD 5 bn reduction 2014-16 Capex USD 20 bn USD 20 bn Free cash flow positive from 2016 USD 3.5 bn Exploration 20 high impact wells Continuing significant exploration…
  18. Balancing Returns and Growth London – Statoil – slide 18
  19. Balancing Returns and Growth London – Statoil – slide 19
    Balancing growth and returns Investing for profitable growth Investment profile 2014-16 100 % 2014: USD 20 bn MPR and MPR and Exploration Other Other organic capex Non- Non-OECD Rest sanctioned 80 % of world New assets Gas E&P…
  20. Balancing Returns and Growth London – Statoil – slide 20
    2013 Good cost control 1) 1) Focus on cost New production increases DD&A Strengthening our Adjusted opex and SG&A, NOK bn Adjusted DD&A, NOK bn competitiveness Project prioritisation 2) 5.8 2) 4.8 2) 4.9 5.4 Standardisation and 4.5…
  21. Balancing Returns and Growth London – Statoil – slide 21
    Items impacting net operating income 4Q 2013 23
  22. Balancing Returns and Growth London – Statoil – slide 22
    Tax rate reconciliation 4Q 2013 Adjusted Tax on adjusted Composition of tax expense and effective tax rate Tax rate earnings earnings D&P Norway 35.4 (26.6) 75% D&P International 3.6 (3.1) 86% Marketing, Processing & Renewable energy…
  23. Balancing Returns and Growth London – Statoil – slide 23
    Net Financial Items 4Q 2013 Interest income and Net foreign exchange other financial items gains/losses Interest and other Net financial items finance expenses 4Q 13 0.7 (1.4) Gains/losses NOK (1.7) derivative financial…
  24. Balancing Returns and Growth London – Statoil – slide 24
    Development in net debt to capital employed Net financial liabilities Net debt to capital employed 1) (NOK bn) 100.0 14.1** 30 % 80.0 86.2 26 % 3%** 77.4 76.0 8.3 2) 20 % 21 % 21 % 60.0 63.7 62.3 1% 2) 14.1 2) 16 % 15 % 40.0…
  25. Balancing Returns and Growth London – Statoil – slide 25
    Long term debt portfolio Redemption profile 31.12.2013 27
  26. Balancing Returns and Growth London – Statoil – slide 26
    MPR Adjusted Earnings - Break-down 3.7 5.1 28
  27. Balancing Returns and Growth London – Statoil – slide 27
    DPN Statoil production per field 4Q 2013 DPN - Statoil operated Statoil share Produced equity volumes - Statoil share DPN - Partner-operated Statoil share Produced equity volumes - Statoil share 1000 boed Liquid Gas Total 1000 boed…
  28. Balancing Returns and Growth London – Statoil – slide 28
    DPI & DPNA Statoil production per field 4Q 2013 DPI Produced equity volumes - Statoil share DPNA Produced equity volumes - Statoil share 1000 boed Statoil share Liquids Gas Total 1000 boed Statoil share Liquids Gas Total ACG 8.56% 54.2…
  29. Balancing Returns and Growth London – Statoil – slide 29
    Exploration Statoil Group Exploration Expenses Fourth quarter For the year (in NOK billion) 2013 2012 2013 2012 Exploration Expenditure (Activity) 5,7 4,9 21,8 20,9 Capitalised Exploration -2,4 -0,6 -6,9 -5,9 Expensed from Previous Years…
  30. Balancing Returns and Growth London – Statoil – slide 30
    Sensitivities1) Indicative effects on 2014 results NOK bn Oil price: 8 + USD 10/bbl 20 Gas price: 7 + NOK 0.50/scm 21 Exchange rate: 8 USDNOK +0.50 20 Net income effect Net operating income effect before tax The…
  31. Balancing Returns and Growth London – Statoil – slide 31
    Indicative PSA effects Assumed oil price 2014 110/bbl 160 80/bbl 140 0 100 200 (1000 boe/d) 33
  32. Balancing Returns and Growth London – Statoil – slide 32
    Reconciliation of Adjusted Earnings to Net Operating Income Items impacting net operating income Fourth quarter For the year ended (in NOK billion) 2013 2012 2013 2012 Net operating income 43.9 45.8 155.5 206.6 Total revenues and other…
  33. Balancing Returns and Growth London – Statoil – slide 33
    Investor Relations in Statoil Investor Relations Europe Hilde Merete Nafstad Senior Vice President hnafstatoil.com +47 95 78 39 11 Lars Valdresbrten IR Officer lavastatoil.com +47 40 28 17 89 Erik Gonder IR Officer ergonstatoil.com…

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