Noreco Q February 2011

Transcription

1 Noreco Q February 2011

2 Important information This company presentation (the Presentation ) has been prepared by Norwegian Energy Company ASA ( Noreco or the Company ). The Presentation has not been reviewed or registered with, or approved by, any public authority, stock exchange or regulated market place. The Company makes no representation or warranty (whether express or implied) as to the correctness or completeness of the information contained herein, and neither the Company nor any of its subsidiaries, directors, employees or advisors assume any liability connected to the Presentation and/or the statements set out herein. This presentation is not and does not purport to be complete in any way. The information included in this Presentation may contain certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words believes, expects, predicts, intends, projects, plans, estimates, aims, foresees, anticipates, targets, and similar expressions. The forwardlooking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. For a description of such risks, uncertainties and other factors; please see the Company's prospectus dated 19 October None of the Company or its advisors or any of their parent or subsidiary undertakings or any such person s affiliates, officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company and its advisors assume no obligation to update any forward-looking statements or to conform these forward-looking statements to the Company s actual results. Investors are advised, however, to inform themselves about any further public disclosures made by the Company, such as filings made with the Oslo Stock Exchange or press releases. This Presentation has been prepared for information purposes only. This Presentation does not constitute any solicitation for any offer to purchase or subscribe any securities and is not an offer or invitation to sell or issue securities for sale in any jurisdiction, including the United States. Distribution of the Presentation in or into any jurisdiction where such distribution may be unlawful, is prohibited. This Presentation speaks as of 17 February 2011, and there may have been changes in matters which affect the Company subsequent to the date of this Presentation. Neither the issue nor delivery of this Presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the affairs of the Company have not since changed, and the Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation. This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Stavanger City Court as exclusive venue. By receiving this Presentation, you accept to be bound by the terms above. 2

3 Q a mixed quarter Production in line with Q3 SCB-1 still offline Significant progress in field developments Huntington and South Arne Phase III approved Disappointing exploration results Dalsnuten and Barchan dry Reserve replacement ~300% Strategic review initiated 3

4 Q income statement NOK million Q4-10 Q3-10 Q Total revenues Production expenses Exploration and evaluation expenses 1) Payroll and other operating expenses 2) EBITDA (66) Depreciation and Write-down EBIT (210) (355) Net financial items (117) (126) (211) (485) (581) EBT (327) 17 (148) (424) (936) Tax (192) (150) (61) (428) (568) Profit/(loss) for the period (135) 167 (87) 5 (368) 1) Exploration cost includes NOK 268 million in dry well cost (Dalsnuten and Barchan) 2) Other expenses includes NOK 17 million in termination of rental contract and legal/consulting cost 4

5 Balance sheet NOK million Assets Fixed assets Receivables 1) Cash Total assets Equity and liabilities Total equity Total long-term liabilities Total current liabilities Total liabilities Total equity and liabilities ) Receivables include NOK 590 million in Assets held for sale (Oselvar and Enoch) and NOK 355 million in expected insurance recovery related to the Siri area fields. 5

6 Financial position NOK million Debt/equity Q Q Q Q Q Q Q Q Q Q Q Q Q Total equity Net interest-bearing debt Debt/equity ratio Net interest-bearing debt = Gross interest-bearing debt less cash and cash equivalents less tax receivables. Debt/equity ratio = Net interest-bearing debt divided by Total equity. 6

7 Strong growth in reserves 2P reserves estimate end 2010: 45.8 mmboe* 50 Reserves development Reserve replacement ratio: 2010: ~300% 2009: 222% 2008: 145% million boe Main additions 2010: Huntington South Arne phase III * Oselvar and Enoch fields included Reserves Produced Additions 7

8 Production per quarter boe/day net Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Lulita Cecilie Nini East Nini Siri South Arne Enoch Brage Volume Price $68.5 $74.0 $75.4 $74.4 $83.9 8

9 Siri Area Siri 50%, Nini East 30%, Nini 30%, Cecilie 61% Gas compressor upgrade completed in January Improved capacity and regularity, reduced flaring SCB-1 still shut in Work-over planned in Q3 Represents approx. 1,500 boed net to Noreco Gross production Siri area boe/day drilling plans: NB-4 water injector on Nini East Noreco reserves: 12.9 mmboe 1-Oct 15-Oct 29-Oct 12-Nov 26-Nov 10-Dec 24-Dec 7-Jan 21-Jan 4-Feb Siri Nini Nini East Cecilie 9

10 Brage Noreco % New well A-19A came on stream in Q4 with good production rates 2011 drilling program Currently drilling Arran (A-14A) combined prod. and exploration well Well A-23C to be drilled in Sognefjord formation later in 2011 Gross production Brage boe/day Oct-10 Jan-11 Noreco reserves: 6.0 mmboe 10

11 South Arne Noreco 6.56% Good contribution from the two new production wells South Arne Phase III sanctioned 2 new wellhead platforms 11 new wells First oil 2012/2013 Capex NOK 450 million (Noreco s share) Gross production South Arne boe/day Oct-10 Jan-11 Noreco reserves: 8.8 mmboe 11

12 2011 production Noreco s forecast for 2011 production: P90: 8,500 boe/day P50: 9,550 boe/day P10: 10,700 boe/day Probabilistic approach Upside and downside risks included in forecast 12

13 Gygrid Developments Two approved developments Huntington South Arne phase III Huntington Flyndre Nemo South Arne Developments coming up Gygrid Nemo Flyndre Capex plan 2011: NOK 0.8 billion Developments NOK 0.5 bn Existing fields NOK 0.3 bn 13

14 Huntington Forties Development on track Noreco share 20%, E.On Ruhrgas operator Development plan approved Sevan Voyageur FPSO currently located at Nymo Arendal for topsides modifications Ensco 100 rig contracted, drilling to commence in Q On track for first oil in Q Noreco reserves: 8.7 mmboe 14

15 Gygrid Fast track project moving towards PDO Noreco equity 17.5%, Statoil operated Subsea development, tie-back to the Njord platform PDO expected Q Prosperous area mapping of resources ongoing Up to three exploration wells planned next 18 months 15

16 2011 exploration wells Total exploration budget NOK billion Albert Arran Kalvklumpen Lupin Clapton Luna 16

17 17 7/06 Rau P1114 P1114 PL271 PL348 7/89 PL055 PL055 PL274 6/95 9/95 9/06 9/95 9/06 PL006C PL348 PL378 PL378 PL412 PL476 PL435 Pl392 PL400 PL545 PL055 Brage Unit PL434 PL414 PL471 02/05 PL385 PL385 PL435 PL519 Huntington Palaeo Huntington Jurassic Yoda Galtvort N Syd Tor Pod Talisker Stat. Knokandoo Brent Ipswich Siri West Gita U Jura Gita M Jura Hyme Gydrid Grosbeak Sogn/Fens Grosbeak Brent Tasta Frusalen Zidane 1 Daslnuten Barchan Svanøgle Arran Ronaldo Kalvklumpen Chamonix Luna Jette Sprott Zidane 2 Albert PL360 PL440S Lupin Mega Clapton Exploration performance and outlook Post Drill Cum Pre Drill Cum Pre Drill P50 Pre Drill P90 Pre Drill P10

18 PL434 Ronaldo Noreco 20% Nexen operated Well defined trap in mature Haltenbanken play (Middle Jurassic) in close vicinity to Heidrun facilities 40% CoS Primary risk element: Charge mmboe (gross) Expected spud Feb 2011 with Songa Delta A B Ronaldo Ronaldo A B 18

19 PL414 Kalvklumpen Noreco 20% Det Norske operated Simple anticline trap in mature Central Graben play (Palaeocene) east of Frøy discovery 35% CoS Primary risk element: Charge mmboe (gross) Expected spud May 2011 with Songa Delta Kalvklumpen Top Hermod Depth Map Det Norske license inventory map 19

20 PL471 Chamonix Noreco 30% OMV operated Amplitude supported stratigraphic trap, in emerging hydrocarbon province: Cretaceous Lysing sandstone. West of Mikkel Additional prospectivity also targeted in deeper horizons (Jurassic) 19% CoS Primary risk element: Trap mmboe (gross) Expected spud June 2011 with Borgland Dolphin W E Chamonix E W 20

21 DK 01/11 Luna Noreco 47% Noreco operated Frontier play prospect, targeting Rotliegendes sands, requiring long range migration from Cemtral Graben: Play opener and will de-risk larger Rocky prospect 14% CoS Primary risk element: Trap mmboe (gross) Expected spud July /11 license award confirmed Clapton Luna 02/05 N S Luna Rocky N S Luna Central Graben Horn Graben 21

22 PL519 Albert Noreco 20% Lundin operated The well will target a major fault bound high north of Tampen Spur hydrocarbon province (Statfjord, Snorre etc) Jurassic/Triassic target in emerging play, trap in close vicinity to discovery well 6201/11-1 Currently under re-evaluation subsequent to new seismic (reprocessed) 28% CoS Primary risk element: Reservoir mmboe (gross) Expected spud Nov 2011 with Transocean Winner 6201/11-1 Discovery Albert N S 22

23 PL435 Zidane 2 Noreco 20% RWE Dea operated Analogue prospect to the 2010 Zidane 1 discovery Low risk prospect in mature play that will considerably enhance the commerciality of the Zidane 1 discovery and may facilitate improved gas export options from area (incl. Viktoria) 50% CoS: Primary risk being geometry of trap mmboe Expected spud in Nov 2011 with West Alpha A A N S Zidane 2 23

24 PL360 Lupin Noreco 15% Statoil operated Large fault bound structure in Ling Graben, gas prospect, target reservoir is the Rotliegendes sands, few wells in North Sea have targeted this frontier play 10% CoS - Primary risk element: Charge mmboe Expected spud Dec 2011 Rig uncertain A N S Lupin A 24

25 PL440S Clapton Noreco 12% Faroe Petroleum operated Chalk reservoir around the flanks of major salt diapir Located in Central Graben in mature play 25% CoS Primary risk element: Trap mmboe Expected spud late 2011/early 2012 with Mærsk Guardian Clapton Luna 02/05 25

26 PL385 Jette/Sprott Noreco 20% Statoil operated Dual target well, testing two separate prospects in both Jurassic and Cretaceous intervals Jurassic target (Jette), trap in mature play, considerable follow-on potential if success 50% CoS Primary risk element: Trap mmboe (gross) Cretaceous target (Sprott), subtle anticline structure overlying Jurassic high. 36% CoS Primary risk element: Trap 7 22 mmboe (gross) Expected spud late 2011/early 2012 with Transocean Leader Sprott N S Sprott Luna Jette 26

27 Upcoming exploration wells Prospect License Noreco share Chance of success Volume potential Ronaldo PL434 20% 40% Q1-11 Kalvklumpen PL414 20% 35% Q2-11 Chamonix PL471 30% 19% Q2-11 Luna DK 1/11 47% 14% Q3-11 Drilling start (est.) Jette/Sprott PL385 20% 50%/36% 17-73/7-22 Q4-11/Q1-12 Albert PL519 20% 28% Q4-11 Zidane 2 PL435 20% 50% Q4-11 Lupin PL360 15% 10% Q4-11 Clapton PL440S 12% 25% Q4-11/Q1-12 1) 1) Million barrels oil equivalents gross, P90-P10 interval 27

28 Way forward Exploration in focus targeting 10 wells Significant development programme underway Optimize production new wells and improved regularity 28

29 29

30 Additional information Ref.: v2

31 Noreco production per field boe/day Field Noreco ownership Q Q Brage 12.26/13.2% Siri 50% Nini East 30% South Arne 6.56% Nini 30% Cecilie 61% Lulita 28.2% Enoch 4.36% Total

32 P&L analysis Q Q Q Q Q Production (boe/day) 10,365 10,225 13,125 11,375 5,775 Realised price ($/boe) Realised price (NOK/boe) Production cost ($/boe) Depreciation and amortisation ($/boe)

33 Exploration and investment activity NOK million Q Q Q Q Q Exploration expenses Exploration capitalized Investments in fields Total

34 Interest bearing debt & equity NOK million Q Q Q Q Q Bonds 2,812 2,270 2,267 2,314 2,311 Reserve Based Loan 1,226 ($ 216) 1,331 ($ 235) 1,500 ($ 235) 1,379 ($ 235) 1,359 ($ 240) Convertible bonds Equity Book equity/total asset 3, % 3, % 3, % 3, % 3, % 34 Note: Exploration financing and receivables not included

35 Reserves As of Total reserves 1P 2P Liquids (mill bbl) Gas (bscf) Gross mill boe Interest % Net mill boe Liquids (mill bbl) Gas (bscf) Gross mill boe Interest % Net mill boe Siri Nini Nini East Cecilie Lulita South Arne Brage Unit Brage Sognefjord Enoch Oselvar Huntington Total

36 Oil price hedging with put options 1,000 barrels Noreco uses put options to protect cash flow against downside risk in oil price 24 months rolling forward programme Q Q Q Q Q Q Q Q Q Asian type puts based on monthly average Brent oil price $60 put $75 put 36

37 Shareholders Top 20 shareholders as of 14 February 2011 Shareholders Shares % of top 20 % of total BANK OF NEW YORK MELLON SA/NV % 11.9 % LYSE ENERGI AS % 9.7 % IKM INDUSTRI-INVEST AS % 6.0 % FOLKETRYGDFONDET % 4.4 % UBS AG, LONDON BRANCH % 3.4 % CREDIT SUISSE SECURITIES (USA) LLC % 3.1 % AWILCO INVEST AS % 3.0 % OM HOLDING AS % 2.3 % SKAGEN VEKST % 2.2 % GOLDMAN SACHS INT. - EQUITY % 1.8 % TEIGEN FRODE % 1.7 % MORGAN STANLEY & CO INTERNAT. PLC % 1.7 % JPMORGAN CHASE BANK % 1.6 % VARMA MUTUAL PENSION INSURANCE % 1.2 % NORDEA BANK NORGE ASA MARKETS MARKET-MAKING DERIVATER % 1.2 % JPMORGAN CHASE BANK % 1.2 % KOMMUNAL LANDSPENSJONSKASSE % 0.9 % DNB NOR NORGE SELEKTV (III) VPF % 0.8 % BNP PARIBAS SECS SERVICES PARIS % 0.8 % AS ACACIA % 0.7 % Total number owned by top % 59.9 % Total numbers of shares