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Q1 2008
Det norske oljeselskap ASAOslo, 8 May 2008
Erik Haugane, CEO
Paul E. Hjelm-Hansen, CFO
Torgeir Anda, PR Manager
Highlights
License awards in APA 2007 increased the company’s risked resources by 150 MBO
Det norske submitted Plan for Development and Operation (PDO) for Frøy
Successful drilling on Draupne. Basis for area development with three adjacent
discoveries. So far, Det norske has made discoveries in two of three exploration wells
Launching of new logo and graphic profile
Increased production from 830 barrels/day in Q1 2007 to 1,724 barrels/day in Q1 2008
Oil sold at an average of USD 94.07/barrel
Shareholder Values
Commercial reserves: 0.5 barrel per share
Proven discoveries: 2.0 barrels per share
Risked resources: 9.9 barrels per share
Acquisition costs 2005 - 2008: 3.9 USD/barrel (after tax)
Discovery costs 2005 - 2008: 0.51 USD/barrel (after tax)
Discovery costs last 12 months: 0.48 USD/barrel (after tax)
Corporate Strategy
- Exploration strategy- E&P company pursuing selective plays in familiar exploration models (oil discoveries in two of three wells)
- Developing an already well-qualified exploration staff further
- Utilize advanced technology
- Active role in the Barents Sea
- Area strategy- Make use of comparable advantages in exploration
- Reduce unit costs for production
- Ensure fast production start-up of discoveries
- Development strategy- Flexible technological solutions enabling profitable production from small fields
- Drilling strategy- Ensure rig capacity, but be driven by good prospects
- Secure internal well planning capacity
- Financial strategy- Finance exploration activities through drawing facilities with collateral in tax refunds
- Development investments through cooperation with contractors, carried interest, and other financing schemes
Reserves and Resources220 513
Source: Company web pages
Company Comparison
Key Figures Q1 2008
MNOK / Mill. barrels Q12008 Q12007
Operating revenues 79.5 29.4
Income / (loss) before taxes (44.8) (10.2)
Exploration costs 56.9 24.6
No. of licenses 46 12
No. of operatorships 24 7
P50 reserves 31.4 7.0
P50 reserves and resources 129 40
Total risked reserves and resources 642 260
Financial Key Figures
MNOK Q12008 Q42007
Operating revenues 79.5 55.6
Income / (loss) before taxes (44.8) (116.7)
Exploration costsof this seismic data
56.99.4
122.88.4
Investments 153.9 145.8
Cash flow before financing (294.9) 202.0
Key Figures Q1 - Production
Per barrel USD Revenues Costs Depreciation Margin on
sold
quantity
Production
volume
barrels
PL 0138 Varg 96 37 24 35 52 031
PL 048B Glitne 93 26 28 39 90 765
PL 048D Enoch 93 5 37 51 14 090
TOTAL 94 28 27 39 156 886
Financial Position Q1
Equity
MNOK 3,524
Equity ratio 54.1%
Liabilities
MNOK 344 interest-bearing debt (exploration facility)
Current assets
Liquid assets MNOK 506
Tax receivables 2008 MNOK 616
Tax receivables 2009 MNOK 40
Production from Varg is expected to
increase during the last half of 2008 due to
new production wells
Production from Glitne is falling, but new
production wells are under planning
Production has been strengthened through
the acquisition of Lundin’s interest in Jotun.
This will be included as soon as transaction
has been approved by the authorities
Expected production is 2,200 barrels/day in
the last six months of 2008
Yme is expected to contribute with 4,000
barrels/day during 2009
Det norske’s Oil Production
Barrels per day
Exciting Discovery on Draupne
Det norske operator 35 %
StatoilHydro 50% PA Resources 15%
Prospect volume: 25-90 Mboe.
Proven volume: 25-30 Mboe
Probable volume: ~ 65 Mboe
Same partnership in the Draupne area
Hanz
West Cable
Draupne
12 – 20 Mboe
3 – 5 Mboe
25 – 65 Mboe
Total 40 – 90 Mboe
Draupne Area Solution
and West Cable
The discovery may open up for
commercial recovery of two
previous oil discoveries in Hanz
Lundin’s Luno
is located close to
Draupne.
Ragnarrock
A joint development will
decrease unit costs.
Jack-up platform with drilling and production
equipment.
Oil stored in tank located on seabed for offloading to
shuttle tankers.
Gas is injected to boost recovery.
Several solutions have been assessed, of which the
selected solution is the more robust.
Maximum crew of 120.
Lease of production facility for a minimum of six
years.
Investments amounting to NOK 3 billion in wells from
2012-2014.
Licensees aim for award of contract in Q3 2008.
PDO Submitted for Frøy
Frøy – Net Present Value Before Tax
Thousand NOK
NPV - 7% cost of
capital
NPV (50 USD/bbl
NPV (calculated future price)
NPV (100 USD/bbl)
Det norske’s licenses in
the North Sea and the
Norwegian Sea
Critical factors:
• Access to acreage
• Exploration
technology
• Production technology
Barents Sea – a Huge Potential
PL 450, ”Storebjørn”, 8 km west of Ula
Recoverable oil: 50 MBO
Discovery probability: 34%
Firm well, drilling in 2010
PL 460, ”Storklakken”, 20 km west of Frøy
Recoverable oil: 30 MBO
Discovery probability: 40%
Firm well, drilling in 2009
PL 476, ”Trolltind”, 8 km east of Midgard
Recoverable gas: 40 Mrd Sm3
Discovery probability: 36%
Well approved, drilling in 2009
APA 2007 Licenses – mature prospects
The Operator Position - Room to Maneuver
Det norske oljeselskap ASA
Per March 2008
The Employees – Our Most Important Asset
Strengthening of Management
VP Reserve and Area
Development
Odd Ragnar Heum
Production and
Operation
VP Drilling &
Well Op.
Anton Tronstad
CEO
Erik Haugane
VP Business Dev.
Vidar B. Larsen
VP Exploration
Tom Bugge
COO
Øyvind Bratsberg
CFO
Paul Hjelm-Hansen
(New CFO 1 July)
VP HSE
Anita Utseth
VP Geology
Sigmund Hanslien
VP Technology &
Development
Stein Fines
PR Manager
Torgeir Anda
IR Manager
Knut Evensen
Det norske’s Drilling Program
Next - Freke
To be drilled by Det norske with
the rig Bredford Dolphin in
August 2008
90 MBO prospect (P50) with a
very high discovery probability
Esso (operator), Statoil, and Det
norske (20%)
Located close to Statoil’s
Ermintrude discovery
ERMINTRUDE
The Portfolio
Det norske will consider selling or swapping interests in discoveries and
prospects, thus enabling a reallocation of resources to the many exciting
prospects in our portfolio. This pertains to projects where we have major
license interests, and where we are the operator.
Det norske will concentrate value creation around exploration and
development of fields where our operatorship will prove decisive to recovery
of resources.
We will swap / reduce our ownership share in exploration licenses where we
hold an interest constituting more than 50%
• Asset Swap Agreement with Concedo finalized
• Other agreements to be announced shortly
We aim to increase our portfolio through applications in APA 2008 and the
20th Licensing Round
Historic
performance
Expected
growth
Expected Growth in Proven Discoveries
OutlookThe Draupne discovery corroborates the potential in the company’s exploration strategy
Det norske’s 7% interest in Jotun, together with increased production from Varg, is expected
to result in a production for Det norske amounting to more than 2,200 BOPD in the last six
months of 2008. Production from Yme will contribute additional 4,000 BOPD during the last
half of 2009
The Freke and Eitri prospects are being drilled by Det norske this year. In addition, we
participate in drilling operations performed and operated by Talisman, Eni, and StatoilHydro
Furthermore, drilling of Grevling (PL 038) will contribute to clarifying the potential for
Storskrymten
PDO for Frøy is expected approved by the authorities during the last half of 2008
Det norske will drill 8 or 9 exploration wells next year
License swaps and sales during 2008 are expected to contribute to increased value creation
and accelerated growth for the company. We will participate actively in APA 2008 and the
20th Licensing Round.
We shall continue to discover resources on the Norwegian Shelf for less than USD 1
per barrel
Attachments
Income Statements 1)
1) Prepared in accordance with IFRS
Det norske oljeselskap - Consolidated Income Statement
(All figures in NOK 1000) 2008 2007
Petroleum revenues 78 165 29 406
Other operating revenues 1 318
TOTAL OPERATING REVENUES 79 483 29 406
Exploration expenses 56 907 24 579
Change in inventories -343 1 475
Production costs 23 369 12 724
Payroll and payroll-related expenses 6 919 431
Depreciation and amortsation expenses 25 255 6 190
Other operating costs 4 658 220
TOTAL OPERATING EXPENSES 116 766 45 619
OPERATING PROFIT/(LOSS) -37 283 -16 213
Interest income 12 571 7 722
Other financial income 1 523 461
Interest expenses 6 968 736
Other financial expenses 14 634 1 442
NET FINANCIAL ITEMS -7 508 6 005
INCOME /(LOSS) BEFORE TAXES -44 791 -10 208
Taxes (+)/tax income (-) on ordinary income/(loss) -35 827 -11 007
NET INCOME /(LOSS) -8 964 799
Minority's share of net income (loss) -21
Majority's share of net income (loss) -8 942
Weighted average no. of shares outstanding 64 925 020 26 513 420
Weighted average no. of shares fully diluted 64 925 020 26 513 420
Earnings/(loss) after taxes per share (adjusted for split) (0,14) 0,03
Earnings/(loss) after taxes per share (adjusted for split) fully diluted (0,14) 0,03
1. kvartal
Balance SheetConsolidated Balance Sheet 31.12.
2008 2007 2007
Intangible assets
Goodwill 1 716 661 43 875 1 671 556
Capitalized exploration expenditures 532 315 7 181 517 867
Other intangible assets 2 421 304 25 189 2 423 340
Tangible fixed assets
Property, plant, and equipment 395 125 111 138 354 692
Financial fixed assets
Long-term receivable (prepayment) 5 159 5 160
Calculated tax receivable 40 283 19 960
TOTAL FIXED ASSETS 5 110 847 207 343 4 972 614Current assets
Inventories
Inventories 2 938 778 6 136
Receivables
Trade receivables 133 605 14 714 128 237
Other receivables 143 669 73 069 116 161
Calculated tax receivable 615 539 112 752 618 044
Cash and cash equivalents
Cash and cash equivalents 506 046 522 899 585 127
TOTAL CURRENT ASSETS 1 401 797 724 212 1 453 704
TOTAL ASSETS 6 512 644 931 555 6 426 319
Paid-in capital
Share capital 12 985 5 308 12 985
Share premium 3 510 654 805 045 3 519 597
Minority interests 30 725
TOTAL EQUITY 3 523 639 810 353 3 563 307
Provisions
Pension obligations 5 597 3 730 8 125
Deferred taxes 2 159 926 27 827 2 166 470
Abandonment provision 82 755 22 368 81 133
Deferred revenues 15 179 10 402
TOTAL PROVISIONS 2 263 457 53 925 2 266 130
Current liabilities
Short-term loan 344 447 128 625
Trade creditors 30 044 8 044 112 788
Taxes withheld and public duties payable 4 060 1 568 12 044
Other current liabilities 346 998 57 665 343 423
TOTAL CURRENT LIABILITIES 725 549 67 277 596 881
TOTAL LIABILITIES 2 989 006 121 202 2 863 012
TOTAL EQUITY AND LIABILITIES 6 512 644 931 555 6 426 319
31.03.
(All figures in NOK 1000)
Cash Flow StatementConsolidated Cash Flow statement 01.01.-31.12.
(All figures in NOK 1000) 2008 2007 2007
Cash flow from operating activities
Income/(loss) before taxes -44 791 -10 208 -247 485
Tax refund -28 323 795
Depreciation and amortisation expenses 25 255 6 190 34 553
Changes in plugging and abandonment liabilities 1 623 440 3 129
Changes in inventories, accounts payable and receivable -84 914 -16 765 62 975
Changes in net current capital and in other current balance sheet items -38 145 11 425 127 640
NET CASH FLOW FROM OPERATING ACTIVITIES -140 972 -8 946 304 607
Cash flow from investment activities
Purchase of property, plant and equipment -62 854 -29 894 -170 824
Payment related to compulsory acquisition of shares -75 810
Purchase of ingangible assets -15 266 -6 242 -194 444
NET CASH FLOW FROM INVESTMENT ACTIVITIES -153 930 -36 136 -365 267
Cash flow from financing activities
Paid-in share capital/capital increase 2 091 2 091
Expenditure related to acquisition of companies -13 775
Payment of loan -290 686
Short-term loan 215 822 130 000
NET CASH FLOW FROM FINANCING ACTIVITIES 215 822 2 091 -172 369
Net change in cash and cash equivalents -79 081 -42 991 -233 029
Cash and cash equivalents at start of period 585 127 565 890 565 890
Cash and cash equivalents in acquired company at time of acquisition 252 267
CASH AND CASH EQUIVALENTS AT END OF PERIOD 506 046 522 899 585 127
Specification of cash and cash equivalents at end of period
Bank deposits, etc. 479 543 497 336 552 741
Restricted bank deposits 3 541 8 806
Other financial investments 22 963 25 563 23 580
Total cash and cash equivalents at end of period 506 046 522 899 585 127
01.01 .- 31.03.