COMPANY PRESENTATION 31 July 2019 Disclaimer THIS PRESENTATION (THE - - PowerPoint PPT Presentation

COMPANY PRESENTATION

31 July 2019

Disclaimer

THIS PRESENTATION (THE “INFORMATION MATERIAL”) HAS BEEN PRODUCED AND DELIVERED BY NORWEGIAN ENERGY COMPANY ASA (THE “COMPANY”). THIS INFORMATION MATERIAL DOES NOT CONSTITUTE AN OFFER, INVITATION OR SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE OR SELL ANY SHARES IN THE COMPANY. THE COMPANY DOES NOT MAKE ANY UNDERTAKING, REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED) AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION (WHETHER WRITTEN OR ORAL AND WHETHER INCLUDED IN THIS INFORMATION MATERIAL OR ELSEWHERE) CONCERNING THE COMPANY OR OTHER MATTERS DESCRIBED HEREIN. NEITHER THE COMPANY NOR ANY OF ITS PARENT OR SUBSIDIARY UNDERTAKINGS OR ANY SUCH PERSON’S AFFILIATES, OFFICERS, EMPLOYEES OR ADVISERS ACCEPT ANY LIABILITY WHATSOEVER ARISING DIRECTLY OR INDIRECTLY FROM THE USE OF THIS INFORMATION MATERIAL OR OTHERWISE IN CONNECTION WITH THE MATTERS DESCRIBED HEREIN. THE DISTRIBUTION OF THIS INFORMATION MATERIAL IN CERTAIN JURISDICTIONS IS RESTRICTED BY LAW. THIS INFORMATION MATERIAL IS NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. THIS INFORMATION MATERIAL 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 FORWARD-LOOKING STATEMENTS CONTAINED IN THIS INFORMATION MATERIAL, 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. NEITHER THE COMPANY NOR ANY OF ITS 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 INFORMATION MATERIAL OR THE ACTUAL OCCURRENCE OF THE FORECASTED DEVELOPMENTS. THE COMPANY ASSUME NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS OR TO CONFIRM THESE FORWARD-LOOKING STATEMENTS TO OUR ACTUAL RESULTS. BY ATTENDING OR RECEIVING THIS INFORMATION MATERIAL YOU ACKNOWLEDGE THAT YOU WILL BE RESPONSIBLE FOR YOUR OWN ASSESSMENT OF THE MARKET AND THE MARKET POSITION OF THE COMPANY AND THAT YOU WILL CONDUCT YOUR OWN ANALYSIS AND BE SOLELY RESPONSIBLE FOR FORMING YOUR OWN VIEW OF THE POTENTIAL FUTURE PERFORMANCE OF THE COMPANY’S BUSINESS AND A POTENTIAL INVESTMENT IN THE COMPANY. THE CONTENTS OF THIS INFORMATION MATERIAL ARE NOT TO BE CONSTRUED AS FINANCIAL, LEGAL, BUSINESS, INVESTMENT, TAX OR OTHER PROFESSIONAL

• ADVICE. THIS INFORMATION MATERIAL SPEAKS AS OF 31 JULY 2019. NEITHER THE DELIVERY OF THIS INFORMATION MATERIAL NOR ANY FURTHER DISCUSSIONS

OF THE COMPANY WITH ANY OF THE RECIPIENTS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE. THIS INFORMATION MATERIAL IS SUBJECT TO NORWEGIAN LAW, AND ANY DISPUTE ARISING IN RESPECT OF THIS INFORMATION MATERIAL IS SUBJECT TO THE EXCLUSIVE JURISDICTION OF NORWEGIAN COURTS WITH OSLO DISTRICT COURT AS EXCLUSIVE LEGAL VENUE.

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Important information

AN INVESTMENT IN THE COMPANY INVOLVES RISK, AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN THIS INVESTOR PRESENTATION, INCLUDING, AMONG OTHERS, RISKS OR UNCERTAINTIES ASSOCIATED WITH THE COMPANY’S BUSINESS, SEGMENTS, DEVELOPMENT, GROWTH MANAGEMENT, FINANCING, MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS, AND, MORE GENERALLY, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN DOMESTIC AND FOREIGN LAWS AND REGULATIONS, TAXES, CHANGES IN COMPETITION AND PRICING ENVIRONMENTS, FLUCTUATIONS IN CURRENCY EXCHANGE RATES AND INTEREST RATES AND OTHER FACTORS. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS INVESTOR PRESENTATION. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS INVESTOR PRESENTATION.

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Transaction finalised 31 July 2019 creating a leading independent North Sea E&P company

▪ Acquisition of Shell’s 36.8% interest in the DUC1 making Noreco the second largest hydrocarbon producer on the Danish Continental Shelf ▪ Assets comprise of 15 fields, net 2P reserves of ~1953 mmboe per YE2018 and net production of ~572 mboepd in 2018 ▪ Significant reserves and production growth coming from existing resources (discoveries, EOR initiatives and new projects) ▪ Transaction completed 31 July 2019 ▪ All fields operated by Total ▪ Proven operational efficiency with opex per boe of USD 16 and capex per boe of USD 10 in 2018 ▪ Strong cost reduction focus ▪ Operator aligned with Noreco and holds a 43.2% interest following acquisitions of the Maersk and Chevron stakes ▪ Solid additions to the board since announcement of the transaction ▪ Day one cash flow from producing assets ▪ ~7 mmboe (net to Noreco) positive revision4 on 2P reserves from YE20173 to YE20183 ▪ >100 mmboe5 of contingent resources (net to Noreco) ▪ Noreco cash flow protected by liquid production guarantee from signing until the end of 2020 ▪ Significant dividend capacity following the Tyra redevelopment ▪ USD 900m RBL facility secured from relationship banks BMO Capital Markets, Deutsche Bank and Natixis ▪ Seven year facility testament to stable cash flow profile through the Tyra redevelopment ▪ USD 540m of new equity and convertible debt subscribed by high-quality fund managers ▪ Leverage of 1-2x EBITDA and long dated maturity profile mitigate refinancing risk

Supermajor

• perated assets

and an attractive

• rganisation

Conservative capital structure Cash flow paired with significant resource potential Transformative transaction

4

1) Danish Underground Consortium; 2) Danish Energy Agency (DEA); 3) Independent estimates from Senergy (Lloyd’s Register) per YE2018 and YE2017; 4) Adjusted for 2018 production; 5) Company estimate

746 352 158

• 1 257
• 1 071

40 22 22

RBL¹ Equity² CB Total Sources Cash Payment at Close Cash Payment at Signing NOR10 Net Transaction (Other Adjustments) Liquidity at Close Total escrow

1) Cash draw; 2) Not including proceeds from contemplated subsequent offering

Transaction overview

Transaction perimeter

Shell Overseas Holdings Limited Shell Olie- Og Gasudvinding Danmark B.V. 100% Shell Olie- Og Gasudvinding Danmark Pipelines ApS Danish Underground Consortium JOA The Netherlands Pipeline Agreement 36.8% 100%

Sources & Uses Transaction perimeter USDm

5 146 Sources Uses

36.8%

Source: Press releases 1) Independent estimate from Senergy (Lloyd’s Register) per YE2018; 2) Danish state-owned oil and gas company; 3) Danish Energy Agency (DEA)

Portfolio of North Sea assets producing since 1972

▪ The DUC comprises of 15 fields on the Danish Continental Shelf. Production started in 1972 and peak production was reached in 2005 at ~500 mboepd ▪ In 2018, the DUC produced ~154 mboepd3 with production routed via the four hubs Halfdan, Tyra, Dan and Gorm ▪ Four pipelines secure exports from the hubs to the Danish mainland and the international market ▪ Production expected to increase over the next decade following finalisation of the Tyra redevelopment in 2022 ▪ Following completion on 31 July 2019, the DUC is a joint venture between Noreco, Total and Nordsøfonden ▪ All fields are operated by Total following the acquisition of Maersk Oil in 2017

Operated by E&P major Key highlights Ownership of 15 fields and four production hubs in the North Sea

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Tyra Dan Halfdan Gorm

Production hubs The DUC is the owner of the Danish North Sea’s key infrastructure points The bulk of Denmark’s produced hydrocarbons are transported onshore via the Gorm and Tyra hubs Pipeline system Infrastructure access from central North Sea position

11% 40% 10% 39%

43.2%

(operator)

20.0%

2

Dan Gorm Halfdan Tyra 2P reserves by hub1

10 20 30 40 50 60 70 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E

1) Independent estimates from Senergy (Lloyd’s Register). “YE2018” forecast represents the most recent reserves report (from 2019). “YE2017” represents the reserves report from 2018 applied in the published presentation 17 October 2018. Danish Energy Agency (DEA) applied in years 2016-2018; 2) Company estimate, Danish Energy Agency (DEA), Rystad Energy, WoodMackenzie; 3) Danish Energy Agency (DEA)

High margin production with several growth venues

2P reserves revision1, mmboe

7 ▪ Liquid volume production guarantee from Shell until the end of 2020 ▪ Tyra expected production capacity of 60 gross mboepd and production of >200 gross

• mmboe. Temporary unit cost increase during the redevelopment period

▪ Tyra redevelopment is expected to be finalised in 2022 ▪ Estimated opex per boe of USD ~13 following the redevelopment and normalised production ▪ Contingent resources include discoveries such as Adda, Alma, Boje and Freja in the DUC ▪ Several other upside opportunities from enhanced recovery initiatives and other projects

Production and economics overview for the DUC 2 (net to Noreco) Illustrative forecast

2P - YE2017 liquids & gas1 Contingent resources2 2P - YE2018 liquids & gas1

2015 2016 2017 2018 H1 2019 Production, mboepd 70 64 67 57 58 Opex, USD per boe 14 13 11 16 16 Capex, USD per boe 7 5 3 10 10

Daily production forecast revision1, mboepd

YE2017 2018 Production3 Revision YE2018 Liquids & gas 209

• 21

+7 195

All figures are net to Noreco unless specifically stated

Tyra redevelopment - accessing significant reserves

Dedicated liquidity buffer to support the Tyra redevelopment Tyra redevelopment project

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1) Danish Continental Shelf; 2) Subject to certain conditions Sources: Press releases, Company

▪ Strategically important asset as Denmark’s largest gas field and facilities that process and export ~90% of all gas produced on the DKCS1 ▪ Decision to fully modernise the facilities enables continued production from the field and improves infrastructure for increased production in the region ▪ Expected to enable a production capacity of 60 gross mboepd and production

• f >200 gross mmboe

▪ The redevelopment of Tyra is enabled by the North Sea agreement between the Danish State and the DUC partners ▪ The project is expected to be finalised in 2022 ▪ Noreco has agreed to create a liquidity buffer to cover operator cash calls during the Tyra redevelopment phase ▪ Shell will make a significant contribution to the liquidity buffer ▪ USD 50m will be funded at closing of Noreco’s acquisition. Starting August 2020 Noreco will fund USD 15m in six equal instalments until January 2021 ▪ The accumulated amount will be USD 140 million in January 2021 ▪ When the Tyra redevelopment is completed the dedicated amount will be reduced to USD 100 million which Noreco can replace with a Letter of Credit

• r other type of security2

New Tyra facilities

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Strengthened organisation following the acquisition

▪ Skilled employees with significant experience from the DUC assets will continue under Noreco ▪ Taking an active role in the DUC partnership with Copenhagen as main hub for operations and technical staff ▪ Currently recruiting additional oilfield experts within geology, geophysics, reservoir, drilling and wells, production technology and facility engineering, HSEQ, asset management and business development ▪ Key additions made through recruitment of three new board members

Comments Key additions to the Noreco organisation since October 2018

Yves-Louis Darricarrère Board member – contemplated elected at EGM

Darricarrère holds a MSc in Economics. He began his career with Elf Aquitaine in 1978 and has held various executive positions within the

• company. In July 2012, he became President of Total Upstream,

which brought together Exploration & Production and Gas & Power; he filled the position until he retired in August 2015

Colette Cohen Board member – contemplated elected at EGM

Colette Cohen holds a BSc Pure & Applied Chemistry. She has worked within the oil & gas sector since 1991, for BP Exploration UK and Reservoir Management Ltd. Between 1998 and 2013 she held various leading positions with ConocoPhilips. From 2013 until 2016 she was P&L responsible for Centrica E&P UK NL and is currently CEO of The Oil & Gas Technology Centre in Aberdeen

Chris Bruijnzeels Board member – contemplated elected at EGM

Chris Bruijnzeels holds a Master's degree in Mining Engineering from the University of Delft. He is president and CEO of ShaMaran Petroleum Corp. and has since 1985 worked with International Petroleum Corp., Lundin Petroleum, PGS Reservoir Consultants, Shell and NAM in various leading positions

Subscription period commencing on or about 12 Aug

Key considerations

Key upcoming dates

▪ Closing on 31 July 2019 ▪ Subsequent offering to take place as soon as the prospectus is approved by the NFSA1, expected early August 2019 ▪ New shares issued as part of the 2018 private placement and the convertible bond issue to be listed following prospectus approval ▪ New board members contemplated elected at EGM 7 August 2019

1

Processes

2 4 5 3

10

Prospectus approval 2 Early August 2019 Listing of shares and CB 4 Closing 1 EGM new board members 5 31 July 2019 7 August 2019 Subsequent

• ffering

3

3Q 2019

Following prospectus approval Financial reporting 21 August 2019 H1 report End November 2019 Q3 report

Key details subsequent offering (expected)

▪ Commencement of subscription period: 12 August 2019 ▪ Eligible shareholders: shareholders as at 16 October 2018, registered in the VPS 18 October 2018 ▪ Rights per share: 0.46310 ▪ Subscription price: NOK 185/share ▪ Transferability and trading: freely transferable and fully tradable

4Q 2019

1) The Norwegian Financial Supervisory Authority

Tyra East platform in the Danish North Sea