Noreco A leading North Sea E&P company September 2019 - PowerPoint PPT Presentation

Noreco A leading North Sea E&P company September 2019

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Important information AN INVESTMENT IN THE COMPANY INVOLVES RISK, AND SEVERAL FACTORS DOMESTIC AND FOREIGN LAWS AND REGULATIONS, TAXES, CHANGES IN COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF COMPETITION AND PRICING ENVIRONMENTS, FLUCTUATIONS IN CURRENCY THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, EXCHANGE RATES AND INTEREST RATES AND OTHER FACTORS.SHOULD ONE OR PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD STATEMENTS AND INFORMATION IN THIS INVESTOR PRESENTATION, INCLUDING, UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY AMONG OTHERS, RISKS OR UNCERTAINTIES ASSOCIATED WITH THE COMPANY’S MATERIALLY FROM THOSE DESCRIBED IN THIS INVESTOR PRESENTATION. THE BUSINESS, SEGMENTS, DEVELOPMENT, GROWTH MANAGEMENT, FINANCING, COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS, AND, MORE UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS INVESTOR GENERALLY, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN PRESENTATION. 3

Noreco at a glance Contingent  A leading North Sea E&P company H1 2019 average 2P reserves resources production 195 100+ 58  Holds 36.8 per cent in Dansk Undergrunds Consortium 1 (DUC), million million kboepd boe the licence holder of the Sole boe Concession Area in Denmark Liquidity 2018  Operating cash flow secured at closing + SO 2 NIBD / EBITDA 3 183 through 2020 by liquids production 0.9x guarantee and price hedging USD million  Conservative capital structure 1 DUC is the owner of the Danish North Sea’s key infrastructure points. The bulk of Denmark’s produced hydrocarbons are landed via the Gorm and Tyra hubs. Four pipelines secure exports from the hubs to the Danish mainland and the international market. All fields are operated by Total, the French supermajor. 2 Subsequent offering 3 Pro-forma 2018. Interest bearing debt does not include the convertible bond 4

The DUC opportunity  Limited recent investments  No new exploration wells drilled since 2015  Production in decline  A reinvigorated partnership with new perspectives 43.2% (op.)  New operator, a supermajor with extensive 36.8% experience 1 20.0%  Core area for Noreco’s activities in Denmark  Determined to chase growth opportunities  Additional reserves potential in producing fields, in discoveries and in the greater Sole DUC Concession Area DUC discoveries Non-DUC  Technology advances trigger new projects Outside DCS 1 Owned by the Danish state 5

Production profile Company estimate Tyra back 60 on stream Reduced production Illustrative net daily production due to Tyra 50 Identified opportunities for redevelopment additional production currently being evaluated 2P gas 40 rate, ‘000 boepd production 30 OPEX estimate 20 USD 13 Oil price Protected hedging per boe 2 volumes 1 10 in place 1 2P gas and liquid production 0 2020 2021 2022 2023 2024 1 Noreco is protected by a liquid volume guarantee to 31 Dec 2020. 22 Oct 2018 Noreco and Shell Trading and Supply entered into a fixed price arrangement at market terms for 80% of the guaranteed liquid volume guarantee until 30 Sep 2020. 1 Aug 2019 Noreco entered into fixed price arrangements for the remaining guaranteed volumes at market terms 2 Estimated OPEX per boe following redevelopment and normalised production 6

Tyra redevelopment unlocks long-term potential Infrastructure redevelopment will provide strong foundation for future reserves growth 1 2022 Project scope Replacing two existing Scheduled accommodation and one completion processing platform by one single accommodation platform and one processing platform. DKK The jackets of the wellhead 17 bn and riser platforms will be raised and topsides CAPEX replaces. No new wells are planned as part of the redevelopment DKK 4 bn ABEX 1 Tyra redevelopment project enables continued production from the field and improves infrastructure for increased production in the area. Operator expects production will peak at around 60,000 boepd gross. Expected to enable the additional production of more than 200 mmboe (gross). Potential to unlock other adjacent fields and prospects, including Adda, Alma, Boje and Freja 7

Significant base of untapped in place volumes Hydrocarbons initially in place 1 (HCIIP) 9.5 13.7 4.2 3.5 bn boe bn boe bn boe bn boe HCIIP in Sole Historic Remaining Noreco’s share Concession area production and HCIIP over = 36.8 % current remaining and above 2P 2P 1 Company estimate 8

From resources to reserves Company estimate Noreco’s share of remaining HCIIP 1 “Noreco aims to deliver annual above 2P 3.5 2 2P growth” bn boe Resources Non- Current Discoveries Discoveries Movable Enhanced movable lacking 2P with plan without plan resources oil recovery resources technology 195 100+ Non-commercial million boe million boe 3 1 Hydrocarbons initially in place 2 Company estimate 3 Company’s current assessment of additional recoverable reserves in producing fields (3P) and contingent resources (2C) in discoveries with plan. Noreco is currently analysing all available G&G data in a comprehensive effort to redetermine accessible resources. All volumes are net to Noreco 9