WINTERSHALL DEA INVESTOR PRESENTATION THE LEADING EUROPEAN - - PowerPoint PPT Presentation

wintershall dea investor presentation
SMART_READER_LITE
LIVE PREVIEW

WINTERSHALL DEA INVESTOR PRESENTATION THE LEADING EUROPEAN - - PowerPoint PPT Presentation

WINTERSHALL DEA INVESTOR PRESENTATION THE LEADING EUROPEAN INDEPENDENT GAS AND OIL COMPANY AUGUST 2020 WINTERSHALL DEA INVESTOR PRESENTATION DISCLAIMER This document has been prepared by Forward-Looking Statements Non-GAAP and Non-IFRS


slide-1
SLIDE 1

WINTERSHALL DEA INVESTOR PRESENTATION

AUGUST 2020

THE LEADING EUROPEAN INDEPENDENT GAS AND OIL COMPANY

slide-2
SLIDE 2

WINTERSHALL DEA INVESTOR PRESENTATION

This document has been prepared by Wintershall Dea GmbH (“the Company”) for information purposes only. The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed

  • n, the fairness, accuracy, completeness or

correctness of the information or opinions contained herein. None of the Company or any

  • f their respective affiliates, advisors, or

representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document, or its contents, or otherwise arising in connection with this document. This document does not constitute, or form part

  • f, an offer or invitation to purchase any

securities and neither it nor part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever.

DISCLAIMER

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 2

Forward-Looking Statements This document includes projections and other “forward-looking statements”, which are based

  • n expectations of the Company’s management

and projections about future events and financial performance as of the date of the

  • presentation. These forward-looking statements

involve a number of risks, uncertainties, and assumptions about the Company and its subsidiaries, which are beyond the control of the

  • Company. In light of these risks, uncertainties

and assumptions, actual results may not occur

  • r may differ materially from those predicted in

the forward-looking statements and from the past performance of the Company. As a result, you should not rely on these forward-looking

  • statements. The Company accepts no obligation

to update any forward-looking statements set forth herein or to adjust them to future events

  • r developments.

Non-GAAP and Non-IFRS Financial Measures This document contains certain non GAAP and non IFRS measures and ratios, including for example EBITDAX, Adjusted Net Income and net debt that are not required by, or presented in accordance with, any GAAP or IFRS. These non GAAP and non IFRS measures and ratios may not be comparable to similarly titled measures used by other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS or any GAAP.

slide-3
SLIDE 3

COMPANY OVERVIEW

PAGE 3 WINTERSHALL DEA INVESTOR PRESENTATION

slide-4
SLIDE 4

WINTERSHALL DEA INVESTOR PRESENTATION

WINTERSHALL DEA AT GLANCE

PAGE 4

Diversified Upstream activities with full lifecycle capabilities

UPSTREAM

01

Exploration, Development and Production

High quality and stable Midstream business

MIDSTREAM

02

European Pipeline Networks

VALUE CHAIN

Production(1) 2P Reserves(2)

617

mboe/d

3.8

billion boe

13

Countries

OPERATIONAL

2.8

€ billion

EBITDAX(3) Operating Cash Flow(3)

1.9

€ billion

FINANCIAL

Baa2 (neg)

Moody‘s

BBB (sta)

Fitch

(1)

FY 2019 PRODUCTION COMPRISING PRODUCTION FOR WINTERSHALL DEA GROUP ON AL LIKE-FOR-LIKE BASIS (AGGREGATING PRODUCTION FOR WINTERSHALL GROUP FOR JANUARY TO APRIL 2019, THE PRODUCTION FOR DEA GROUP FOR JANUARY TO APRIL 2019 AND THE PRODUCTION FOR WINTERSHALL DEA GROUP FOR MAY – DECEMBER 2019) ON A WORKING INTEREST BASIS; INCLUDING PROPORTIONAL PRODUCTION FROM AT EQUITY ACCOUNTED COMPANIES; EXCLUDING LIBYA ONSHORE PRODUCTION;

(2)

2P RESERVES AS OF DECEMBER 31, 2019

(3)

FY 2019 FIGURES REPRESENT AN AGGREGATION OF JANUARY-APRIL FIGURES FOR WINTERSHALL HOLDINGS GMBH GROUP AND DEA DEUTSCHE ERDOEL AG GROUP AND MAY-DECEMBER ACTUALS FOR WINTERSHALL DEA GROUP, WITHOUT ANY PRO FORMA ADJUSTMENTS; EFFECTS FROM THE PURCHASE PRICE ALLOCATION INCLUDED FROM 1 MAY 2019 ONWARDS ONLY.

slide-5
SLIDE 5

WINTERSHALL DEA INVESTOR PRESENTATION

OUR STRATEGY

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 5

Energy demand growth globally Climate change and energy transition Abundance of low cost fossil fuels Renewables cannot keep up with demand growth Resilient, low cost, gas weighted upstream portfolio Exposure to high quality and stable midstream business Disciplined Financial Framework Competitive and sustainable shareholder returns Focus on Sustainability

LANDSCAPE OUR STRATEGY 01 02 03 04 05

slide-6
SLIDE 6

KEY INVESTMENT HIGHLIGHTS

PAGE 6 WINTERSHALL DEA INVESTOR PRESENTATION

slide-7
SLIDE 7

WINTERSHALL DEA INVESTOR PRESENTATION

KEY INVESTMENT HIGHLIGHTS

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 7

Diversified, gas weighted upstream portfolio Resilience through peer-leading production costs High quality and stable midstream business Strong partnerships with world class operators Robust financial policy anchored on

  • ur commitment to investment grade

Strong ESG footprint and focus on sustainability

03 02 01 06 05 04

slide-8
SLIDE 8

(1)

FY 2019 PRODUCTION COMPRISING PRODUCTION FOR WINTERSHALL DEA GROUP ON A LIKE-FOR-LIKE BASIS (AGGREGATING PRODUCTION FOR WINTERSHALL GROUP FOR JANUARY TO APRIL 2019, THE PRODUCTION FOR DEA GROUP FOR JANUARY TO APRIL 2019 AND THE PRODUCTION FOR WINTERSHALL DEA GROUP FOR MAY – DECEMBER 2019) ON A WORKING INTEREST BASIS; INCLUDING PROPORTIONAL PRODUCTION FROM AT EQUITY ACCOUNTED COMPANIES; EXCLUDING LIBYA ONSHORE PRODUCTION;

(2)

RESERVES AS OF DECEMBER 31, 2019

Northern Europe 24% Russia 58% MENA 11% LATAM 7%

WINTERSHALL DEA INVESTOR PRESENTATION

DIVERSIFIED, GAS WEIGHTED UPSTREAM PORTFOLIO

PAGE 8

Northern Europe 2019 Production: 201 mboe/d Mexico Brazil Argentina Algeria Libya Egypt UAE Russia

Northern Europe 33% Russia 47% MENA 8% LATAM 12%

617(1)

mboe/d

3.8

bn boe

Latin America 2019 Production: 76 mboe/d MENA 2019 Production: 51 mboe/d Russia 2019 Production: 289 mboe/d Established Upstream Business Units Growth Upstream Business Units Other Business Units

RESILIENT PORTFOLIO WITH DIVERSIFIED PRICING CONSTRUCTS KEY FIGURES 2019

Production Reserves(2) 3.0 3.8 6.0 2.2 1P 2P 2C 2P+2C 1P R/P 13 years 2P R/P 17 years 1P+2C R/P 27 years bn boe

01

72% Gas 70% Gas

slide-9
SLIDE 9

WINTERSHALL DEA INVESTOR PRESENTATION

HIGH QUALITY AND STABLE MIDSTREAM BUSINESS

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 9

4,140 km

  • nshore gas

pipelines

PARTICIPATION IN MIDSTREAM ASSETS STRONG FINANCIAL CONTRIBUTION TO THE GROUP(1) (€ MILLION)

Compressor stations NEL/OPAL GASCADE pipeline network Transit pipeline (third-party) Nord Stream Nord Stream 2 (financing only)

272 282 283 159 161 164 2017 2018 2019 EBITDA Net Income

Long term potential in low-carbon environment – hydrogen transportation Predictable and stable business Buffer against commodity price volatility High quality and modern infrastructure assets

(1)

FROM DECEMBER 2019, WIGA GROUP CONSOLIDATED AT EQUITY

02

slide-10
SLIDE 10

WINTERSHALL DEA INVESTOR PRESENTATION

RESILIENCE THROUGH PEER-LEADING PRODUCTION COSTS

PAGE 10

5.1

Peer median: $7.7/boe

SOURCE: COMPANY AND PUBLIC INFORMATION

$/boe

(1)

PRODUCTION COSTS INCLUDE ONLY PRODUCTION RELEVANT AND OPERATING LEASE EXPENSES.

(2)

  • INCL. AKER BP, APACHE, BP, CONOCOPHILLIPS, ENI, EQUINOR, GALP, HESS, LUNDIN, NOBLE ENERGY, OMV, OXY, REPSOL, SANTOS, SHELL, TOTAL, WOODSIDE

PRODUCTION COSTS(1) VS. PEERS (2017-2019 AVERAGE)(2) PRODUCTION COSTS OVER TIME ($/BOE)

7.1 4.3 3.9

2014 2019 1H 2020

~ 45 %

03

slide-11
SLIDE 11

WINTERSHALL DEA INVESTOR PRESENTATION

STRONG PARTNERSHIPS WITH WORLD CLASS OPERATORS

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 11

Non-operated Operated JV-operated

Country Production 2019, mboe/d Operating in the country since Key Partners

Russia 289 1990s Norway 145 1970s Argentina 72 1980s Egypt 38 1970s Mexico 4 2017 UAE N/A Development

PROVEN PARTNERSHIP MODEL WITH LONG HISTORY OF OPERATIONAL TRACK RECORD

~2/3 of production(1)

  • wn or

JV-operated

(1)

2019 PRODUCTION SPLIT

04

slide-12
SLIDE 12

WINTERSHALL DEA INVESTOR PRESENTATION

ROBUST FINANCIAL POLICY ANCHORED ON OUR COMMITMENT TO INVESTMENT GRADE

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 12

Growth 04

CLEAR PRIORITIES AND CAPITAL ALLOCATION Disciplined capital allocation in selected profitable growth

Capacity to pay competitive dividends through the cycle

Maintain our solid investment grade rating

Sustaining and committed capex 01 Balance sheet 02 Dividend 03 05

Fulfill commitments and maintain current production

slide-13
SLIDE 13

WINTERSHALL DEA INVESTOR PRESENTATION

STRONG ESG FOOTPRINT AND FOCUS ON SUSTAINABILITY

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 13

OUR APPROACH – MORE ENERGY, LESS EMISSIONS

Offsetting Net GHG reduction supported by nature-based solutions Technologies Technology development to enable energy transition Portfolio Emission efficiency via portfolio construction Management Emission efficiency in

  • perations incl. reduction

targets Transparency Comprehensive reporting incl. GRI, CDP and TCFD

WE ACHIEVED Founding Signatory of Methane Guiding Principles Gas in our portfolio Promoter of hydrogen Research collaboration with KIT(1) on hydrogen and CCS Deliver IOGP stretch target

  • f zero flaring

70 %

(1)

KARLSRUHE INSTITUTE OF TECHNOLOGY

We are part of the energy transition

06

slide-14
SLIDE 14

FINANCIAL AND OPERATIONAL RESULTS

PAGE 14 WINTERSHALL DEA INVESTOR PRESENTATION

slide-15
SLIDE 15

WINTERSHALL DEA INVESTOR PRESENTATION

2020 DELIVERING ON CRISIS ACTIONS

PAGE 15

TOP PRIORITIES CONTINUING TO DELIVER IMPLEMENTED DECISIVE MEASURES

Production and development capex budget reduced by 30%

Exploration budget reduced by 20%

Opex budget reduced by 10%

Dividend suspended

Protecting our people Business continuity Balance sheet No material impact to production Record low production costs of $3.5/boe in Q2 achieved Positive free cash flow outlook for 2020

slide-16
SLIDE 16

WINTERSHALL DEA INVESTOR PRESENTATION

SECOND QUARTER PERFORMANCE

PAGE 16 PAGE 16

OPERATIONAL FINANCIAL HEALTH AND SAFETY

Production(1) Production Cost

606

mboe/d

3.5

$ per boe

367

€ million Q2 2019(2): 614 mboe/d Q2 2019(2): $4.1/boe

CAPEX(3)

Q2 2019(2): €465 million

254

€ million

EBITDAX Free Cash Flow

  • 294

€ million

90

€ million Q2 2019(2): €683 million Q2 2019(2): €33 million

  • Adj. Net Income

0.58 LTIF

TRIR

1.57

Q2 2019: 0.36 Q2 2019: 3.49 Q2 2019(2): €330 million

1)

EXCLUDING LIBYA ONSHORE PRODUCTION

2)

LIKE-FOR-LIKE PRESENTATION, AGGREGATING THE INCOME STATEMENT OF THE WINTERSHALL GROUP FOR APRIL 2019 (IN THE NEW REPORTING STRUCTURE), THE INCOME STATEMENT OF THE DEA GROUP FOR APRIL 2019 (IN THE NEW REPORTING STRUCTURE) AND THE INCOME STATEMENT OF THE WINTERSHALL DEA GROUP FOR MAY - JUNE 2019, EFFECTS FROM THE PURCHASE PRICES ALLOCATION ONLY INCLUDED FROM 1 MAY 2019 ONWARDS

3)

INCLUDING CAPITALIZED EXPLORATION AND ACQUISITIONS

slide-17
SLIDE 17

Balance Sheet

RESULTS SUMMARY

Unit

Q2 2020 Q2 2019(2)

FY 2019(3) FY 2018(4) Production(1) mboe/d

606 614

617 566 Brent $/boe

30 69

64 71 Gas TTF $/mscf

2.1 4.8

4.4 7.9 EBITDAX € million

254 683

2,828 3,591 Operating Cash Flow € million

99 494

1,866 2,796 Capex(5) € million

367 465

1,676 1,570 Free Cash Flow € million

  • 294

33

190 1,182 Net income € million

  • 703
  • 868
  • 673

952 Adjusted Net income(6) € million

90 330

879 1,055

30.06.2020 31.03.2020

31.12.2019 31.12.2018 Net Debt € million

5,999 5,713

5,762 – Leverage Ratio (LTM) x

2.9 2.3

2.0x – Liquidity € million

1,797 2,441(7)

WINTERSHALL DEA INVESTOR PRESENTATION

Environment Financial Results

(1) EXCLUDING LIBYA ONSHORE PRODUCTION; THE PERIOD Q2 2019 COMPRISES PRODUCTION FOR WINTERSHALL DEA GROUP ON AL LIKE-FOR-LIKE BASIS (AGGREGATING PRODUCTION FOR WINTERSHALL GROUP FOR APRIL 2019, THE PRODUCTION FOR DEA GROUP FOR APRIL 2019 AND THE PRODUCTION FOR WINTERSHALL DEA GROUP FOR MAY – JUNE 2019) ON A WORKING INTEREST BASIS; INCLUDING PROPORTIONAL PRODUCTION FROM AT EQUITY ACCOUNTED COMPANIES (2) LIKE-FOR-LIKE PRESENTATION, AGGREGATING THE INCOME STATEMENT OF THE WINTERSHALL GROUP FOR APRIL 2019 (IN THE NEW REPORTING STRUCTURE), THE INCOME STATEMENT OF THE DEA GROUP FOR APRIL 2019 (IN THE NEW REPORTING STRUCTURE) AND THE INCOME STATEMENT OF THE WINTERSHALL DEA GROUP FOR MAY - JUNE 2019, EFFECTS FROM THE PURCHASE PRICE ALLOCATION ONLY INCLUDED FROM 1 MAY 2019 ONWARDS. (3) FY 2019 FIGURES REPRESENT AN AGGREGATION OF JANUARY-APRIL FIGURES FOR WINTERSHALL GROUP AND DEA GROUP AND MAY-DECEMBER ACTUALS FOR WINTERSHALL DEA GROUP, WITHOUT ANY PRO FORMA ADJUSTMENTS (4) FY 2018 FIGURES REPRESENT AN AGGREGATION OF JANUARY-DECEMBER FIGURES FOR WINTERSHALL GROUP AND DEA GROUP WITHOUT ANY PRO FORMA ADJUSTMENTS (5) INCLUDING CAPITALIZED EXPLORATION AND ACQUISITIONS; (6) ADJUSTED FOR SPECIAL ITEMS LIKE IMPAIRMENT LOSSES AND EXPENSES RELATED TO THE MERGER SUCH AS RESTRUCTURING AND INTEGRATION; (7) AS REPORTED, INCLUDING WORKING CAPITAL LINES SIGNED AFTER QUARTER END
slide-18
SLIDE 18

WINTERSHALL DEA INVESTOR PRESENTATION

PRODUCTION

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 18

(1)

INCLUDES PRODUCTION FROM AT-EQUITY ACCOUNTED COMPANIES, EXCLUDING LIBYA ONSHORE VOLUMES

205 210 186 200 207 199 306 280 264 307 300 287 41 48 59 55 49 46 74 76 80 75 70 74 626 614 589 638 626 606

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Northern Europe Russia MENA Latam

% Gas 72% 72% 71% 73% 73%

Russia Gas Russia Condensate Argentina Gas Other Non- Europe Gas Europe Spot Gas Brent Crude

606

(mboe/d)

38% 10% 7% 18% 17% 9%

PRODUCTION(1) (WI, MBOE/D) Q2 2020 PRODUCTION(1) COMPOSITION

~36% of total production linked directly to spot Brent and European gas prices 73%

slide-19
SLIDE 19

WINTERSHALL DEA INVESTOR PRESENTATION

PROFITABILITY

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 19

2,355 1,671 419 463 397 320 235 270 282 275

  • 98
  • 170

3,591 2,828

2018 2019

379 118 105 37 95 43 65 27 78 58

  • 39
  • 29

683 254

Q2 2019 Q2 2020

Northern Europe Russia MENA Other Midstream Latam

EBITDAX (€ MILLION) ADJUSTED NET INCOME (€ MILLION)

1,055 879

2018 2019

330 90

Q2 2019 Q2 2020

  • 21 %
  • 63 %
  • 17 %
  • 73 %
slide-20
SLIDE 20

WINTERSHALL DEA INVESTOR PRESENTATION

COST PERFORMANCE

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 20

5.7 5.4 4.3 4.1 3.5

2017 2018 2019 Q2 2019 Q2 2020

PRODUCTION COST EVOLUTION ($/BOE)

1)

COST OF TRADE GOODS INCLUDES PRIMARILY TRADING ACTIVITIES. OTHER PRIMARILY INCLUDES TRANSPORT FEES AND LEASES AND OTHER COST OF SALES

Q2 2020 PRODUCTION AND OPERATING EXPENSES

Production Costs Cost of Trade Goods Other 32% 28% 40%

€333

million

(1)

slide-21
SLIDE 21

APPENDIX

PAGE 21 WINTERSHALL DEA INVESTOR PRESENTATION

slide-22
SLIDE 22

Dawn Summers COO Northern Europe and MENA Mario Mehren Chairman of the Board and CEO Thilo Wieland Board Member for Russia, LatAm and Midstream Hugo Dijkgraaf CTO

WINTERSHALL DEA INVESTOR PRESENTATION

HIGHLY EXPERIENCED AND DIVERSE LEADERSHIP TEAM

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 22

Paul Smith CFO

CEO of Wintershall, Chairman of the Board of Executive Directors (2015-2019) Member of the Board of Executive Directors responsible for Exploration & Production Russia, North Africa and South America (2011-2015) Head of Finance & Information Management, Wintershall (2006 – 2011) Various positions with BASF (1998- 2006) Member of the Board of Executive Directors of Wintershall (2015-2019) Various other positions with Wintershall since 1999, including General Manager, Libya (2014 – 2015) and Vice President, Strategy & Portfolio Management (2013 – 2014) Managing Director of Wintershall Norge (2017-2019) Various other positions with Wintershall since 2000, including Vice President and Project Director

  • f the Maria development, Norway

(2012 – 2017) Chief Operating Officer, Beach Energy (2018-2020) Chief Operating Officer, Origin Energy (2016-2018) Head of HSE , Operations and Development, Genel Energy (2013- 2015) Various positions with BP between 1993 and 2013 Co – Founder & CFO, Vesta Energy (2017-2019) CFO and Executive Vice President, Talisman Energy (2013 – 2016) Executive Vice President, North America, Talisman Energy (2009 – 2013) Various positions with BP between 1993 and 2009 10+ years in senior E&P roles 25+ years in E&P 25+ years in E&P 20+ years in E&P 15+ years in E&P

slide-23
SLIDE 23

WINTERSHALL DEA INVESTOR PRESENTATION

SHAREHOLDER STRUCTURE AND CORPORATE GOVERNANCE

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 23

SIMPLIFIED CORPORATE STRUCTURE CORPORATE GOVERNANCE

Ordinary shares Preference shares(1) 67% (72.7%) (33% (27.3%) 5.7% 100% Wintershall Dea Finance BV

Wintershall Dea GmbH

Employee representatives BASF nominees LetterOne nominees Independents WD Executive Team Supervisory Board Oversight of the Management Board Chairman rotates every 15 months between two shareholders Shareholders Committee Approval of annual budgets, new country entries, major capital commitments and changes to corporate governance Executive Board Board Responsible for delivering the strategy and ongoing operations

Lord Browne

  • f Madingley

Michael Heinz German Khan Hans-Ulrich Engel

SHAREHOLDER COMMITTEE

(1) PREFERENCE SHARES WILL BE CONVERTED INTO ORDINARY SHARES IN WINTERSHALL DEA NO LATER THAN 36 MONTHS AFTER CLOSING BUT IN ALL CASES BEFORE AN IPO.

All other subsidiaries

slide-24
SLIDE 24

WINTERSHALL DEA INVESTOR PRESENTATION

DEFINITIONS

WINTERSHALL DEA INVESTOR PRESENTATION PAGE 24

Adjusted Net Income

  • Adjusted net income is net income adjusted for identified items such as impairments, expenses related to the merger, deconsolidation effects and other
  • ne-off effects

Break-Even Price

  • FCF Break-even defined as brent price required for free cash flow before acquisitions and dividends to be zero, assuming TTF of $4.0 / mcf and constant domestic prices.

CAPEX

  • Capex (excluding M&A, incl. capitalized exploration expenditure) for the Group consists of payments for intangible assets, property, plant and equipment and investment

property EBITDAX

  • EBITDAX defined as income before tax but adjusted for the following items: financing costs, exploration expense, DD&A and impairments, acquisitions, disposals, identified

items, minority interest, FX gains and losses, pensions, loss or gain in relation to disposal of fixed assets Free cash flow

  • Free cash flow for the Group comprises the cash flow from operating activities and the cash flow from investing activities but excludes payments for acquisitions

Leverage

  • Net debt divided by last twelve months EBITDAX

LTIF

  • Lost time injury frequency per million work-hours

Net Debt

  • Net debt consists of liabilities to banks, bonds, interest bearing financial liabilities from cash-pooling towards related parties and leasing liabilities less cash and cash

equivalents and less interest-bearing financial receivables from cash-pooling from related parties Production costs

  • Production costs include G&A allocation but exclude export and processing tariffs, finance items and R&D

TRIR

  • Total Recordable Incident Rate per million hours worked