WINTERSHALL DEA INVESTOR PRESENTATION
THE LEADING EUROPEAN INDEPENDENT GAS AND OIL COMPANY
MAY 2020
WINTERSHALL DEA INVESTOR PRESENTATION THE LEADING EUROPEAN - - PowerPoint PPT Presentation
WINTERSHALL DEA INVESTOR PRESENTATION THE LEADING EUROPEAN INDEPENDENT GAS AND OIL COMPANY MAY 2020 WINTERSHALL DEA INVESTOR PRESENTATION DISCLAIMER This document has been prepared by Wintershall Dea GmbH (the Company) for information
MAY 2020
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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 on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company or any of their respective affiliates, advisors, or representatives shall have any liability whatsoever (in negligence or
This document does not constitute, or form part of, 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. Forward-Looking Statements This document includes projections and other “forward-looking statements”, which are based on 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 or 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 or developments. Non-GAAP and Non-IFRS Financial Measures This document contains certain non GAAP and non IFRS measures and ratios, including for example EBITDAX 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.
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High quality and stable Midstream business
Exploration – Development – Production European Pipeline Networks
UPSTREAM MIDSTREAM
Diversified Upstream activities with full lifecycle capabilities
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Focus on Sustainability Strict Financial Framework Competitive and sustainable shareholder returns Advantaged, gas weighted upstream portfolio Exposure to high quality and stable midstream business
Climate change and energy transition Abundance of low cost fossil fuels Energy demand growth globally Renewables cannot keep up with demand growth
OUR STRATEGY LANDSCAPE
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Large and diversified upstream portfolio
1 2 3
Strong partnerships with world class operators Resilience through top decile production costs Exposure to high quality and stable midstream business Robust financial policy anchored on our commitment to investment grade
4 5 7
Excellent ESG footprint and strong focus on sustainability
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Brazil Argentina Mexico Algeria Libya Egypt UAE Russia
Established Upstream Business Units Growth Upstream Business Units Other Business Units
Northern Europe
‘19 Production: 201 mboe/d
Russia
‘19 Production: 289 mboe/d
Latin America
‘19 Production: 76 mboe/d
MENA
‘19 Production: 51 mboe/d
RESILIENT PORTFOLIO WITH DIVERSIFIED PRICING CONSTRUCTS KEY FIGURES 2019
(1) EXCLUDING LIBYA ONSHORE PRODUCTIONReserves Replacement Ratio
2P Reserves Life
Nothern Europe Russia MENA LATAM 33% 47% 8% 12%
617(1) mboe/d
Production
Liquids Gas
Reserves
3.8 bn boe
30% 70%
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▪ Predictable and stable
business
▪ Buffer against commodity
price volatility
▪ High quality and modern
infrastructure assets
▪ Long term potential in low-
carbon environment - hydrogen transportation
272 282 283 159 161 164 2017 2018 2019 EBITDA Net Income
OUR PIPELINE NETWORK STRONG FINANCIAL CONTRIBUTION TO THE GROUP(1) (€ MILLION)
Compressor stations GASCADE pipeline network Transit pipeline (third-party) NEL/OPAL Nord Stream Nord Stream 2 (financing only)
4,140 km onshore gas pipelines
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FROM DECEMBER 2019, WIGA GROUP CONSOLIDATED AT EQUITY
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PRODUCTION COSTS OVER TIME ($/BOE) PRODUCTION COSTS(1) VS. PEERS (2017-2019 AVERAGE)(2)
7.1 4.3 2014 2019
5.1 Peer median: $7.7/boe
(1)
PRODUCTION COSTS INCLUDE ONLY PRODUCTION RELEVANT AND OPERATING LEASE EXPENSES.
(2)
(3)
AGGREGATED NUMBER FOR WINTERSHALL AND DEA. FOR ILLUSTRATIVE PURPOSES ONLY.
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SOURCE: COMPANY AND PUBLIC INFORMATION
40 %
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$/boe
Non-operated Operated JV-operated 67%
PROVEN PARTNERSHIP MODEL
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
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WITH LONG HISTORY OF OPERATIONAL TRACK RECORD
(1)
2019 PRODUCTION SPLIT
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~2/3 OF PRODUCTION(1) OWN OR JV-OPERATED
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Conservative capital structure & financial discipline
▪
Maintain our investment grade rating
Prioritising shareholder returns
▪
Capacity to pay competitive dividends through the cycle
Value-driven growth
▪
Disciplined capital allocation in selected profitable growth BALANCE SHEET DIVIDEND GROWTH
2 3 4
SUSTAINING AND COMMITTED CAPEX
1
CLEAR PRIORITIES AND CAPITAL ALLOCATION CAPITAL ALLOCATION FRAMEWORK
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(1)
WINTERSHALL DEA IS COMMITTED TO THE WORLD BANK’S ZERO ROUTINE FLARING BY 2030 INITIATIVE
Women in executive positions Zero harm to people No routine flaring and venting(1)
OUR SUSTAINABILITY TARGETS OUR UNITED NATIONS SUSTAINABILITY GOALS OUR APPROACH – MORE ENERGY, LESS EMISSIONS
Transparency
Implement TCFD recommendations Top performer in IOGP ranking by 2025
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TOP PRIORITIES Protecting our people Business continuity Preserving liquidity OUR RESILIENT BUSINESS PROFILE Low cost asset base
to below $20/boe in 2021(1) Midstream business contributing c. €140 million of stable cash flow Diversified portfolio with multiple pricing mechanisms OUR RESPONSE TO THE CRISIS Development capex reduced 30% Exploration spend reduced 20% Opex reduced 10% Dividend suspended Increased liquidity to €2.4 billion
(1) ASSUMING $4/MCF TTF
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2 3 4 1 5
(1)
EXCLUDING LIBYA ONSHORE PRODUCTION
(2)
Q1 2019 FIGURES REPRESENT AN AGGREGATION OF JANUARY-MARCH FIGURES FOR WINTERSHALL HOLDINGS GMBH GROUP AND DEA DEUTSCHE ERDOEL AG GROUP WITHOUT ANY PRO FORMA ADJUSTMENTS
(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
(4)
FY 2018 FIGURES REPRESENT AN AGGREGATION OF JANUARY-DECEMBER FIGURES FOR WINTERSHALL HOLDINGS GMBH GROUP AND DEA DEUTSCHE ERDOEL AG GROUP WITHOUT ANY PRO FORMA ADJUSTMENTS
(5)
ADJUSTED FOR INTEGRATION AND RESTRUCTURING COST
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Balance Sheet
Unit Q1 2020 Q1 2019(2) Performance FY 2019(3) FY 2018(4) Performance
Production(1) mboe/d 626 626
(0%) 617 566
(+9%) Brent $/boe 50 63
(-21%) 64 71
(-10%) Gas TTF $/mscf 3.7 7.1
(-48%) 4.4 7.9
(-44%) EBITDAX € million 481 832
(-43%) 2,828 3,591
(-21%) Operating Cash Flow € million 502 581
(-14%) 1,866 2,796
(-33%) Capex € million 357 361
(-1%) 1,676 1,570
(+7%) Free Cash Flow € million 137 118
(+16%) 190 1,182
(-84%) Adjusted Net income(5) € million
320
(-126%) 879 1,055
(-17%)
Unit 31.03.2020 31.03.2019 Performance 31.12.2019 31.12.2018 Performance
Net Debt € million 5,713 5,762
5,762
x 2.3 2.0
2.0x
Financial Results
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1)
INCLUDES PRODUCTION FROM AT-EQUITY ACCOUNTED COMPANIES, EXCLUDING LIBYA ONSHORE VOLUMES
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PRODUCTION(1) (WI, MBOE/D)
% Gas 69 % 72 %
Q1 2020 PRODUCTION(1) COMPOSITION
~35% OF TOTAL PRODUCTION LINKED DIRECTLY TO SPOT BRENT AND EUROPEAN GAS PRICES
72 % 72 % 71 % 73 % 73 %
Russia Gas Russia Condensate Argentina Gas Other Non- Europe Gas Europe Spot Gas Brent Crude
626 (mboe/d)
9% 39% 9% 7% 18% 18%
203 201 205 211 186 200 207 252 289 306 280 264 307 300 37 51 41 48 59 55 49 74 76 74 76 80 75 70 566 617 626 615 589 638 626 2018 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Northern Europe Russia MENA Latam
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EBITDAX (€ MILLION)
2,355 1,671 419 463 397 320 235 270 282 275
3,591 2,828 2018 2019
Northern Europe Russia MENA Midstream Other Latam
508 328 172 105 74 61 44 8 80 44
832 481 Q1 2019 Q1 2020
ADJUSTED NET INCOME (€ MILLION)
1,055 879 2018 2019 320
Q1 2019 Q1 2020
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21 % 42 % 17 % 124 %
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Q1 2020 PRODUCTION AND OPERATING EXPENSES PRODUCTION COST EVOLUTION ($/BOE)
33% 39% 28% 5.7 5.4 4.3 4.3 4.3 2017 2018 2019 Q1 2019 Q1 2020
€496 million
COST OF TRADE GOODS PRIMARILY INCLUDES TRADING ACTIVITIES OTHER PRIMARILY INCLUDES TRANSPORT FEES AND LEASES WINTERSHALL DEA INVESTOR PRESENTATION
Other Production Costs Costs of Trade Goods
3.8 6.0 3.0 2.2 1P 2P 2C 2P+2C
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Gas Other liquids Condensate Northern Europe Russia MENA Latam
2P PRODUCT SPLIT 2P REGIONAL SPLIT
2PD 2PUD
SIGNIFICANT UNDEVELOPED RESERVES UPSIDE
bn boe
2P RP 17 years
1P RP 13 years 2P+2C RP 27 years
PEER LEADING RUNNING ROOM IN TERMS OF R/P AND 2PUD/2P RATIOS
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13% 17% 70% 58% 11% 7% 24% 55% 45%
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Brazil Argentina Mexico Algeria Libya Egypt UAE Russia
Northern Europe Germany:
technological base with focus on EOR Norway:
significant short-medium term growth and attractive exploration upside in proximity to existing infrastructure
Rest of Europe:
Middle East and North Africa Egypt:
during past political unrest UAE:
the acquisition of the Ghasha concession, highly promising gas and condensate offshore development project Algeria:
Sahara with challenging geological and logistical demands Libya:
geopolitical issues Russia
1990s
generation
Latin America Mexico:
acquired blocks Brazil:
licenses in one of the most attractive hydrocarbon provinces aiming to build a significant resource base Argentina:
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SOUTHERN NORTH SEA: SMART OFFSHORE OPERATIONS NORWAY: WD IS THE LEADING INTERNATIONAL OIL AND GAS COMPANY IN THE COUNTRY
Key assets WI (%) Operators
Key producing assets Aasta Hansteen 24% Equinor Vega 56% Wintershall Dea Skarv 28% Aker BP Edvard Grieg 9% Lundin Maria 50% Wintershall Dea Gjøa 28% Neptune Energy Key development projects Njord 50% Equinor Dvalin 55% Wintershall Dea Nova 45% Wintershall Dea Ærfugl 28% Aker BP
2P Reserves: 671 mmboe R/P: 13 Production 2019 (mboe/d)
Key assets WI (%) Operators
Key producing assets Wingate 64.5% Wintershall Noordzee Ravn 63.6% Wintershall Noordzee Key development projects Rembrandt/ Vermeer 30% Wintershall Noordzee
Key Highlights
Key Highlights
platforms
accounted at equity in Wintershall Dea accounts
GERMANY: OPERATIONS AT HIGHEST TECHNICAL STANDARDS
Key assets WI (%) Operators
Key producing assets Mittelplate 100% Wintershall Dea Völkersen 100% Wintershall Dea Emlichheim 90% Wintershall Dea
2P Reserves: 223 mmboe R/P: 13 Production 2019 (mboe/d) Key Highlights
49% 51% Oil Gas 25 24 Total: 49 76 70 Total: 146 48% 52% Oil Gas
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RUSSIA: STRONG CASH FLOW FROM LONG-LIFE PRODUCING FIELDS
Key assets WI (%) Operators
Key producing assets Achimov 1A 50% Achimgaz Yuzhno Russkoye (Cenomanian layers) 35%(1) Severneftegazprom Wolgodeminoll 50% RITEK Key development projects Yuzhno Russkoye (Turonian layers) 35%(1) Severneftegazprom Achimov 4A & 5A 25% Achim Development
2P Reserves: 2,234 mmboe R/P: 21 Production 2019 (mboe/d) Key Highlights
worldwide
1)
ECONOMIC SHARE, WINTERSHALL DEA HAS 25 % LEGAL INTEREST IN THE PROJECT
254 56 Total: 289 19% 81% Oil Gas
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BRAZIL: GROWTH COUNTRY MEXICO: SUCCESSFUL EXPLORATION AND APPRAISAL
Key assets WI (%) Operators
Key producing assets Ogarrio 50% Wintershall Dea Key E&A assets Zama 40% Talos Energy Block 2 30% Pemex Blocks 16,17 & 30 40% Wintershall Dea
2P Reserves: 41 mmboe R/P: 26 Production 2019 (mboe/d)
Key assets WI (%) Operators
Key exploration assets 3 licenses Potiguar Basin 70% Wintershall Dea 1 license Ceará Basin 100% Wintershall Dea 3 licenses Campos Basin 20% Repsol 2 licenses Santos Basin 20% Chevron
Key Highlights
Zama discovery Key Highlights
Potiguar basins and five non-operated licenses in in Santos and Campos basins
ARGENTINA: LARGEST DRY GAS PRODUCER IN THE REGION
Key assets WI (%) Operators
Key producing assets CMA-1 37.5% Total Aguada Pichana 27%% Total Aguada Federal 50% Wintershall Dea Banduria Norte 50% Wintershall Dea
2P Reserves: 214 mmboe R/P: 8 Production 2019 (mboe/d) Key Highlights
65 7 Total: 72 1 3 Total: 4 9% 91% Oil Gas 70% 30% Oil Gas
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21% 79% Oil Gas
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UAE: ESTABLISHED POSITION VIA TECHNICAL COMPETENCE ALGERIA: ONSHORE DRILLING EXPERTISE
Key assets WI (%) Operators
Key producing assets Reggane Nord 19.5% Repsol
Production 2019 (mboe/d)
Key assets WI (%) Operators
Key development projects Ghasha 10% ADNOC
Key Highlights
with production until at least 2040 Key Highlights
developments, Ghasha
sour gas project
EGYPT: FOCUSED OPERATIONS
Key assets WI (%) Operators
Key producing assets Disouq 50% DISOUCO Gulf of Suez 50% SUCO West Nile Delta 17.25% BP
2P Reserves: 120 mmboe R/P: 10 Production 2019 (mboe/d) Key Highlights
around three assets
energy projects in Egypt
30 8 Total: 38 0% 100% Oil Gas 9 Total: 9
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Mario Mehren Chairman of the Board and CEO Paul Smith CFO Dawn Summers(1) COO Northern Europe and MENA Thilo Wieland Board Member for Russia, LatAm and Midstream Hugo Dijkgraaf CTO Roles
sector on average
Shareholders' Committee
Shareholders Committee Supervisory Board
Executive / Management Board
German Khan Michael Heinz Lord Browne of Madingley Hans-Ulrich Engel
THREE-TIER GOVERNANCE STRUCTURE EXECUTIVE BOARD SHAREHOLDER COMMITTEE
(1) TO BE APPOINTED AS OF JUNE 1ST, 2020