Equinor Asa · OSL:EQNR
Equinor Asa — Statoil — Investor Day (February 2018)
56 slides from Equinor Asa's investor day presentation, Feb 7, 2018
Slide 1: Capital markets update
Capital markets update LONDON, FEBRUARY 7, 2018 Delivering high value Eldar Seetre, CEC Arne Sigve Nylund,£VP Lars Christian Bacher. [ Hans Jakob Hegge. CF Jent and Chief Executive Officer avelopment and Production Norwa velopment and Production International Chief Financial Office Margareth Ovrum o
Slide 2: Forward-looking statements
ao Fesraoi Forward-looking statements This presentation contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as “ambition”, “continue”, “likely’, "may", “outlook’, ‘plan’, “strategy”, “will, “guidance” and similar expressions to identify
Slide 3: Delivering high value
Delivering high value Eldar Seetre President and Chief Executive Officer Statoil
Slide 4: Always safe, high value, low carbon
Always safe Serious incident frequency! 2.2 19 L4 11 109 08 | 1 TT aL i O 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1. Serious incidents per million work-hours. Page 4 Idar Seetre, High value Break-even next generation portfolio” 2 1 USD/bbl Free cash flow positive below 5 O USD/bbl 2017 eff
Slide 5: Recovering markets - need for significant new energy supplies
¥ Statoil Delivering high value Recovering markets - need for significant new energy supplies Recovering oil and gas prices USD 90 808 75@ 068 60 30 0) 1 tf 2 S 5 2 a S — Brent (USD/bbl) ——NBP (USD/mmBtu, rhs) 140 120 100 Need for new oil and gas mmboe/d g a g & & & Oil demand range — Oil decline I
Slide 6: Strong financial position - increasing dividend
at 74° Statoil. Delivering high value Strong financial position - increasing dividend Committed to capital distribution Strong cash generation and value creation AQ dividend 0.23 USD per share? + 4.5% cash dividend increas Free cash flow! Accumulated free Net debt ratio? RoACE? positive cash Flow? :
Slide 7: Creating value from competence and technology
Statoil Delivering high value. Creating value from competence and technology Value drivers Operational excellence recovery World class Leading project delivery Premium Digital market access leader BRAZIL UNCONVENTIONAL OFFSHORE WIND @ Efficiency improvement 2013 to 2017. Expected ultimate recovery y
Slide 8: A world class project portfolio
Statoil. Delivering high value. A world class project portfolio Johan Sverdrup Next generation portfolio? g S cash flow starting Delivering world Class returns Break-even? Increased net Internal rate Phase 1 Full field phase 1 Break-even Break-even present value*> of return? Below Below Above Above
Slide 9: Renewing and strengthening our resources
Statoil Delivering high value. Renewing and strengthening Non-sanctioned project: our resources with large potential? Reserve replacement Adding high value Exploration ratio barrels 2018 1 Nord Above Around mae” bn boe in 20171 el) Increasing resources from 3 to Around 6 bn barre Transactions’: Carc
Slide 10: Continuing the transformation
NA AH Statoil Delivering high value. Continuing the transformation Unit production cost! Cost per well Sustain Around _ 10) level in 2020 2016 to 2018 RoACE? Above 10% 2018 + Maintaining cost and financial discipline + Locking in effects + Continuous improvement 1. USD/boe Statoil share, real, assum
Slide 11: Positioned for a low carbon future
ie * Statoil. Delivering high value. Positioned for a low carbon future Competitive advantage Low carbon oil & gas portfolio Industrial position in new energy + Industry leader on carbon intensity + Ambitious CO, emission reduction targets + Competitive returns - 9-11%! + Stress-testing and transpar
Slide 12: Growing cash flow, returns and dividend
wa “4° Statoil Delivering high value Delivering high value Growing cash flow, returns and dividend Investing in world Class projects Leveraging strengths to create value 1 Assuming 70 USD/bb. Cash flow around 12 bn USD 2018-2020! RoACE around 12% in 2020! Dividend growth 4.5%2 Next generation portfo
Slide 13: Delivering high value on the NCS
Delivering high value on the NCS Arne Sigve Nylund EVP Development and Production Norway & Margareth @vrum EVP Technology, Projects and Drilling i Statoil
Slide 14: Statoil uniquely positioned to capture long term value
LU ‘ HF statoil Alivering high value on the Nt Statoil uniquely positioned to capture long term value Value drivers Operational World class Leading project Premium Digital excellence recovery delivery market access leader Five decades of renewal and innovation Resources, assets and infrastructure in
Slide 15: Growing production - reducing costs
Statoil. Delivering high value on the OPERATIONAL EXCELLENCE Growing production - reducing costs _ CO, Intensity” ’ Total production Capex kboe/c bn USD 1750 - 12 1500 —b2s=aaaenen=2 2 / 50 ° 1250 4 1000 4 150 CO, reductions 500 4 250 0 0 2013. «2014-2015, 2016-2017 2013. «2014-=Ss«2015-=Ss—«2016-S«
Slide 16: Adding around 125k barrels per day
Statoil. Delivering high value on the OPERATIONAL EXCELLENCE Adding around 125k barrels per day! Increased production efficiency Unplanned losses Around Planned stops Around 2013 2017 1. Statoil operated activity- estimated pro rease compared to 2C 2. Production wells on and brownfield) Average per
Slide 17: Adding billion barrels of oil reserves
NA H* statoil Delivering high value on the NCS. WORLD CLASS RECOVERY Adding 9 billion barrels of oil reserves! Recoverable oil reserves 20 Current reserves * Life time extension on = 16 1 . . = ' 23 installations 2 + ongoing 8 PDO reserves 4 0 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 R
Slide 18: Delivering competitive projects and wells
Statoil. Delivering high value on the NCS. LEADING PROJECT DELIVERY Delivering competitive projects and wells Next generation portfolio! Break-even2 Increased net present Internal rate of return* value3+ Above Above USD/bbI bn USD Cost development projects in execution® Cost per well® Percentage Mil
Slide 19: Continuous improvement and lasting changes
ce a Statoil. Delivering high value on the NCS. LEADING PROJECT DELIVERY Continuous improvement and lasting changes + Simplification in what we build and how we build + Perfect well / Perfect project - setting ambitious targets + Design to value ~ design to carbon Johan Castberg | Askeladd Phase 1 O
Slide 20: Johan Sverdrup
wa “4° Statoil, Delivering high value on the NCS. Full field resources Johan Sverdrup Highly profitable production starting next year | ; Ji OO aa 3 , ile OO mmboe + Increased volumes, reduced capex and opex + 17 wells delivered - more than one year ahead of plan + More robust schedule Capex Capex O
Slide 21: Troll phase 3
Statoil. Delivering high value on the NCS. Troll phase 3 Continuous renewal of a giant + Extended gas plateau by 7 years + Extended gas production by 19 years + Planned start-up 2021 Competitive project and well deliveries! Yearly export (bern) 40 30 Production Troll Phase 3 20 10 0 1. Assumes yearl
Slide 22: Roadmap towards an unmanned Remotely Operated Factory
ce a Statoil. Delivering high value on the NCS. Roadmap towards an unmanned Remotely Operated Factory - ROF™ Innovation, technology and digitalisation for a future-fit portfolio UK and Barents Krafla/Askja Oseberg Vestflanken 2 Ultra deep water upp™ Stand alone remote oil and gas field Stand alone d
Slide 23: Digitalisation drives the next wave of improvements
#* Statoil. Delivering high value on the N¢ DIGITAL LEADER Digitalisation drives the next wave of improvements 1, 3% increase in production Statoil share pre-tax. Automated drilling compared to conventional. 3. New facility concept comy conventional. Digitalisation & innovation Potential Value creat
Slide 24: Creating value from competence and technology on NCS
Statoil. Delivering high value on the NCS. Creating value from competence & technology on NCS - leveraging internationally Value drivers NCS Outlook me SI = . ra — ie = ——— — rout. if Ov Operational World class Leading project Premium Digital excellence recovery delivery market access leader Product
Slide 25: Delivering high value in our international portfolio
Delivering high value in our international portfolio Lars Christian Bacher © Torgrim Reitan EVP Development and Production International EVP Development and Production USA >. Statoil
Slide 26: Leveraging experience internationally
ce Ss Statoil. Delivering high value in our international portfolio. Leveraging experience internationally Value drivers Operational excellence World class recovery Leading project delivery Reduction in break-even 2016 - 2018 40x Reduction opex and SG&A/boe 2013 - 2017 34% US Onshore EUR! improvemen
Slide 27: Brazil: value creation in a core area
@* Statoil. Brazil: value creation in a core area Brazil Value creation in a core area age 27 ars Christian Bacher
Slide 28: Delivering a high value, low carbon portfolio
we 4° Statoil. Brazil: value creation in a core area Delivering a high value, low carbon portfolio Apodi solar project First oil Peregrino phase 2 - 2020 Roncador Peregrino BM-C-33 Carcara Roncador, execution of strategic partnership with Petrol Five firm exploration and appraisal wells with rig pti
Slide 29: Peregrino: safe production, improved profitability
Safe production Serious incident frequency! Below 0.5 Barrels of oil produced? 160 million 1. Per million hours worked. 2. Since first oil in 2011 age 29 | by Lars Christian Bacher Improved profitability Peregrino phase 1 cost? per boe 22% 2013-2017 Peregrino phase 2 break-even 42 USD/bbI 3. Opexand
Slide 30: Carcara - a world class asset
ce a Statoil. Brazil: value creation in a core area. Carcara | A world class asset Light oil, pre-salt discovery with further exploration potential 1 Stepwise acquisitions ' and farm-down fe} 2016 Acquisition from Petrobras ensuring strong and 1 aligned partnership © 2017 Acquisition from Queiroz Ga
Slide 31: Roncador - applying Statoil recovery experience
4° Statoil. Brazil: value creation in a core area ‘oncador | Applying Statoil recovery experience Large profitable production upside Barrels of oil in Place Strategic partnership with 1 @ Petrobras bn uture planne Expected recovery factor rom lL bn increase 5% from 2018 ‘tending life of field by 5-1
Slide 32: DPUSA: the flexible cash generator at 50 USD WTI
4* Statoil. DPUSA. The flexible cash generator at 5¢ DPUSA The flexible cash generator at 50 USD WTI Torgrim Reitat
Slide 33: 2015-18 Transformation on track
at 74° Statoil. DPUSA. The flexible cash generator at 50 USD WTI 2015-18 Transformation | On Track From 90 to 50 Oil price needed NO! = 0! 90 92 79 66 53 2014 2015 2016 2017 2018 —O=— Oil price needed NOI = 02 Improve Improvements beyond targets? 2015 2018 baseline forecast SG&A/boe 525% Onshore Op
Slide 34: From needing funding to surplus cash
at 74° Statoil. DPUSA. The flexible cash generator at 50 USD WTI DPUSA From needing funding to surplus cash 92 90 79 66 53 50 ™s 2014 2015 2016 2017 2018 Oil price needed NOI = 0! 1. Adjusted NOI; excluding exploration and downstream. Assumes product and gas prices correlate to changes in the WTI pr
Slide 35: Using the whole of Statoil to build competitive advantage onshore
NA BH Statoil DPUSA. The flexible cash generator at 50 USD WTI. Using the whole of Statoil to build competitive advantage onshore Value drivers Operational excellence Drilling efficiency 34% Increase wells per rig 2016-2017 + The perfect well + Predictive analytics to improve production efficiency 1
Slide 36: US Onshore positive earnings, surplus cash, growing
a. Statoil. DPUSA. The flexible cash generator at 50 USD W US Onshore Positive earnings, surplus cash, and growing at 50 USD/bbI! 2018: The turning point 2016/2017 2018/2019 2020/2021 3 Positive earnings” Surplus cash? Below Below 2 70 USD/bbI USD/bbI USD/bbI 70. USD/bbI Robust portfolio Accretive g
Slide 37: US transformation on track
NA %}* Statoil. DPUSA. The flexible cash generator at 50 USD WTI DPUSA US transformation On track Onshore: A flexible cash generator at 50 USD! 1. WII price, adjusted NOL. 2. Offshore and onshore. 3. Based on current plans. Page 37 | by Torgrim Reitan, FVP [ + *90-50": 53 USD NOI break-even 2017! +
Slide 38: Delivering high value in our international portfolio
a Statoil. Delivering high value in our international portfolio. Delivering high value in our international portfolio Improving quality / Net present in the portfolio value increase! bn USD Above Improving cash 3 O CFFO after tax margin (2018 - 2020)? USD/boe Above Capturing high 4 International sha
Slide 39: Hans Jakob Hegge, Chief Financial Officer
Delivering high value Hans Jakob Hegge Chief Financial Officer Statoil
Slide 40: 2017 strong financial results and deliveries
Foto Delivering high value. 2017 | Strong financial results and deliveries NOI Ee Ww RRR Results . ; 1 3 . 8 3 1 5 Ox bn USD bn USD bn USD ——— Wepromised = —— -—— We delivered = ——\ Organic capex 1 1 bn USD 9 0 4 bn USD Free cash flow positive Sy O USD/bbI Below 5 O USD/bbI Production growth 4 ~ 5 %
Slide 41: 2017 solid adjusted earnings from all segments
NA BH Statoil Delivering high value. 40 2017 | Solid adjusted earnings from all segments -— Group! E&P Norway —— -— E&P International —— 4 >— MMP. — + Record high production volumes + Solid operational performance + Increasing production + Higher sale of piped gas at higher prices + Lower depreciati
Slide 42: 2017 valuable growth
NA BH Statoil Delivering high value. 2017 | Valuable growth Strong production growth Above 6% equity growth (kboe/d) 2,134 2,095 1978 933 1,013 834 40 2016 40 2017 FY2016 + Record high quarterly and full year production - Increased flexible gas production - Increased production US onshore - Start-up
Slide 43: Improving from a strong position
NA BH Statoil Delivering high value. Improving from a strong position Operational Unit production cost? Average global well cost? Facility cost? IFA, STL 25% lower Statoil Industry average Statoil Industry average Financial IRR Projects under development!” Corporate ROACE 5” Upstream RoACE®” STL 20%
Slide 44: Sustaining cost reductions
Statoil. Delivering high value. Delivering high value Sustaining cost reductions Unit production cost! 2020 201 Zoe Capex average? 2018-20 Around 1 1 bn USD 1. USD/boe Statoil share, real, assuming fixed currency. 2. Indicative organic capex, at 8.25 USD/NOK. age 4 | by Hans Jakob Hegge. 4. Deliveri
Slide 45: Sustaining the transformed cost level
4° Statoil. Delivering high value. Sustaining the transformed cost level x and SG&A (bn USD) Organic Capex level? Unit production cost! Cost per well Sustain Around Around level in 2020 2016 to 2018 bn USD in 2018 1. USD/boe Statoil share, real, assuming fixed currency, 2. Organic capex at 8.25 USD/
Slide 46: Leading project delivery - world class portfolio
NA BH Statoil Delivering high value. Leading project delivery - world class portfolio — Next generation portfolio! Non-sanctioned projects* Delivering world class returns Break-even prices and volumes continue to improve Average Value Improving Increasing Value break-even2 Oil share Resources increa
Slide 47: High value production growth
a * Statoil. Delivering high value. High value production growth Statoil equity production kboe/d 3-4% CAGR! 2500 2000 1500 1.000 500 2017 2018 2020 = Norway International conventional = US onshore 1. Compound annual growth rate. Page 47 | by Hans Jakob Hegge. Chie! Financial Olficer Major start-ups
Slide 48: Strong cash flow generation - flexibility maintained
%* Statoil. Delivering high value Strong cash flow generation - flexibility maintained Growing cash flow! Materially improving net debt ratio4 Firm financial framework Free cash flow positive below 50 USD/bb! Below 15% at 70 USD/bbI 2018/2019 2020/2021 Strong financial position bn USD a) 40% rating
Slide 49: Guidance & outlook
Statoil. Delivering high value. | Guidance & outlook PERIOD OUTLOOK Organic capex 2018 ' around LI pnusot Exploration 2018 Around 1.5 bn USD 2017-2018 1-2% Production H 2017-2020. 3-4% cacr 1. Based on USD/NOK exchange rate of 8.25. Page 49 | by Hans Jakob Hegge
Slide 50: Growing cash flow, returns and dividend
“%4* Statoil, Delivering high value Delivering high value Growing cash flow, returns and dividend Investing in world Class projects Leveraging strengths to create value 1 Assuming 70 USD/bb. Cash flow around 12 bn USD 2018-2020! RoACE around 12% in 2020! Dividend growth 4.5%2 Next generation portfol
Slide 51: Supplementary information
Supplementary information
Slide 52: Long term debt maturity profile
Long term debt maturity profile Redemption profile 31.12.2017 million USD 3.000 mUSD mNOK mGBP EUR 2500 2000 . | [ 1000 500. | = 2 2018 2019 2020 2071 2022 2023 2024 2025 2026 2027 2028 202 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 Page 52 | 2043
Slide 53: Sensitivities
Oljepris: + 10 USD/bbl Gasspris: + 1,5 USD/mmBTU Valutakurs: USDNOK +0,50
Slide 54: Investing for profitable growth
Investing for profitable growth Investment profile 2018-19 100 % AP and other Rest of world Non-operated 50 % US onshore and exploration Producin 0% Upstream by region Operatorship Production/growth Page 54 ~60% on the NCS ~/0% in operated assets ~55% in new assets ~90% in upstream
Slide 55: 2017 reserve replacement ratio of 150%
2017 | Reserve replacement ratio of 150% Adding new reserves and optimising resource portfolio bn boe 20 19 — 15 (08) | | (19) 11 — — (07) (0.04) 2016 Production Divestments Discoveries 2017 Acquistions Revisions ™ Proved reserves (SEC) ™ Reserves and resources Page 55 | Reserve replacement ratio -
Slide 56: Investor Relations in Statoil
Faro Investor Relations in Statoil E-mail: [email protected] Investor Relations Europe Investor Relations USA & Canada 2 ey Fal 3 Q a