BlueNord ASA

Good morning and welcome to BlueNord's results presentation for the third quarter of 2024. I want to start by saying that we've had a really strong three months with lots of movement, all of which has been in the right direction. So firstly, we've had great performance from our base assets. Quarterly production was right at the top end of our guidance for the period. We've also seen progress on Tyra steadily accelerate. This can be most clearly seen through the timing for when maximum technical capacity will be reached, being brought forward by more than a month from the end of December 2024 to mid to late November 2024. And as we announced yesterday, we've also made a meaningful gas condensate discovery through the Hemj well, as is the benefit of having all the necessary infrastructure in place. This is a keeper well where production is set to begin by the end of the year. So these highlights show that we're already maximising the potential of our asset base and are also now significantly closer to fulfilling our long-term promise of substantial shareholder distributions while at the same time maintaining a robust and conservative capital structure. So I'm very pleased to be joined by the team this morning to walk you through what I've just told you about in a little bit more detail. But before doing that, I want to make one quick reference to housekeeping. So we'll have Q&A at the end, and please feel free to submit your questions as we go through. And with that, let's turn to the first slide. So our net production in Q3 was 25,000 barrels a day of oil equivalent and that was at the top end of our guidance for the period and also represents an increase from 23,500 barrels of oil equivalent and 24,500 barrels of oil equivalent in Q1 and Q2 2024 respectively. But importantly, it also reflects a continuation of the strong track record that we've built with us now having had 15 consecutive quarters at or above our production guidance. What we're also seeing this quarter is the continued benefit of having active drilling operations in the DUC. Not only do we have the ongoing contribution from the first info well drilled on Halfdan earlier this year, but we also announced yesterday the substantial HemJ discovery that will extend the plateau on Tyre. Combined with our ongoing optimisation and management campaigns, this active approach supports a positive outlook for our base production levels for the rest of 2024 and beyond. We're also making good progress in bringing the tyre field back into production. So Miriam will talk you through this in more detail, but we now expect to see the hub at maximum technical capacity in the second half of November. And what this will allow is plateau production to be reached in Q4 and for us to exit 2024 at over 30,000 barrels a day of oil equivalent net to Blue Nord. Once we are fully at plateau, We intend to utilise the material near-term free cash flow that we generate to both make significant capital returns to our shareholders and also maintain a conservative capital structure. The distributions will be set based on the previously announced distribution policy, which will see us pay out 50% to 70% of net operating cash flow for the 2024 to 2026 period. I'll hand over in a second to Catherine, who will also talk about what the future looks like for us in Denmark. But our position remains clear. We'll look to produce more from our existing base of 2p reserves and 2p resources, where it makes economic sense to do so. And these volumes, which stood at 213 million barrels at the end of 2023, will support not only our near-term growth, but also the stability of our medium term profile and ensure that we have material production levels out to 2042 when our current DUC license expires. And then moving on to look at where we are from a financial perspective, Jacqueline will later on in the presentation provide more detail, but the high level summary for me is that what we're reporting today is that the recent strong operating results are continuing to be reflected in the financial results And that further, the capital structure reset that we concluded earlier in the year provides us with not only substantial liquidity, but also a firm base to deliver on our future objectives. So all in all, it's been a strong quarter that's seen us both deliver for today and for the future. I'll come back at the end to offer some closing remarks. But in the meantime, let me hand over to Miriam to talk you through our operations in more detail. Thank you.

Thank you, Johan. I have looked forward to presenting the operational status and look ahead. As Johan just presented, there are many positive updates today. I will first take you through the status of the Tyre Redevelopment Project and present how we plan to deliver on Tyre in 2024. Then I will present how we have achieved the strong Q3 base asset production and present the outlook and planned activities for the base asset. Lastly, I will present the preliminary findings of the successful drilling of the Harold East Middle Jurassic Well. Let me first emphasize the importance of TIRA. The TIRA redevelopment project is not only strategically important to BlueNord, it plays a vital role in securing energy for Denmark and Europe in the coming years. The redevelopment of Tyre will unlock substantial volumes of gas from both the Tyre field and its satellite fields as a result of the installation of new, modern facilities. The benefits extend beyond just increased gas production. With Tyre's upgraded facilities, we expect a significant reduction in CO2 intensity by 30%. Further operation of the new facilities will enable us to lower our unit operating cost to $13 per BUE, improving our overall efficiency and profitability. Now let us look at the status and future outlook for the tyre redevelopment project for the remainder of 2024. I am pleased to say today that we are only a few weeks away from restarting Tyra. As we presented in Q1, the Tyra 2 was restarted on 21 March 2024. On 18 April, while ramping up the export of Harold gas, an incident occurred in which the transformer providing power for the IP compressor short-circuited. As communicated in Q2, there was an offshore incident impacting the LP transformer on 8 July. During Q3, the operator Total Energies has worked diligently to rectify the issues and ensure that we can safely restart Tyra. And at the same time, the operator has produced Herald gas in a temporary production mode from July to October. So the status of the project is that both the LP and the IP transformers are offshore on Tyra. The LP transformer is integrated into the system and the IP transformer is being integrated. Implementation of protective measures into the electrical system to protect the transformers and other equipment are almost completed. Hook-up and commissioning activities have continued in parallel. So current outlook. is that we are ready to restart tyre in a permanent production mode between 15th and 30th of November as per the remit and ramp up of production will be in line with reaching plateau in Q4 2024. Now let us look at why we believe it's feasible to achieve plateau production in Q4 2024 building on the recent progress and the plans just presented here. So we have been producing gas from Herald West and Herald East fields from July to October. This production was conducted in a temporary mode, routing the gas directly to one of the export compressors. A full restart of Tyre will commence between 15th and 30th of November. Reaching plateau production at Tyre and Q4 2024 is evaluated to be feasible due to the following three things. Firstly, the Tyre West and Tyre East facilities are ready to start up and all wells on Tyre have been unplugged. Secondly, the Tyre satellites Roa, Tyre South East and Valdemar have been reinstated. And thirdly, the fact that this work has been completed will allow for a faster ramp-up once Tyre is restarted. So based on recent performance and the information just shared with you and in line with the remit just published by the operator, we believe that achieving plateau production by end of Q4 is feasible and at an exit rate of 2024 to be estimated above 13 MbE per day net blue note. And consequently, we have updated our tyre production guidance to a range between 4 to 11 MbE per day for Q4 2024. I am also pleased to inform you that we have successfully completed the planned work on the permanent Nogat line. This enabled us to export gas both to Denmark via Nybro and to the Netherlands via Nogat. I will now present to you how we have achieved the strong base asset production in Q3, which is production from the DAN, Haftan and Gorm hubs, and then provide an outlook and outline the planned activities for the base assets. Let us first look at the production data from the base assets for Q3 and the outlook for the upcoming quarter. So I'm pleased to share with you that the production in this third quarter has exceeded the production of the second quarter. And with the production of 25 MW per day in NetBlue Nord, we are at the top end of our Q3 guidance range of 23 to 25 MW per day, NetBlue Nord. This strong performance is mainly due to three things. First of all, we successfully have completed 14 out of 28 planned optimization jobs on Haftan. We have increased the production potential from the Skjold field since August due to the Skjold gas acceleration pilot project. And thirdly, we've had a very high operational efficiency of 93% average for the quarter. We expect a low base decline for the remainder of 2024, as we expect continued benefit from rum on DAN and half DAN, continued benefit from Skjold gas acceleration project, and also continued focus on the operational efficiency. So given the recent strong performance and our current understanding of the base assets and the continuous focus the Operator Total Energies has on operation efficiency, I am pleased to confirm that our guidance for the base assets remains unchanged with a range between 23 to 25 MBV per day for Q4. So in summary, I want to highlight that the production from base acid is strong, it's within our guidance, and we have consistently met or exceeded our guidance for the last 15 quarters. Now let us look at the RIC activities for the DOC fields to support the ongoing strong production. So we continue to see positive impact from the production optimization work on Haften North East and Dan. We are using the Noble Reacher rig for the optimization work that we refer to as RUM. We initiated the RUM2 campaign on half-stand in Q1 2024 and will continue working on a half-stand into the first quarter of 2025, where we have planned 28 different well interventions, which will contribute with additional production this year and subsequent years. In Q2 2025, the retail will be used to carry out the Hafdan HCA gas lift project that will extend the life of the HCA wells. In Q3 2025, the retail will move to Gorm to execute Run 3 work. Two wells have been drilled in 24 with a shelf drilling winner. We have decided to push the first Halfdan EcoFrizz well to early 25 to be able to complete two workovers on Halfdan to proactively protect the production from these wells after completing HMJ. We will commence drilling on the first Halfdan EcoFrizz well, HDA 35, early 25, followed by the second Halfdan EcoFrizz well, HDA 31. Final investment decision for the second well is planned for Q4 2024. So overall, the activity level is high and we will continue to mature opportunities for the two rigs to support the production. So in summary, we see strong production and a very promising outlook for the coming years. And finally, I am pleased to announce that the shelf-drilling winner has successfully drilled the Harold East Metal Jurassic Well in the eastern part of the producing field, Harold. The well will soon be completed for production and brought online in connection with the restart of TIRA. According to our assessment, the preliminary results are promising. Our preliminary evaluations indicate the presence of 48 metres of good quality sand reservoir containing gas condensate. The estimated volumes are currently under investigation and will depend on initial production performance. The Harald East Mill Jurassic Well is expected to increase production from the Harald Field, extend the life of the Harald Hub and enhance energy security in Denmark and Europe. So to round off the operations piece today, I can say that the entire redevelopment project, our strong Q3-based asset production and the successful drilling of Harald East Mill Jurassic are all key parts of our strategy for 2024. Together with the operator, we are committed to deliver these operational objectives. And now I will hand over to Katrine, our Chief Corporate Affairs Officer, who will present the long-term outlook for BlueNord. Thank you.

Thank you, Miriam, and good morning to everyone. With the Infill Drilling Programme and TIRA II fresh in mind, I would also like to talk about how we work to support energy security in Europe and also what is a bit different being located in Denmark. First of all, Denmark has a very stable fiscal regime for oil and gas producers. This is manifested through an agreement which was made between the previous concessionaire in the DUC and the Danish state. The agreement, also known as the compensation clause, was entered into to ensure stability and the continuation of investments in the Danish part of the North Sea. And what that means in practice is that any fiscal changes specific to oil and gas taxation would entail compensation to the DUC partners. And this in itself is definitely an important differentiator compared to other jurisdictions and more important today than ever before. Secondly, Denmark is absolutely at the forefront when it comes to the energy transition. This with a highly developed wind industry and also with bold objectives to be a CCS hub in Europe. Blue Nord already plays an important role in Danish onshore CCS through its ownership in carbon cuts and Project Ruby. In addition to having heavily invested in wind and CCS, Denmark has, in contrast to most other countries, also set an end date for oil and gas production in 2050. This is through its 2020 North Sea Agreement, which is eight years later than our license expiry. The North Sea Agreement actually provides the current place in Denmark with important stability for the next three decades. And with a focus on maximizing economic recovery prior to 2050, it also provides us with several opportunities to operate within a stable framework and with a set timeline without any surprises. Once Tyra is at plateau, Denmark will not only be self-sufficient, but it will also be one of the largest oil and gas producers in the EU. And as a net exporter of gas, Denmark will play an important role in the EU's energy security needs. Considering the alternative, which for the EU is LNG imports, this has on average more than three times higher emissions intensity compared to piped gas from the DOC. And with energy security in Europe as a backdrop, that takes me over to the next slide. With Miriam having gone through the infill well program, I'm not going to spend too much time on this, but I still wanted to highlight just how efficiently this drilling program can boost our gas production. With the first infill well adding 3,000 barrels per day overnight, and with the success we have just announced on HemJ, we're off to a very good start. And this continued activity will help us deliver important additional barrels in the next coming years. Then we also have the development projects, all having unit technical costs of less than $20 per barrel. Not only are these economically attractive projects, but they're also carefully selected projects which can maximize the use of our existing infrastructure. We have this quarter matured two of these projects in particular, as we are seeing potential synergies between them. These are Adda, which will be named Tyra North, and Halvdan North. Both have very strong economic profiles, and the first project can be tied directly back to Tyra's new processing facility, hence the anticipated name change. Halftone North is also a project with simple unmanned infrastructure, which can be tied back to Halftone. And collectively, the infill well program and the developments has the potential to add more than 6 million barrels of resources to Blue Nord. And that takes me to the final page, which shows the significant impact the step change of TIRA 2 and the existing opportunities I just went through. It illustrates the production contribution from our existing and in-plan projects, which takes us to 55,000 barrels a day on average next year, and allows us to sustain a high level five years later into 2030. And by adding infill wells from Tyra to the plan, as you can see in grey, we're also in a position to actually exit this decade above 55,000 barrels per day. And we're not only sustaining production high, which supports future cash flow for the company, but this plan also allows us to move barrels from 2C resources into 2P reserves. So put in short, our production profile shows how we can sustain a robust production over time, which again will support future distributions to shareholders, and that without having to seek for inorganic growth. And with that, I say thank you for listening and pass over the word to our CFO, Jacqueline, who will take you through the Q3 financials.