BlueNord ASA

Good morning, everyone, and welcome to our investor presentation for the fourth quarter of 2024. It's great to have you with us today as we mark an important milestone for Blue Nord, another step in us delivering on our long term promise and one that sees us start down the path of returning capital to shareholders. So over the next half hour or so, we're going to walk you through the highlights of our performance over the last three months. reflect on our achievements in 2024 as a whole, and give some insight into how we see 2025 developing. But before we dive into the details, I want to start by taking a step back. Our story has always been one about growth. Since 2019, this has been anchored operationally around Tyra, a hub that will more than double our production when it's fully ramped up. And now, as we stand on the cusp of fully delivering this objective, I'm delighted we're able to add the next leg of our narrative, growing shareholder returns. And it's against this backdrop that this morning we're announcing our first distribution to shareholders. For 2024, we propose to pay out $215 million, which is at the top end of our stated policy. While this marks the start of our capital returns programme, anyone familiar with our story will know that it doesn't stop here. We look forward to continuing to deliver material distributions through 2025 to 2026 and beyond. And with that, let's turn to the first page and begin with our Q4 highlights. So I'm pleased to be able to report today that we've had another strong quarter, a quarter with something for the short, medium and long term, and a quarter with meaningful progress in all the areas that matter. Let's start with production. And in Q4, we averaged 25,900 barrels of oil equivalent per day, with 23,000 of this coming from our base assets and 2,900 barrels a day from Tyra. Our base asset production was in line with guidance, continuing our track record of strong performance and low decline rates. And we also have a positive outlook into 2025, thanks to ongoing projects and optimization activities. Now if we turn to Tyra. So we successfully restarted the hub in November of last year and we've steadily seen production increasing since then. As of this week, we're producing 19,000 barrels of oil equivalent per day net to Blue Nord and this will continue to grow over the coming days and weeks. Once producing at maximum capacity, we expect Tyra to remain at this level through the entirety of 2025. And one of the key drivers of this is the HMJ exploration success that we reported in October 2024. The results here significantly exceed our pre-drill forecasts with estimated gross reserves at 33 million barrels, over 60% higher than we initially expected. One of the other important things here is that Hemj was very much infrastructure-led exploration. What that means is that there isn't a long timeline to first production. The well came on stream in December of 2024, less than two months after the initial discovery was made, and is currently producing around about 50 million standard cubic feet per day. And to give that number some context, Hemjai, which is one well out of a total of 78 in the Tyre Hub, currently represents about 30% of Tyre's gas export. So this performance sets us up for an extended plateau on Tyra, adding at least 10 additional months. So far, so good operationally. But what's really important here is how this performance positions us to deliver against our long-term objectives. And in that vein, let's move on to distributions. As I mentioned at the outset, today we're announcing a proposed distribution for 2024 of $215 million. This is at the top end of our stated distribution range, representing as it does 70% of operating cash flow for the year. Payment of this distribution is subject to meeting the RBL completion test for Tyra, and we anticipate this will happen either later this month or early in March. So after a long wait, we're ever closer to delivering our first return of capital. And then finally, our financial performance remained strong, with revenue, EBITDA and cash flow all growing quarter on quarter, reflecting the increasing contribution from Tyra, as well as the positive gas price environment. And this means that we're closing out 2024 with a robust liquidity position of $521 million. All in all, a strong finish to the year. And now let's turn to what this means as we step into 2025. So we start the year with strong momentum and a positive outlook. For production guidance, our base assets remain stable throughout the year with potential for growth in the second half as projects and investments progress. For Tyra, Q1 reflects the finalisation of the hub's ramp up and we expect average production over the first three months of 2025 of 17,000 to 20,000 barrels of oil equivalent per day. And for the final three quarters, we expect stable production around the facility's maximum capacity. For distributions, we remain fully committed to our stated policy. And during 2025, we intend to distribute between 50% and 70% of operating cash flow on a quarterly basis. So as you've heard so far, we continue to have a business that's well positioned, not only for today, but also for the future. And to provide some more insight into what gets us to this place, let's turn over to the next slide. So from a company perspective, our focus is simple and clear. Maximise the potential of our operational business and by maintaining a disciplined approach to capital allocation, we're able to do this while also delivering substantial equity distributions and preserving a conservative balance sheet. Now there are several important factors driving our performance here, and if we walk through them first of all from a near-term perspective. So we have robust base production, a stable low-decline asset portfolio. We also have transformational growth, with a more than doubling of our net production near-term, driven by the Tire Hub. We benefit from favourable commodity prices. We're in a strong gas price environment where the forward curve to the end of 2026 is averaging $15 an MCF. And we also have substantial tax losses, close to a billion dollars of which will mean that we expect to have a marginal cash tax rate of 25% through to the end of 26. In terms of longer term strengths, we operate in Denmark, which has a supportive regulatory environment. We have fiscal certainty and defined operating parameters with a set end date of 2050. We have a portfolio that has accretive investment projects. 60 million barrels of new resources are expected on stream by 2030. That means that we also have a stable production profile. We're expecting to average over 50,000 barrels a day in 2025 and still be above 40,000 barrels a day in 2030. And finally, we have a fit for purpose capital structure. It's been designed to support our corporate objectives and support us through the future. Together, these factors underpin both our near-term distributions and also our potential for long-term value creation. And with that, I'll hand over to Miriam, our COO, to provide further details on our operations. Thank you.

Yes, thank you, Johan. It's been a very exciting and positive fourth quarter and I've been looking forward to presenting the operational status and outlook. As Johan mentioned, we have many positive updates today. First, I will take you through how we achieved a strong production for the base assets for the full year of 2024. After that, I will present the Q4 base assets production and share the outlook and some of the planned activities. Then I will present the Blue Note production guidance for 2025 for the base assets. Next, I will update you on the status of the tyre redevelopment project, the plan to reach production plateau and the Blue Note Guidance for 2025 for Tyre. Lastly, I will present the current performance of the Harold East Mill Jurassic Well, which was successfully drilled, completed and put on production in the fourth quarter of 2024. Let us first look at the production performance for the base assets for Q4 and for the full year of 2024 and the outlook for the coming quarters. Historically, we have maintained a robust production from the base assets with an annual decline of less than 4% year-on-year since 2021. And this is supported by the 2024 production of 24.1 MBOE per day net to BlueNord. This achievement is mainly due to three things. One, optimization work carried out via the RUM campaigns. Two, the workovers and drilling of an infill well. And three, high operational efficiency, and this was 91% for 2024. The activities in 2024 were extensive. The ROM campaign on Hafdan commenced in January 2024 and was successfully completed in January 2025 with 21 interventions on 20 wells. Since August, the Skjøl gas acceleration pilot project has led to increased production from the Skjøl field. The newly drilled Halfdan Tornos East Infill Well HBA27B was successfully completed and put on production in April 2024. Additionally, workovers were successfully completed on Halfdan to safeguard production. I am pleased to share with you that the Q4 production from the base assets was 23 MbE per day, net to BlueNord, meeting our guidance range of 23 to 25 MbE per day, net. This quarterly production was achieved despite the impact to the December production due to well optimization work on Halfdan, deferring some production, and operational issues on both DAN and GORM, which have now been resolved. I want to highlight that the production fund-based asset is strong and within our guidance and also the fact that we have consistently met or exceeded our guidance for the last 16 quarters. In 2025, we will maintain to have focus on keeping operational efficiency high, despite plant production deferrals due to a higher level of plant integrity work to support the high operational efficiency for the facilities and the installation of flare recovery systems on GORM. Given this work, the first two quarters of our 2025 guidance range is 2022 MBOE per day net blue-nord for the base assets, and it will be increasing for the last two quarters following the activities to increase production. Today I want to emphasise a few important activities supporting the 2025 Production Performance Outlook and guidance. The Nobel-RETA rig has moved to the Haftar Northeast ACA platform to commence execution of the gas lift project, which will enable stable production for longer from the Haftar Northeast gas field. The project will make gas lift available for nine gas wells to help produce the liquids in the wells and thereby enabling continued steady production. Following this, the ROM3 campaign on GORM is planned to commence, with the work scope still being evaluated for up to 15 interventions. And, as mentioned earlier, we will also be implementing the flare gas recovery project to minimize the flaring on GORM. An evaluation of the performance of this project may enable flare recovery on Halfdan. So in summary, a strong production performance was seen for 2024 and a strong performance for 2025 is expected. Now let us look at the tyre redevelopment project status, ramp-up look-ahead and tyre guidance for 2025. Tire is on stream and ramping up as we speak. Tire reached full technical capacity on the 10th of November 2024 and production ramp-up commenced. Several minor issues related to the facilities were encountered during the first months after restart. After achieving stable production on the Tire Hub in the second half of December, the mechanical seal on the IP compressor was damaged during operations, which led to a shutdown of the tire facilities in early January. After successfully replacing the seal, the production resumed on January 16 and ramp-up continued. The ramp-up has been impacted by unstable weather conditions and minor operational occurrences, which is resulting in fewer wells currently open to flow than estimated. Some wells can be open to flow immediately, other wells need work on gas-lift valves or need gas injection to replace the water sitting in the wells since they were closed in for more than five years. This work is done physically at the different platforms in the Tyra hub by access from a walk-to-work vessel, as there are no helicopter landing on these platforms. The vessel has an operating tolerance towards the wave height, which means that the access to platforms to open wells is depending on having a suitable weather window. And this is more challenging now since it's the winter season. So where are we now? The hub is currently producing at more than 50% of its maximum potential, with production reaching approximately 19 MbE per day net to Blue North on 7 February. Efforts are underway to increase the production potential of the tyre hub. Plateau production is expected in February 2025, subject to maintaining stable operations and the availability of suitable weather windows. The operator has recently mobilized a second walk-to-work vessel given the current outlook for better weather. This gives an opportunity to accelerate the work on the platforms for the coming period. Tyre consists of both gas and oil-weighted wells, with the Valdemar and Lolita fields being more oil-weighted. The plateau for gas volumes is likely to be achieved before the plateau for liquids given the wells opened are more gas-weighted. Let me again emphasize that Tyre is a strategically important gas hub in the Danish North Sea, and when Tyre reached plateau, this will more than double Blue North's production, increase the gas split, reduce the lifting cost to below $13 per BUE, and very importantly, reduce the emissions intensity by more than 30%. Now let us look at the status for the Tyre production and the Blue North estimate for plateau production in February 2025 and the guidance for Tyre in 2025. Let us first look at the tyre production rates to understand the status and BlueNord's estimated plateau level. At present, the gas export rates are at 170 msg per day gross. BlueNord estimates that the gas plateau production is 250 msg per day gross. This plateau level represents the maximum capacity driven by the gas processing on tyre being constrained by the IP compressor. Achieving gas export rates of around 250 million scoops per day will require stable production and the opening of more wells to flow. Currently, the liquid export we refer to as oil are at around 17,000 barrels of oil per day gross, and BlueNord has estimated that the liquid production plateau to be at around 32. There are no direct constraints to the liquids production, but the oil is produced with associated gas and the gas is produced with compensate, so the liquids production will be governed by the gas compression constraint. Achieving the estimated gas and liquid export plateau rates equates to an oil equivalent production rate of 80 mbu per day gross or 30 mbu per day net to blue note. And again, since tyre hop consists of both gas and oil-weighted wells, the plateau for gas volumes is likely to be achieved before the plateau for liquids, given the wells open until now are more gas-weighted. And this may push the level of 30 MbE per day net into March. The tyre production guidance is based on reaching production plateau at 80 MbE per day, gross in February or early March, and maintaining a stable production at plateau through 2025. This will be enabled by the recent gas discovery by the Havel East Middle Jurassic Well. I will now present the early performance of the Havel East Middle Jurassic Well. The Herald East Mid Jurassic Well has turned out to be an excellent contribution to our portfolio. As we presented at Q3, the shelf drilling winner has successfully drilled the Herald East Mid Jurassic Well. The well has been tied back to the Herald platform. The well was completed and put on production on the 6th of December. The discovery has significantly exceeded our pre-drill expectations, and BlueNord has estimated gross reserves of 33 million BWE gross compared to the pre-drill estimates of 21. Since HMJ was an exploration well, the recoverable volumes were not included in our year-end 2023 2PN2C disclosure. However, it will be included in the ERC reserves report for the year-end 2024. Currently, the gas production rate from HemJ is approximately 50 million scoops per day, which is around 30% of the present tire gas export. Blue Nord expects HemJ to prolong the tire plateau by 10 months or more. And as mentioned, the well produces back to the Herald Hub, and it is expected that the production from HemJ will extend the economic lifetime of the Herald Hub from the late 2020s to mid-2030s. So in summary, still pending further data and results, the HMJ well is expected to increase gas production from the Herald field, extend the life of the Herald hub and contribute to energy security of supply in Denmark and Europe. To conclude the operations piece today, I can confirm that the tyre redevelopment project, our strong Q4-based assets production and the new Herald East Middle Jurassic Well on production are all key components of our strategy for 2025. Together with the operator, we are committed to achieving these operational objectives. I will now hand over to Catherine, our Chief Corporate Affairs Officer, who will present the long-term outlook for BlueNord.

Thank you Miriam and good morning. With TIRA 2 and the success of the recently drilled HemJ well in mind, I would like to take you through the role that Blue Nord intends to play in supporting the energy security objectives of Denmark and in the EU. Now that TIRA 2 is on stream, we are about to become one of the largest oil and gas producers in the EU. For pipe gas in particular, the alternative energy source is imported LNG. While imported LNG volumes is required to meet the European energy consumption needs, it is a far more emissions intensity heavy alternative, as you can see demonstrated on this slide. On average, it carries a more than three times higher burden on the environment, and it is also less stable and reliable versus piped gas, given it's traded in a global market, which tends to be very competitive. With our presence in Denmark, we have a strategically important platform in a country which is both at the forefront of the energy transition, but it's also an important provider of security of supply to the EU. With an end date in 2050, we have a predictable runway where a stable fiscal regime allows Blue Nord to both deliver into important energy needs and to support the Danish CCS ambitions through our fully owned subsidiary CarbonCuts. And with energy security in mind, I just wanted to give you a snapshot of the current gas market sentiment, as this is an important driver for continued investments in the DOC. Yesterday, we saw TTF hit 58 euros per megawatt hour. This is at a two-year high price point. And the forward curve is indicating a continued strong market during the year, where the typical historic seasonality is more or less removed from the summer season. the European gas consumption has strengthened by 7% year on year, mainly driven by colder weather, but also a much lower wind power generation. And as we currently stand, the EU storage levels are heavily drawn down and far quicker than the five-year average. In Blue Nord, we have a unique value proposition to continue to support the European energy needs through our existing portfolio of accretive projects, which takes me to the next page. This plan illustrates how the partnership can support future energy needs while at the same time deliver on the key objective of the partnership, which is to maximize economic recovery in the DOC. During the next years, we have, together with our partners, identified opportunities that can add more than 60 million barrels of resources net to the company. You can roughly divide these into two categories. The most impactful one are the three development projects, Tyron North, Halfton North and Valdemarbo South. These would be of relatively simple infrastructure, unmanned platforms, and all three are to be tied back to existing infrastructure. This allows us to utilize our infrastructure and also ensures that the three projects are competitive from a price point. They all have unit technical costs below $20 per barrel. In total, the upside potential in terms of adding further barrels to our reserves is significant, with 46 million barrels in 2P reserves and near-term 2C resources. And the latter category are the infill drilling activities, which in addition to the four wells on Halftan and Sven, we definitely see further potential to add in total more than 19 million barrels. And you can visibly see the impact of the revised production profile here. This profile includes our current 2P reserves, but also shows the significant potential in the near-term 2C resources. Given Tyra's significance, you can see the production contribution from 2025 onwards at the bottom, followed by the other base assets, Dan, Gorm and Halfdan. The justified and approved 2P projects are clearly represented in black, and together with the already producing assets, you can see how it supports not only our net production staying above 50,000 barrels per day during the next years, but also how we should be able to exit the decade around 45,000 barrels per day. The potential in the near and long-term 2C resources, illustrated in grey and light grey, provides further upside potential to the future production. And this can also allow Blue Nord to even increase its output from 2028 and onwards. And the key message I will leave you with is that Blue Nord is in a unique position to not only generate cash flow, which will support shareholder returns throughout this decade, but also to deliver into the energy needs of Denmark and Europe. And with that, I will leave the word to Jacqueline, who will take you through our Q4 financials.

Thank you, Cathleen. So Ewen shared his reflections on the quarter and the year gone, and our consistent and strong performance, despite some challenges. And it's positive to hear from Miriam about the strong base asset portfolio. And now this quarter, the restart of Tyra, producing and ramping up, and we are close to reaching plateau. HemJ is a big part of that success. And beyond Tyra, we have a portfolio of opportunities, which Kathleen reminded us of. And with a stable region to be working in, we look forward to maturing this portfolio. With that in mind, I will now take you through the financial results that were underpinned by this operational performance that you've just heard about and how we intend to and can deliver on our strategy to prioritise shareholder returns. So 2024 underlying financial performance saw an upward shift in the fourth quarter, and this demonstrates how we continue to manage the business well in the continued volatile and uncertain commodity and financial markets. As you heard earlier from Miriam, underlying asset operating performance continues to be strong and Tyra volumes have started to have an impact in Q4. We did see softer oil prices late in Q4, offset in part by the improved gas price, which continues to strengthen in this first part of 2025. This quarter, we have higher oil volumes with the unwind of the underlift from the previous quarter. And we also have gas volumes relatively consistent quarter on quarter. Revenue for the fourth quarter is $193 million, compared with $170 million last quarter and $702 million for the year. Underlying operating costs are consistent. However, we reviewed the accounting treatment of well recovery and optimisation activities and concluded that these costs should be capitalised given the additional reserves being realised. This further underpins the positive investment contribution of these activities to the base assets. The total capitalised on ROM this year is $30 million, and we have presented it in this chart adjusted per quarter. The adjustment from a financial statement perspective is included within the fourth quarter result. So OPEX for the quarter is $54 million when you include the ROM adjustment, and as seen here, $74 million if you adjust each quarter. The average OPEX per BOE is $30 per BOE. As a result of the overall contribution margin has improved in Q4 and this continues to be positive. The reported EBITDA is $109 million and this compares with $85 million in the last quarter. Turning to the summary income statement, you can see the full earnings position. EBITDA has improved, with higher revenue and lower OPEX. The increase in other production expenses is mainly due to the change from underlift to overlift of oil. Our other expenses and G&A also includes spend on carbon cuts, our CO2 storage exploration licence, which Catherine mentioned earlier. You can also see here depreciation starts to increase as we now have Tyra volumes. And net financial items is affected primarily by the non-cash fair value movement on embedded derivatives in the BNOR15 convertible bond. Now, this went from a gain of $28 million to a loss of $54 million in this quarter. So you can see the valuation of this is quite sensitive to the share price. Now, a further non-cash volatility that we see on the income statement is on tax expense. And as we have seen last quarter as well, this is mainly driven by foreign exchange movement on tax losses, which are denominated in Danish crowns and must be revalued each period end. This had an effect of negative $58 million. So the underlying current tax expense excluding this is as expected. So overall, when we bring it together, we ended this quarter with a net loss of $76 million. But if we now consider the balance sheet, the main items to highlight there relate to working capital, derivatives and tax. Derivatives, you can see, have moved in the reverse direction of last quarter with higher liabilities and lower assets. This volatility reflects the movement in commodity prices where we've seen the gas price above our already hedged prices in place. And the lower derivative asset is due to settlement of oil contracts and the new contracts in place being closer to the market price at year end. On working capital, you will note a continued higher cash balance, as well as lower receivables and higher payables. A part of this is timing. This is where the majority of our oil lifted has been received before year end. But we have a higher payable, which includes VAT on the oil, which isn't payable until January. So we also note that we paid our final instalment of tax for 2023 during this quarter, and we do not expect any tax to be payable for 2024 year. There is a small receivable on the balance sheet at year end. So turning to cash. We report an operating cash flow before tax of $146 million this quarter, compared with $92 million last quarter. And this is $383 million for the full year. Operating cash flow is up since last quarter, primarily due to higher oil liftings and working capital benefits noted earlier, as well as the reclassification of ROM. After taxes paid of $50 million and net financing outflow of $23 million of interest costs this quarter, We then have a capital spend, which is primarily Tyra redevelopment, the drilling of Hem J, and the reclassification of ROM. This is overall cash neutral for the quarter. So the total capital spend is $63 million this quarter. Overall, we finished with a net cash inflow of $9 million. The liquidity position remains robust with $251 million of cash available and $270 million of undrawn RBL facility. So this maintains our fully funded outlook with a closing available liquidity increasing to $521 million. Moving to the commodity price environment and how we are managing our exposure. So we continue to use hedging as a way to provide visibility over future cash flows and we add volumes where it makes sense to do so. Our focus for hedging this quarter has been mainly in gas with the upward trend on gas prices in Q4 and Tyra volumes beginning to pick up. Our focus in this period has been on summer season 2025 and onwards. You can see the average hedged oil price in this outlook to the end of 2026 is in the low 70s US dollars per barrel, which provides good downside protection given the uncertainty of which direction oil will head this year. For gas hedging, this period we have sought to take out more hedging to secure base pricing, given gas prices have been consistently trending upwards and we have continued to focus on gas hedging in early 2025. So this slide shows our latest position as at the end of December 2024. And of course, we will continue to take advantage of the market where it looks attractive to do so. So aligned with our latest production guidance, 2025 is currently hedged approximately 42% on oil and 39% on gas. So this hedging approach continues to support our balance sheet and capital structure, and it helps to bring a level of certainty over our financial performance. Now turning to the capital structure, I'll just reflect a little bit on the things we completed in this year to reset it and deliver on our priority to return capital to shareholders. So the capital structure is now set to optimise our access to capital and support the business strategy. We completed the refinancing of the RBL in June with a facility size of $1.4 billion. And we placed the new BNOR16 bond in the market in early July of $300 million and repaid BNOR14. We have managed to deliver this while still ensuring BlueNord's business objectives can be achieved, in particular access to sufficient liquidity, a diverse capital structure and ability to pay distributions in line with our cash generation outlook. Our net debt at the end of the quarter is $1.2 billion. So having this foundation in place means we are set to deliver on our policy to return capital to shareholders. So as the reminder, our returns policy is to distribute 50% to 70% of net operating cash flow from 2024 to 2026. Today, we start delivering on that commitment by expecting to pay a distribution for 2024 of $215 million, which is 70% of net operating cash flow for 2024. The timing of payment is subject to meeting the RBL completion test, which is expected in late February or early March. This is the first distribution and we reiterate our commitment to a policy of 50 to 70 per cent of net operating cash flow for 2025 and 2026. The substantial free cash flow that will be generated, particularly in the near term, enables us to deliver on the policy whilst balancing the need to reinvest to maintain our asset portfolio and maintain a strong balance sheet through cycle. Beyond 2026, we will manage the business in a way that is consistent with our desire to maintain a meaningful returns profile whilst maintaining a conservative capital structure. So in summary, the 2024 financial performance reflects a consistent and stable underlying asset base that supports our balance sheet. Our hedging has supported this performance during some volatile and uncertain periods this year, And now we look forward to a strong outlook for 2025 to further drive the cash generation we expect in the coming years and continue to deliver on our priorities. And with that, I hand back to Ewan for closing remarks.

Thank you Jacqueline. As Jacqueline just highlighted again, today's a big day for Blue Nord. It's the start of our return of capital to shareholders and it gives you a good indication of having had recent strong operational performance, how our outlook looks from a distribution perspective. When we think about the operational business, with Tyra fully up and running, we're going to have a more than doubling of our net production to over 50,000 barrels of oil equivalent per day, a reweighting of our commodity mix to roughly 45% gas, a reduction of our direct lifting cost to below $13 a barrel, and a lowering of our emissions intensity by more than 30%. So we're well on the way to delivering the objective we set ourselves of material shareholder returns, but also doing so while maintaining a disciplined and conservative capital structure. So thank you for joining us today. We appreciate your support and look forward to you continuing to join us on the journey through 2025 and beyond. And we'll pause now for a few moments to allow additional questions to be submitted and then we'll come back to answer them. Thank you very much.

Thank you. First question. When will be the earliest date for dividend?

As we stated in the presentation, our expectations on the Tyra completion test being reached should be around the end of February to early March. So we will take it from there.

Do you have to wait for stable plateau production before you can hedge gas production? Or can you already hedge the future plateau production now?

Yeah, I mean, we certainly look forward at what our expectations on the profiles of gas and we do then add hedges through the forward looking position. So, yes.

What is your guiding for total return of capital for 2025?

So our policy, just to reiterate that, on distributions is 50% to 70% of net operating cash flow. So that's probably the key point around expectations. And obviously, that specific number will depend on what the outlook is on the cash flow that we generate.

When the operator Total Energies had their Q4 presentation, they said full capacity at 70,000 barrels per day. You say on slide 11, 80,000. What is the difference?

So the difference in the plateau level is mainly driven by different gas lift assumptions. We have included 60 million scuffs per day based on historical levels and to tell is using 100 million scuffs per day with a possibility to optimize. And this difference of 40, it creates to around 8 MbE per day and with that also comes some oil. So that's the difference.

Given the plateau production to 2030 and slow decline in free cash flow after 2030, what is the right level of debt, either absolute or as net debt EBITDAX for the business?

So standing here today, when we look at our leverage, and I think as we've talked about it in the capital structure, we do look at a level of one and a half times as the right level of leverage. So I think with our outlook and access to capital, That is where we target. But of course, this is something that we do monitor as we move forward.

Congrats on a great 2024 and on first dividend. How do you think about the convertible bond given that it will be re-striked by the dividend payment? Any plans to tender for the bonds in the market?

So I guess first, just as a reminder, yeah, we obviously have been very proactive in the past when we look at our capital structure. So it is something that we are considering indeed. And maybe just as a reminder, the instrument does have an option to settle in cash. So it is something we're looking at.

Regarding hedging gas volumes and the current gas restraint in Europe, do you intend to hedge more of the 2025 or 2026 volumes? And if yes, which prices would you be satisfied with?

Yeah, I mean, the gas price obviously is very constructive at the moment. So that is absolutely something that we are looking at and seeing what the best instruments are to put in place and how much we can hedge going forward. So indeed, 25 to 26, it's a good level. And this is a very supportive market price right now.

Will the dividends be paid in quarterly installments for 2025 and 2026?

I think we'll come back with more detail on that in one of our future quarterly reports. That's certainly something we're looking at being able to pay in quarterly installments, but we will look at that more closely.

First of all, congratulations on another strong quarter and thank you for taking my questions. My first question is related to your gas hedges. It looks like you added some hedges for 2025, 26 and 27 during the quarter and currently 39% of 2025 gas volumes are hedged. Are you looking to add more hedges for these years at current spot and forward levels?

So the straight answer to that is yes. We have actively been looking at and have added hedges even here in January 25. And we continue to look at it clearly. And I think I answered on a previous question as well. It's a very constructive price. So we are looking at that and what are the right instruments to put in place to look at 25 and 26.

My second question is related to the updated production profile towards 2030. Can you please provide some color on what is driving the higher than expected production as it seems like you are hiking the production levels meaningfully towards 2030?

So a great part of the higher production is of course that HemJ now is on production and we've been able to include that into our production forecast. We also have a lot of infill wells that we talked about earlier and we have a lot of other development projects. All is coming closer now to being developed.

And as a follow-up to that, given the results from the HemJ well, when do you plan to move forward with the Sven reinstatement infill wells?

So this year, we are absolutely kicking off the work on how we're going to develop Sven. So it's something that we are looking at now.

My last question is related to dividends. Is it fair to assume that you will target the upper range of the 50% to 70% of net operating cash flow in distributions for 2025 as well?

So the reason that we've set it as a range is to make sure that we have the right level of flexibility going forward so that we can respond to situations as they occur but I think what I can definitely say is we're always going to target paying the maximum that we can and that's 70%. We've been pretty clear on what the objective is with Tyra on stream which is to distribute as much of the cash flow as we can and we intend to do that within the stated policy and 70% is the upper end of that so we'll always be targeting paying out 70% if we can.

And I think we have already had a close to this last question, but how will dividends be distributed on a quarterly basis with 50% to 70% of operating free cash flow in the quarter?

We'll come back in the next quarterly reporting and give more color to that one.

Thank you. That concludes the Q&A session.