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.