Aker Bp Asa Ord

Good morning and welcome to RKBP's presentation of the fourth quarter and full year of 2024 results, which includes our annual strategy update. And as usual, CFO David Delner and I will take you through the presentation, followed by a Q&A session. Let's begin with a brief overview of today's highlights. RKBP delivered outstanding performance in both the fourth quarter and throughout 2024. with industry-leading efficiency, low production costs and low emissions. Production reached the high end of our guided range, reflecting the strength of our operations. Our project execution remains on track, with all major developments progressing as planned. And importantly, our total COPX estimate for the project portfolio is still unchanged. Looking ahead, we have a clear strategy to sustain production above 500,000 barrels per day beyond 2030, with ambitions to grow even further. A key driver for this growth is ArcaBP's 2 billion barrel opportunity, reflecting the significant upside in and around our existing assets. One example is Yggdrasil, where we have increased our resource ambition to more than a billion barrels. Another is Johan Sraddholt, where the operator has increased the recovery ambition to 75%. With a strong financial position and outlook, we remain committed to creating value for shareholders, including a 5% increase in dividends for 2025. Before handing over to David, I want to take a moment to reflect on ArcaBP's core strengths and what they mean when we say that ArcaBP is the E&P company of the future. The oil and gas industry is undergoing rapid evolution, fueled by technological innovations and new business models. However, in many ways it has been slow to adapt, with much of the work still being carried out using traditional methods. AlkaBP has been on a transformation journey over the past decade to build an E&P company that is future fit. We have developed distinct capabilities that sets us apart. We have a strong performance culture that drives execution excellence. We have a well-established alliance model that fosters collaboration across the value chain. And importantly, we have a leading position in digitalization, transforming the way we work. And with our world-class asset base, we are delivering industry-leading performance. The track record speaks for itself. And I want to take this opportunity to thank the entire RKBP team for their outstanding work, both in 2024 and the years before. And then finally, as mentioned, we have a clear strategy to sustain production above 500,000 barrels per day beyond 2030 and aim for further growth. With our capabilities, assets and tools, we are ideally positioned to drive profitable growth on the NCS into the 2030s. Finally, our financial framework is designed to maximize valuation through profitable growth and strong shareholder returns, something I'm pretty sure David will cover in more detail. And with that, David, let's take a closer look at the 2020 fourth quarter and full year results.

2024 was a year of exceptional operational performance, laying a solid foundation for continued delivery of our value creation plan. Sustained high production and low operating costs, in combination with a relatively stable commodity price environment, translated into a record high operating cash flow of $6.4 billion. Our development projects progressed according to plan, and Carla will come back to this in more detail in the strategy update section. We grew distributions to shareholders by 9% year over year, paying $2.4 per share in dividends. And we have proactively worked to further fortify our financial position. Among other things, we refinanced most of our short-term maturities with longer-dated debt. And in the fourth quarter, we have successfully issued our first 30-year U.S. dollar bond. In short, we leave 2024 stronger than ever, focused on maximizing long-term value to shareholders. And for us, this always starts with operations. Our 2024 operational summary shows how we continued to deliver strong performance by sustaining production, reducing cost, and advancing the decarbonization of our business. Total production ended at 439,000 barrels of oil equivalents per day, with an average production efficiency of 93%. We finished the year on a high note, with Q4 production of 449,000 barrels per day, driven by outstanding contributions from several key assets. Most notably, Johan Sverdrup maintained plateau production throughout the year, and achieved a new all-time high annual output. Alvheim and Valhall also deserve recognition, with the Tyrving project coming on stream, boosting production in the Alvheim area. At Valhall, the team maintained a production efficiency above 95% in the fourth quarter, a level not seen in many years on this asset. The reduction in production from 23 to 24 is mainly driven by natural decline on Edvard Grieg, where we now see that the decline rate has really tapered off. Production costs remained flat year over year at $6.2 per barrel. which is lower than expected, driven by good cost control and a weakening of the Norwegian kroner. Our DHD intensity ended at 2.6 kilos per barrel of oil equivalents produced, continuing to trend down from already industry-leading levels. The strong operational performance also translated well into our financial results. Earnings ended at $2.9 per share, up from $2.1 in 2023. More important, we achieved a record high cash flow from operations after tax of $10.2 per share, providing a solid foundation for our dividends paid of $2.4, and in addition covering most of our growth investments. If we adjust the 2024 cash flows for facing of cash taxes, as the taxes paid in the first half of 2024 was for the year 2023, the underlying cash generated in 2024 was almost $1.2 billion higher. This gives an adjusted free cash flow after investments and financing costs more than covering our dividends paid. Through the year, we also strengthened our liquidity position, and we ended the year with a conservative leverage ratio just below 0.3 times net debt to EBITDAX. Zooming then in on a few key points from the fourth quarter results specifically. Production in the fourth quarter was, as mentioned, 449,000 barrels of oil equivalents per day, but as we had 10,000 barrels of underlift, the net sold volumes ended at 439,000. Realized hydrocarbon price was $75 per barrel of oil equivalents in the quarter, with realized oil prices remaining close to Brent. We achieved very low operational cost at $5.7 per barrel produced in the quarter, compared to $6.6 in Q3. This was driven by a reduction in maintenance cost in combination with a ramp up in production. As already highlighted, cash flow from operations was record high in 2024. And when examining the separate quarters, there are some differences worth noting. Before tax payments and changes in working capital, cash flow remained fairly stable throughout the year. However, with two tax installments in the second and fourth quarter, these quarters had lower cash generation. In the fourth quarter, we also had a negative effect of the reversal of working capital from Q3 back to a more normalized level. So to get a better view of the actual underlying cash generation, I recommend looking at the third and the fourth quarter in combination. Investments in the quarter remained stable and in line with our overall plan. The combination of two tax installments and the increase in working capital left us with a negative free cash flow of $304 million in the quarter, or minus 48 cents per share. On a three-year basis, we generated over $1.1 billion in free cash flow, And combined with two successful bond issuances, we strengthened our total cash position to $4.1 billion, an increase of over $700 million since the end of 2023. In combination with our undrawn bank facilities of $3.4 billion, the total available liquidity at the end of the year was $7.5 billion. To round off, let me comment on how our 2024 deliveries compared against our guidance to the market throughout the year. We started 2024 with a production guidance of 410 to 440, with the message that the key drivers of where we would end up was dependent on the ability to maintain the high production on Johannesburg and the absence of any major unplanned production stoppages. With strong performance as we progressed through the year, we were able to lift the lower end of the range at both our Q2 and Q3 presentations, ending with a most recent guidance of 430,000 to 440,000 barrels per day. Johan Sverdrup delivered stable production throughout the year, and total ARC BP production for 2024 ended at the high end of the range, after a very strong fourth quarter. Production cost was originally guided close to $7 per barrel for 2024, and we ended at $6.2. The drivers for outperformance are well known to those of you who follow our quarterly presentations. Cost discipline, lower electricity costs than planned, a weakening of the Norwegian kroner, and strong production have all contributed positively. CapEx in 2024 ended at $4.8 billion, close to the guidance of around $5 billion. Considering the weakening of the Norwegian Kroner and the general uncertainty around facing of activity around the OM, this is pretty much spot on our expectations. Exploration and abandonment spend also ended at guidance of close to 500 and 250 million respectively. Now, with a strong 2024 behind us, the stage is set for a deeper dive into our updated plans for the future.

Thank you, David. My key takeaway is that we are continuing to deliver strong operational performance and solid project execution. But more than that, it is a testament to our ability to create value, not just today, but well into the future. As I mentioned in my opening remarks, I think RKBP is ideally positioned to drive profitable growth on the NCS well into the 2030s. And in a few moments, I'll show you exactly why. But before we get into that, let's take a step back. Why does this even matter? Will Norwegian oil and gas be relevant in the 2030s? Now, we really think so. And to put this into perspective, I've invited RAKABIPI's chief economist, Tobin Tjus, to join me. And Tobin, you have spent your entire career analyzing the oil and gas market and energy markets. Where are we heading? I guess that's a really big question, isn't it?