Aker Bp Asa Ord

Good morning and welcome to AKBP's first quarter 2026 results presentation. We entered 2026 with a strong momentum and it continued in Q1. Production efficiency was 97%, consistently among the best in the industry. Symbra came on stream nine months ahead of the original plan. And the broader development portfolio hit its key milestones. And when the oil price moved higher late in the quarter, driven by geopolitical disruptions in the Middle East, a high performing portfolio enabled us to capture the upside with tailwinds carrying into Q2. We delivered production in the high end of our guided range, sector leading cost, a significant project delivered nine months early and realized prices well above what the screen showed. briefly turn to our operational performance in the quarter as summarized here. Starting with production efficiency, our assets delivered 97% of the theoretically installed capacity. This reflects consistently strong operations across the portfolio. Daily production averaged just above 398,000 barrels, close to the high end of our full year guidance range. Production cost was reduced to $7.7 per barrel, fully consistent with our full year guidance of around $8 per barrel. And we remain among the lowest cost producers in the industry. At the same time, we continue to operate with very low emissions intensity at just three kilograms of CO2 per barrel, reinforcing the quality of our asset base. Together, this underscores the strength of our portfolio and a high degree of operational control. Q1 reinforces a clear message. We are converting our project pipeline of attractive low break-even project into barrels on or ahead of schedule. This chart shows our production outlook into 2030. Delivery of our major project keep us on track to reach around 525,000 barrels per day in 2028, corresponding to approximately 35% growth from 2026. Beyond 2028, our ambition remain unchanged to sustain production at around 500,000 barrels per day well into the 2030s. Our ongoing field developments continue to underpin production growth, supported by a disciplined and repeatable execution approach across the portfolio. Over the past several years, we have built an operating model centered around hub development, standardization, and alliance-based execution. This is clearly reflected in our subsidy tieback program. This year, production has started at both Solvay Phase 2 and Symbra, tied back to existing infrastructure in the Eiger area. Symbra came on stream nine months ahead of the original plan, and it's the sixth subsidy project sanctioned in 2021 and 2022 to start production. Three tied back to Alfheim, and three tied back to Eiger. Momentum continues at Skav, where the three tieback projects have now been further accelerated and are now expected on stream in the third quarter this year, almost a year earlier than originally planned. Across the portfolio, these nine tiebacks have delivered strong project economics. On average, the project showed an estimated full cycle return of around 50% at a $7 per barrel price, with breakeven prices of approximately $27 per barrel and payback time of around 10 months. These results reflect execution through our subsea and drilling alliances, built on long-term partnerships, early contractor involvement, and aligned incentives. The results are repeatable and a competitive position in the subsidy tieback execution on the NCS. Alongside our tieback activity, execution continues on our two major development projects. Both Yggdrasil and Varlal PVP fenders remain on track for First Oil in 2027. At Yggdrasil, activity levels are high across the project. And as we move closer to the offshore phase, the main priority is to complete as much work as possible onshore ahead of sail away. For Huguenet topside, sail away is planned in the fourth quarter with focus on minimizing carryover into offshore execution. At Valhall, a key milestone was recently reached with a successful installation of the Fendres topside. Construction of the PVP topside is progressing at the Stordjord, with sail away for offshore installation scheduled for the third quarter. Here too, focus is on productivity and readiness ahead of the offshore execution period. Let me show you what this quarter installation looks like in practice. Thank you. This is large-scale project execution. Together, our tieback portfolio and the major developments provide a balanced and capital-efficient path to growth, with material production coming on stream from 2027. we continue to view exploration as an integrated part of our business, with its importance reinforced by a broader focus on energy security. The activity was lower in the first quarter, but has now picked up. In the Johan Sverdrup area, the Tonja exploration well was completed in early May and confirmed volumes in line with the pre-drill estimates. The data from this well will provide valuable information for future development in the northern part of the area. We are currently drilling the appraisal well at Kalman and have recently spotted linga. Over time, this work helps ensure that our production base remains competitive beyond the current project cycle.

Thank you, Carla. And good morning, everyone. The first quarter represents a strong operational and financial start to the year. Production, cost and project execution are tracking our full year plan. And cash flow generation has strengthened materially compared to the previous quarter. I will start with a brief comment on the oil market environment, and then walk you through the financial performance for the quarter, before closing with a few remarks on cash flow and the balance sheet. The recent events in the Middle East are causing significant human suffering, while also affecting global energy markets. From a market perspective, we have seen oil prices move materially higher since early March. I'd like to spend a few minutes on how this translates into our realized prices, since the dynamics this quarter have been somewhat unusual. And what investors see on their screens does not fully capture what flows through to our top line. Aaker BP's physical oil sales are priced against Brent Dated, not the front month futures contract that most investors follow. When we agree a sales contract for a cargo, we agree a differential to Brent Dated. The cargo is typically delivered one to two months later, and the final price is set in the five days around the delivery date, based on a Brent Dated plus or minus that differential. There are two points here that matter for how you should think about our realized prices. First, since March, Brent-dated has traded materially above the front-month futures contract. Under normal market conditions, the two move closely together. The dislocation we have seen this quarter reflects tightness in the physical market for prompt barrels. The practical implication is that headline Brent prices have understated the price of physical North Sea barrels. Second, the differentials on our own cargoes have increased materially through the same period. And without going into specific numbers, this dynamic provides additional support to our realized prices, on top of the Brent-dated effect itself. Together, these factors contributed to an average realized oil price of $83.5 per barrel in the first quarter. the same dynamics have continued into the second quarter, and to an even greater extent. As a result of the contract structure I just described, our average realized oil price in the first month of the second quarter was approximately $127 per barrel. Note that this reflects pricing on volumes already delivered, and is not a forecast for the full quarter. If you would like to understand these dynamics in more depth, our chief economist, Torbjørn Kjus, has recorded a video presentation that walks through the current market situation in more detail. It is available on our website, and I would encourage anyone who wants more granularity on the physical pricing mechanics to watch it. Turning to the Q1 results. Production averaged just above 398,000 barrels of oil equivalents per day in the quarter, close to the high end of our full year guidance. Due to overlift, sold volumes were slightly higher, averaging around 406,000 barrels. Total income amounted to $3 billion, supported by a realized liquids price of $82 per barrel and a realized gas price of $80 per barrel of oil equivalent. Unit production costs were $7.7 per barrel. After expiration expenses of $48 million, EBITDA for the quarter was $2.7 billion. In the quarter, we recognized a net impairment reversal of $522 million, primarily relating to the other intangible assets at Valhall and driven by higher short-term oil and gas prices. This is a reversal of impairment charges recognized in the fourth quarter of 2025. The methodology and assumptions behind this are described in detail in Note 7 in the report. As a result, net profit was $758 million, compared with a net loss of $145 million in the fourth quarter of 2025. Moving from earnings to cash, operating cash flow amounted to $2 billion. Cash generation benefited from a higher income and lower tax payments, with two installments in the quarter compared to three in the fourth quarter of last year. Partly offset by working capital movements, amplified by higher prices in the quarter. Overall, the first quarter demonstrates how our operational execution and cost discipline translate into strong financial performance and robust cash generation. Let me also briefly comment on our guidance for 2026. All components of our guidance are reconfirmed. production between 370 and 400,000 barrels per day, production cost around $8 per barrel, and capex of $6.2 to $6.7 billion. After Q1, production is tracking within range, costs are below the full year level, and capex is in line with plan. In light of the current market situation, I would also like to address the outlook for cash flow and the balance sheet. But before I walk through this slide, I want to emphasize that the figures shown are scenario-based. They illustrate possible free cash flow outcomes under different price paths, and they are not forecasts. Since the strategy update in February, the only change we have made is to lift the assumed average realized oil price in the first half of 2026 to $90 per barrel across the scenarios. The key outcome is that 2026 has become significantly more robust. And even in a prolonged low oil price scenario of $50 per barrel from the second half of this year and onwards, our leverage ratio is now estimated to not exceed 1.5 times. What the scenarios also show is that across a wide range of price paths, our portfolio continues to generate positive free cash flow before dividends. At current strip prices, free cash flow generation is materially positive. And in a lower price scenario, the financial flexibility we have built provides the buffer needed to manage volatility, while keeping us comfortably within our investment-grade framework. 2026 remains an investment-heavy year, with peak activity on Yggdrasil and PVP Fenris. As these projects come on stream next year, the scenarios show free cash flow generation increasing materially across all the price paths shown. Let me then close off with a few words on what this means for our shareholders. Our capital allocation framework is unchanged. A strong balance sheet is the foundation for value creation. On that foundation, we make disciplined investments that generate returns that in the end are distributed to shareholders. Our job is to maximize long-term dividend capacity, and that requires capital and good investments first. Translating this into where we stand today. First, we maintain a strong investment-grade balance sheet with $5.4 billion of available liquidity, providing flexibility through the cycle. Second, we fund the investments that drive our growth, Yggdrasil, PVP Fenris, and the high return Tyvek portfolio. And third, we return capital to shareholders through a predictable growing dividend, currently at 66.15 cents per share per quarter. Going forward, the picture is clear. 2026 is a peak investment year. From 2027 and onwards, as Yggdrasil and PVP Fenris come on stream, free cash flow generation steps up materially, providing the basis for continued attractive shareholder returns in the years to come. With that, let me hand back to Karle for some concluding remarks.

Thank you, David. Q1 2026 confirmed the strategy is working. High production efficiency, sector-leading cost, and yet another project delivered well ahead of plan. Our track record on subsidy tiebacks lays a solid foundation for future projects. Looking ahead, our priorities remain unchanged. Safe and efficient operations, disciplined project execution, and an exploration program aiming at strengthening the resource base. Underlying all of this is continued focus on execution. Operating, developing, and exploring more efficiently year by year and translating that performance into sustainable shareholder returns. We will now take a short pause before opening the Q&A session. And as usual, to participate, please use the Teams link on the webcast page. And if you prefer to listen only, please stay tuned and we will resume in one minute. Welcome back. And then I think as usual, we'll just go directly to Q&As. And as usual, the master of ceremony is our very own Kjetil Bakken. Kjetil, over to you.