Bw Energy Ltd

Warm welcome to this fourth quarter presentation, fourth quarter 2024 by BW Energy. As usual, this presentation will be hosted by Brice Morlot, our CFO, Lynn Espy, our Chief Operating Officer, and myself, Carl Arnett. I have two things that I would like you to notice. First of all, our disclaimer. And also notice that all our figures presented in this presentation are unaudited. The audited figures will be available at the release of our annual report later in February. Then onwards to the Q4 highlights. We had a record quarterly EBITDA and a 32% increase in net production. The Doosafu net quarterly production was at an all-time high of 2.5 million barrels. And we are currently producing around 40,000 barrels per day gross at Doosafu. Then on to a lot of figures this time. This is the fourth quarter. First, our net production was 33,600 barrels per day. which is significantly up over the third quarter and the fourth quarter, 23. Our revenue, again, 233 million and significantly up. Same OPEX, but OPEX was down due to the higher production and cost focus, so also much better than in Q3, 24, and Q4-23 at $25.6 per barrel. Our EBITDA was 141, net profit 56, and the operating cash flow 117 million. For the full year, the net production was 10 million barrels, which was significantly up from 23, almost 70%. Our revenue, a new record, was close to $800 million, again, significantly up over 2023. The OPEX for the full year was $30 per barrel, which is about 16% down from previous year. EBITDA of $457 million, which is significantly up, 90%. And the net profit, $165 million. close to 166 million actually, uh, which is again, doubling from 23. The operating cashflow was very solid, uh, and, uh, at three close to 350 million. And of course up significantly over 23 as well. So all in, I would say we are very pleased with developments in 2024. And, uh, I think we can now say that we have turned a corner on our trials and tribulations with ESPs. And although we did see some patchy production from Golfino due to certain issues that I will cover later, it is showing very solid production from the Tortue and the Hibiscus Rouge area, as you can see from this graph. 2025 guidance, net production, we expect to produce between 11 and 12 million barrels. We expect operating costs around $18 to $22 per barrel. The operating costs we will report from now onwards will not include royalty and tariffs, which is not customary to include. So we have made a little adjustment just so that you are aware of this new reporting regime. The net capex expected for 2025 is 260 to 285 million. This does not include the Maromba and Golfino that Maromba we expect to FID later in the first quarter. And the Golfino boosting is still work in progress. The GNA is expected to come in at around $19 to $22 million. Then some more granularity on operations. The DUSIFU net production was 2.5 million barrels, significantly up over the previous quarter. We had a high operational uptime on Adusafu, and we brought two new wells online, as well as restarted three wells after the workovers. And the operating cost reduced to $18.5 per barrel, which is below the year-end 2024. The Golfino production was a bit more mixed bag. We had an unfortunate shutdown of the Petrobras gas import pipeline, which caused a shutdown of our ESPs or our wells produced by ESPs. The operating cost as a result is high, $56.4 per barrel. And we are, of course, forward Increasing our focus on the production regularity and what we can do to improve on the situation on Golfino. We had another good quarter in terms of HSE performance. We had one LTI in 2024 and no environmental incidents. So all in a good HSE performance. performance. Then on to field development. Our major field development is Maromba, and we expect to FID that in the course of first quarter 25 this quarter. And the wellhead platform design is near completion. And again, to remind you, this is a dry tree concept. We are currently undertaking a geotechnical campaign on site. And the objective is to find the proper field center and have specific locations for the location of the Wellhead platform. The FBSO refurbishment has commenced, as you can see from this snapshot from the yard in China. And we are currently undertaking steel work. And as soon as we FID the total project, we will, of course, then also J. order long lead items and we expect to do that pretty much simultaneously with the fi doing the project plan delivery of this project is in Q3 2027 investment budget $1.2 billion and we are. Again, to remind you, in the first phase, targeting the low-risk Maastricht barrels that have been highly appraised and delineated by the previous owners of Bromba, Petrobras and Chevron. The target production is 50,000 barrels per day. We are getting very close to completing the financing efforts. with the FPSO financing having gone through credit approval, and the Wellhead platform is also very close to completion. Then on to appraisal and exploration activities. The main activity as we speak is the Bourdon appraisal in Gabon. We are currently drilling and we are, as we speak, getting close to TD for the well, the planned TD. Here we are targeting risk gross recoverable reserves of 30 million barrels. And we obviously expect to have the results of this well in the first quarter. Just a small reminder on the Burdon concept. It's always been a large, a large potential in the Burdon. It has a good seismic profile, but again, just to remind you also of the risks here, we do have inherent risks in Burdon. in the drilling and this prospect, and they are mainly related to whether we have a seal and the quality of the rock that we have good quality reservoir. So those are the main risks. As you may surmise, I mean, we started back in eight years ago in Gabon and we are drilling this prospect now so it has not been our top ranked prospect and it does have such a high risk than previously drilled prospects where we have been as you know highly successful historically. The second Appraisal well, high-impact well, we will drill in 2025. We expect to drill or spud in the third quarter 2025. It's the Karas appraisal well in Namibia. The well will be located in the northern portion of the Kudu license. We have been out to bid for a rig. rigs and services and we are currently in a selection process looking very positive that we will have access to excellent assets to do this work and we are working with the other operators in the orange basin and looking into potential sharing of available resources and Our KUDU seismic processing has been completed, and we have, as we have told you previously, we have a number of very interesting targets, but we will start with Karas in 2025. The last activity on our appraisal and exploration is the planning of the seismic campaign over the new Gabon acreage. We have, as you know, signed up Niossi Marine and Guduma Marine, two very large blocks offshore Gabon surrounding the Dusefu, as well as the Atam fields and also some inboard Perenko fields. Total is around 5,000 square kilometers and we hope that we can start our seismic campaign in the fourth quarter 25 or the first quarter 26. The intent is to shoot these two blocks, Niossi and Guduma, as well as the parts of Dusefu where we have poor seismic quality, mainly the Walt Whitman area in the northeastern corner, maybe also some extra seismic in the Mubenga area. Where discoveries have been made in the past, but on very, let's say, poor quality seismic. So that's the main activities in terms of exploration and appraisal. Then I will hand the word over to Brice that will take you through the financials.

Thank you, Carl. Well, an excellent production for the quarter, and it's reflected in the financial figures. So let's just dive in the Q4 financial section. To the income statement for the fourth quarter, we had an operating revenue of $237 million. So it's plus $30 million compared to Q3. We had three liftings in Dusafu and one golfino lifting in the quarter. So very good production. We are currently producing over 40,000 barrels per day at Dusafu. This is a bit offset by the lower realized price in the Q4, around $72 versus $82 in average. 3.8 million dollars of unrealized loss on hedging, operating expenses of 91.8 million dollars. This reflects a higher production on Dusafu and increasing royalties and tariff. which gave us an EBITDA of $141.6 million for the fourth quarter. This is the record quarterly EBITDA for BW Energy. So again, an excellent quarter for the company with a strong production growth. A slightly higher depreciation for Dusafu due to higher production, giving us an operating profit of $84.5 million. A slightly lower interest income. We had interest expense of $16.4 million. A profit before tax of $73.6 million. Income tax expense of $16.7 million. And so we end the fourth quarter with a strong net profit of $56.8 million. So for the full year 2024, a revenue of 0.8 billion, up 60% compared to last year, an EBITDA of 457 million, up 90%, and a net profit that has doubled of 165.9 million. A very good year. To the cash flow overview, We had a cash at end of September of close to $210 million. We had operating cash flow of 117.7, a net investment of 76.6, and then net financing activities of $29 million. And that give us a cash position of $221.8 million at the end of this quarter. Investment in assets. This slide presents the company investments since 2021. In 2024, investments focused on drilling and workovers of hibiscus wells related to the DUSAFU development. Investment in PL73 license in Namibia. Facility upgrade as well for FPSO Adolo and FPSO Cidade de Victoria at Golfino. and the acquisition of Marumba FPSO. To the balance sheet, our balance sheet is supporting our growth strategy, a total asset of $1.9 billion, a net interest-bearing debt of $341 million. In this, we have the Dusafu Reserve-based lending of $250 million, the Golfino prepayment facility of $80 million, the corporate bond of $100 million, and the Mabombo lease less the cash. We have a very strong balance sheet with more than 43% equity ratio, a ratio of 0.75, and you can see on the right the maturity profile of our debt. We will publish audited figures for 2024 full year on the 26th of February. Lifting schedule and hedging. We will have in Q1-25, three Doosan-Fu liftings of around 950,000 barrels each and one Golfino lifting of half a million barrels. And a few words on hedging. We have requirements to hedge in the RBL facility for Dusafu, where we have to hedge 40% of the year one production and 25% of the year two production. We are also hedging part of the golfino production. So currently we have 4.9 million barrels hedged for 25 and 26. And this is a mix of puts, zero cost collars and swaps. Then over to the summary. This is the production outlook. We expect to produce 11 to 12 million barils of net production to BW Energy for 2025. This production outlook presents you as well the potential of growth for BW Energy with Golfino boosting online in Q3 26. Then we have Hibiscus and Ruche phase two, four additional wells on Mabomo in Q4-26, Maromba online end of 27 early 2028, and two infield wells end of 2028 in Golfino. Our upcoming milestones, we had an amazing year in 2024, a solid net production of 10 million barrels of oil, up 33% from 2023 and a record EBITDA. So we are in a strong position to grow. And this is our plan, exciting plan for 2025. We have the Bourdon appraisal. As Carl said, the well is being drilled as we speak, so we will be able to share more information with you in the coming weeks. We have Maromba FID. The concept design and financing are nearly completed and with an ongoing geotechnical campaign finalizing the last aspect of the concept. The FPSO is in China now, refurbishment has begun, and we plan to FID in March. And this will be for a field delivery planned for the end of 2027. And the Kudu appraisal, we are in advanced discussions with regional partners to secure a rig and long rig items are already on their way. This puts us in a strong position to spread the word before the end of the year. So in conclusion, there is a high level of activity with production exceeding 40,000 barrels per day, ensuring strong operational cash flow, and we have a solid balance sheet that provides a strong foundation to support our growth strategy. And that brings us to the end of this presentation. And then I'll leave the word back to Operator for questions from the audience. And then we will continue with the questions we have received from the web. Thank you.

Thank you. If you do wish to ask a question, you will need to press five star on your telephone. To withdraw a question, press five star again. Our first question comes from the line of Theodor Sven Nils from SB1 Markets. Please go ahead. Your line will be unmuted.

Thank you. Good afternoon, Carl and Brice.

A few questions from me. First, very positive to see that the production now is 40,000 barrels per day. I just wondered if you could shed some light on how we should model the production through the year and what you expect as an exit rate production from 2025. And second question that is on CapEx, are you providing on CapEx without Maromba and Golfinje cost, just wondering if you could provide an approximate number of what we should expect as a total capex also included non-FID projects. And my final question is on Maromba and farm, I think we discussed that previously, but if you could just give an update on how you think around the potential farm down timing and which stake we should expect to farm down, that would be useful. Thank you.

Thank you, Theodore. Thank you for your questions, especially on the guidance. I received as well quite a lot of questions online, so I will try to answer the questions on the 2025 guidance in a block. So for the production guidance, we guide 11 to 12 million barrels per year. That's around 31 to 33,000 barrels net to BW Energy. I have a question, by the way, from Mr. Fosio online. This includes Dusafu and Golfino. But yes, Golfino boosting is excluded from this and as well from the production and from the capitalist guidance. In terms of breakdown of the production, you can take 25 bile oil per day in Gabon and 7,000 by a little per day in Brazil, not for BW Energy. Yes, the production is good at the moment in Gabon, but we hope to maintain a production above 40,000. This is growth. But we have to be a bit conservative. We need to take into account maintenance, unexpected downtime, planned shutdown of 15 days this summer, probably. And of course, a bit of decline. So we prefer to guide with a bit of conservatism. A word on the so-called name plate on Adolo. We don't foresee any surface topside facility major bottleneck. We have a valid MOC to approve 45,000 barrel per day capacity. We are working to validate an ongoing study to go above this. So technically, no big constraints. We now hope that the well will deliver as they should. Um, you had a question on the, on the CapEx guidance. So on the CapEx guidance, we guide, uh, 260 million to 285. That includes one could do well, uh, at the end of 25, but it exclude non FID project, Marumba and Golfino boosting. Um, there is no contribution from Marumba and Golfino boosting in the guidance. Post-FID, we will, of course, increase the guidance accordingly. You can take, for Dusafu, 100 million. Kudu, the well, should be less than 100, so maybe 95. Golfino, 40. And Marumba, a bit less than 20. And for the non-FID project, Marumba is 1.2, but we are working on a dedicated presentation to the market that will be early May. I think it will be an in-person presentation and we will share with you all the figures for Marumba. Did I answer your question, Theodore?

I think there was one question left. Marumba farmland.

Yeah.

And well, obviously, we will always entertain discussions on Farmdown. So far, we do believe that it is vastly more accretive for our shareholders to bring the project further and take it through FID. But, you know, As I said, we always entertain interested parties. We have in the past as well, but we do need to see somebody with a tangible interest that is willing to pay what we think is sensible. It's difficult to say how much, because again, that will depend on valuation and the view of the asset. We are very convinced we have a first class asset with very high return. And I think that's our position. We are super excited about Maromba and see this as a huge next step for the company. And we are totally okay to drive it forward alone. And then we will see. So I find it very difficult to speculate on what people may or may not think around us. So that's really the answer.

Okay, understood. Thank you.

Thank you, Theodor. As a reminder, press five stars to ask a question. There'll be a brief pause while questions are being registered. The next question will be from the line of Nick Manine from Sexton. Please go ahead, you'll now be unmuted.

Hi, I had just a couple of questions. Can you break down the OPEX guidance between what you're assuming for Gofinio and what you're assuming for DUSAFU? And also within the, can you give a bit of color on what the DUSAFU CAPEX is is coverings it still seems quite a bit um is there a uh is there an amount in there for the seaboard production partners payments um and would that complete those payments in in 2025 are those all still running to 2026.

So in terms of OPEX profile guidance in 25 between Dusafu and Golfino, Dusafu is around 18 and Golfino around 49, a bit more, $50 per barrel. What was the last question again? Sorry.

The CAPEX for Dusafu, if I heard right, I think you said about $100 million. What's that mostly covering? And does that include an amount for Seaboard Production Partners payments that you're still making?

um yes so on on the capex for dusafu uh we have some uh um life extension on the fpso that it's it's included as well uh the uh the bourdon well is in 25 so that's included in this um so that's uh that's the jusafu capex okay and one last one just on the

I guess decline, you're assuming at Disafu. So it's operating a bit above 40 now. If I heard correctly, I think you said it was 25 net, you're assuming, for Disafu. So it's about 34 gross. So that sort of implies declining to... maybe a bit below 30 by the end of the year. You think kind of big decline given as well that the original plans were based on six wells and you now have eight wells. I guess if there's any specific reasons you think decline may be relatively steep, it would be useful to hear those.

Yeah, maybe Lynn can take the decline, but you have to take into account as well that we will have a planned maintenance shutdown and we have to increase a bit of downtime, maybe some issue with the compressors. So that's why we try to guide with a bit of conservatism. Maybe Lynn, do you want to take that one as well?

Yeah, exactly. You got it spot on. I mean, 40,000 barrels a day is what it's operating. when everything's running, but you know, there's unplanned downtime, uh, and there's also scheduled maintenance downtime, which is going to be, you know, uh, 10% or so. And so that, that automatically gets you down to 36. And then on top of that, we've made an assumption toward the, in the second half of the year that we may lose, uh, an ESP well to also provide a little, uh, realism that, uh, one of the wells, we may have a ESP issue. So that's, uh, um, Those factors right there bring the overall average to what we've guided.

Sorry, another specific well you think has an issue, or that's just probabilistically you think there may well be an issue with one out of eight by then? Exactly, just probabilistic, no specific well. Okay, and you said 10% downtime, so five and a bit weeks for zero production is assumed.

Well, it doesn't really work like that. We have a two-week shutdown for maintenance, which is scheduled mid-year, like Free said. And then just average unplanned downtime where you have spurious shutdowns of the process plant, that takes the balance.

And that's averaged out throughout the year. Okay, thank you.

Thanks, Len. Well, just to fill in a little bit there, I mean, typical uptime for these kind of facilities, quite simple facilities, is actually below 95. So I think we're doing quite a good job to keep it at 95. This plant was probably designed more to achieve 90 to 92. So I think we've done a good job of increasing the downtime. So 5% is quite normal in spurious shutdowns. And then as Lynn said, we have the 5% addition, which is the planned shutdown.

Okay. If I can just ask one last question. What do you estimate is the current well production capacity is sort of just over 40 is that what you estimate the capacity currently is yeah i think it's a good number yeah that's a good number yeah just uh maybe just a tad above it or so okay thank you thank you nick has no one else lined up for questions in this call i'll now head it back to breeze for any written questions

Yeah, thank you. Quite a lot of questions online. Question on Marumba, but as I said, we are planning a market presentation dedicated to Marumba once the project reach FID. So you will of course be invited and we will provide you all the information you need. So questions on Golfino boosting? We hope to FID end of Q2 2025. We are assessing the well stock and refining the best possible options. So we will share information on boosting when they will be ready. Questions on Bourdon. Well, we are drilling Bourdon right now as we speak. So we are close to reaching target. Then there will be the logging. So we can't share data yet. But we share data as soon as they will be ready. Question on... GOLFINO prepayment facility. Yes, the facility will mature in March 25. And yes, we will renew, extend the facility for the same amount, $80 million. Question on KUDU from Mr. Erebic and Mr. Litzheim. So budget is around 95 million dollars for the well. It's a well that will be drilled at 640 meters water depth. The long-league items are secured. And we are planning around 80 days plus mob-demob for the drilling phase. And the objective is to map the true potential of Kudu. For the time being, no, there is no plan to farm down. No data room has been opened as well. And that's not the plan for the moment. And for a second well, well, we need first to evaluate the acquired data from the first well. And we'll take some time to improve our understanding of Kudu before to decide on or sanction on a second well. And then I think that's it. I think I've covered all the other questions. If you have other questions, please do not hesitate to send us a mail. This is at ir.bwenergy.no. And thank you very much for attending this presentation. And then I will leave the word to Carl to close the meeting. Thank you.

Well, thank you, Brice. I see there's a number of questions regarding the Recon Africa well in Namibia and some speculation about announcements. We leave really announcements around this well to Recon Africa as well as the farming that I think purely a function of when it was actually signed off by Namibia. So I don't think there's any So there's no reason to speculate why these announcements were made almost simultaneously. The results will be and has been in an announcement from Recon, and we don't have anything to add to what they say in their press releases.

All right. I think I forgot a question actually on dividends. Sorry, Carl. And because we forgot to put that in the presentation, but as we said, the dividend payments will commence after Marumba first started in 2028. Yeah.

Okay. Very good. Yeah. Okay. Anyway, as Brice said, we are planning to have a showcase a bit more thoroughly the Maromba development, as soon as we have the FID, it will probably be done in conjunction with the reporting of the first quarter 2025 results. And we aim to do that in person in Oslo. So we're very much looking forward to that and looking forward to any questions. Again, thank you so much for attending this presentation and your continued interest in BW Energy. Thank you very much.