Bw Energy Ltd

Thank you, operator, and thank you all for joining BW Energy's fourth quarter and full year 2025 presentation. My name is Carl Arnett. I'm the chief executive officer of BW Energy. I will take you through some of the highlights for 2025 and the fourth quarter and some of our developments. Then you will have some more granularity on the operations from our Chief Operating Officer Brice Morlot and of course as usual some granularity on the financials by our Chief Financial Officer Thomas Young. 2025 was a strong year for BW Energy with a record annual production, another record I'm pleased to say and of course with the record production comes reduced unit OPEX. Our project portfolio is on schedule and cost and we are very pleased to have raised a total of 1 billion, approximately 1 billion of low-cost financing related to our developments. We are also pleased that our discovery last year, Burdon, is moving towards FID, and that will be more to come very soon in future reporting. So for 2025, we had a total EBITDA of 414 million, with a net profit of 133 million. Our cash at the end of 25 was 150 million. Fourth quarter figures, our net production for the quarter was 25,200 barrels per day with an EBITDA of 37.1. Our key projects are progressing into 2026. Maromba Development is on track and I will take a little bit more detail on that. And then we have Bobo Phase 2 with First Oil in 26. This is of course addressing low risk and high profitability infield drilling opportunities we have on Dösefu. We hope to sanction very soon, which will give us another cluster on Ducefou. And last but not least, we are still progressing very well on the Golfino Boost project. So some more details on the growth projects. We have the Ducefou, which will have, of course, a pivotal year in 26. with the Mabomo phase two where we will address about 2p reserves of 14 million barrels and we have four development wells planned where we have in planning two hibiscus appraisals. Gulfino boost is again addressing about 12 million barrels of 2p reserves. We are converting gas lift wells to seabed ESPs and the project is going very well and again a very accretive project better than 30% IRR and we are progressing as I said well. Maromba that's of course the biggie 123 million barrels 2p reserves and we expect to drill a total of 12 production wells where we start with six in the first phase and then another phase of six that will follow that's more drilling execution phases we're talking about and again a very high rrr for the maromba project And Bordeaux discovery we expect to have on this list very shortly. The Maromba execution is on track. We have reported extensively on the FPSO refurbishment and so you showed your pictures of that. It's going well and there's full activities in Dalian at the China Yard. The Wellhead platform had an initial stay late or second half of last year in Singapore, where we did, let's say, an extensive assessment of work scope. And she's now been transported to the conversion yard. For the CERF, the main activity is engineering and procurement. to prepare for the installation towards late 26. The other main focus of the whole Maromba execution is to prepare for the regulatory approval process and we are spending a lot of effort in our engineering and preparations and of course also yard supervision to prepare for meeting all the regulatory requirements when we mobilize into Brazil. Next picture, very cool picture, shows the scale of our jack up, our jack up acquisition as she's being towed into the yard in Dubai. We have, you can see it's a very large unit and we have, we are well underway now with the engineering and the initial mostly demolition work, but preparatory work for the conversion and all the upgrades that we will do to have her serving as a drilling and wellhead platform. And the planned sail away to Brazil is end 26. Then on to an update on our appraisal and exploration activities. We have just completed our 3D seismic campaign, the seismic shoot on Nyosi Guduma and the corner of Dusefu. And we will now, of course, enter a fairly extensive period of analyzing this seismic data. We are planning for two appraisal targets at Tusufu in the Mabomo Phase 2 campaign and we also have further targets. We are still planning the Movomo Phase 2 drilling campaign in its totality. So we may come back with further news later on. In Namibia, as you know, we have completed our CARAS-1. We are now working on a preparation of a data room for our findings on that well. The other activity we have in Namibia is, of course, the non-operated PEL 73, where our partner is undertaking onshore exploration campaign with, let's say, some initial good news on the drilling that has taken place there. Then we have announced some progress in Angola. Angola is a country of interest in our West Africa strategy. We have agreed with Azul Energy to acquire net 10% of Block 14 and 5% of Block 14K. I remind everybody that this is fairly extensive processes where you have regulatory approvals, there's closing conditions and also preemption rights. So we are not declaring in any form or fashion victory today, but we have agreed with Azul Energy and we see this as a very interesting opportunity. to get a foothold in a mature hydrocarbon basin, where we see a lot of future potential with the BW Energy strategy. So all in, we are very much on track to deliver industry-leading growth. We have given year 25 with a new record production, our guidance for 26 is flattish. We have activities to fight back on depletion, which you always have, and we expect to keep our production at very healthy levels in 26. But of course, as we complete our developments and get the production from Marogba, we will see a significant threefold increase in production. So with that, I will leave the word to Brice that will take you through the operational update.

Thank you, Carl, and good afternoon, everyone. 2025 marked another step forward for BW Energy with a new annual production record of around 30,000 barrels per day. This reflects the continued focus on safe and reliable operation across our assets. and it is encouraging to see our targeted work translating into a steady year-on-year improvement in production. Let me take you through the key operational developments during the year. DUSAFU delivered another strong year marked by a high uptime and a rapid recovery following the planned maintenance in the third quarter. During Q4, production was impacted by a mechanical failure on one of our ESP. This was budgeted and planned for as part of the ESP maintenance, and we have a hydraulic workover unit that is already in Gabon, ready to perform the workover. The workover will be performed without a drilling rig. The well should be back online mid-March 2026. Golfino experienced some challenges in Q4, with maintenance being extended due to a live boat davit integrity issue. The well maintenance program will involve several optimization measures. Also took longer than expected, but we successfully managed to resolve the issues and ramp up production toward the end of the year. In total, the full year production came in at 10.9 million barrels, so very close to our original guidance of 11 million barrels net to BW Energy. Let us have a look at the quarterly OPEX development now. On operating cost, I'm pleased to report that we ended the year comfortably within our guidance range at around $20 per barrel, This reflects high facility of time, stable operating performance, and continued cost discipline across our assets, particularly at DOSAFU. Now let me take you through the operation outlook for 2026. We have an active year ahead, 2026, with several important operational milestones to be delivered. So at Dusafu, first, we will commence drilling under the Mabomo Phase 2 program during the summer. And our base case is that two wells will be completed and ready to come on stream late in the year. This well will be ramped up following the seasonal maintenance period in the third quarter with a contribution to first quarter production while you will see the full production impact realized in 2027. As in the previous year, we will carry out our planned three weeks maintenance at Dusafu during the third quarter And in addition, we have identified one ESP that requires replacements. This work is already underway and is expected to be completed by mid-March, with only limited and temporary impact on production. Overall, for Dusafu in 2026, we expect natural decline from the existing wells to be partially offset by the initial production from Mabomo Phase 2. However, full production is expected to be somewhat lower than 2025, as most of the new volumes will contribute next year in 2027. At Golfino now, we recently completed a substantial well optimization program as part of the Q1 maintenance. And we are already seeing positive effects across several wells. So with this improved weld performance and reduced maintenance activity compared to last year, we expect production at Goldfino to increase in 2026. Takeover to get... Taken together, the support full year production guidance will be between 9 and 11 million barrels, net to be W energy, corresponding to 25 to 30,000 barrels per day operating cost. The operating costs are estimating around 20 to 24 dollars per barrel in 2026. So OPEX remained under control. We expect to capture efficiencies gain on Adelo, including onshore support, repairs and maintenance, crew as well, and the removal of third-party markups, which should reduce operating costs while natural production decline across the portfolio offset some of these benefits on a per year basis. The operating cost guidance range primarily reflects the range of production outcomes. With that, I conclude the operational section and hand it over to Thomas for the financials.

Thank you, Rhys, and good afternoon, everyone. 2025 marked another strong year for B2B Engie, both operationally and on the financial side. We delivered in line with guidance across our key cost parameters and secured further important financing supporting our ongoing field development projects. A good illustration of our approach to ensuring efficient financing is the latest lease arrangement concluded in the fourth quarter. By entering into the $275 million long-term lease for developed platform, we have further optimized our liquidity profile during the key investment years of 26 and 27 ahead of Moromba coming on stream. Whilst the total Maromba CapEx remains unchanged, the revised structure shifts all well-heard platform related costs past first oil. Overall, our value creation plan remains firmly on track. With the CapEx estimates unchanged and continued strong cash flow contributions from our producing assets, we have taken another solid step towards the company's next phase of growth across our key assets. I will come back to our updated financial outlook, but let's first take a closer look at the key developments for the quarter. Production for the quarter amounted to 2.3 million barrels. During Q4, production was impacted largely by two key operational events at Dusafu and Gofino that were covered by breeze. If we were to adjust for these impacts, Q4 net production would have been about 1,700 barrels higher per day net, which would correspond to roughly 200,000 barrels for the quarter. Sales volumes were impacted in particular by one Dusafu lifting that slipped into the following quarter. All in all, this resulted in 1.8 million barrels sold net to the company. The slight delay in the final lifting that was planned for year-end led to Q4 having one less lifting compared to Q3, with a resulting inventory at year-end of 900,000 barrels. Timing effects such as this are normal and will, of course, even out over time. During the fourth quarter, continued macroeconomic uncertainty weighed on all markets, with Brent prices averaging about $64 per barrel compared to 69 in the previous quarter. B2B Energy continued to realize prices close to Brent with an average realized price of $62 per barrel for the quarter. It's worth pointing out we had one cargo sold in December when Brent prices were at the lowest point during the quarter. As our liftings are based on monthly averages rather than quarterly averages, the realized prices show a larger discount relative to the quarterly average rent price. The same factors also impacted operating cash flow. Let me therefore turn to the key drivers behind our cash flow development this quarter. We entered the fourth quarter with a relatively high cash balance of 259 million. Given that we're in a period of elevated investment activity, a reduction in cash and liquidity was expected. Please keep in mind that although it doesn't show up on the liquidity definition, there is effectively about 375 million remaining undrawn product funding on the FBSO project finance facility and the welfare platform lease. Operating cash flow came in somewhat lower than anticipated, mainly due to the extended maintenance in Brazil and the timing of the DUSA fuel lifting. This was largely offset by lower investment spending, reflecting the conversion of CapEx to lease for the World Platform project, which defers these cash outflows beyond 2028. The change in working capital primarily reflects the release of trade receivables following the receipt of sale proceeds from a lifting achieved at the very end of Q3. Beyond Maromba, we continue to invest in Gofinio Boost project with the rest of the spending related to kudu, facility upgrades and early planning costs for Mabomo Phase 2 at Dusafu. Financing cash flows reflect debt repayments made in Q4. This included the termination of the Shell prepayment facility on Gofinio and partial repayment of the corporate revolving credit facility, aiming at reducing interest costs while maintaining a comfortable cash balance. I'd like to point out that the Repayment of the Shell facility now leaves both Maromba and Gofinio V licenses unencumbered and available to facilitate further potential financing to fund our growth. Overall, the net cash movements were brought in line with expectation. We ended the fourth quarter with 151 million in cash and a strong liquidity position of 366 million, including undrawn facilities, but as mentioned, excluding undrawn project finance facilities. Let's now look at how this is reflected in our overall financial position. Starting from the left-hand side, the net debt increased in line with the ramp up of our investment program. The increase in net debt was primarily driven by lower cash balance with cash decreasing by roughly 110 million compared with the prior quarter. The increase in net debt to EBITDA also reflects a reduction in Q4 EBITDA of 105 million relative to the fourth quarter of 2024. This was the result of natural production decline, as well as timing of the lifting that slipped into 2026. As a result, the leverage ratio increased from 0.9 to 1.5. This remains at a comfortable level, with the quarter-on-quarter movement partly amplified by the temporary impact on EBITDA from the slightly delayed lifting and the planned reduction of cash on hand to manage interest costs. As expected, net debt to EBITDA will continue to increase during this growth phase as we move forward to first-all Amaramba. Our equity ratio remains strong at 40%, and overall, we exit the quarter with a robust balance sheet well-positioned to progress into the next phases of our development program. With the new Wella platform lease in place, we have materially improved the phasing of cash at close while keeping the total project budget unchanged. The lease structure means the payment commences at first oil and extends over a 10-year period thereafter. As a result, pre-first oil cash outflows has been reduced by 274 million, improving liquidity during the most capital intensive years of the Morumba project in particular. You can see this reflected in the investment plan where pre-first oil spend now totals approximately 725 million, with the remaining capex phase post-first oil. The overall underlying Morumba capex envelope remains around 1.5 billion, Jone Peter Reistadt, With a majority allocated infrastructure and initial development wells, followed by additional sanction wells after first all. Jone Peter Reistadt, The key takeaway is that we have not reduced scope delayed execution or increase total costs, rather, we have during the quarter strength and liquidity eliminated near term funding requirements and further the risk the path to first oil. Together with the existing financing arrangements put in place earlier in 2025 and strong operating cash flow, this latest financing optimization further reinforces our ability to efficiently fund greenfield developments through key production infrastructure. Capital deployment remains firmly on track towards first all, with our value creation plan progressing as intended. On the sources side, we are supported by strong underlying operating cashflow from Dusafu and Gofinio combined with secured FBSO and rig financing on highly competitive long-term terms. Together with our existing liquidity, this gives us ample financial flexibility for the peak investment period. On the user side, the majority of capital is directed towards Maromba pre-first oil CapEx alongside continued investment across the portfolio. Even on the conservative oil price assumptions, we do generate excess cash flows that provide a third liquidity buffer and supports our debt service. In total, our CapEx outlook remains unchanged. The investment program is progressing as planned, and the overall funding structure remains robust. We continue to maintain a strong balance sheet with more than $350 million in cash and under-owned facilities and leverage at comfortable levels. Overall, this leaves us well positioned as we close in on Maromba cash flows with less than two years remaining to first oil. Onto the 2026 guidance. We have another active and exciting year ahead with several key activities shaping our guidance. Our production guidance for the year is 9 to 11 million barrels equal to 25 to 30,000 barrels per day. The range reflects some remaining uncertainty related to the impact of Malbomo phase two drilling program at Dusafu. While new wells are planned to come on stream before year-end, any delay to the drilling schedule could result in production being deferred into 2027. In terms of phasing, we expect stronger production in the first half of the year, while the third quarter will be impacted by approximately three weeks of planned seasonal maintenance in Dusafu. We expect higher production on Gorfinja following well optimization activities related to the boost project, as well as no planned major maintenance for the year. As highlighted earlier, operating cost guidance for 26 is $20 to $24 per barrel, reflecting continued cost control and updated production outlook. Capital expenditure for the year is guided in the range of $500 to $600 million. The increase in capex guidance for 26 relative to 25 reflects the ramp up of the Maromba development, including the FBSO and long lead items for drilling and surf, start of Dusafu Marbomo Phase 2 campaign, and the Gaufinio Boost project. As a reminder, capex related to Wella platform is no longer included in this guidance as no cash outflows will occur before lease payments commence following first production at Maromba. Finally, we expect G&A expenses to decline to between 12 to 14 million for the year. This is a significant drop from last year, not due to big cuts in administration, but rather more the cost being allocated to project spend as we have increased our project activities. Before opening the floor to questions, I would like to share a few concluding remarks. Our investment proposition remains compelling. We are executing on our strategy to deliver long-term value as a fast-growing EMP company, supported by a diversified asset base, strong cash regeneration, efficient financing, and a robust balance sheet. We are actively progressing our key development projects, which underpin a meaningful growth and support our ambition to reach production of around 90,000 barrels per day by 2028. This growth is underpinned by a solid financial capacity, disciplined capital allocation, resilient balance sheet, and the completion of key Maromba financing milestones. Overall, B2B is well positioned to fund its growth and deliver sustained value for shareholders. With that, I'll hand it back to the operator to open the line for questions. Thank you.

Thank you. The first question comes from the line of Theodore Sven Nielsen, calling from SB1N. Please go ahead.

Good afternoon, and thanks for taking my questions. First, on the gold figure, you explained that there's like five of them in production in 2026. I just wonder how much higher than the Q4 level, doubling or even more compared to the Q4 level. Second question, that is on listings in Q1 2026, you said that one of the listings had slipped into Q1. So if you can give an indication of these things for next quarter, that would be beautiful. Thank you.

Thank you, Theodor. I can cover the first one. The vine wasn't great, so I wasn't sure if I fully heard you. In terms of the lifting, we had planned it for the end of the year. It was slightly more than 600,000 barrels, but because of a tanker delay from the trader, it slipped into effectively Q1, which meant that we didn't receive the cash nor do we take the the profit from from that lifting? The first question to do I didn't catch.

Yeah, well, the first question was regarding expected the gold pillar production in 2020. So I assume you you expect a uplift? Is that right?

On Gofinio, no, we exited the quarter with a bit extra inventory, aligning with the fact that we would, you know, had that lifting coming up, which we then took in Q1.

I was actually referring to the total company, the overall listing for BB Energy, if you're expecting an overlist in Q1 2026.

Yes. Well, an over lift in the sense of the exit of the quarter.

Yeah, so lifting will be more than production in Q1, right?

Yes, correct. Because of that lifting at the end of the year, at the end of the year, basically very, very started this year.

Understood. And unexpected production for Golfinjo in 2026.

Brice, can you cover that?

Yeah, so production should be better on Golfino compared to last year. We've already seen some improvement at the end of the year, but we hope that we have done some good optimization on the wells, and we are confident that the production will be stronger this year compared to last year.

Okay, thank you.

We currently have no questions coming through. So as a final reminder, if you would like to ask a question, please press star one now. There are no further questions coming from the telephone line. Therefore, we're going to take now the question coming from the webcast, the return question. The floor is yours.

Yeah, we have a question from the web here concerning the... Gabon CapEx budget, as well as the contribution from Gabon into our production. So about 50% of our CapEx is Mara Rombaud, 20% Dusafu, 20% Cofinio, 10% Kudu in 26. And roughly 70% of the production will be coming from Dusafu in terms of the guidance. We have another question here. What is the status in KUDU? How should we interpret the opening of a data room?

Yeah, maybe I should take that. Well, we have not fully completed our analysis yet of the KARA's run well, but well, As of today, we have 95% ownership in the license. What we see is that it's interesting, but it will also require extensive additional appraisal slash exploration to unlock the potential of KUDU. And I think it's prudent that we open a data room and invite potential partners to have a look and see if they share our excitement and want to cooperate on continuing the work on Kudu. I think that's the main reason for a data room. We're still of the opinion that the Orange Basin is very early in its development. And even though there's quite a few wells drilled lately, it's very few wells if you look at historic data, how many wells were needed to unlock basins, et cetera, et cetera. So we found liquid hydrocarbons, that's interesting, but we also found that much more work is needed, hence Data Room.

Thank you, Carl. We have a next question that you may be able to cover too. Is Angola included in guidance? The answer to that is no, but what can we expect from Angola contribution in 2026?

I don't think one should hold one's breath waiting for Angola to be coming into our books. Again, it's a new entry into a new country. We are extremely, of course, pleased that we have managed to make a deal with the seller. But as you all know, there's government approvals, there are partner approvals, et cetera, that you have to pass before you can access the assets. So yeah, we see Angola is very interesting, but we are not there to declare victory today. Hopefully we will have victory sometime in the future, but I don't want to start speculating on when we can have this all concluded one way or the other.

Thank you, Carl. That concludes the call.

Thank you very much. Thank you to everybody for listening in and participating. Always great to have good questions from participants. And well, see you next time.