Orrön Energy AB (publ)

Thanks very much Roberto. Welcome everyone to the Q2 results of London Energy and the half-year results. We'll follow the usual form. Alex Schneider will take you through the highlights and the operations and then Taita Paulson will take you through the financials and Alex will summarise at the end. We're going to do questions from the conference call first and then we'll take any questions from the webcast afterwards. So if that's all clear I'll hand over to Alex.

Yeah, good morning. Thanks, Ed, and good morning, everybody. Sorry, here we go. So, well, let me get into the second quarter and the last six months right away, starting with on page two and the highlights. I guess before I go into the highlights, we can say that the second quarter has seen four records. On the positive side, we've seen an historical record production for the company at close to 163,000 bars of oil equivalent per day. We've seen also record low quarterly operating costs at below 2.4 US dollars per BOE. And we've seen also our emissions. We were targeting below 4 kilograms per barrel produced, and our emissions were well below 3 kilograms per barrel produced. excellent record during the second quarter and what we can qualify as a difficult quarter, taking consideration of COVID-19 and the economic environment. And of course, the fourth record, which was more a challenging record, is obviously the oil price. And as you've seen on our report, we've realized an oil price of just short of $25 for the second quarter. But I think, to me, what was really pleasing and important is that this low oil price really show that the company is very resilient to low oil prices. And despite a realized oil price of $25, we've actually posted a positive free cash flow for the oil and gas operations. So very pleased with that. And it's a good proof that our business is very resilient to economic disruptions and low oil prices. On the Corona crisis itself, we had no disruptions. There was a lot of attention on this subject and particularly on the operation side, but very pleased to say that we had absolutely no disruption on production during the second quarter of this year. I mentioned the free cash flow positive. which is in relation to oil and gas operation. We actually posted close to $20 million on free cash flow positive for the second quarter. I think the other point that is important is the activities and the organic growth of the company, which still remain on the heart of our strategy. And you've seen that not only we have four ongoing projects, developing projects, but we also have eight new potential projects. and some of them will be accelerated thanks to the uplift or the improvement of the tax. And as you probably know, not only your liquidity has improved in the short term due to the tax improvement, and Taito will say a few more words on this, but also if you are able to submit a plan of development before the end of 2022, you will be able to actually benefit for this tax incentive. And this is significant. It's significant on the rate of returns and on NPVs. And it's certainly a focus today for us because we see several projects that could become really great projects and great returns. So we'll say a little bit more later on. On the response to the lower prices, of course, capital discipline has been on the forefront of our mind, and we've phased out some of the costs, and we've saved also costs, and this is in excess of $300 million. We also raised a new corporate debt of $340 million, and of course, we took the prudent measure to reduce the dividend. Plus the improvement on the taxes. If you take all these items together, we've improved from the pre-COVID to the post-COVID situation over $850 million in our liquidity. So the company today, in my view, it is in a better position than it actually was on the pre-COVID situation. Moving on to the next slide, that's an highlight in the coronavirus crisis. I think the highlight really is that, first of all, we had no disruption as a state in our production. And secondly, of course, the safeguarding of the well-being of our people was on our forefront. and we've taken a lot of mitigating action to reduce the number of activities without impacting our productions and that has worked really well and I think the whole industry in Norway has worked really well to cooperate and finding the right solution and the best solution. Today I would finish on this to say that the offshore activity resumed to normal operations And so far I would say, I would consider this now all our projects and operations are going as planned. in terms of the resilience as i mentioned uh you know the market is the market and then of course we had a you know quite a crisis in the during the second quarter with the probably the lowest demand ever after the second world war and we had to be we had to face this this this crisis but uh but i think that as i really highlighted the quality of the company First of all, on our industry-leading operating costs, as I mentioned, and as you know, not only we're posting very low operating costs today, but this is sustainable over the long term. And we don't see operating costs. We actually give a guidance between $3.2 to $4.2 over the years on the operating costs, very much led by Edvard Grieg and Jens Fedrup. The second point in terms of high quality, low cost is, of course, the low cash flow breakeven. If you take the next seven years, on average, all cash flow, free cash flow breakevens are at about 15 US dollars per BOE. In actual fact, if you take these numbers post Yonsei phase two, so from 2023, this 15 dollars will go as low as below 10 dollars. So the company is extremely resilient to low oil prices. And that's very much led by high world-class assets and also, of course, low operating costs. On the liquidity side, I mentioned about the $850 million of improved liquidity for 2020. And I think I'm not going to go through each slide. Taito can say a little bit more about it. And I think I mentioned the different part of the puzzles who makes up the $850 million. But in a very privileged position we are today as a company. Let me move on to the 2020 productions. For the first half, we posted 158,000 vals of oil equivalent per day. And as I mentioned, the second quarter was actually a record production for the company, close to 163,000. That record was achieved despite the fact that in June we already had the curtailment of production that was imposed by the Norwegian government. And as you know, from until year end, we have to somehow reduce our production. I would say the reduction in production due to the restriction are relatively small, but we had to revise our guidance and we are now targeting 157,000 bars of oil equivalent per day for the full year guidance. And I think to highlight also the last point is that this is the 20th quarter in a row that actually we posted at or above guidance in terms of production. So very pleased by what the team has achieved and the operation in general. It's very, very good. In terms of operating performance and more an overall operating performance, what we've seen is again on the efficiency, very high efficiency on Hedberg-Rieg and Alwine. I mean, we talked about 99%. This is absolutely world-class efficiency. And we've seen also high efficiency in Jonsvedrop at 91%, despite the fact that Jonsvedrop is, fair to say, still in a commissioning mode. And it was only a few months ago that we started producing in Jonsvedrop, and Jonsvedrop has been absolutely brilliant. And in addition, we've seen the capacity of Jonsvedrop increasing now to fall in 70,000. We mentioned the operating cost and the full year guidance remaining at 2.8, which is really a quarter of what you see in the North Sea, probably some of the lowest operating costs you see in our industry. And the final puzzle in terms of operating performance is obviously the carbon intensity. And I'm very pleased to see that not only we have achieved our targets, which was below 4 kilograms of CO2 per barrels of oil equivalent, but we went below 3 to 2.8. And we've seen that Jöns Fedrup is achieving very, very good track record in terms of emissions per barrel produced, and so does Edvard Grieg. So we are well on our way to achieve our targets and our ambition to become target neutral by 2030. Let me move into the assets. I will start with Jón Svedrup. I think in page 7, those figures are well known to the industry. But just to repeat, in terms of reserves, Jón Svedrup today stands between 2.2 to 3.2 billion on a gross basis. Phase 1 now, as I mentioned, the capacity has increased and is standing at 470. That was achieved in April. Not only we have achieved plateau two months ahead of schedule, but higher than what was anticipated. And as a consequence, the full field production capacity has also increased. And today stands at 690,000 bars of oil per day. On phase two, and that's important considering the crisis we live in, we're still living with COVID-19. But phase two is on track and on budget and so very pleased despite the uncertainties out there in the world that the project has progressed as per plan. And we still anticipate and there are no changes to achieve first oil in the fourth quarter of 2022. And as a reminder, that's been stated several times, but the full field break-even stands at below $20 per BOE. So, I would say Jöns Fedorvi is really the field of the future with an absolutely phenomenal track record and phenomenal reservoir and field. And obviously, to mention very low OPEX, below $2 a barrel. Overall, Eon's FedDrop has definitely performed above expectation. We've achieved, I mentioned that, 470 head of schedule and the 470 is above the anticipated plateau production. I think it's important to highlight that now we have Well 11 that is on stream and now we have the capacity to test above and beyond 470,000. So we are currently working on a plan for the next few months to test the capacity of Young's FedDrop Phase 1 and see if we can actually achieve rates above 470,000 buzzers per day. So that's going to be very exciting to see. Reservoir is performing extremely well. It's an absolutely world-class reservoir, and I think over time we're going to see some very positive news from this reservoir. And as I mentioned, we have now 11 wells producing, so we have capacity to go beyond 470,000 basalt per day. Moving on to the greater Edvard Grieg area and Edvard Grieg itself. I think the most important message to you today on Edvard Grieg is that based on the performance of Edvard Grieg, we are currently finalizing a dynamic reservoir model. And we definitely see that Edvard Grieg will have an increase in reserves and we will have further extension on the plateau. And today the plateau has been extended up to end of 2022. So we see already now that we will extend this. There will be further news coming during the autumn when we have finalized all the work, but it is very pleasing to see how this asset has performed over time. We are now at 300 million on 2P reserves, and we definitely see scope to increase this number. We will take the advantage of the shutdown and move back the shutdown to this year since we've been constrained in production. We're going to move forward this shutdown so that next year we don't have to plan another shutdown. We will also resume, for the first time in the history of Edvard Grieg, an infield drilling program, which is due to start in the Q2 of 2021. And of course, we are now well on the way to to implement the full power from shore, which, as you know, will bring to full electrification by the end of 2022 and will actually allow us to go even lower on our emissions as a company post-2022 to below 2 kilograms per bar produced. The third item is on future growth. I think the story on the Otsira high and in particular also Edvard Grieg is far from finished. We have the Solveig first oil, which is a subsidiary back to Edvard Grieg due to come on stream on the Q3 of 2021. And that's well on the way. Very pleased with the progress. We have the Roses Extended Wealth Test, first of all, also in the Q3 2021. And this is also progressing very well. This is a play in the basement between Jens Fedorov and Edvard Grieg. And that production will allow us to decide to move to the next level, to the full field, full development of roses, and actually also being able to take advantage of the tax incentives should we be able to submit a plan of development before 2022 for the full field of development. We will see also what we call Merck's exploration well in Q4, which is on the western flank down deep from Solveig, a very interesting play. And actually beyond that, there's still further exploration on the Edvergrieg area. We haven't yet explored the western flank of Edvergrieg, and we have other projects such as Lilleprinsen, which are potentially future tiebacks. So overall, very exciting, and that will allow us to maintain the capacity full for as long as possible. So overall, Hedva Grieg is performing extremely well. The next slide is more detailed in terms of the ongoing project, the tiebacks to Hedva Grieg. Solveig, as a reminder, is a subsea tieback development with a resource range between 40 to 100 million barrels of oil equivalent and a very attractive break-even oil price of below $30. Rovers currently the range stands between 14 to 78 but of course this range will be very much dependent on any upside on how the extended well test will behave when we have the well on production and as I stated The current project, both projects, are progressing well and pleased with the progress. In the slide itself, you see actually pictures of the ongoing activities next to the Edvig Rig platform for ROSE and Solvig. Moving on to the third key assets, Halvime. I think overall I would say Halvime is performing also very well. In 2020 we have a plan to drill two further infill wells and also importantly we have the Frosk and the Cobra East Gecko developments which are planned to be sanctioned by mid-2021. But overall, and I will remain to that statement, Alvam is progressing very well and is producing well and is also a very efficient production. But of course, it's compared to Edvard Grieg and Jens Federer, but it's a smaller equity for us. In terms of the organic growth, that's really very exciting and a major focus for us. As I mentioned, we have four projects ongoing. And I think more importantly, the latest uplift in taxes and particularly our ability to be able to take advantage of the tax uplift. If you submit a plan of development before 2022, has been really a major focus in our company. And we see some very attractive projects. We currently have a preliminary estimate of a target of an excess of 120 million barrels of oil, equivalent of resources. But of course, as we go along the way, these numbers will be revised and there will be projects that may be better and there will be projects that may not reach the threshold of commerciality. But very exciting, a lot of projects, and it's something we're focusing a lot right now. And we'll add above and beyond the guidance in terms of production should this project go ahead. On the expiration and appraisal, This year we have a total of seven wells. We drilled already four and made a really interesting discovery every evening, which will be appraised next year. This is another project that will be able to potentially take advantage of the uplift in taxes that we could submit before the deadline of 2022. And we have four wells remaining. The fourth quarter will see a lot of activity and explorations. And three out of four will be wells drilled in the southern Barents Sea. Very interesting wells with high potential and all in existing petroleum systems, all in trend with existing discoveries. I'm thinking about Alta, but I'm thinking also about Katzberg. So it's going to be a really interesting quarter from an exploration point of view. And we remain very active. The company is very focused on organic growth in Norway, and you'll see the company active through the whole Norwegian continental shelf from the very north to the very south. Moving on to the decarbonization strategy, I would say the punchline is that we are well on the way to achieve our targets. You've seen the result on Q2, which are well below our target with the emission of CO2 per barrel produced of less than 3 kilograms. We are well on the way to achieve below two kilograms of CO2 per barrel produced by the time Edvard Grieg is fully electrified, and we're well on the way to achieve carbon neutrality by 2030. On the renewable side, The projects are on track. The hydropower project is now producing, and it's fair to say so far performance are above expectations, and the wind farm project in Finland is progressing well and according to plan and budgets. So with this, I'll leave the floor to Titor on the financial side.

So here we go.