Orrön Energy AB (publ)

The line is now live.

Please begin your meeting. Thanks very much, Mark. Good afternoon or good morning, wherever you are. Welcome to the London Energy Third Quarter 2021 results call. We'll follow the normal course of business today. Nick Walker, the CEO, will take you through operations in an update from the quarter. and Title Post and CFO will take you through the financials, and then Nick will finish off with a quick summary. And then Q&A, again, will follow the normal course. We'll take calls from the line first, and then I'll moderate any calls from the web. So please get your questions in early if you want. So thanks very much, and Nick, I'll hand over to you.

Well, thanks, Ed, and good afternoon or good morning if you're joining us from North America. And of course, welcome to our third quarter 2021 results discussion. I'll start off with the key highlights. I'm pleased to report another set of record production and financial results for the third quarter. This is underpinned by continued strong operating performance and further strengthening of oil and gas prices. And you can see here Q3 production was 194,000 BOEs per day, and we expect full-year production to come in towards the top of the guidance range. All of our key projects are on track. The Evergreen Tyvek projects of Solvay and Rolls-Ness achieved first oil in the first quarter on schedule and below budget. And the Yeoans Federate Phase 2 project is firmly on schedule for first oil in the fourth quarter next year. And yesterday, we announced the strategic acquisition of a further 25% interest in the Whisting Development I think this is a great deal for us. It adds 130 million barrels of resources at a price of $2.50 per barrel, which I think is very value accretive and further supports the long term production outlook for our business. On top of that, a high quality cash generated business delivered record financial results in the quarter. You can see operating costs here of $2.90 per BOE, which is better than guidance. And we delivered record free cash flow for the period of $1.6 billion, resulting in deleveraging of the business. And you can see net debt at the end of the period is $2.6 billion. And I'm pleased to note that the Board of Directors anticipates to propose to the 2022 AGM a 25% increased dividend for 2021 of $2.25 per share, which in total is $640 million. And I think this clearly demonstrates our commitment to grow shareholder returns. And we continue to be firmly positioned as an industry leader on carbon emissions. And during the quarter, we further accelerated our decarbonization plan to become carbon neutral by 2023 from our operational emissions. And already today, 60% of our production is independently certified as carbon-neutrally produced. And I see this as a key value differentiator for London Energy looking forward. So in summary, we've delivered another set of excellent results in the third quarter, but all of our key business priorities are on track. And now what I want to do is step through some of the details supporting this performance. So first of all, looking at production, World-class assets keep on outperforming. As I've mentioned, 3Q production was 194,000 BOEs per day, which was towards the top of the guidance range, as you can see on the charts. And that's now 25 quarters running that we've met or exceeded guidance. And this performance continues to be driven by excellent production efficiencies across all assets and additional facilities capacity at every degree due to further declines at Eva Rawson. And when we look forward, we expect the production for the full year to come in towards the upper end of the guidance range, which I think you'll recall is between 180,000 to 195,000 BOEs per day. So we should come in towards the top of that range. This delivery is backed by continued top tier operating performance, which you can see shown on this chart with excellent production efficiency metrics of 95 to 98% across all our assets. I've already talked about operating costs of $2.90 per barrel, which is better than guidance, and these are truly industry leading levels. And also really good performance on carbon emissions, 2.9 kilograms of CO2 per BOE, and to put that into context, that's one sixth of the world average. And importantly, we again delivered safe operations in the quarter. So I think stellar operating metrics all around. Turning now to our decarbonization plan, where we're firmly an industry leader, we're making great progress. And during the quarter, we further accelerated our plans to become carbon neutral from operational emissions by 2023. And to recap, the plan is supported by real action around three key pillars. Firstly, reducing emissions with electrification of our assets with power from shore, which you can see on the chart significantly reduces our carbon emissions. Secondly, replacing and offsetting our power usage with our own investments in renewables. And then thirdly, what we can't reduce, a commitment to nature-based carbon capture through quality reforestation projects to neutralize the balance. This means that by 2023, every barrel that we produce will be independently certified as carbon neutrally produced. We're continuing to work to build a market for carbon neutrally produced barrels. I think we're seeing lots of interest and we've made quite a number of sales on that basis. As I mentioned, I see this as a key value differentiator for the company looking forward. A key aspect of our decarbonisation plan is powering our business with renewables. We're on track with the Power From Shore projects at Johan Federer and Everett Grieg. Our target is to meet all of our own power usage with our own generated renewable energy. And our Lycanga hydropower investment in Norway, as you can see from the chart, covers around 40% of our net power usage this year. The MLK wind farm in Finland, which you can see in the photo, has just started generating power and will be fully operational by the end of the year. And our Swedish Karsgrove wind farm will be online at the end of 2023, by which time, as you can see in the chart, we'll have net generating capacity of around 600 gigawatt hours per annum, which covers all of our usage, including the requirement we now need for whisking. And this means that by the end of 2023, our business will be fully powered by our own generated renewable energy. So now turning to our world class assets that underpin our business performance. Firstly, Johan Fedrup continues to perform at an extremely high level with phase one operating very stably at 535,000 barrels of oil per day gross with extremely high production efficiency. And you can see some stellar operating metrics. OPEX is well under $2 a barrel and exceptionally low carbon emissions, more than 100 times better than the world average. And when phase two comes online, this will lift full field capacity levels to over 755,000 barrels of oil per day. And to put that into context, it's about 25% of Norway's total production. And we continue to see excellent reservoir performance and based on the company's latest technical assessments, there is potential for increased resources and also to extend the plateau through infill drilling. And we're working to complete this work as part of our reserves process. So I think you'll hear more of that in the coming months. So now looking at phase two of Johan Svedrup, the project remains firmly on track for first oil in Q4 of next year and with costs unchanged from the PDO. And I think the key elements of the project are coming together very nicely. We reported in the last quarter that the jacket for the Phase II platform and a large module on the existing riser platform were installed in the summer. The subsea facilities are being installed at the moment and will be complete by the end of the year, which will allow drilling operations on the subsea wells to commence early next year. And in the photo, you can see the fully assembled phase two process top size, which is being completed in Norway and will be installed offshore in the second quarter next year. So in summary, Johan Fedrup continues to deliver above expectations and everything's on track for phase two. So now turning to the Greater Evergreen area, where we're delivering on our multiple projects that will keep the facilities full in the long term. At Edvard Grieg, we've had excellent results from the infill well program, which I'll cover in the next slide. And we continue to see the benefits of facilities capacity upside with Ivar Orson clearly in the decline phase. And we're on track with our Power From Shore project for completion at the end of next year. The Solva and Roldnest tieback projects, which flow through Edvard Grieg, I'll talk about those in a moment. They're now online. And we recently completed a successful appraisal well and test of the little Princeton discovery. And we're now moving forward with development studies to potentially submit a PDO at the end of 2022. And we're also working hard to bring forward a number of new opportunities. And I expect we will be exploring and appraising in this area for many years to come. So now focusing on the Evergreen Reservoir, the performance continues to exceed expectations, which I expect will lead to reserve increase and further plateau extension and will update on that with our 2021 year end reserves process. We've had great results from the three well infill well program in the field as highlighted on the map. You can see the three wells that have been drilled and this is now complete with results from all three wells in line with or better than expected. And this is a great project with stellar economics and to remind the breakevens for this project are less than $20 a barrel. And we're already beginning to think about the further phase of infill drilling. So the Edvard Grieg reservoir continues to outperform and continues to offer upside. So now focusing on the tie back projects to Edvard Grieg. I'm pleased to report that we've delivered first oil from Solvay phase one on schedule. and below budget and this is a key project for us to sustain production through the evergreen facilities that will produce as you can see a plateau rate of 300 30 000 barrels of oil per day gross the project's got great economics with a break-even oil price of below 20 a barrel and i think this shows the value of tyvek projects into existing facilities you can see from the chart that the first two horizontal production wells have been completed And we saw excellent results that are better than expected. And I anticipate this will lead to a reserve increase at year end. The third producer is currently drilling. And then we've got two water injectors to complete, which will be done in the first quarter next year. And that will complete the phase one development. The early production results here are key to de-risking a possible Solvi phase two project. which on success we aim to bring forward for PDO at the end of 2022. And there's quite a lot of upside here. You can see that the whole area has a potential up to 100 million barrels of boil equivalent gross. So it's quite a big prize for us if we can move forward with a phase two development. So this has been a great project for us so far. I think it's going to be super exciting to see the production results and hopefully then we can move forward with a phase two project in the area. We've also delivered the Rolls-Royce extended weld test project again on schedule and on budget. This is an exciting project and is aimed at unlocking significant potential resources in weathered and fractured basement reservoirs on the Utsura High. And early production performance from the extended weld test is in line with expectations, which is, I think, very encouraging. The aim of the EWT is to gain a better understanding of the long-term production performance of the reservoir. And on success, the potential is to unlock a full field development here of rolls nest with you can see resources up to 80 million barrels gross. So in parallel with understanding the reservoir, we're moving forward the development studies and we're ready to submit a PDO at the end of next year if the reservoir performance supports that. And success here could unlock significant additional basement potential in the area, potentially up to another 100 million barrels gross. So I think it's going to be super exciting to see how the EWT performance goes over the next year. And hopefully then we can step into a full field development here and start to think about the other opportunities that are available in the area. And this chart we've shown before, I think, pulled all of the elements of the Greater Edvard Grieg area together and reminds you of the long-term production outlook for the area. We've already stated in the past that the plateau has been extended to the end of 2023. That's five years on from where the original PDO was. And with Eberhausen on decline, it allows production through the Edvard Grieg facilities to further expand, as you can see. which has already increased production from the contractual levels that we have with EvoRawson from 95,000 BOEs per day. And we have the potential to lift this up to 135,000 barrels a day as EvoRawson declines further. And the key thing here is that we have the wealth capacity to use any of the capacity that's available to us. And I think there's lots more upside in the area with the potential to keep the facilities full in the longer term. And as I've discussed, we're working super hard to bring forward a number of those new projects in the area, and I think it's going to continue to be an exciting opportunity to grow resources here. I just one slide on the album area. This continues to be a good asset for us, so it's got a strong track record of continued growing reserves and creating value. and we continue to progress multiple opportunities in the area. With three infill wells planned this year, two have been completed with results in line with expectations, and the third well is currently drilling. And with three new projects being progressed, PDOs have been submitted for the Cobra East and Gecko and Frost projects, and these projects are now moving forward. And concept studies are ongoing on the Trell and Treen development with the aim to submit a PDO next year. And all of these projects have been progressed under the Norwegian temporary tax regime, have great economics with break evens in the $25 to $30 per barrel range. And you can see from the chart what these do for us. Together they add 65 million barrels of gross reserves and deliver gross peak production of up to 45,000 BOEs per day. So I think it's super encouraging that we continue to find opportunities here to create value, and I think there's still more to come in the future. And turning now to Wisting, I was super pleased yesterday that we could announce that we've acquired a further interest in the Wisting oil developments. Last year, we acquired 10% in Wisting for Imidimitsu. And at the time, we said we made it clear that we'd have liked more. And it's great this opportunity has come along for us. This deal with OMV gives us an additional 25% in the project, taking our working interest to 35%. I think this is a strategic deal. It creates the next production core area for the company and supports the long-term production outlook for our business. And you can see the deal adds 130 million barrels of net fully appraised contingent resources at an acquisition price of approximately $2.50 per barrel, which I think is very value accretive. And the addition of these resources alone, you can see, delivers a total resource replacement ratio for the company in 2021 of about 190%. Wisting's a high-quality 500 million barrel project with strong economics. At the moment, the finalization of the concept select for the project is ongoing, and the PDO is planned to be submitted by the end of next year. And as this development is being powered from shore, the deals fully aligned with our decarbonisation strategy. And on top of that, we see significant exploration upside close to Whisting, with the surrounding acreage estimated to hold another 500 million barrels of oil of unrisked prospective resources. So I think this still is a perfect example of how we look to supplement our organic growth strategy with opportunistic acquisitions and fitting our ambition to sustain our business in the long term. So I was super pleased that we could do this. So we're continuing to deliver on our growth strategy. The business is set to produce over 200,000 barrels a day by 2023. In fact, we're almost there, and that's supported by the projects that we've recently completed and those that are underway. And we aim to sustain at those levels with a pipeline of new projects. We've got two projects heading to sanction. Three projects are being de-risked. And we aim to also deliver future value. For example, The strategic acquisition of Wisting is a good example of that, but we also aim to continue a material exploration program. As I've mentioned, we're set to, again, more than replace our resources. The Wisting deal alone adds almost two times this year's production, showing we continue to grow the business. And so I remain really excited by the growth opportunities and prospects ahead, and I'm confident that we can continue to sustain our business in the longer term. So that wraps up the operations overview, and with that, on their hand, over to Paita to review our financials.