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First Quarter Results 2021

HIGHLIGHTS

  • Q1 EBITDA of USD 33.2 million and net profit of USD 7.8 million
  • Maintained a strong balance sheet with no debt and cash position of USD 184.8 million
  • Q1 gross production of 1.22 million barrels with 0.8 million barrels sold to the Company
  • Completed one lifting of 0.65 million barrels (net BWE) at a price of USD 66.7 per barrel
  • Jack-up rig soon on location to drill the DTM-7H horizontal production well at the Tortue field
  • Progressing preparations for Hibiscus/Ruche development with reduced CAPEX and time to first oil
  • Managing and monitoring the COVID-19 pandemic and its impact on operations

EBITDA FOR THE FIRST QUARTER OF 2021 WAS 33.2 USD MILLION, UP FROM USD 28.3 MILLION IN THE FOURTH QUARTER 2020, MAINLY DUE TO A HIGHER REALISED OIL PRICE.

DUSSAFU PRODUCTION AVERAGED APPROXIMATELY 13,600 BARRELS OF OIL PER DAY FROM FOUR WELLS, AMOUNTING TO A TOTAL GROSS PRODUCTION OF 1.22 MILLION BARRELS OF OIL IN THE QUARTER. ONE LIFTING WAS COMPLETED TO BW ENERGY IN THE QUARTER, REALISING AN AVERAGE PRICE OF USD 66.7 PER BARREL. PAYMENT FOR THE LIFTING WAS RECEIVED IN APRIL 2021. THE COMPANY SOLD 0.8 MILLION BARRELS OF OIL NET IN THE QUARTER INCLUDING APPROXIMATELY 97,000 BARRELS OF FIRST QUARTER DMO DELIVERIES AND AN UNDER-LIFT POSITION OF AROUND 156,000 BARRELS AT PERIOD-END.

“WE ARE FULLY FOCUSED ON OUR VALUE-ENHANCING ACTIVITIES ON THE DUSSAFU MARIN LICENSE LED NEAR TERM BY THE COMPLETION OF THE TORTUE PHASE 2 DEVELOPMENT WELLS AND THE PROGRESSION OF THE HIBISCUS-RUCHE DEVELOPMENT PROJECT INCLUDING THE SIGNIFICANT COST REDUCTIONS ENABLED BY THE JACK-UP RIG CONVERSION”, COMMENTED CARL K. ARNET, CEO OF BW ENERGY. “WE ARE DISAPPOINTED THAT THE HIBISCUS EXTENSION APPRAISAL WELL WAS UNSUCCESSFUL, BUT WE HAVE GATHERED VALUABLE DATA TO REFINE OUR SUBSURFACE MODELS. THE KNOWLEDGE GAINED ALLOWS US TO FURTHER HIGH-GRADE OUR EXTENSIVE INVENTORY OF ATTRACTIVE EXPLORATION PROSPECTS WITH HIBISCUS NORTH BEING THE FIRST IN LINE FOR DRILLING LATER THIS YEAR.”

FIRST QUARTER PRODUCTION COST (EXCLUDING ROYALTIES) WAS USD 23 PER BARREL, INCLUDING APPROXIMATELY USD 1.0 MILLION OF ADDITIONAL COVID-19 RELATED COSTS. BW ADOLO HAD A SIX-DAY SCHEDULED MAINTENANCE SHUTDOWN IN MAY, WHICH WILL IMPACT THE SECOND QUARTER PRODUCTION.

TOTAL DUSSAFU PRODUCTION FOR 2021 IS PROJECTED TO BE APPROXIMATELY 12,900 TO 15,600 BARRELS PER DAY GROSS, OR BETWEEN 4.7 TO 5.7 MILLION BARRELS IN TOTAL FOR THE YEAR, BASED ON FIRST OIL FROM THE REMAINING TORTUE PHASE 2 AT END OF THE THIRD OR EARLY IN THE FOURTH QUARTER. FULL YEAR PRODUCTION COST (EXCLUDING ROYALTIES) IS EXPECTED BETWEEN USD 21 TO 24 PER BARREL. THE CONTINUING COVID-19 PANDEMIC HAS SO FAR NOT IMPACTED DAY TO DAY OPERATIONS BUT IT IS AFFECTING PLANNED MODIFICATION WORK TO AMONG OTHERS THE GAS LIFT SYSTEM, AND COULD POTENTIALLY ALSO INFLUENCE THE HOOK-UP OF THE LAST TWO TORTUE PHASE 2 WELLS. AS A CONSEQUENCE, THE UNCERTAINTY IN OUR PRODUCTION FORECAST HAS INCREASED.

CASH BALANCE WAS USD 184.8 MILLION AT 31 MARCH 2021, COMPARED TO USD 120 MILLION AT 31 DECEMBER 2020. ON 20 JANUARY 2021, BW ENERGY COMPLETED A PRIVATE PLACEMENT RAISING GROSS PROCEEDS OF APPROXIMATELY USD 75 MILLION, ENSURING THAT BW ENERGY HAS CAPITAL TO DEPLOY TOWARDS ACCRETIVE PROJECTS AND CAPTURE SIGNIFICANT VALUE CREATION GOING FORWARD.


DEVELOPMENT PLANS
THE HIBISCUS EXTENSION APPRAISAL WELL, DHIBM-2, HAD THE PRIMARY OBJECTIVE OF TESTING THE NORTH-WESTERN EXTENSION OF THE GAMBA SANDSTONE RESERVOIR OF THE HIBISCUS FIELD, DISCOVERED IN 2019. THE WELL RESULTS PROVED TO BE MORE REPRESENTATIVE OF AN EARLIER SEISMIC INTERPRETATION REFERRED TO AS THE MUPALE PROSPECT, WITH THE OUTCOME DEMONSTRATING A STRUCTURAL SEPARATION BETWEEN THE TWO AREAS WITH NO INDICATIONS OF HYDROCARBONS IN THE GAMBA OR IN THE SECONDARY TARGETS IN THE DEEPER DENTALE FORMATION. THE DATA ACQUIRED FROM THE DHIBM-2 WELL WILL NOW BE ANALYSED AND INTEGRATED INTO THE LARGER DUSSAFU MARIN MODEL. THE WELL WAS DRILLED TO A TOTAL DEPTH OF 3,536M AND WAS THEN PLUGGED AND ABANDONED.

THE EXISTING HIBISCUS 2P GROSS RECOVERABLE RESERVES OF 46.1 MILLION BARRELS ESTABLISHED BY THE DHIBM-1 WELL, AND ITS APPRAISAL SIDE-TRACK DRILLED IN 2019, ARE NOT AFFECTED AND REMAIN THE BASIS FOR THE ONGOING HIBISCUS/RUCHE DEVELOPMENT PROJECT.

FOLLOWING THE DHIBM-2 WELL, THE RIG MOVED TO DRILL THE HORIZONTAL PRODUCTION WELL, DTM-7H, AT THE TORTUE FIELD, WHERE SPUDDING WILL SOON COMMENCE. THE RIG WILL SUBSEQUENTLY MOVE TO DRILL THE HIBISCUS NORTH PROSPECT, LOCATED APPROXIMATELY 6 KM NORTH-NORTHEAST OF THE DHIBM-1 WELL. THE HIBISCUS ALPHA CONVERSION PROJECT IS PROGRESSING AHEAD OF PLAN WITH PLACEMENT UNDERWAY FOR ALL MAJOR CONTRACTS AND FIRST OIL TARGET IN Q4 2022, COMPARED TO PREVIOUSLY Q1 2023.

THE MAROMBA PROJECT CONTINUES TO PROGRESS TOWARDS THE ENVIRONMENTAL APPROVAL AND OPTIMISATION OF THE FIELD DEVELOPMENT PLAN WITH RESPECT TO INVESTMENT, OPERATIONAL COSTS, AND SCHEDULE. THE ENVIRONMENTAL BASE-LINE STUDY WAS COMPLETED EARLIER THIS YEAR. A FINAL INVESTMENT DECISION IS PLANNED BY THE FIRST QUARTER OF 2022.

IN JANUARY 2021, BW ENERGY ANNOUNCED A FARM-IN AND CARRY AGREEMENT WITH NAMCOR TO INCREASE ITS WORKING INTEREST IN THE KUDU GAS FIELD TO 95%, IN LINE WITH PREVIOUSLY DISCLOSED INTENTIONS. THE AGREEMENT HAS NOW BEEN APPROVED BY THE NAMIBIAN COMPETITION COMMISSION WITH GOVERNMENT APPROVAL STILL PENDING. BW ENERGY IS CONTINUING ITS EFFORTS TO DEVELOP THIS RESOURCE COMMERCIALLY.

PLEASE SEE THE ATTACHED Q1 PRESENTATION. THE EARNINGS TABLES ARE AVAILABLE AT:

WWW.BWENERGY.NO/INVESTORS/REPORTS-AND-PRESENTATIONS.

BW ENERGY WILL TODAY HOLD A CONFERENCE CALL FOLLOWED BY A Q&A HOSTED BY CEO CARL K. ARNET, CFO KNUT R. SÆTHRE AND COO LIN G. ESPEY AT 14:00 CEST.

CONFERENCE CALL INFORMATION:

TO DIAL IN TO THE CONFERENCE CALL WHERE THE SECOND QUARTER RESULTS AND Q&A WILL BE HOSTED, PLEASE DIAL IN TO ONE OF THE FOLLOWING NUMBERS:

NORWAY: +47 2350 0236
FRANCE: +33 170 750 775
SINGAPORE: +65 6408 5768
UK: +44 3333 009 266
US: +1 833 5268 395

YOU CAN ALSO FOLLOW THE PRESENTATION VIA WEBCAST WITH SUPPORTING SLIDES, AVAILABLE ON:

HTTPS://STREAMS.EVENTCDN.NET/BWE/BW-ENERGY-Q1-2021-PRESENTATION/

PLEASE NOTE, THAT IF YOU FOLLOW THE WEBCAST VIA THE ABOVE URL, YOU WILL EXPERIENCE A 30 SECOND DELAY COMPARED TO THE MAIN CONFERENCE CALL. THE WEB PAGE WORKS BEST IN AN UPDATED BROWSER - CHROME IS RECOMMENDED.

FOR FURTHER INFORMATION, PLEASE CONTACT:
KNUT R. SÆTHRE, CFO BW ENERGY, +47 91 11 78 76
IR@BWENERGY.NO

ABOUT BW ENERGY
BW ENERGY IS A GROWTH E&P COMPANY WITH A DIFFERENTIATED STRATEGY TARGETING PROVEN OFFSHORE OIL AND GAS RESERVOIRS THROUGH LOW RISK PHASED DEVELOPMENTS. THE COMPANY HAS ACCESS TO EXISTING FPSOS TO REDUCE TIME TO FIRST OIL AND CASHFLOW WITH LOWER INVESTMENTS THAN TRADITIONAL OFFSHORE DEVELOPMENTS. THE MAIN ASSETS ARE 73.5% OF THE PRODUCING DUSSAFU MARINE PERMIT OFFSHORE GABON AND A 95% INTEREST IN THE MAROMBA FIELD IN BRAZIL, BOTH OPERATED BY THE COMPANY. TOTAL NET 2P+2C RESERVES WERE 242 MILLION BARRELS AT THE START OF 2021.

THIS INFORMATION IS CONSIDERED INSIDE INFORMATION PURSUANT TO THE EU MARKET ABUSE REGULATION AND IS SUBJECT TO THE DISCLOSURE REQUIREMENTS PURSUANT TO SECTION 5-12 THE NORWEGIAN SECURITIES TRADING ACT. THIS STOCK EXCHANGE RELEASE WAS PUBLISHED BY ERIC STOUSLAND, CORPORATE FINANCE, BW OFFSHORE, ON 20 MAY AT 07.30 CEST.

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