Monday 15 January 2018

Aker BP is hosting its annual Capital Markets Day today. During 2017, Aker BP increased its reserves (2P) by a net of 202 million barrels of oil equivalents (mmboe), to a total of 913 mmboe. The company delivered significant growth, while simultaneously chasing cost per barrel produced, and had efficient operations with high operational uptime. Aker BP has a strong cash flow outlook and a robust balance sheet with a USD 2.9 billion liquidity reserve, enabling the company to increase dividends for 2018 to USD 450 million, and further strengthen its position as the leading independent E&P company offshore.

“We are well positioned for further growth. The acquisition of Hess Norge in 2017 significantly enhanced our production and resource base, and the submitting of three PDO’s late 2017 represents further important building blocks in our growth ambition,” says Aker BP CEO Karl Johnny Hersvik.

Aker BP’s pro-forma production in 2017 was 160 mboepd, including the production from Hess Norway. About 80 percent was oil and 20 percent gas. 2018 production is expected to be between 155 and 160 mboepd, with an average production cost of 12 USD/boe. With its current portfolio, the company has the potential to produce 330 mboepd in 2023 (from both sanctioned and non-sanctioned projects), representing a compound average growth rate of 13 percent.

While the company’s oil and gas reserves grew to 913 mmboe at the end of 2017, contingent resources were estimated at 785 mmboe at year-end 2017, each with an increase of approximately 30 percent from the previous year. Organic reserve replacement ratio (RRR) was 2.3 times production, and the total RRR was 4.5 times.

Aker BP has a robust balance sheet with USD 2.9 billion in available liquidity, providing the company with ample financial flexibility and dividend capacity. At year-end 2017, the company’s net interest-bearing debt was estimated at USD 3.2 billion. Aker BP plans investments of approximately USD 1.3 billion in 2018. Exploration expenses are expected to be approximately USD 350 million, while decommissioning expenditures are estimated at USD 350 million in 2018. The increase in decommissioning spend is mainly due to the increased ownership at Valhall.