(Trondheim 20 January 2022) OKEA ASA (OSE: OKEA) today announces a trading update for the fourth quarter of 2021 with a production of 16 038 (16 315) barrels of oil equivalents per day (boepd), and a total operating income of NOK 1 725 (1 026) million.
(Amounts in parentheses refer to previous quarter)
‘OKEA delivered another strong operational quarter with high reliability at Draugen and Gjøa’, says OKEA CEO, Svein J. Liknes. ‘High oil prices and record-high European gas prices contributed to exceptionally strong cash flow, and total revenues for the quarter were on par with the full year revenues for 2020. With the Yme field now onstream, OKEA is well positioned for further growth.’
Fourth quarter 2021 petroleum production and sales
OKEA produced 16 038 (16 315) boepd in the fourth quarter with high reliability at both Draugen and Gjøa. Production from the Yme field started in October with further commissioning of process systems and start-up of additional wells in January and February.
Sold volumes in the fourth quarter amounted to 18 102 (16 979) boepd. Market prices have continued to improve during the quarter which resulted in an average realised liquids price of USD 78.0 (67.4) per boe* and an average realised price for gas of USD 1.11 (0.57) per scm**.
OKEA received Gjøa tariff income of NOK 24 million, NOK 13 million revenues from joint utilisation of Draugen logistic resources and a net gain from gas forward contracts of NOK 54 million.
|
|
Unit |
Q4 2021 |
Q3 2021 |
Q4 2020 |
FY 2021 |
FY 2020 |
|
Total operating income |
MNOK |
1,725 |
1,026 |
584 |
3,882 |
1,730 |
|
Realised liquids price |
USD/boe |
78.0 |
67.4 |
39.0 |
65.3 |
36.3 |
|
Realised gas price |
USD/scm |
1.11 |
0.57 |
0.19 |
0.62 |
0.11 |
|
Net production |
Boepd |
16,038 |
16,315 |
16,171 |
15,530 |
16,147 |
|
Net production – liquids |
Boepd |
10,580 |
11,365 |
10,961 |
10,793 |
11,152 |
|
Net production – gas |
Boepd |
5,458 |
4,950 |
5,210 |
4,737 |
4,995 |
|
Third-party volumes available for sale |
Boepd |
419 |
165 |
– |
147 |
– |
|
Over/underlift/inventory adjustments |
Boepd |
1,645 |
499 |
2,623 |
166 |
-276 |
|
Net sold volume |
Boepd |
18,102 |
16,979 |
18,794 |
15,843 |
15,871 |
|
Net sold volumes – liquids |
Boepd |
11,629 |
11,966 |
14,016 |
10,782 |
11,145 |
|
Net sold volumes – gas |
Boepd |
6,473 |
5,013 |
4,778 |
5,061 |
4,726 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
MNOK |
2,039 |
1,504 |
871 |
2,039 |
871 |
|
Net interest-bearing debt |
MNOK |
750 |
874 |
1,529 |
750 |
1,529 |
– barrels of oil equivalents
*Boe – barrels of oil equivalents
**Scm– standard cubic metres
***Compensation volumes from Duva received (tie-in to Gjøa) included in Net sold volumes – gas
Status on 2021 guiding
2021 full-year average production was 15,530 boepd and capex was NOK 638 million, both within the guiding range.
|
|
Unit |
Preliminary |
Guiding |
|
Production |
Boepd |
15,530 |
15,500 – 16,500 |
|
Capex |
MNOK |
638 |
600 – 700 |
For guiding purposes capex figures do not include capitalised interest.
Impairments
As previously communicated, the transfer of ownership of the Inspirer rig to the Yme licence was completed during Q4. For accounting purposes, the transaction results in recognition of a pre-tax impairment charge, materially offset under income taxes for change in deferred taxes following the impairment and reduction in taxes payable from uplift. The impairment charge primarily results from lower net asset value from the Yme field as uplift reduces tax payable. The reorganisation of operations and ownership of the Inspirer rig is expected to provide significant cost improvement and cash flow benefits of around NOK 300 million net after tax to OKEA over the next six months.
Financial position
At the end of the quarter, cash and cash equivalents and liquid investments amounted to NOK 2 249 (1 504) million. Net interest-bearing debt amounted to NOK 750 (874) million which includes the value of OKEA’s share of the lease contract with Havila for the Inspirer rig of NOK 493 million.
During the quarter, OKEA bought back OKEA02 bonds for a nominal value of USD 11.8 million at an average price of 103.6 to par. By end of 2021, OKEA had bought back OKEA02 bonds for a nominal value of USD 38.4 million at an average price of 95.7 to par of which USD 6.3 million has been cancelled.
In December, OKEA received NOK 109 million in proceeds for the sale of OKEA’s regional headquarter Råket 2 in Kristiansund.
Financial risk management
OKEA uses derivative financial instruments to manage exposures to fluctuations in commodity prices.
By year end 2021, OKEA had sold forward 30% of the net after tax exposure for natural gas for Q1-22 at an average price of 304 GBp/th, 20% for Q2-22 at an average price of 216 GBp/th and 20% of Q3-22 at an average price of 213 GBp/th.
Disclaimer
The information contained in this statement is based on a preliminary assessment of the company’s fourth quarter 2021 operating and financial results and may be subject to change.
Fourth quarter 2021 financial report on 11 February 2022
OKEA ASA will release its fourth quarter 2021 results on Friday 11 February 2022 at 06:00 CET. A presentation of the results will be held on the same day through a webcast and audioconference starting 08:00 CET. The presentation will be held by Svein J. Liknes (CEO) and Birte Norheim (CFO).
The webcast can be followed at www.okea.no
or https://channel.royalcast.com/landingpage/hegnarmedia/20220211_8/
Dial in details for the audioconference:
Norway: +47 2195 6342
UK: +44 203 769 6819
PIN Code: 681934
For further information, please contact:
CEO Svein J. Liknes, +47 917 67 704
CFO Birte Norheim, +47 952 93 321
VP IR Trond Omdal, +47 915 32 578
About OKEA
OKEA ASA is a leading mid to late-life operator on the Norwegian continental shelf (NCS) with a current target production of 18 000 – 19 000 boe per day in 2022. OKEA finds value where others divest and has an ambitious growth strategy built on accretive M&A activities, value creation and capital discipline.
OKEA is listed on the Oslo Stock Exchange (OSE: OKEA).
More information is available at www.okea.no