BW Energy

Trading update Q1 2020

HIGHLIGHTS

• BW Energy shares commenced trading on Oslo Stock Exchange on 19 February after raising net USD 121 million in the IPO
• Gross production of 11,485 bbls/day compared to 10,735 bbls/day in Q4
• Completed one lifting of 427,647 bbls net to BW Energy in Q1
• Q1 2020 EBITDA of USD 14.8 million compared to USD 57.3 million in Q4 2019
• Non-cash impairment of USD 10.7 million, reflecting the recorded value of the Kudu project
• Q1 2020 net loss of USD 23.6 million
• DTM-4H and DTM-5H wells at Dussafu successfully connected to FPSO BW Adolo
• DTM-6H and DTM-7H wells rescheduled due to COVID-19
• Ruche and Maromba projects deferred due to COVID-19

EBITDA for the first quarter of 2020 was USD 14.8 million, down from USD 57.3 million in the fourth quarter 2019. The decrease reflects one lifting from Tortue with net 0.4 million bbls to BW Energy compared to two liftings and net 1.3 million bbls in the previous quarter, as well as a realised oil price of USD 33 per barrel compared to USD 65 per barrel in the fourth quarter.

Gross production from Tortue increased to an average of 11,485 bbls/day for the first quarter compared to 10,735 bbls/day for the fourth quarter. Total gross production from the Tortue field increased to 1,045,000 bbls of oil from 987,000 in the fourth quarter. Production regularity was impacted by a scheduled downtime for the FPSO to connect the two new wells which came onstream in early March. Production cost (excluding royalty) was USD 21.8 per barrel in the quarter compared to USD 22.8 per barrel in the fourth quarter of 2019.

Net financial expense was USD 5.5 million for the first quarter mainly caused by a USD 1.5 million loss on interest rate swaps and currency losses due to the strengthening of the USD. Total equity at 31 March 2020 was USD 460.9 million compared to USD 363.1 million at the end of 2019. The equity ratio was 55.2% compared to 49.2% at year-end. Total available liquidity at the end of the quarter amounted to USD 168.3 million compared to USD 81.0 at the end of 2019.

BW Energy is continuing the process to establish a reserve-based lending (RBL) facility for Dussafu with a syndicate of leading banks.

"We have managed to protect our employees and partners and maintain full operations amid Covid-19. At the same time, we have taken action to protect our operational and financial flexibility, having more than halved our planned capex for 2020,” says Carl K. Arnet, CEO of BW Energy. “Our business model enables us to rapidly adapt to changing conditions, and we will quickly resume our development activities once restrictions are lifted. Our Dussafu assets are profitable at low oil prices and this highly prospective area holds significant remaining potential.”