wintershall dea investor presentation · 2020-05-22 · sustainability page 12 (1) wintershall dea...

WINTERSHALL DEAINVESTOR PRESENTATION

THE LEADING EUROPEAN INDEPENDENT GAS AND OIL COMPANY

MAY 2020

WINTERSHALL DEA INVESTOR PRESENTATION

DISCLAIMER

PAGE 2


This document has been prepared by Wintershall Dea GmbH (“the Company”) for information purposes only.

The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy,

completeness or correctness of the information or opinions contained herein. None of the Company or any of their respective affiliates, advisors, or representatives shall have any liability whatsoever (in negligence or

otherwise) for any loss whatsoever arising from any use of this document, or its contents, or otherwise arising in connection with this document.

This document does not constitute, or form part of, an offer or invitation to purchase any securities and neither it nor part of it shall form the basis of, or be relied upon in connection with, any contract or commitment

whatsoever.

Forward-Looking Statements

This document includes projections and other “forward-looking statements”, which are based on expectations of the Company’s management and projections about future events and financial performance as of the

date of the presentation. These forward-looking statements involve a number of risks, uncertainties, and assumptions about the Company and its subsidiaries, which are beyond the control of the Company. In light of

these risks, uncertainties and assumptions, actual results may not occur or may differ materially from those predicted in the forward-looking statements and from the past performance of the Company. As a result, you

should not rely on these forward-looking statements. The Company accepts no obligation to update any forward-looking statements set forth herein or to adjust them to future events or developments.

Non-GAAP and Non-IFRS Financial Measures

This document contains certain non GAAP and non IFRS measures and ratios, including for example EBITDAX and net debt that are not required by, or presented in accordance with, any GAAP or IFRS.

These non GAAP and non IFRS measures and ratios may not be comparable to similarly titled measures used by other companies and have limitations as analytical tools and should not be considered in isolation or as a

substitute for analysis of our operating results as reported under IFRS or any GAAP.

COMPANY OVERVIEW

PAGE 3



FOCUSED ACTIVITIES ACROSS THE E&P VALUE CHAIN

PAGE 4

High quality and stable Midstream business

Exploration – Development – Production European Pipeline Networks

UPSTREAM MIDSTREAM

Diversified Upstream activities with full lifecycle capabilities 1 2WINTERSHALL DEA INVESTOR PRESENTATION

OUR STRATEGYWINTERSHALL DEA INVESTOR PRESENTATION

Focus on Sustainability

Strict Financial Framework

Competitive and sustainable shareholder returns

Advantaged, gas weighted upstream portfolio

Exposure to high quality and stable midstream business

3

4

1

2

5

Climate change and energy transition

Abundance of low cost fossil fuels

Energy demand growth globally

Renewables cannot keep up with

demand growth

OUR STRATEGYLANDSCAPE

PAGE 5



THE LEADING EUROPEAN INDEPENDENT GAS AND OIL COMPANY

PAGE 6

Large and diversified upstream portfolio1

2

3

Strong partnerships with world class operators

Resilience through top decile production costs

Exposure to high quality and stable midstream business

Robust financial policy anchored on our commitment to investment grade

4

5

7 Excellent ESG footprint and strong focus on sustainability



LARGE AND DIVERSIFIED UPSTREAM PORTFOLIO

PAGE 7

Brazil

Argentina

Mexico

Algeria

Libya Egypt

UAE

Russia

Established Upstream Business Units

Growth Upstream Business Units

Other Business Units

Northern Europe

‘19 Production: 201 mboe/d

Russia


Latin America


MENA


RESILIENT PORTFOLIO WITH DIVERSIFIED PRICING CONSTRUCTS KEY FIGURES 2019

(1) EXCLUDING LIBYA ONSHORE PRODUCTION

Reserves Replacement Ratio

109%

2P Reserves Life

17 years

Nothern Europe

Russia

MENA

LATAM

33%

47%

8%

12%

617(1)

mboe/d

Production

Liquids

Gas

Reserves

3.8bn boe

30%

70%



EXPOSURE TO HIGH QUALITY AND STABLE MIDSTREAM BUSINESS

▪ Predictable and stable

business

▪ Buffer against commodity

price volatility

▪ High quality and modern

infrastructure assets

▪ Long term potential in low-

carbon environment -

hydrogen transportation

272282 283

159161

164

2017 2018 2019

EBITDA Net Income

OUR PIPELINE NETWORK STRONG FINANCIAL CONTRIBUTION TO THE GROUP(1) (€ MILLION)

Compressor stations

GASCADE pipeline network

Transit pipeline (third-party)

NEL/OPAL Nord Stream

Nord Stream 2 (financing only)

4,140 km onshore gas pipelines


PAGE 8

(1) FROM DECEMBER 2019, WIGA GROUP CONSOLIDATED AT EQUITY


RESILIENCE THROUGH TOP-DECILE PRODUCTION COSTS

PRODUCTION COSTS OVER TIME ($/BOE)PRODUCTION COSTS(1) VS. PEERS (2017-2019 AVERAGE)(2)

7.1

4.3

2014 2019

5.1

Peer median: $7.7/boe

(1) PRODUCTION COSTS INCLUDE ONLY PRODUCTION RELEVANT AND OPERATING LEASE EXPENSES.

(2) INCL. AKER BP, APACHE, BP, CONOCOPHILLIPS, ENI, EQUINOR, GALP, HESS, LUNDIN, NOBLE ENERGY, OMV, OXY, REPSOL, SANTOS, SHELL, TOTAL, WOODSIDE

(3) AGGREGATED NUMBER FOR WINTERSHALL AND DEA. FOR ILLUSTRATIVE PURPOSES ONLY.

PAGE 9

(3)SOURCE: COMPANY AND PUBLIC INFORMATION

40 %


$/boe

Non-operated

Operated

JV-operated

67%

STRONG PARTNERSHIPS WITH WORLD CLASS OPERATORS

PROVEN PARTNERSHIP MODEL

CountryProduction

2019, mboe/dOperating in the

country sinceKey Partners

Russia 289 1990s

Norway 145 1970s

Argentina 72 1980s

Egypt 38 1970s

Mexico 4 2017

UAE N/A Development


PAGE 10

WITH LONG HISTORY OF OPERATIONAL TRACK RECORD

(1) 2019 PRODUCTION SPLIT


~2/3 OF PRODUCTION(1) OWN OR JV-OPERATED

ROBUST FINANCIAL POLICY ANCHORED ON OUR COMMITMENT TO INVESTMENT GRADE


Conservative capital structure & financial discipline

▪ Maintain our investment grade rating

Prioritising shareholder returns

▪ Capacity to pay competitive dividends through the cycle

Value-driven growth

▪ Disciplined capital allocation in selected profitable

growth

BALANCE SHEET

DIVIDEND

GROWTH

2

3

4

SUSTAINING AND COMMITTED CAPEX1

CLEAR PRIORITIES AND CAPITAL ALLOCATIONCAPITAL ALLOCATION FRAMEWORK

PAGE 11



EXCELLENT ESG FOOTPRINT AND STRONG FOCUS ON SUSTAINABILITY

PAGE 12

(1) WINTERSHALL DEA IS COMMITTED TO THE WORLD BANK’S ZERO ROUTINE FLARING BY 2030 INITIATIVE

> 30%Women in executive

positions

Zero harm to people

0No routine flaring

and venting(1)

OUR SUSTAINABILITY TARGETSOUR UNITED NATIONS SUSTAINABILITY GOALS

OUR APPROACH – MORE ENERGY, LESS EMISSIONS

Transparency

Implement TCFD

recommendations

0 Top performer in IOGP

ranking

by 2025


FINANCIAL AND OPERATIONAL RESULTS

PAGE 13


FACING THE CRISISWINTERSHALL DEA INVESTOR PRESENTATION

PAGE 14PAGE 14

TO

P

PR

IOR

ITIE

S

Protecting our people

Business continuity

Preserving liquidity

OU

R R

ES

ILIE

NT

BU

SIN

ES

S P

RO

FIL

E Low cost asset base

• Top decile production cost of $4.3/boe

• Free cash flow breakeven of $~30/boe, reducing to below $20/boe in 2021(1)

Midstream business contributing c. €140 million of stable cash flow

Diversified portfolio with multiple pricing mechanisms

OU

R R

ES

PO

NS

E

TO

TH

E C

RIS

IS

Development capex reduced 30%

Exploration spend reduced 20%

Opex reduced 10%

Dividend suspended

Increased liquidity to €2.4 billion

(1) ASSUMING $4/MCF TTF


2

3

4

1

5

(1) EXCLUDING LIBYA ONSHORE PRODUCTION

(2) Q1 2019 FIGURES REPRESENT AN AGGREGATION OF JANUARY-MARCH FIGURES FOR WINTERSHALL HOLDINGS GMBH GROUP AND DEA DEUTSCHE ERDOEL AG GROUP WITHOUT ANY PRO FORMA ADJUSTMENTS

(3) FY 2019 FIGURES REPRESENT AN AGGREGATION OF JANUARY-APRIL FIGURES FOR WINTERSHALL HOLDINGS GMBH GROUP AND DEA DEUTSCHE ERDOEL AG GROUP AND MAY-DECEMBER ACTUALS FOR WINTERSHALL DEA GROUP, WITHOUT ANY PRO FORMA ADJUSTMENTS

(4) FY 2018 FIGURES REPRESENT AN AGGREGATION OF JANUARY-DECEMBER FIGURES FOR WINTERSHALL HOLDINGS GMBH GROUP AND DEA DEUTSCHE ERDOEL AG GROUP WITHOUT ANY PRO FORMA ADJUSTMENTS

(5) ADJUSTED FOR INTEGRATION AND RESTRUCTURING COST

RESULTS SUMMARYWINTERSHALL DEA INVESTOR PRESENTATION

PAGE 15

Ba

lan

ce

Sh

ee

t

Unit Q1 2020 Q1 2019(2) Performance FY 2019(3) FY 2018(4) Performance

Production(1) mboe/d 626 626 (0%) 617 566 (+9%)

Brent $/boe 50 63 (-21%) 64 71 (-10%)

Gas TTF $/mscf 3.7 7.1 (-48%) 4.4 7.9 (-44%)

EBITDAX € million 481 832 (-43%) 2,828 3,591 (-21%)

Operating Cash Flow € million 502 581 (-14%) 1,866 2,796 (-33%)

Capex € million 357 361 (-1%) 1,676 1,570 (+7%)

Free Cash Flow € million 137 118 (+16%) 190 1,182 (-84%)

Adjusted Net income(5) € million -78 320 (-126%) 879 1,055 (-17%)

Unit 31.03.2020 31.03.2019 Performance 31.12.2019 31.12.2018 Performance

Net Debt € million 5,713 5,762 5,762 -

Leverage Ratio (LTM) x 2.3 2.0 2.0x -

En

vir

on

me

nt

Fin

an

cia

l R

esu

lts

PRODUCTIONWINTERSHALL DEA INVESTOR PRESENTATION

1) INCLUDES PRODUCTION FROM AT-EQUITY ACCOUNTED COMPANIES, EXCLUDING LIBYA ONSHORE VOLUMES

PAGE 16

PRODUCTION(1) (WI, MBOE/D)

% Gas 69 % 72 %

Q1 2020 PRODUCTION(1) COMPOSITION

~35% OF TOTAL PRODUCTION LINKED DIRECTLY

TO SPOT BRENT AND EUROPEAN GAS PRICES

72 % 72 % 71 % 73 % 73 %

Russia Gas

Russia CondensateArgentina

Gas

Other Non-Europe Gas

Europe Spot Gas

Brent Crude

626(mboe/d)

9%

39%

9%

7%

18%

18%

203 201 205 211 186 200 207

252 289 306 280264

307 300

3751 41 48

59

55 497476 74 76

8075 70566

617 626 615589

638 626

2018 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Northern Europe Russia MENA Latam


PROFITABILITYWINTERSHALL DEA INVESTOR PRESENTATION

EBITDAX (€ MILLION)

2,355

1,671

419

463

397

320

235

270

282

275

-98 -170

3,591

2,828

2018 2019

Northern Europe Russia MENA Midstream OtherLatam

508

328

172

105

74

61

44

8

80

44

-46 -65

832

481

Q1 2019 Q1 2020

ADJUSTED NET INCOME (€ MILLION)

1,055

879

2018 2019

320

-78

Q1 2019 Q1 2020

PAGE 17

21 % 42 % 17 % 124 %


COST PERFORMANCEWINTERSHALL DEA INVESTOR PRESENTATION

PAGE 18

Q1 2020 PRODUCTION AND OPERATING EXPENSESPRODUCTION COST EVOLUTION ($/BOE)

33%

39%

28%

5.75.4

4.3 4.3 4.3

2017 2018 2019 Q1 2019 Q1 2020

€496 million

COST OF TRADE GOODS PRIMARILY INCLUDES TRADING ACTIVITIES

OTHER PRIMARILY INCLUDES TRANSPORT FEES AND LEASES


OtherProduction

Costs

Costs of Trade

Goods

3.8

6.0

3.0

2.2

1P 2P 2C 2P+2C


Gas

Other liquids

Condensate

Northern Europe

Russia

MENA

Latam

2P PRODUCT SPLIT 2P REGIONAL SPLIT

2PD

2PUD

SIGNIFICANT UNDEVELOPED

RESERVES UPSIDE

bn

bo

e

2P RP17 years

1P RP13 years

2P+2C RP

27 years

RESERVES OVERVIEW

PEER LEADING RUNNING ROOM IN TERMS OF R/P AND 2PUD/2P RATIOS

PAGE 19

13%

17%70%

58%

11%

7%

24%

55%

45%


APPENDIX

PAGE 20



UPSTREAM PORTFOLIO OVERVIEW

PAGE 21

Brazil

Argentina

MexicoAlgeria

Libya Egypt

UAE

Russia

Northern Europe

Germany: • Managing late life assets and production decline;

technological base with focus on EORNorway: • Current production and development area with

significant short-medium term growth and attractive exploration upside in proximity to existing infrastructure

• Exploration: Focus on value creation in the vicinity of operating fields and infrastructure

Rest of Europe: • Shallow water operations focusing on production

optimization

Middle East and North Africa

Egypt:• Long history in the region with stable production even

during past political unrestUAE:• Future of the Middle Eastern new production following

the acquisition of the Ghasha concession, highly promising gas and condensate offshore development project

Algeria:• Participation in the gas development project in the

Sahara with challenging geological and logistical demands

Libya:• History of stable production interrupted by current

geopolitical issues

Russia

• Participation in world-class assets starting from early 1990s

• Low-cost production supported by giant reserves base

• Long plateau production with significant cashflow generation

• Long-term contractual offtake agreements

Latin America

Mexico: • Mature onshore oil production and participation in one

of the world’s largest shallow-water discoveries• Exploration: Major exploration opportunity in recently

acquired blocks

Brazil:• Exploration: Participation in offshore exploration

licenses in one of the most attractive hydrocarbon provinces aiming to build a significant resource base

Argentina: • Established operations in onshore and offshore fields



NORTHERN EUROPE: STABLE PORTFOLIO BACKBONE

PAGE 22

SOUTHERN NORTH SEA: SMART OFFSHORE

OPERATIONS

NORWAY: WD IS THE LEADING INTERNATIONAL

OIL AND GAS COMPANY IN THE COUNTRY

Key assets WI (%) Operators

Key producing assets

AastaHansteen

24% Equinor

Vega 56% Wintershall Dea

Skarv 28% Aker BP

Edvard Grieg 9% Lundin

Maria 50% Wintershall Dea

Gjøa 28% Neptune Energy

Key development projects

Njord 50% Equinor

Dvalin 55% Wintershall Dea

Nova 45% Wintershall Dea

Ærfugl 28% Aker BP

2P Reserves: 671 mmboe

R/P: 13

Production 2019 (mboe/d)



Wingate 64.5% Wintershall Noordzee

Ravn 63.6% Wintershall Noordzee


Rembrandt/Vermeer

30%Wintershall Noordzee

Key Highlights

• Europe’s largest oil and gas producing country

• More than 100 licenses, 30 of them as operator

• Stable fiscal and operating environment; low political risk

Key Highlights

• Major gas producer in region with more than 20 offshore

platforms

• Operated via JV company Wintershall Noordzee which is

accounted at equity in Wintershall Dea accounts

GERMANY: OPERATIONS AT HIGHEST TECHNICAL

STANDARDS



Mittelplate 100% Wintershall Dea

Völkersen 100% Wintershall Dea

Emlichheim 90% Wintershall Dea


R/P: 13


Key Highlights

• Mature hydrocarbon province

• Focusing on production sites in Northern Germany

• Leveraging technical expertise (e.g. sour gas)

49%

51%

Oil

Gas 25

24

Total: 49

76

70

Total: 146

48%

52%

Oil

Gas



RUSSIA: LARGEST RESOURCE AND PRODUCTION BASE

PAGE 23

RUSSIA: STRONG CASH FLOW FROM LONG-LIFE PRODUCING FIELDS



Achimov 1A 50% Achimgaz

Yuzhno Russkoye (Cenomanian layers) 35%(1) Severneftegazprom

Wolgodeminoll 50% RITEK


Yuzhno Russkoye (Turonian layers) 35%(1) Severneftegazprom

Achimov 4A & 5A 25% Achim Development

2P Reserves: 2,234 mmboe

R/P: 21


Key Highlights

• Country with largest known gas reserves and sixth largest proven oil reserves

worldwide

• Stake in key fields for Russian gas exports to Europe

• Longstanding, close collaboration with our Russian partners since nearly 30 years

• Extremely low production costs

1) ECONOMIC SHARE, WINTERSHALL DEA HAS 25 % LEGAL INTEREST IN THE PROJECT

254

56

Total: 289

19%

81%

Oil

Gas



LATAM: STRONG GROWTH POTENTIAL

PAGE 24

BRAZIL: GROWTH COUNTRYMEXICO: SUCCESSFUL EXPLORATION AND

APPRAISAL



Ogarrio 50% Wintershall Dea

Key E&A assets

Zama 40% Talos Energy

Block 2 30% Pemex

Blocks 16,17 & 30 40% Wintershall Dea


R/P: 26



Key exploration assets

3 licenses PotiguarBasin

70% Wintershall Dea

1 license CearáBasin

100% Wintershall Dea

3 licenses Campos Basin

20% Repsol

2 licenses Santos Basin

20% Chevron

Key Highlights

• Mature production in Ogarrio leveraged by technical

optimization

• Progressing on development concept for the world class

Zama discovery

Key Highlights

• Key growth country in the portfolio

• Holder of four operated exploration licenses in Ceará and

Potiguar basins and five non-operated licenses in in Santos

and Campos basins

ARGENTINA: LARGEST DRY GAS PRODUCER IN THE

REGION



CMA-1 37.5% Total

Aguada Pichana 27%% Total

Aguada Federal 50% Wintershall Dea

Banduria Norte 50% Wintershall Dea


R/P: 8


Key Highlights

• Presence in the country since more than 40 years

• Stake in 20 on- and offshore fields, 3 as operator

• Large potential in shale resources

65

7

Total: 72

1

3

Total: 4

9%

91%

Oil

Gas

70%

30%

Oil

Gas


21%

79%

Oil

Gas


MENA: REMARKABLE FOOTPRINT IN THE RICH HYDROCARBON REGION

PAGE 25

UAE: ESTABLISHED POSITION VIA TECHNICAL

COMPETENCE

ALGERIA: ONSHORE DRILLING EXPERTISE



Reggane Nord 19.5% Repsol




Ghasha 10% ADNOC

Key Highlights

• Partner in Reggane Nord project comprising six gas fields

with production until at least 2040

Key Highlights

• UAE is a new focus area for Wintershall Dea

• Partner in one of the UAE‘s major gas and condensate

developments, Ghasha

• Successful Shuwaihat appraisal in Abu Dhabi, a complex

sour gas project

EGYPT: FOCUSED OPERATIONS



Disouq 50% DISOUCO

Gulf of Suez 50% SUCO

West Nile Delta 17.25% BP


R/P: 10


Key Highlights

• Stakes in six onshore and offshore concessions centred

around three assets

• Partner in West Nile Delta project, one of the most important

energy projects in Egypt

30

8

Total: 38

0%

100%

Oil

Gas 9

0

Total: 9


HIGHLY EXPERIENCED MANAGEMENT TEAM WITH STRONG CORPORATE GOVERNANCE


PAGE 26


Mario MehrenChairman of the Board and CEO

Paul SmithCFO

Dawn Summers(1)

COO Northern Europe and MENA

Thilo WielandBoard Member for Russia, LatAm and Midstream

Hugo DijkgraafCTO

Roles

• Highly experienced management team with 20+ years in E&P sector on average

• Diverse and complementary background and skillset

Shareholders'

Committee

• Members from both shareholders as well as two observers/independents

• Certain reserved matters for alignment in the Shareholders Committee

Supervisory Board • Responsible for supervision of the Management Board

Executive /

Management Board

• Responsible for overall strategy and management

• Composed of senior management leadership team

German KhanMichael Heinz

Lord Browne of MadingleyHans-Ulrich Engel

THREE-TIER GOVERNANCE STRUCTURE EXECUTIVE BOARD

SHAREHOLDER COMMITTEE

(1) TO BE APPOINTED AS OF JUNE 1ST, 2020

wintershall dea investor presentation · 2020-05-22 · sustainability page 12 (1) wintershall dea...

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