OKEA (OKEA) Q1 2025 earnings summary

Executive summary

• Strong operational performance in Q1 2025 with production at 34,200 boepd, slightly down from the previous quarter due to asset sales and a shut-in well at Draugen, but with no serious incidents.

• Sold volumes reached 39,100 boepd, reflecting an overlift, and net profit after tax increased to USD 21 million from USD 6 million in Q4 2024, alongside a strengthened net cash position of USD 120 million.

• Key development projects, including Draugen Power from Shore and Bestla, are progressing on schedule and within budget, with major milestones such as cable installation and subsea template completion achieved.

• Portfolio optimization included a discovery at Mistral (19–44 mmboe) and a 35% working interest acquisition in the Tverrdal prospect near Brage.

• Dividend payments are temporarily suspended to prioritize balance sheet health during a period of elevated investment.

Financial highlights

• Total revenue from petroleum products was USD 266 million, with operating income of USD 271 million and EBITDA at USD 183 million for the quarter.

• Net profit after tax was USD 21 million, with an effective tax rate of 83%, higher than expected due to non-deductible goodwill impairment.

• Cash and cash equivalents increased to USD 343 million, with an additional USD 24 million in money-market funds, and net cash position stands at USD 120 million.

• Production expenses declined to USD 18.6 per boe, down from USD 19.7 per boe.

• Recognized a USD 12 million impairment of technical goodwill due to lower forward prices.

Outlook and guidance

• Production guidance for 2025 is 28,000–32,000 boepd and for 2026 is 26,000–30,000 boepd.

• CapEx guidance is USD 310–350 million for 2025 and USD 300–360 million for 2026, with most production contributions from these investments expected after the guided period.

• No announced dividend plan due to a large investment program; board will revisit dividends when conditions allow.

• Strategy focuses on value-accretive growth through portfolio optimization, M&A, and organic projects.