OKEA (OKEA) Q3 2024 earnings summary

Executive summary

• Strong operational performance in Q3 2024 with average production of 37,300 boe/d, offsetting planned maintenance and supported by increased Statfjord output.

• Sale of the non-core Yme asset for USD 15.65 million, resulting in significant net impairment income, reduced capex, and improved net profit after tax.

• Net profit after tax increased to NOK 277 million, up from NOK 87 million year-over-year, with reversal of previous impairments due to the Yme sale.

• Portfolio optimization continues, with focus on organic and inorganic growth, and three new exploration wells commencing in Q4 2024.

• Major development projects Bestla and Draugen Power from Shore are progressing, though Draugen electrification is delayed to 2028.

Financial highlights

• Petroleum revenues reached NOK 2,944 million, up from NOK 2,442 million, mainly due to higher sold volumes and increased realised gas prices.

• EBITDA increased to NOK 1,975 million from NOK 1,617 million year-over-year.

• Net impairment income of NOK 871 million, mainly from reversal of Yme impairments; technical goodwill impairments at Statfjord and Ivar Aasen due to lower oil price forecasts.

• Cash and cash equivalents stood at NOK 3,614 million, with total liquidity just under NOK 3,900 million.

• Cash generated from operations was NOK 1,418 million, up from NOK 684 million, driven by higher sold volumes and lower taxes paid.

Outlook and guidance

• 2024 production guidance narrowed to 37,000–39,000 boe/d, or 34,000–36,000 boe/d excluding Yme; 2025 and 2026 guidance at 28,000–32,000 and 26,000–30,000 boe/d.

• CapEx guidance for 2024 revised to NOK 3.2–3.5 billion; 2025 and 2026 CapEx expected at NOK 3.3–3.7 billion and NOK 3.2–3.8 billion.

• Production expected to decline in 2025 and 2026 due to natural decline and timing of new projects.

• Bestla project to add 10,000 boe/d in 2027, outside current guidance period.

• Up to four exploration wells per year planned, with three lined up for Q4 2024.