BW Energy: Fourth Quarter and Full Year Results 2023
FOURTH QUARTER AND FULL YEAR RESULTS
2023
HIGHLIGHTS
- Q4 EBITDA of USD 133.4 million and net profit of USD 80.2
million
- Full-year revenue of USD 0.5 billion (+83%) with EBITDA of USD
241.0 million (+56%) and net profit of USD 81.0 million (+80%)
- Q4 gross production of 3.03 million barrels with 2.48 million
net to BW Energy
- Four liftings of 2.7 million barrels (net BWE) at average
realised price of USD ~82 per barrel
- Achieved combined production milestone of 50,000 operated
barrels per day in October
- Maintained a strong balance sheet with cash position of USD 194
million
- Completed acquisition of FPSO Cidade de Vitória
- Discovery of Hibiscus South
- MoU signed with Cosco Shipping Heavy Industry for FPSO BW
Maromba upgrade
BW Energy, operator of the Dussafu Marin licence in Gabon and
the Golfinho cluster offshore Brazil, reported EBITDA for the
fourth quarter of 2023 of USD 133.4 million, up from USD 49.7
million in the third quarter of 2023, due to increased production
and liftings.
Gross production from the operated assets was ~33,000 barrels of
oil per day in the quarter, up 20% from the previous quarter. This
includes a full quarter of production from the Tortue and Hibiscus
fields in the Dussafu licence (73.5% working interest) and the
Golfinho field (100% working interest) after assuming ownership in
late August.
Full-year 2023 production was approximately 7.6 million barrels
of oil, up 97% from 2022. Full-year EBITDA was USD 241 million (USD
154.2 million).
"We delivered strong production from Dussafu and Golfinho, which
is reflected in improved financial performance, making the fourth
quarter and full year 2023 BW Energy’s best.” said Carl K. Arnet,
the CEO of BW Energy. “Looking ahead, we expect increased oil
production and strong cash generation in 2024 with the completion
of the Hibiscus / Ruche phase 1 development program, including
start-up of production from Hibiscus South and Ruche fields and ESP
replacements, combined with a full-year contribution from Golfinho
in Brazil.”
DUSSAFU
BW Energy completed two liftings in the fourth quarter at an
average realised price of USD 83 per barrel. BW Energy’s share of
gross production was approximately 1.5 million barrels of oil. The
net sold volume, which is the basis for revenue recognition in the
financial statements, was approximately 1.86 million barrels
including 187,000 barrels of state profit oil with an over-lift
position of 228,000 barrels at the end of the period. Gross
production from the Dussafu licence averaged 22,500 barrels of oil
per day in the quarter, amounting to total gross production of 2.07
million barrels of oil for the period. Production was impacted by
the previously communicated electrical issues affecting the ESPs
(electrical submersible pumps) on the Hibiscus field. Fourth
quarter production cost (excluding royalties) was approximately USD
28 per barrel.
The Company has committed all necessary resources on identifying
and resolving the electrical integrity issues affecting the ESPs.
Currently, the DHIBM-6H well is producing on natural flow. The
DHIBM-3H and DHIBM-4H wells are producing on ESP, following
completion of workovers and ESP changeout. Preparations are ongoing
for restarting DHIBM-5H well following a similar process. The
programme of diagnosis, repair and replacement of the ESPs is well
underway.
GOLFINHO
Gross production from the Golfinho field averaged 10,400 barrels
of oil per day in the fourth quarter, amounting to a total
production of 958,000 barrels in the period. There were two
liftings in the quarter at an average realised price of USD 80 per
barrel, with remaining inventory of approximately 325,000 barrels
at the end of the period. Fourth quarter production cost (excluding
royalties) was approximately USD 44 per barrel.
OTHER ITEMS
BW Energy had a cash balance of approximately USD 194.2 million
on 31 December 2023, compared to USD 197.6 million on 30 September
2023. The change reflects the net impact from oil sold in the
period and investments primarily related to the ongoing Hibiscus /
Ruche development. The Company had a total drawn debt balance of
USD 380 million as of 31 December 2023 including the Golfinho
prepayment facility.
Total production net to BW Energy from Gabon and Brazil for 2024
is projected to be between 10 and 12 million barrels, based on the
current Hibiscus / Ruche development plan and ESP work-over
schedule. Full-year production cost (excluding royalties) is
expected to be USD 30 to 35 per barrel. Net capital expenditures
are expected in the range USD 250 to 300 million related to ongoing
drilling and project maturation activities.
DEVELOPMENT PLANS
The 2023 reserves update assessed 2P+2C reserves and resources
of 580 million barrels net to BW Energy. This includes 103.1
million barrels in the in the Dussafu licence, reflecting
adjustment for net annual production of 5.9 million barrels and
positive reserve adjustments on Dussafu, 148.2 million barrels in
Golfinho and Camarupim clusters and BM-ES-23, 138.8 million barrels
in the Maromba licence, and 190.3 million barrels oil equivalent
contingent resources in the Kudu licence. The increase mainly
reflects the acquisition of the Golfinho and Camarupim clusters and
BM-ES-23.
The Hibiscus / Ruche Phase 1 drilling campaign comprises of
eight wells. In addition to the four Hibiscus wells and the one
Hibiscus South well drilled to date, the updated plan includes a
fifth Hibiscus well, finalisation of the Ruche well, and a Bourdon
prospect test well.
In November, a substantial oil discovery was made in the
Hibiscus South satellite prospect (DHBSM-1). In early 2024, the
Company returned to the well to complete it as a production well.
First oil is expected in March, less than five months after
discovery. The Hibiscus South structure is a separate accumulation
with a deeper oil-water contact than the nearby Hibiscus Field,
increasing the Company’s reserve base.
The Hibiscus / Ruche drilling campaign has the potential to
bring total oil production on the Dussafu licence up to the FPSO
capacity of approximately 40,000 barrels per day gross when all
wells are on-stream.
In Brazil, BW Energy completed the acquisition the FPSO Cidade
de Vitória from Saipem in November. This will contribute to lower
production cost per barrel. Production from the Golfinho
field continues to exceed initial expectations. Preparations
continued for two planned Golfinho infill wells (GLF-51 oil well
and GLF-50 gas well) which are expected to double production in
2027.
Also in Brazil, the Maromba development plan progressed with
completion of the revised concept expected in the second quarter of
2024. Total oil production from Maromba at peak annual average is
expected between 30-40,000 barrels of oil per day. In October, BW
Energy paid the first instalment for FPSO Polvo, renamed BW
Maromba, with the remaining USD 20 million instalment due in the
second quarter of 2024. The FPSO has been mobilised to the COSCO
yard in China where it is being prepared for upgrades. The final
investment decision for the Maromba development is subject to
completion of the project financing.
In Namibia, BW Energy is progressing the revised development
plan for the gas-to-power project and analysing data from the 3D
survey completed in May. Interpretation of the initial data has
enhanced the depositional model and de-risked potential
targets with additional prospects identified, and the Company has
decided to start ordering long-lead items for a future exploration
program.
OUTLOOK
BW Energy continually prioritises safety first with zero harm as
an overriding objective for people and the environment. BW Energy
is substantially reducing its carbon footprint by developing
discovered oil and gas resources through repurposing of existing
production infrastructure.
BW Energy expects oil and gas to remain an important part of the
global energy mix with increased demand in decades to come and
remains focused on realising long-term value creation via its
phased development strategy and investments in high-return assets.
The flexible investment strategy has proven robust for a range of
market scenarios and positions BW Energy to address both short- and
long-term opportunities to drive cash flows and earnings.
Energy prices remain at high levels despite a softening of
macroeconomic drivers during 2023 as geopolitical conflict, global
supply chain challenges, inflation and higher interest rates
impacted global economic growth. Reduced OPEC production and
continued concerns for global energy supply are among factors
supporting current prices.
BW Energy expects to create significant value for its
stakeholders going forward. Short-term, the focus is on completing
the Hibiscus / Ruche development and resolving the ESP challenges
to bring production up towards the FPSO capacity, and optimising
production at Golfinho in Brazil while preparing for drilling of
two new production wells in 2027. This should further support
significant positive cash flow at current oil price levels.
REPORTS AND PRESENTATION
BW Energy today published its annual report for the financial
year ended 31 December 2023. BW Energy has also today published the
Board-approved report on payments to governments and the annual
statement of reserves for the financial year 2023. Please find all
reports and the fourth-quarter earnings presentation attached. The
reports are also available at:
www.bwenergy.no/investors/reports-and-presentations
BW Energy will today hold a conference call followed by a
Q&A hosted by CEO Carl K. Arnet, CFO Knut R. Sæthre and COO Lin
G. Espey at 14:00 CET.
You can follow the presentation via webcast with supporting
slides, available on:
Viewer Registration • Q4 2023
Call-in information:
Participants dial in numbers:
DK: +45 7876 8490SE: +46 8 1241 0952NO: +47 2195 6342UK: +44 203
769 6819US: +1 646-787-0157Singapore: 65-3-1591097France:
33-1-81221259
PIN code: 980877
Please note, that if you follow the webcast via the above URL,
you will experience a 30 second delay compared to the main
conference call. The web page works best in an updated browser -
Chrome is recommended.
For further information, please contact:
Knut R. Sæthre, CFO BW Energy, +47 91 11 78 76
ir@bwenergy.no
About BW Energy:
BW Energy is a growth E&P company with a differentiated
strategy targeting proven offshore oil and gas reservoirs through
low risk phased developments. The Company has access to existing
production facilities to reduce time to first oil and cashflow with
lower investments than traditional offshore developments.
The Company's assets are 73.5% of the producing Dussafu Marin
licence offshore Gabon, 100% interest in the Golfinho and Camarupim
fields, a 76.5% interest in the BM-ES-23 block, a 95% interest in
the Maromba field in Brazil and a 95% interest in the Kudu field in
Namibia, all operated by BW Energy. Total net 2P+2C reserves and
resources were 580 million barrels of oil equivalent at the start
of 2024.
This information is subject to the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities Trading
Act
- BW Energy Annual report 2023
- BW Energy Report on Payments to Governments 2023
- BW Energy Annual Statement of Reserves 2023
- BWE Q4 2023
- bwenergyltd-2023-12-31-en
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