BW Energy: Q2 2024 trading update
BW Energy: Q2 2024 trading update
BW Energy will publish financial figures for the second quarter
and first half year of 2024 on Thursday, 29 August
2024.
Net production to BW Energy was 2.14 million barrels of oil in
the second quarter of 2024. This includes production from the
Tortue, Hibiscus and Hibiscus South fields in the Dussafu licence
(73.5% working interest) and production from the Golfinho field
(100% working interest).
DUSSAFU
Production from the Dussafu licence was 1.41 million barrels net
to BW Energy in the quarter, an average of 15,570 barrels of oil
per day. Production was impacted by planned annual maintenance of
the FPSO BW Adolo as well as the situation with defective ESPs
(Electrical Submersible Pumps). The annual scheduled maintenance
resulted in a shutdown of 21 days during May and June. Work
included tank-refurbishments as well as work on the boiler system,
the gas lift compressors and other general systems improvements. BW
Energy completed one lifting in the quarter in May of ~ 734,000
barrels net at an average realised price of USD 80 per barrel.
Production costs (excluding royalties) for the period were
approximately USD 29 per barrel. This compares with first quarter
production costs of USD 23 per barrel, reflecting the lower
production.
The net sold volume, which is the basis for revenue recognition
in the financial statement, was approximately 940,000 barrels,
including 32,500 barrels of DMO deliveries and 173,000 barrels of
state profit oil, with an under-lift position of 341,000 barrels at
the end of the period.
In May, the Company made a substantial oil discovery with good
reservoir quality in the DHIBM-7P pilot well, appraising the
northern flank of the Hibiscus field. The preliminary evaluation
indicates an increase in Hibiscus gross recoverable reserves
(mid-case) of 8-12 million barrels of oil. The well will be drilled
as a production well later in the present program.
Earlier in May, the DHBSM-2P pilot well confirmed a northern
extension of the Hibiscus South field with good reservoir quality,
increasing reserve estimates of Hibiscus South. The DHBSM-2H
development well has completed drilling and has been completed with
the first conventional ESP system. The well was handed over from
drilling to production on 25 July and will now start production
after hook-up and testing.
BW Energy has extended the contract for the Borr Norve jack-up,
and the delivery of conventional ESP systems including spares has
now been secured, allowing all previously drilled and
completed wells to be successively worked over and completed with
conventional ESP systems. The contract extension is also expected
to include the drilling of the Bourdon
prospect.
GOLFINHO
Production from the Golfinho licence was 732,000 barrels net in
the quarter, an average of 8,040 barrels of oil per day. Production
was impacted by reduced gas-lift compressor up-time and lack of gas
production from the GLF-28 well. GLF-28 has subsequently been
successfully restarted after ROV intervention, and work is underway
to improve reliability. A 12-day shutdown is scheduled for August
on the FPSO Cidade de Vitória, to undertake compressor maintenance
and other activities to improve production stability.
A lifting of 505,000 barrels was completed in April with a
realised price of USD 90 per barrel, followed by a lifting in June
of 500,000 barrels with a realised price of USD 83 per barrel.
Remaining inventory was ~385,000 barrels at the end of the period.
The production cost, excluding royalties, averaged USD 48 per
barrel.
OTHER NEWS
In April, BW Energy executed a sale and leaseback agreement with
a Minsheng Financial Leasing Co entity (MSFL) for the MaBoMo
production facility on the Dussafu Licence. The transaction added
USD 110 million of net liquidity for the
Company.
In June, the Company issued a USD 100 million, five-year senior
unsecured bonds with a coupon of 10% per annum. The bond placement
met strong investor demand across Nordic and international markets
and was significantly oversubscribed. An application has been made
for the bonds to be listed on the Oslo Stock
Exchange.
In July, the Company signed a Letter Agreement with
Reconnaissance Energy Africa Ltd (“ReconAfrica”) to acquire ~16.8
million shares and ~16.8 million warrants for a total consideration
of USD 16 million in ReconAfrica’s announced equity raise. By
participating in the equity raise, BW Energy will also receive a
20% non-operating interest in the onshore Petroleum Exploration
License 73 (“PEL 73”). This enables the Company to expand its
footprint in this strategically important energy
region.
HEDGING, LIQIDITY AND DEBT
BW Energy expects to recognise a net loss of USD 1.5 million in
the second quarter related to the hedging program, of which USD 0.8
million is unrealised.
The Company had a cash balance of approximately USD 244 million
on 30 June 2024, compared to USD 150 last quarter. The increase
reflects the net impact from oil sold in the period, proceeds from
the MaBoMo sale leaseback, the bond issue, repayment on the RBL
facility and investments. Investments for the period are primarily
related the ongoing Hibiscus Ruche field development
program.
The Company had a total drawn debt balance of USD 589.2 million
on 30 June including the MaBoMo lease financing, the bond debt, as
well as a USD 70 million principal repayment on the Dussafu
RBL.
For further information, please
contact:
Brice Morlot, CFO BW Energy, +33.7.81.11.41.16
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 Marine 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.
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