WINTERSHALL DEA INVESTOR PRESENTATION
THE LEADING EUROPEAN INDEPENDENT GAS AND OIL COMPANY
MAY 2020 WINTERSHALL DEA INVESTOR PRESENTATION DISCLAIMER
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.
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 2 COMPANY OVERVIEW
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 3 WINTERSHALL DEA INVESTOR PRESENTATION FOCUSED ACTIVITIES ACROSS THE E&P VALUE CHAIN
UPSTREAM MIDSTREAM
Exploration – Development – Production European Pipeline Networks
Diversified Upstream activities with full lifecycle capabilities High quality and stable 1 2 Midstream business
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 4 WINTERSHALL DEA INVESTOR PRESENTATION OUR STRATEGY
LANDSCAPE OUR STRATEGY
Competitive and sustainable shareholder 1 returns
Climate change and Energy demand 2 Strict Financial Framework energy transition growth globally Advantaged, gas weighted upstream 3 portfolio
Exposure to high quality and stable 4 midstream business Renewables cannot Abundance of low keep up with cost fossil fuels Focus on Sustainability demand growth 5
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 5 WINTERSHALL DEA INVESTOR PRESENTATION THE LEADING EUROPEAN INDEPENDENT GAS AND OIL COMPANY
Large and diversified upstream portfolio 1
2 Exposure to high quality and stable midstream business
3 Resilience through top decile production costs
4 Strong partnerships with world class operators
5 Robust financial policy anchored on our commitment to investment grade
7 Excellent ESG footprint and strong focus on sustainability
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 6 WINTERSHALL DEA INVESTOR PRESENTATION LARGE AND DIVERSIFIED UPSTREAM PORTFOLIO
RESILIENT PORTFOLIO WITH DIVERSIFIED PRICING CONSTRUCTS KEY FIGURES 2019
Northern Europe Russia Production ‘19 Production: 201 mboe/d ‘19 Production: 289 mboe/d Russia LATAM Nothern 12% Europe 33% MENA 8% Reserves Replacement Ratio 617(1) mboe/d 109%
Algeria 47% UAE Russia Mexico Libya Egypt Reserves Latin America Brazil MENA Liquids ‘19 Production: 76 mboe/d ‘19 Production: 51 mboe/d 30% 2P Reserves Life Gas 3.8 70% Established Upstream Business Units bn boe 17 years Argentina Growth Upstream Business Units Other Business Units
(1) EXCLUDING LIBYA ONSHORE PRODUCTION
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 7 WINTERSHALL DEA INVESTOR PRESENTATION EXPOSURE TO HIGH QUALITY AND STABLE MIDSTREAM BUSINESS OUR PIPELINE NETWORK STRONG FINANCIAL CONTRIBUTION TO THE GROUP(1) (€ MILLION)
282 283 272 ▪ Predictable and stable business
▪ Buffer against commodity 164 161 159 price volatility
▪ High quality and modern infrastructure assets
▪ Long term potential in low- 4,140 km onshore gas pipelines carbon environment -
2017 2018 2019 hydrogen transportation Compressor stations Transit pipeline (third-party) EBITDA Net Income NEL/OPAL Nord Stream GASCADE pipeline network Nord Stream 2 (financing only)
(1) FROM DECEMBER 2019, WIGA GROUP CONSOLIDATED AT EQUITY WINTERSHALL DEA INVESTOR PRESENTATION PAGE 8 WINTERSHALL DEA INVESTOR PRESENTATION RESILIENCE THROUGH TOP-DECILE PRODUCTION COSTS
PRODUCTION COSTS(1) VS. PEERS (2017-2019 AVERAGE)(2) PRODUCTION COSTS OVER TIME ($/BOE) $/boe 40 % 5.1
7.1
4.3
Peer median: $7.7/boe SOURCE: COMPANY AND PUBLIC INFORMATION 2014 (3) 2019
(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.
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 9 WINTERSHALL DEA INVESTOR PRESENTATION STRONG PARTNERSHIPS WITH WORLD CLASS OPERATORS
PROVEN PARTNERSHIP MODEL WITH LONG HISTORY OF OPERATIONAL TRACK RECORD
Production Operating in the Country Key Partners Non-operated 2019, mboe/d country since
Russia 289 1990s
Norway 145 1970s JV-operated 67% Argentina 72 1980s
Egypt 38 1970s Operated
Mexico 4 2017
~2/3 OF PRODUCTION(1) OWN OR JV-OPERATED UAE N/A Development
(1) 2019 PRODUCTION SPLIT
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 10 WINTERSHALL DEA INVESTOR PRESENTATION ROBUST FINANCIAL POLICY ANCHORED ON OUR COMMITMENT TO INVESTMENT GRADE CAPITAL ALLOCATION FRAMEWORK CLEAR PRIORITIES AND CAPITAL ALLOCATION
Conservative capital structure & financial discipline 1 SUSTAINING AND COMMITTED CAPEX ▪ Maintain our investment grade rating
BALANCE SHEET Prioritising shareholder returns 2
▪ Capacity to pay competitive dividends through the cycle 3 DIVIDEND Value-driven growth 4 GROWTH ▪ Disciplined capital allocation in selected profitable growth
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 11 WINTERSHALL DEA INVESTOR PRESENTATION EXCELLENT ESG FOOTPRINT AND STRONG FOCUS ON SUSTAINABILITY OUR UNITED NATIONS SUSTAINABILITY GOALS OUR SUSTAINABILITY TARGETS
No routine flaring Zero harm to people 0 and venting(1) 0 Top performer in IOGP ranking
OUR APPROACH – MORE ENERGY, LESS EMISSIONS
Transparency Women in executive positions Implement TCFD > 30% recommendations by 2025
(1) WINTERSHALL DEA IS COMMITTED TO THE WORLD BANK’S ZERO ROUTINE FLARING BY 2030 INITIATIVE
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 12 FINANCIAL AND OPERATIONAL RESULTS
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 13 WINTERSHALL DEA INVESTOR PRESENTATION FACING THE CRISIS
Protecting our people
Business continuity TOP
Preserving liquidity PRIORITIES
Low cost asset base 1 Development capex reduced 30% • Top decile production cost of $4.3/boe 2 Exploration spend reduced 20% • Free cash flow breakeven of $~30/boe, reducing to below $20/boe in 2021(1) 3 Opex reduced 10% Midstream business contributing c. €140 million of stable
4 Dividend suspended cash flow
TO THE CRISIS THE TO
OUR RESILIENT OUR OUR RESPONSEOUR
5 Increased liquidity to €2.4 billion BUSINESSPROFILE Diversified portfolio with multiple pricing mechanisms
(1) ASSUMING $4/MCF TTF
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 14 WINTERSHALL DEA INVESTOR PRESENTATION RESULTS SUMMARY
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%)
Environment 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%)
Financial Financial Results 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 - Balance Balance Sheet
(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 PAGE 15 WINTERSHALL DEA INVESTOR PRESENTATION PRODUCTION
PRODUCTION(1) (WI, MBOE/D) Q1 2020 PRODUCTION(1) COMPOSITION
% Gas 69 % 72 % 72 % 72 % 71 % 73 % 73 % Brent Crude 638 18% 617 626 615 626 589 566 75 76 74 76 70 Russia 74 41 80 55 49 51 48 39% Gas 37 59 626 Europe 18% (mboe/d) Spot Gas 289 306 280 307 300 252 264 7% Other Non- 9% 9% Europe Gas Russia Argentina 203 205 211 207 Condensate 201 186 200 Gas
2018 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 ~35% OF TOTAL PRODUCTION LINKED DIRECTLY TO SPOT BRENT AND EUROPEAN GAS PRICES Northern Europe Russia MENA Latam
1) INCLUDES PRODUCTION FROM AT-EQUITY ACCOUNTED COMPANIES, EXCLUDING LIBYA ONSHORE VOLUMES
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 16 WINTERSHALL DEA INVESTOR PRESENTATION PROFITABILITY
EBITDAX (€ MILLION) ADJUSTED NET INCOME (€ MILLION)
21 % 42 % 17 % 124 % 3,591 282 235 2,828 1,055 397 275 879 419 270 832 320 80 44 463 74 172 481 44 8 2,355 61 105 1,671 320 508 328 -78
-98 -170 -46 -65 2018 2019 Q1 2019 Q1 2020 2018 2019 Q1 2019 Q1 2020
Northern Europe Russia Latam MENA Midstream Other
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 17 WINTERSHALL DEA INVESTOR PRESENTATION COST PERFORMANCE
PRODUCTION COST EVOLUTION ($/BOE) Q1 2020 PRODUCTION AND OPERATING EXPENSES
Other 28% Production 33% Costs €496 5.7 5.4 million
4.3 4.3 4.3
39%
Costs of Trade Goods
COST OF TRADE GOODS PRIMARILY INCLUDES TRADING ACTIVITIES 2017 2018 2019 Q1 2019 Q1 2020 OTHER PRIMARILY INCLUDES TRANSPORT FEES AND LEASES
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 18 WINTERSHALL DEA INVESTOR PRESENTATION RESERVES OVERVIEW
PEER LEADING RUNNING ROOM IN TERMS OF R/P AND 2PUD/2P RATIOS
2P+2C 1P RP 2P RP 2P PRODUCT SPLIT 2P REGIONAL SPLIT RP 13 years 17 years 27 years Condensate MENA 13% 11% Russia Other 58% Latam 17% 7% 2.2 liquids 70% Gas 24% Northern
boe Europe bn bn
6.0 SIGNIFICANT UNDEVELOPED RESERVES UPSIDE
3.8
3.0 2PUD 55% 45% 2PD
1P 2P 2C 2P+2C
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 19 APPENDIX
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 20 WINTERSHALL DEA INVESTOR PRESENTATION UPSTREAM PORTFOLIO OVERVIEW
Northern Europe Russia Germany: • Managing late life assets and production decline; • Participation in world-class assets starting from early technological base with focus on EOR 1990s Norway: • Low-cost production supported by giant reserves base • Current production and development area with significant short-medium term growth and attractive • Long plateau production with significant cashflow exploration upside in proximity to existing infrastructure generation • Exploration: Focus on value creation in the vicinity of Russia operating fields and infrastructure • Long-term contractual offtake agreements Rest of Europe: • Shallow water operations focusing on production optimization
Mexico Algeria Latin America UAE Middle East and North Africa Mexico: Egypt: • Mature onshore oil production and participation in one Libya Egypt • Long history in the region with stable production even of the world’s largest shallow-water discoveries during past political unrest • Exploration: Major exploration opportunity in recently Brazil UAE: acquired blocks • Future of the Middle Eastern new production following Brazil: the acquisition of the Ghasha concession, highly promising • Exploration: Participation in offshore exploration gas and condensate offshore development project licenses in one of the most attractive hydrocarbon Algeria: provinces aiming to build a significant resource base • Participation in the gas development project in the Sahara with challenging geological and logistical Argentina: Argentina demands • Established operations in onshore and offshore fields Libya: • History of stable production interrupted by current geopolitical issues
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 21 WINTERSHALL DEA INVESTOR PRESENTATION NORTHERN EUROPE: STABLE PORTFOLIO BACKBONE
GERMANY: OPERATIONS AT HIGHEST TECHNICAL NORWAY: WD IS THE LEADING INTERNATIONAL SOUTHERN NORTH SEA: SMART OFFSHORE STANDARDS OIL AND GAS COMPANY IN THE COUNTRY OPERATIONS Key Highlights Key Highlights Key Highlights • Mature hydrocarbon province • Europe’s largest oil and gas producing country • Major gas producer in region with more than 20 offshore • Focusing on production sites in Northern Germany • More than 100 licenses, 30 of them as operator platforms • Leveraging technical expertise (e.g. sour gas) • Stable fiscal and operating environment; low political risk • Operated via JV company Wintershall Noordzee which is Production 2019 (mboe/d) Production 2019 (mboe/d) accounted at equity in Wintershall Dea accounts
Gas 52% 2P Reserves: 223 mmboe Gas 51% 25 2P Reserves: 671 mmboe 76 Oil 49% 24 Oil 48% 70 R/P: 13 R/P: 13 Total: 49 Total: 146
Key assets WI (%) Operators Key assets WI (%) Operators Key assets WI (%) Operators Key producing assets Key producing assets Key producing assets Aasta Mittelplate 100% Wintershall Dea 24% Equinor Wingate 64.5% Wintershall Noordzee Hansteen Völkersen 100% Wintershall Dea Ravn 63.6% Wintershall Noordzee Vega 56% Wintershall Dea Emlichheim 90% Wintershall Dea Key development projects Skarv 28% Aker BP Rembrandt/ Wintershall Noordzee 30% Edvard Grieg 9% Lundin Vermeer 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
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 22 WINTERSHALL DEA INVESTOR PRESENTATION RUSSIA: LARGEST RESOURCE AND PRODUCTION BASE
RUSSIA: STRONG CASH FLOW FROM LONG-LIFE PRODUCING FIELDS
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
Production 2019 (mboe/d)
2P Reserves: 2,234 mmboe Gas 81% 254 56 R/P: 21 Oil 19% Total: 289
Key assets WI (%) Operators Key producing assets Achimov 1A 50% Achimgaz Yuzhno Russkoye (Cenomanian layers) 35%(1) Severneftegazprom Wolgodeminoll 50% RITEK Key development projects Yuzhno Russkoye (Turonian layers) 35%(1) Severneftegazprom Achimov 4A & 5A 25% Achim Development
1) ECONOMIC SHARE, WINTERSHALL DEA HAS 25 % LEGAL INTEREST IN THE PROJECT
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 23 WINTERSHALL DEA INVESTOR PRESENTATION LATAM: STRONG GROWTH POTENTIAL
ARGENTINA: LARGEST DRY GAS PRODUCER IN THE MEXICO: SUCCESSFUL EXPLORATION AND BRAZIL: GROWTH COUNTRY REGION APPRAISAL Key Highlights Key Highlights Key Highlights • Presence in the country since more than 40 years • Mature production in Ogarrio leveraged by technical • Key growth country in the portfolio • Stake in 20 on- and offshore fields, 3 as operator optimization • Holder of four operated exploration licenses in Ceará and • Large potential in shale resources • Progressing on development concept for the world class Potiguar basins and five non-operated licenses in in Santos Production 2019 (mboe/d) Zama discovery Production 2019 (mboe/d) and Campos basins
2P Reserves: 214 mmboe Gas 91% 65 2P Reserves: 41 mmboe Gas 30% 1 Oil 70% 3 R/P: 8 Oil 9% 7 R/P: 26 Total: 72 Total: 4
Key assets WI (%) Operators Key assets WI (%) Operators Key assets WI (%) Operators Key producing assets Key exploration assets Key producing assets Ogarrio 50% Wintershall Dea 3 licenses Potiguar CMA-1 37.5% Total 70% Wintershall Dea Key E&A assets Basin Aguada Pichana 27%% Total 1 license Ceará Zama 40% Talos Energy 100% Wintershall Dea Basin Aguada Federal 50% Wintershall Dea Block 2 30% Pemex 3 licenses Campos 20% Repsol Banduria Norte 50% Wintershall Dea Blocks 16,17 & 30 40% Wintershall Dea Basin 2 licenses Santos 20% Chevron Basin
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 24 WINTERSHALL DEA INVESTOR PRESENTATION MENA: REMARKABLE FOOTPRINT IN THE RICH HYDROCARBON REGION EGYPT: FOCUSED OPERATIONS ALGERIA: ONSHORE DRILLING EXPERTISE UAE: ESTABLISHED POSITION VIA TECHNICAL COMPETENCE Key Highlights Key Highlights Key Highlights • Stakes in six onshore and offshore concessions centred • Partner in Reggane Nord project comprising six gas fields • UAE is a new focus area for Wintershall Dea around three assets with production until at least 2040 • Partner in one of the UAE‘s major gas and condensate • Partner in West Nile Delta project, one of the most important developments, Ghasha energy projects in Egypt Production 2019 (mboe/d) Production 2019 (mboe/d) • Successful Shuwaihat appraisal in Abu Dhabi, a complex sour gas project 2P Reserves: 120 mmboe Gas 79% 30 Gas 100% 9 R/P: 10 Oil 21% 8 Oil0% 0 Total: 38 Total: 9
Key assets WI (%) Operators Key assets WI (%) Operators Key assets WI (%) Operators Key producing assets Key producing assets Key development projects Disouq 50% DISOUCO Reggane Nord 19.5% Repsol Ghasha 10% ADNOC Gulf of Suez 50% SUCO West Nile Delta 17.25% BP
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 25 WINTERSHALL DEA INVESTOR PRESENTATION HIGHLY EXPERIENCED MANAGEMENT TEAM WITH STRONG CORPORATE GOVERNANCE EXECUTIVE BOARD THREE-TIER GOVERNANCE STRUCTURE
• Members from both shareholders as well as two Roles Shareholders' observers/independents Committee • Certain reserved matters for alignment in the Mario Mehren Shareholders Committee Chairman of the Board and CEO Supervisory Board • Responsible for supervision of the Management Board Paul Smith CFO Executive / • Responsible for overall strategy and management Management Board • Composed of senior management leadership team Dawn Summers(1) COO Northern Europe and MENA SHAREHOLDER COMMITTEE
Thilo Wieland Hans-Ulrich Engel Lord Browne of Madingley Board Member for Russia, LatAm and Midstream
Hugo Dijkgraaf CTO
Michael Heinz German Khan
• Highly experienced management team with 20+ years in E&P sector on average
• Diverse and complementary background and skillset
(1) TO BE APPOINTED AS OF JUNE 1ST, 2020
WINTERSHALL DEA INVESTOR PRESENTATION PAGE 26