Investor Presentation September 2016 (updated) Cautionary Statement 2
By attending or reading this presentation, you acknowledge and agree to be bound by the following limitations and restrictions. This presentation has been prepared by Galp Energia, SGPS, S.A. (“Galp” or the “Company”) and may be amended and supplemented, but may not be relied upon for the purposes of entering into any transaction. This presentation is strictly confidential, is being distributed to a limited range of persons solely for their own information and may not (i) be distributed to the media or disclosed to any other person in any jurisdiction, nor (ii) be reproduced in any form, in whole or in part, without the prior written consent of the Company.
Although the Company has taken reasonable care in preparing the information contained herein, no representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein or any other material discussed at the presentation. Neither the Company nor any of its affiliates, subsidiaries, shareholders, representatives, agents, employees or advisors shall have any liability whatsoever (including in negligence or otherwise) for any loss or liability howsoever arising from any use of this presentation or its contents or any other material discussed at the presentation or otherwise arising in connection with this presentation.
This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or otherwise acquire securities of the Company or any of its subsidiaries or affiliates in any jurisdiction or an inducement to enter into investment activity in any jurisdiction. Neither this presentation nor any part thereof, nor the fact of its distribution, shall form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever in any jurisdiction.
This presentation is made to and directed only at persons (i) who are outside the United Kingdom, (ii) having professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant Persons"). This presentation must not be acted or relied on by persons who are not Relevant Persons.
Neither this presentation nor any copy of it, nor the information contained herein, in whole or in part, may be taken or transmitted into, or distributed, directly or indirectly in or to the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws. No securities of the Company have been registered under the United States Securities Act of 1933 or the securities laws of any state of the United States, and unless so registered may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.
Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe”, “expect”, “anticipate”, “intends”, “estimate”, “will”, “may”, "continue”, “should” and similar expressions usually identify forward-looking statements. Forward-looking statements may include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; energy demand and supply; developments of Galp’s markets; the impact of regulatory initiatives; and the strength of Galp’s competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although Galp believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. No assurance, however, can be given that such expectations will prove to have been correct. Important factors that may lead to significant differences between the actual results and the statements of expectations about future events or results include the Company’s business strategy, industry developments, financial market conditions, uncertainty of the results of future projects and operations, plans, objectives, expectations and intentions, among others. Such risks, uncertainties, contingencies and other important factors could cause the actual results of Galp or the industry to differ materially from those results expressed or implied in this presentation by such forward-looking statements.
Actual future results, including financial and operating performance; demand growth and energy mix; Galp’s production growth and mix; the amount and mix of capital expenditures; future distributions; resource additions and recoveries; project plans, timing, costs, and capacities; efficiency gains; cost savings; integration benefits; product sales and mix; production rates; and the impact of technology could differ materially due to a number of factors. These include changes in oil or gas prices or other market conditions affecting the oil, gas, and petrochemical industries; reservoir performance; timely completion of development projects; war and other political or security disturbances; changes in law or government regulation, including environmental regulations and political sanctions; the outcome of commercial negotiations; the actions of competitors and customers; unexpected technological developments; general economic conditions, including the occurrence and duration of economic recessions; unforeseen technical difficulties; and other factors.
The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice. Galp and its respective representatives, agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this presentation to reflect any change in events, conditions or circumstances.
Investor Presentation | September 2016 An integrated energy player 3
52 projects Exploration & 701 mmboe 2P reserves Production 45.8 kboepd WI production €356 m Ebitda €10.8 bn Market Cap
€1.6 bn Ebitda 330 kbopd refining capacity Refining & 114.6 mmboe processed €1.3 bn Capex Marketing 9.1 mton sales to direct clients €800 m Ebitda 6.8 k Employees
1 7% ROACE 7.665 mm3 NG/LNG sales Gas & 12,533 km NG distribution network Power 4.636 GWh electricity sales €381 m Ebitda
1 ROACE of 7% on capital employed of €8.6 bn as of YE2015, including work in progress Investor Presentation | September 2016 (non-productive assets) of €2.1 bn. All figures relate to year end 2015, except market cap shown as end of August 2016. The 3E's approach 4
Execute Extract Explore
Focus on delivery Unlock more value Screening new and profitability from current opportunities and portfolio portfolio management
Investor Presentation | September 2016 5
Developing highly competitive upstream projects
Extracting value from downstream and gas businesses
Committed to a solid capital structure
Delivering long term value to stakeholders
Key takeaways
Appendix
Investor Presentation | September 2016 Galp holds a unique upstream portfolio 6
Brazil Portugal 6 sanctioned projects 7 exploration licenses 4 non-sanctioned projects 17 exploration licenses Santos basin (8) Potiguar basin (7) East Timor Barreirinhas basin (4) 1 exploration license Parnaíba basin (4) Op. Pernambuco basin (2) Amazonas basin (1) Sergipe Alagoas (1) Op. Mozambique 2 non-sanctioned projects São Tomé and Príncipe
1 exploration license Op. Angola 5 sanctioned projects Namibia 1 non-sanctioned project 6 exploration licenses 2 exploration licenses Op.
Op. Operated Investor Presentation | September 2016 Executing world-class projects… 7
1999 2006 2009 2010 2013 2014 2015 2016
FPSO #1 (CAR) FPSO #2 (CPY) FPSO #3 (CMB) FPSO #4 (CIT) FPSO #5 (CMR) . Lula Pilot . Lula NE . Iracema South . Iracema North . Lula Alto
America (100 kbopd) (120 kbopd) (150 kbopd) (150 kbopd) (150 kbopd)
South
FPSO #6 (CSQ) . Lula Central
(150 kbopd)
Africa Kuito field1 BBLT CPT TL CPT Lianzi field . Block 14 . Block 14 . Block 14 . Block 14k (100 kbopd) (130 kbopd) (through BBLT CPT)
1Kuito FPSO decommissioned during 2013. Investor Presentation | September 2016 … and further to be delivered 8
2017 2018 2019 2020 2020+
Lula South Lula Ext South Atapu 1 Sépia Lula West
Replicant FPSO Replicant FPSO Replicant FPSO Leased FPSO
150 kbopd 150 kbopd 150 kbopd Atapu 2 Replicant FPSO
150 kbopd America
Lula North Berbigão/Sururu Replicant FPSO Replicant FPSO Carcará 150 kbopd 150 kbopd
South
Júpiter
Coral Kaombo North Kaombo South 125 kbopd 125 kbopd
Africa Mamba
Investor Presentation | September 2016 Premium assets delivering production growth 9
Working interest production (kboepd)
Execute + Extract Execute + Extract + Explore Sanctioned Projects
Breakeven <$30/bbl
CAGR 2015-20 25-30% 35-40%
46
2015 2016E 2020E Pre-sanctioned Upside/ Potential Exploration 2020+
Note: Breakeven NPV10. Investor Presentation | September 2016 Investing in competitive upstream projects 10
Technical costs1 ($/boe) . Reservoir characteristics and project scale driving Brazil technical costs close to $15/boe 27
. Potential from further capex and cost 22 optimisation < 20
. Lifting costs expected to be under $5/boe by 2020
2014 2015 2020E
Lifting costs Leasing costs DD&A
1Technical costs based on group working interest production (excludes royalties, overheads and oil taxes). Investor Presentation | September 2016 Lula/Iracema: delivering a world-class project 11
BM-S-11: Lula/Iracema . Six out of 10 FPSOs producing in 2016
. 96 wells drilled out of c.150 planned
. Consortium technical skills and experience supporting the development of this key asset
Investor Presentation | September 2016 Lula/Iracema: outstanding productivity 12
Top pre-salt producer wells1 FPSO #1 production Oil recovery factor (kboepd) (kbopd) (%)
100 Plateau ≈7 years Lula 45.4 40% Lula 43.7 Sapinhoá 40.1 Lula 40.0 28% Jubarte 39.9 Lula 38.2 Sapinhoá 37.9 Sapinhoá 36.9 Lula 36.8 Lula 36.2 Lula 33.9 2010 2015 2020E Current recovery Ambition 2 Lula 33.6 PoD 2010 Actual + Forecast factor
Each 1 p.p. increase in oil recovery results in incremental c.200 mmbbl gross
1Source: ANP Jun-16. 2 Investor Presentation | September 2016 Note: Galp view. Increasing efficiency in Lula/Iracema 13
Drilling and completion (#days) Ramp-up period of Lula/Iracema FPSOs (#months)
18 239 15 13 13
110 75
2010 2015 Best performance FPSO #1 FPSO #2 FPSO #3 FPSO #4 and LT ambition . Benefiting from learning curve and optimising well . FPSO #4 already producing at plateau, having achieved designs full ramp-up in 13 months
. Negotiating rig and subsea contracts . FPSO #5 and FPSO #6 to reach full capacity during 2017
Investor Presentation | September 2016 De-risking other relevant projects in Brazil 14
Berbigão | Sururu | Atapu Carcará Júpiter | Sépia East
1
. Significant resource base in a . DST in Carcará North proved . Sépia East DoC submitted and challenging heterogeneous excellent reservoir productivity unitisation with Sépia (ToR, 100% reservoir Petrobras) being prepared . DoC expected to be submitted in . Production in Berbigão/Sururu 2018 . Júpiter appraisal campaign proved expected by 2018 and Atapu 1 by large oil, natural gas and early 2019 . Extension of the discovery into condensates base, with DoC open area to the North extended until 2021
1Petrobras announced the farm-out to Statoil in July 16. Investor Presentation | September 2016 Mozambique: Optimising initial development solutions 15
Area 4 . Area 4 total GIIP volumes of c.85 Tcf
. Dry gas in high quality reservoir
Mamba onshore LNG - 2x5 mtpa LNG trains (1st phase) . Unitisation process with Area 1 concluded in 2015
. Finalising framework for common facilities development
. EPC proposals being evaluated
Coral FLNG - 1 FLNG (3.0-3.7 mtpa) . EPCIC contract under negotiation
. LNG long-term gas offtake contract being finalised
. PoD approved in February 2016
Investor Presentation | September 2016 Angola: Optimising development projects 16
Blocks 14/14k Block 32
. Four producing areas and two CPT platforms . Ongoing drilling campaign
. Lianzi production started during 2015 . Two FPSO of 125 kbopd expected for 2017 and 2018
. Implementation of cost reduction initiatives . PSA fiscal terms renegotiated during 2015 and potential for further cost reduction
Investor Presentation | September 2016 17
Developing highly competitive upstream projects
Extracting value from downstream and gas businesses
Committed to a solid capital structure
Delivering long term value to stakeholders
Key takeaways
Appendix
Investor Presentation | September 2016 An efficient refining system capable of meeting market needs 18
Production profile and consumption in Iberia . Fully invested and competitive refining system after €1.4 bn upgrade
. Focus on maximising energy efficiency and 14% 26% optimising refining processes to achieve higher refining margin
69% 83% . Leveraging refineries’ location (European SW), namely competitiveness to the U.S. market
5% 3% Galp production yields Iberian oil market
Others Middle distillates Light distillates
Investor Presentation | September 2016 3rd largest player in Iberia and a growing presence in Africa 19
Service station in Portugal . 1,435 service stations, of which 138 service stations across the African continent
. Annual oil sales to direct clients of 9.1 mton, of which around 8% sold in Africa
. Improving refining and marketing integration
. Stable contribution to Ebitda
. Launched innovative tri-fuel offer in Iberia (oil products, gas and electricity)
Investor Presentation | September 2016 Downstream efficiency and margin optimisation 20
Galp refining margin improvements ($/bbl) Additional cost reduction in R&M (€m)
50 150 6.0 1.0 100 5.2 80
2.5 2.5
2015 2020 before Improvements 2020E Previous target 2015 Further New target improvements impact by 2019 delivered efficiency by 2020 (2018+) efficiency Benchmark refining margin
Investor Presentation | September 2016 Building a sustainable NG and LNG portfolio 21
NG and LNG portfolio breakdown (bcm)
. Expand and leverage client base Portfolio ambition Other . Diversify and increase sourcing Spot Network trading Medium-term Contracted 2015 volumes structured sales . Grow medium-term structured sales pipeline
7.7 bcm Contracted LNG NG Iberia demand
Sourcing Sales
Investor Presentation | September 2016 Steady contribution from regulated activities 22
NG Infrastructure Power
. Extensive infrastructure in Iberia with regulated gas . 173 MW of cogeneration capacity installed and distribution network and stakes in Iberian pipelines expected c.4 TWh/yr of electrical power generation
. RAB of €1.05 bn, with 6.2% RoR between . 3 TWh of electricity sold to direct clients in Iberia Jul’16 – Jul’17
Investor Presentation | September 2016 Ring fencing regulated gas infrastructure business 23
Transaction structure Highlights
Values @ June 30, 2016 . Marubeni led consortium with Toho Gas to acquire a Galp Energia, SGPS, SA stake of 22.5% in GGND
Total Assets: €11.7 bn . Shared governance leading to accounting deconsolidation Net Debt: €1.8 bn . €138 m equity transaction, implying c.€1.3 bn EV, a 27% premium over RAB and 11.5x Ebitda 2016E multiple Galp Energia, SGPS, SA Shareholder loans Equity . GGND to raise own funding to repay existing shareholder Total Assets: €13.0 bn €568 m 100% loans
Net Debt: €2.5 bn
€0 m 77.5% . Total cash proceeds of c.€700 m to Galp at completion (GGND fully consolidated)
Galp Gás Natural About GGND Distribuição (GGND) . Holding of nine local distribution concessionaries
Total Assets: €1.3 bn . €1.05 bn Regulated Asset Base, with RoR of 6.2% for the Net Debt1: €0.6 bn period Jul’16 - Jul’17
Investor Presentation | September 2016 1 GGND will raise stand-alone funding to reimburse existing shareholder loans of €568 m. 24
Developing highly competitive upstream projects
Extracting value from downstream and gas businesses
Committed to a solid capital structure
Delivering long term value to stakeholders
Key takeaways
Appendix
Investor Presentation | September 2016 Capex plan focused on developing key projects 25
Capex profile (€bn) . 2016-2020E capex estimated at €1.0 - €1.2 bn 1.5 Group capex . E&P to account for c.85% of Group capex
. First stage of BM-S-11 in Brazil to drive short E&P Brazil development term investments
. Potential capex reduction from greater efficiency and contract renegotiation E&P Mozambique
0.0 . Expected 2016 capex of €1.1 - €1.3 bn 2015 2016E 2017E 2018E 2019E 2020E
Investor Presentation | September 2016
Capex flexibility 26
Capex allocation 2016-2020 . Around 60% of E&P capex already committed and focused on Brazil and Angola E&P developments uncommitted
. E&P uncommitted capex relates to non- sanctioned projects with production to start after 2020
. E&A1 capex accounting for 15% of E&P investment and more intensive from 2019 onwards
. Downstream and gas capex mostly for energy efficiency projects and process optimisation E&P excl. Mozambique E&P Mozambique D&G
1 E&A – Exploration & Appraisal. Note: E&P committed capex considers Lula/Iracema and Iara in Brazil, Blocks 32 and 14/14k in Angola, and Investor Presentation | September 2016 2016 E&A.
Group Ebitda CAGR 2015-20 of 15% 27
E&P Ebitda (€m) D&G Ebitda (€m)
R&M G&P1 2,250 1,500
Ebitda CAGR >40% 1,500 1,000
750 500
0 0 2015 2016E 2017E 2018E 2019E 2020E 2015 2016E 2017E 2018E 2019E 2020E
2016 Group Ebitda expected at €1.2 - €1.3 bn
1G&P Ebitda does not consider sale of regulated infrastructure. Investor Presentation | September 2016 Free cash flow breakeven during 2018 28
Galp free cash flow1 (€m) . FCF positive during 2018, assuming committed and uncommitted capex 600
. Testing at $45/bbl, FCF positive one year later, assuming no further capex reduction
0 . Brazil FCF positive during 2017 at $45/bbl
. Further upsides expected from upstream learning curve, higher productivity and contract renegotiation -600 2015 2016E 2017E 2018E 2019E 2020E Base case Brent flat @ $45/bbl . Positive FCF of €215 m in 1H16 post-dividend and before expansion capex
1IFRS post interest, taxes and dividends and excluding Sinopec reimbursements. Investor Presentation | September 2016 Note: Does not consider sale of regulated infrastructure. Galp fully funded 29
Sources and uses 2016-2020 (€bn) Net Debt to Ebitda3
Base case Brent flat @ $45/bbl
12 3.0x NG Inf. cash in Not
Liquidity1 committed
8 Capex 2.0x
CFFO Dividends2 4 post-tax 1.0x
Debt service
0 0.0x Sources Uses 2014 2015 2016E 2017E 2018E 2019E 2020E
1Liquidity as of June 2016, including cash of €0.9 bn, credit lines of €1.2 bn and loan to Sinopec of €0.6 bn. 2Assumes €0.41472 DPS, related to 2015 fiscal year, and €0.50 flat DPS from 2016 onwards. 3Ratio considers net debt plus Sinopec MLT Shareholder Loan to Petrogal Brasil minus loan to Sinopec. Does not Investor Presentation | September 2016 consider sale of regulated infrastructure. 30
Developing highly competitive upstream projects
Extracting value from downstream and gas businesses
Committed to a solid capital structure
Delivering long term value to stakeholders
Key takeaways
Appendix
Investor Presentation | September 2016 Galp in the capital markets 31
Galp shareholding structure Free float evolution
67% Free Float 60% o.w.: 7% 2% - 5% 60% 2% - 5%
33% 23% 2% - 5%
2% - 5%
Free float Free float Potential 1 Geographic dispersion of institutional investors : @2006 (IPO) @Sept. 2016 Free float Europe North America RoW @2017
56% 38% 6%
1According to best available information, as of end of June 2016. Note: Parpública’s 7% stake placed through exchangeable bonds. Investor Presentation | September 2016 Adding value to shareholders 32
Last 12-month share performance (%) Total shareholder return since Galp IPO1 (%)
39%
11% 7% 6% 4% 2% 1%
0% -3% -5% -10%
European European SXEP European European European European European European Majors Integrated Refiners E&P Majors Refiners Integrated E&P
Source: Bloomberg. 1 Total shareholder return from October 23, 2006 to end August 2016.
European E&P: Africa Oil, Cairn, DNO, ENQuest, Genel, Lundin, Ophir, Premier, Soco and Tullow; European Integrated: Eni, MOL, OMV, Repsol and Statoil; European Majors: BP, Shell and Total; European refiners: Investor Presentation | September 2016 Hellenic Petroleum, Lotos, MOH, Neste, Orlen, Saras and Turkish Petroleum. Commitment to shareholder remuneration 33
Galp DPS (€/share)
0.50 . Current policy of 20% p.a. dividend growth 0.41 until 2016 0.35 0.29 . Business plan assumes €0.50/sh flat from 2017 0.24 onwards
2012 2013 2014 2015 2016E
Investor Presentation | September 2016 A corporate governance model which promotes transparency 34
Governing bodies . The board of directors is composed of 19 General Shareholders members of which seven are executive Meeting members
Remuneration Supervisory Board Committee . Of the 12 non-executive directors, five are considered independent directors based on the independency criteria established by the Statutory Auditor Portuguese Securities Market Commission (CMVM)
Board of Directors . A robust supervisory framework including the Supervisory Board and the Statutory Auditor Company Secretary
Executive Committee
Investor Presentation | September 2016 A focused and experienced executive team 35
Over 25 years of experience in different industries, including Oil & Gas, energy and beverages. Member of Board of Directors of Galp since 2007
Chief Executive Officer
Carlos Gomes da Silva
Chief Financial COO Exploration COO Supply, COO Iberian Oil COO Gas & Power Chief Corporate Officer & Refining & Marketing & Officer / New Production Planning International Oil Energies
Filipe Silva Thore E.Kristiansen Carlos Silva Tiago Câmara Pestana Pedro Ricardo Carlos Costa Pina
Former CEO of Held positions as More than 20 years Former CEO of Dia Over 20 years of Former Secretary of Deutsche Bank in Senior Vice of professional Portugal, which experience in the State for Treasury Portugal President of Statoil experience in the operates 640 stores in Gas sector. and Finance and for South America areas of mainland Portugal Previously member of the BoD and was also procurement and responsible for of the Portuguese Chairman of Statoil engineering in the supply and trading Securities Market Brasil automotive, of natural gas Commission hospitality and Oil & Gas industries
Investor Presentation | September 2016 Galp corporate sustainability recognised internationally 36
Galp’s acknowledgements . Galp was included for the forth consecutive year in the Iberia 125 CDLI1 by the Carbon Disclosure Project in 2015
. Presence in the DJSI Europe and DJSI World for the third consecutive year
. Considered one of the 100 most sustainable companies in the world by Corporate Knights, occupying the 30th place in the general ranking and the 2nd best in the sector
1Climate Change Disclosure Leadership Index. Investor Presentation | September 2016 37
Developing highly competitive upstream projects
Extracting value from downstream and gas businesses
Committed to a solid capital structure
Delivering long term value to stakeholders
Key takeaways
Appendix
Investor Presentation | September 2016 Key takeaways 38
Competitive Unique growth Financial position profile discipline
Projects Production Capex <$30/bbl 25-30% 15% breakeven CAGR 2015-20 reduction1
Integrated Ebitda Net debt/ Resilient ≈15% ≈1.0x profile CAGR 2015-20 Ebitda@2020
During 2018 ROACE to shareholder FCF>0 ≈15% Commitment @$55/bbl @2020 remuneration
1From financial outlook presented in the CMD in Mar-15 to the one published in the CMD Mar-16. Investor Presentation | September 2016 39
Developing highly competitive upstream projects
Extracting value from downstream and gas businesses
Committed to a solid capital structure
Delivering long term value to stakeholders
Key takeaways
Appendix
Investor Presentation | September 2016 Key operating indicators 40
2Q16 2Q15 2Q16 YoY 1H15 1H16 YoY
Exploration & Production1
56.3 43.8 54.7 25% Average working interest production2 (kboepd) 42.7 55.5 30% 52.9 40.5 51.7 28% Oil production (kbopd) 39.4 52.3 33% 53.7 40.9 52.2 28% Average net entitlement production2 (kboepd) 39.8 53.0 33% 7.9 7.4 7.1 (3%) Angola 7.6 7.5 (1%) 45.8 33.5 45.0 34% Brazil 32.2 45.4 41% 26.2 53.0 38.3 (28%) Average realised sale price3 (USD/boe) 51.8 32.1 (38%) 8.9 7.6 9.8 29% Production costs (USD/boe) 9.6 9.3 (3%)
Refining & Marketing
4.1 7.3 4.6 (37%) Galp refining margin (USD/boe) 6.6 4.3 (35%) 2.0 1.4 1.7 25% Refining cash cost 4 (USD/boe) 1.6 1.8 17% 25.2 29.8 26.3 (12%) Raw materials processed (mmboe) 56.0 51.5 (8%) 4.2 4.7 4.6 (4%) Total refined product sales (mton) 9.1 8.7 (4%) 2.1 2.3 2.3 (2%) Sales to direct clients (mton) 4.6 4.4 (3%)
Gas & Power
1,860 1,869 1,593 (15%) NG supply total sales volumes (mm3 ) 4,064 3,454 (15%) 901 919 882 (4%) Sales to direct clients (mm3) 1,918 1,782 (7%) 960 951 712 (25%) Trading (mm3) 2,146 1,672 (22%) 1,192 1,120 1,229 10% Sales of electricity (GWh) 2,247 2,421 8%
1 Unit figures based on net entitlement production. 2 Includes natural gas exported, excludes natural gas used or reinjected. 3 Investor Presentation | September 2016 Galp average oil and gas realised sale price, including change in production effects. 4 Excluding impact of refining margin hedging operations. Maintaining solid capital structure 41
Profit & Loss (€m) Balance Sheet¹ (€m)
1Q16 2Q15 2Q16 QoQ YoY 1H16 YoY Dec.2015 Jun.2016 Jun-Dec
Turnover 2,829 4,247 3,267 +15% (23%) 6,095 (25%) Net fixed assets 7,892 7,304 (588)
Ebitda 293 447 337 +15% (25%) 631 (23%) Work in progress 2,077 2,347 +270 E&P 48 119 86 +79% (27%) 135 (37%) Working capital 510 365 (145) R&M 148 230 143 (3%) (38%) 291 (22%) Loan to Sinopec 723 576 (147) G&P 90 89 97 +9% +10% 187 (15%) Other assets (liabilities) (515) (335) +180 Ebit 137 304 185 +35% (39%) 323 (39%) Non-current assets/liabilities 842 +842 Associates 21 17 24 +14% +42% 45 +5% held for sale Financial results 3 (10) 15 n.m. n.m. 18 n.m. Capital employed 8,610 8,752 +142
1 Taxes (39) (107) (79) +100% (26%) (118) (34%) Net debt3 2,422 2,467 +45 Non-controlling interests (9) (15) (12) +41% (16%) (21) (19%) Equity 6,188 6,285 +97 Net Income 114 189 133 +17% (29%) 247 (20%) Net Debt + Equity 8,610 8,752 +142 Net Income (IFRS) (58) 110 66 n.m. (40%) 8 (89%)
1IFRS Figures. 2 Investor Presentation | September 2016 Does not include loan to Sinopec as cash. Balanced debt profile 42
Debt breakdown @30 June 2016 (€bn) Reimbursement profile (€m)
June 2016 YE2015 3.4 900 Public bonds
0.9 600 Private 1.9 placements 0.7
Multilaterals 300
Bank loans
0 Gross debt Cash Loan to Net debt 2016 2017 2018 2019 2020 2021 2022+ Sinopec c.60% . Maintaining diversified sources of funding and reducing . Average maturity of 2.7 years average cost
Investor Presentation | September 2016 Key indicators on Galp’s debt 43
2015 1H16
Gross debt €3.6 bn €3.4 bn
Cash and equivalents €1.1 bn €0.9 bn
Net Debt €2.4 bn €2.5 bn
Net Debt considering loan to Sinopec as cash €1.7 bn €1.9 bn
Net Debt to Ebitda Ratio1 1.2x 1.6x
Available credit lines €1.1 bn €1.2 bn
Average life of debt 3.1 2.7
Average interest rate 3.75% 3.50%
% Debt @ floating rate 58% 57%
1Ratio considers net debt plus Sinopec MLT Shareholder Loan to Petrogal Brasil minus loan to Sinopec. Investor Presentation | September 2016 Outlook and business plan sensitivities 44
Galp assumptions 2016E 2017E 2018E 2019E 2020E
Brent price ($/bbl) 35 45 55 65 70
Refining margin benchmark1 3.6 3.3 2.9 2.6 2.5
EUR:USD 1.12 1.12 1.12 1.12 1.12
Ebitda sensitivities Change 2016E 2020E
Brent price $5.0/bbl €90 m €210 m
Refining margin benchmark1 $1.0/bbl €90 m €95 m
EUR:USD 0.05 (€45 m) (€115 m)
1Benchmark refining margin = 42.5% cracking margin + 45.0% hydrocracking margin + 5.5% aromatics Investor Presentation | September 2016 margin + 7.0% base oils margin. Galp’s reserves and resources portfolio 45
Reserves and resources (mmboe)1
Reserves 2014 2015 % Chg. 1P 232 276 19% 2P 638 701 10% 3P 833 960 15%
Contingent resources 2014 2015 % Chg. 1C 332 307 (8%) 2C 1,672 1,343 (20%) 3C 3,496 3,025 (13%)
Exploration resources 2014 2015 % Chg. Unrisked 1,605 1,493 (7%) Risked 217 226 4%
1Exploration resources and contingent resources on a working interest basis. Reserves figures on a net Investor Presentation | September 2016 entitlement basis. All figures are based on DeGolyer and MacNaughton report as of 31.12.2015. Ongoing exploration activities 46
Potiguar basin (Brazil) Alentejo basin (Portugal) São Tomé and Príncipe
. Pitu discovery appraised during . First ever deepwater exploration . First operatorship in deepwaters 2015 well in Portugal . Planning for broadband seismic 3D . Broadband 3D seismic across five . Main targets are Lower Cretaceous acquisition blocks expected in 2016/2017 and Upper Jurassic sands
Investor Presentation | September 2016 Acronyms 47
# Number DJSI Dow Jones Sustainability Indices m Million ≈ Approximately DoC Declaration of Commerciality mmbpd Million barrels per day % Percentage DST Drill Stem Test mmboepd Million barrels of oil equivalent per day & And E Exploration mmbbl Million barrels € Euros E&A Exploration and Appraisal mmboe Million barrels of oil equivalent $ (or USD) Dollars E&P Exploration and Production MSc Master of Science x Times Ebitda Earnings before interest and taxes, depreciation and amortisation mton Million tonnes 1C; 2C; 3C Contingent resources EIA U.S. Energy Information Administration mtpa Million tonnes per annum 4D Four Dimensional EOR Enhanced Oil Recovery NE Northeast 1P Proved reserves EPCIC Engineering Procurement Construction Installation Commissioning NG Natural Gas 2P Proved and probable reserves FEED Front-End Engineering Design NOCs National Oil Companies 3P Proved, probable and possible reserves FCF Free Cash Flow NPV Net Present Value A Appraisal FID Final Investment Decision NLNG Nigeria Liquefied Natural Gas Organisation of the Petroleum Exporting ANP Agency of Petroleum, Natural Gas and Biofuels FLNG Floating Liquefied Natural Gas OPEC Countries bcm Billion cubic metres FPSO Floating Production Storage Offloading Opex Operational expenditure bbl Barrel FOB Free On Board p.p. Percentage points BBLT Benguela, Belize, Lobito and Tomboco FTE Full-time Equivalent PoD Plan of development BoD Board of Directors GDP Gross Domestic Product PPSA Pré-Sal Petróleo S.A. bn Billion cubic metres GeoER Reservoir geoengineering Q&A Questions and Answers c. Circa GIIP Gas Initially in Place R&T Research and Technology Capex Capital expenditure GIIGNL International group of liquefied natural gas importers R&M Refining and Marketing CAGR Compound Annual Growth Rate HSE Health, Safety and Environment RCA Replacement Cost Adjusted CEO Chief Executive Officer ICE Intercontinental Exchange RDA Reservoir Data Acquisition Cid. Cidade IEA International Energy Agency ROACE Return on Average Capital Employed CIF Cost, Insurance and Freights IHS CERA Information Handling Services Cambridge Energy Research Associates RRR Reserve Replacement Ratio CFO Chief Financial Officer IMF International Monetary Fund ToR Transfer of Rights CNE Central North East IOR Improved Oil Recovery US United States of America
CO2 Carbon dioxide ISPG Instituto do Petróleo e Gás vs. Versus CDP Carbon Disclosure Project kboepd Thousand barrels of oil equivalent per day WAG Water alternating gas COO Chief Operating Officer kbopd Thousand barrels of oil per day YoY Year over Year D&G Downstream and Gas LatAm Latin America YE Year End DD&A Depreciation, Depletion and Amortisation LNG Liquefied Natural Gas Yr Year
Investor Presentation | September 2016