Abu Dhabi National Energy Company PJSC (TAQA) FY 2014 ... · FY Results Presentation, Abu Dhabi,...

FY Results Presentation, Abu Dhabi, April 2015. www.taqaglobal.com

Abu Dhabi, 1 April 2015

Abu Dhabi National Energy Company PJSC (TAQA)

FY 2014 results presentation


Disclaimer

1

These materials have been prepared by the Abu Dhabi National Energy Company - TAQA (“Company”). These materials are for information purposes only and do not constitute a prospectus, offering memorandum or offering circular or an offer to sell any securities and are not intended to provide the basis for any credit or any third party evaluation of any securities or any offering of them and should not be considered as a recommendation that any investor should subscribe for or purchase any securities. The information contained herein is preliminary as of the date hereof, supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered. Any investor who subsequently acquires any securities must rely solely on any final offering memorandum published in connection with such securities, on the basis of which alone purchases of or subscription for any securities may be made. In addition, investors should pay particular attention to any sections of any such final offering memorandum describing any risk factors. The information contained herein is subject to change without notice and past performance is not indicative of future results. The Company is under no obligation to update or keep current the information contained herein. No person shall have any right of action (except in case of fraud) against the Company or any other person in relation to the accuracy or completeness of the information contained herein. The merits or suitability of any securities to any investor's particular situation should be independently determined by such investor. Any such determination should involve inter alia, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of any securities. No person is authorized to give any information or to make any representation not contained in and not consistent with these materials and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of the Company. These materials are confidential and are being submitted to selected recipients only. They may not be taken away, reproduced (in whole or in part), distributed or transmitted to any other person without the prior written consent of the Company.These materials are not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. In particular, these materials are not intended for distribution, except (i) to accredited investors as defined under applicable Canadian securities laws, (ii) within the United States to persons that are qualified institutional buyers under Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities Act") and (iii) outside the United States to persons that are not U.S. persons (as defined in Regulation S under the Securities Act) in offshore transactions in compliance with Regulation S. These materials contain, or may be deemed to contain, "forward-looking statements" (as defined under applicable Canadian securities laws and in the U.S. Private Securities Litigation Reform Act of 1995). By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The future results of the Company may vary from the results expressed in, or implied by, the following forward looking statements, possibly to a material degree. Any investment in securities is subject to various risks, such risks should be carefully considered by prospective investors before they make any investment decisions.


Summary

2 2 FY Results Presentation, Abu Dhabi, April 2015. www.taqaglobal.com


Summary

Strong operational performance

• Underlying revenues grew 8.6% to AED 23bn

• Record EBITDA of AED14.5bn, 7.7% up on 2013

• Net loss of AED 3.0 bn due to non-cash impairment

• Cashflow after investing activities very strong at AED

6.5bn, up by 17.5%

• Net debt reduced by AED2.7bn

3

• Record oil and gas production of 158.9 mboe/day

• Record power production of 82,723 MWh and strong

technical availability of 91.2%

• Completion of two major projects and remaining major

project on track

Financial performance hit by non-cash impairment

Restructuring and transformation

• Organisational simplification and move to geographical model leading to:

• Enhanced safety and reliability

• 23% reduction of capex: 2014 vs 2013, and planned reduction of 39% in 2015 vs 2014

• Target annual reduction in total cash costs of AED 1.5 bn by 2016

FY Results Presentation, Abu Dhabi, April 2015. www.taqaglobal.com 4

Non-cash impairment

The material drop in oil prices during the second half of 2014 had significant implications for

the valuation of oil and gas assets, leading to a non-cash, pre-tax impairment of AED 3.8bn

and AED 3.2bn post-tax

– North America (AED 1,787m)

– UK (AED 1,360m)

– Netherlands (AED 120m)

The impairment charge is non-cash and has no impact on TAQA’s ability to meet its

obligations, including the service of its ongoing debt obligations

However, as a consequence of the resulting loss there will be no dividend in 2014

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Operational performance review

5 5 FY Results Presentation, Abu Dhabi, April 2015 www.taqaglobal.com


Power & Water – Increased capacity, record production

Power and water production

MIG

D

GW

h

Gross power capacity

MW

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2009 2010 2011 2012 2013 2014

230,000

245,000

260,000

275,000

0

20,000

40,000

60,000

80,000

100,000

FY 2013 FY 2014

International Power Domestic Power Water Desalination

• Record production of 82,722 gigawatt hours (GWh) of electricity

• Domestic assets generated a total of 58,941 GWh and desalinated a total of 260,100 million imperial gallons (MIG) of water.

• International assets generated 23,723 GWh, boosted by contribution from expanded TAQA Morocco

• The expansion of our reverse osmosis water desalination facilities at Fujairah 1 is more than 85% complete.

6

(*per 200,000 hours )


60

70

80

90

100

110

Q112

Q212

Q312

Q412

Q113

Q213

Q313

Q413

Q114

Q214

Q314

Q414

Domestic International

Power & Water – Robust technical performance

7

Technical availability of power plants (%)

EFOR (Forced outage rate)

%

0

2

4

6

8

Domestic International Average

FY 13 FY 14

• Strong technical availability of 91.2% across fleet as a whole:

• UAE portfolio recorded 91.8%, largely in line with budget expectations

• TAQA Morocco recorded excellent technical availability of 92.6% for units 1-4 and 89.9% for newly commissioned units 5&6

• Technical availability at Takoradi was affected by a persistent outage at one of its units during the second half of the year


Oil & Gas – Record production

• North America

‒ Oil and gas production up by 3%

‒ horizontal well, multistage, fracking technology

‒ Focused capex on core acreage has increased production

• United Kingdom

‒ 30% increase in production, due to expanded portfolio,

successful well intervention work, and top quartile operating

efficiency

• Netherlands

‒ Slightly lower production levels, due to natural decline,

offset by first oil from the new offshore fields Amstel and

Maas. 2015 will also be bolstered by new wells Rijn A13-Z

and P15-19.

8

(average

production

mboe/day)

FY 2014 FY 2013

North America 89.5 87.1

UK 61.4 47.0

Netherlands 8.0 8.2

Total 158.9 142.2


• TAQA Morocco 5&6 – Expansion completed, increasing capacity by 700MW to 2,056MW – now the largest coal-fired power plant in MENA region, generating over 50% of Morocco’s total electricity requirements

• Gas Storage Bergermeer – Largest open access gas storage facility in Westren Europe Construction completed and partial operations commenced. All 46 terawatt-hours of first season storage capacity sold. Full operational launch 1 April 2015

Major project delivery progressing well

• Takoradi – Expansion progressing, commissioning expected mid-2015

• Atrush – Development of the block is progressing despite challenging

environment

• Sorang – Completing construction, commissioning expected 2Q 2015

2014 c

om

ple

ted

2015 p

roje

cts


Financial performance



Financial performance

11

Total sales revenue EBITDA

Net Income (after minority interest) Total assets AED Million AED Million

AED Million AED Million

25,757

27,325

0 5,000 10,000 15,000 20,000 25,000 30,000

FY 13

FY 14

13,445

14,476

0 5,000 10,000 15,000

FY 13

FY 14

121,925

115,038

0 30,000 60,000 90,000 120,000

FY 13

FY 14

-2,519

-3,010

180*

257*

-3,500 -2,500 -1,500 -500 500

FY 13

FY 14

*Pre-impairment


0.0 20.0 40.0 60.0 80.0 100.0 120.0

FY 14

FY 13

FY 14

FY 13

FY 14

FY 13

No

rth

Am

eri

ca

UK

NL

Operating costs Royalties Operating netback

Netbacks, operating performance and

market environment

12

• Netbacks reflect weaker oil pricing in the

second half of the year

– North American netbacks increased,

7% due to stronger gas prices

– UK down 9%, due to lower oil prices

• Unit operating costs lowered 6% in North

America and 16% in the UK

Netbacks by geography (US$ /boe)

Net realised prices by geography (US$ /boe)

- 20.00 40.00 60.00 80.00 100.00 120.00

North America

UK

NL

FY 14 FY 13


Operational focus reducing capex

• Focus on core capital investment projects and key priorities has led to a 23% reduction in capex spend in 2014 vs 2013

• 2015 capex is expected to be US$1,073m, 39% less than 2014 reflecting the lower commodity price environment.

13

US$ millions FY 2014*

Actuals

2013

Actuals*

Oil & Gas 1,417 1,760

- North America 433

- UK 644

- Netherlands 263

- Iraq 101

Power & Water 337 530

Total 1,754 2,290

* Capex excludes the PP&E additions relating to revisions to ARO

* Excluding acquisitions


Key ratios

14

Description FY 2014 FY 2013

Return on Equity (65%) (46%)

Net Debt/ Net Capital 84% 82%

EBITDA/Interest 3.5x 2.8x

Net Debt/EBITDA 5.0x 5.6x


Concluding remarks



Appendix



12 months ended December 31

2014 2013

UAE domestic plants

Power generation (GWh) 58,941 58,627

Water desalination (MIG) 260,100 253,419

Technical availability (%) 91.8 92.20

International plants

Power generation (GWh) 23,723 16,236

Technical availability (%) 88.2 89.30

Operational Data – Power & Water KPIs


Operational Data – Oil & Gas Production

18

Average Production


2014 2013

North America

Crude oil (mbbls/day) 17.28 16.94

Natural gas liquids (mbbls/day) 11.85 12.07

Natural gas (mmcf/day) 362.13 348.26

Average (mboe/day) 89.48 87.05

United Kingdom


Natural gas liquids (mbbls/day) 0.97 0.78



The Netherlands




Total Production

Crude Oil (mbbls/day) 72.92 59.37

Natural Gas Liquids (mbbls/day) 12.82 12.85

Natural Gas (mmcf/day) 438.92 419.66



Operational Data – Oil & Gas Pricing

19

Average Realised Prices


2014 2013

TAQA NORTH

Crude oil (US$/bbl) 77.09 79.05

Natural gas liquids (US$/bbl) 54.20 58.88

Natural gas (US$/mcf) 4.32 3.36

Average (US$/boe) 39.56 36.97

TAQA Bratani

Crude oil (US$/bbl) 100.13 110.06

Natural gas liquids (US$/bbl) 70.21 63.38



TAQA Energy

Crude oil (US$/bbl) 95.67 97.10




Operating Netbacks 12 months ended December 31

2014 2013

North America

Gross price 39.56 36.97

Royalties 6.27 5.06

Net sales price 33.29 31.91

Operating costs 10.76 11.46

Operating netback 22.53 20.45

United Kingdom


Net sales 94.34 103.82



The Netherlands


Royalties 1.64 4.19

Net sales price 61.28 68.18



Operational Data – Oil & Gas Netbacks

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