Good afternoon, ladies and gentlemen, and welcome to ANI 2015 First Quarter Results Conference Call, hosted by Maximo Mondazzi, Chief Financial and Risk Management Officer. For the duration of the call, you will be in listen only mode. However, at the end of the call, you have the opportunity to ask questions. I'm now handing you over to Joost to begin today's conference. Thank you.
Thank you very much. Good afternoon and welcome to our Q1 results presentation. In this quarter, we continued to perform in line with our strategy progressing in all our businesses and delivering positive results in each of them. In particular, in E and P, we achieved as planned 5 main start ups. This together with the contribution of ramp ups and increased Libyan production contributed to a volume growth of more than 7% or 3.7% net of PSA and portfolio effects.
Development activities are progressing well. In particular, Perla is on track to start up in June and Goliath at the end of July following the arrival of the FPSO in Norway a few weeks ago. Exploration successes continue with near field discoveries in Egypt, Libya and the upgrade of our Merakes gas discovery in Indonesia. In mid downstream, all segments were profitable achieving in total more than €400,000,000 of EBIT, thanks in Gas and Power to the improved competitiveness of our gas contracts and more favorable weather condition in R and M and Chemicals to better margins and the result of our continuing turnaround. As a consequence, the company generated an operating cash flow of €2,300,000,000 This combined with CapEx in line with the guidance and the positive exchange rate effect allow us to keep our leverage unchanged at 22%, notwithstanding the steep fall in oil and gas prices.
Q1 adjusted operating profit amounted to €1,570,000,000 around €1,900,000,000 lower than last year. This drop was driven by the negative scenario, which accounted for €2,500,000,000 partially compensated by our stronger industrial performance that improved by €600,000,000 All our businesses recorded positive adjusted operating profits, reflecting the implementation of our turnaround program. The adjusted net profit amounted to €648,000,000 benefiting from 185,000,000 gain from the fair value interest in Galp as NAM that in 4th quarter to Q1 2014 accounted for EUR 65,000,000 Turning to E and P. Hydrocarbon production was 1,697,000 boe per day, 7.2% higher compared to the Q1 of 2014. Excluding both EPS A and portfolio effects, production increased by 3.7%, thanks to the new field start up to mention the most important Algonquin South and Lutjos in U.
S, Lena Marine in Congo, West Franklin in U. K. And El Fisk Phase 2 in Norway. And the production ramp ups mainly in Angola, Congo, Egypt and United States. Production levels also benefited from better performance in Libya, which included the volumes of the deal on the Intisar store gas testing to the local market.
Operating profit was affected by the decline in oil and gas prices, which accounted for €3,200,000,000 versus the Q1 2014, partially counterbalanced by higher production volumes, lower exploration and operating costs as well as a favorable exchange rate. Gas and Power. Gas and Power adjusted operating profit amounted to €294,000,000 This result has been achieved leveraging on gas contract renegotiations including 2 achieved this quarter and the positive retail performance driven by higher sales in certain European countries mainly in France and more favorable weather condition compared to last year. This result represented 21 percent increase versus the Q1's 2014 that as you might remember benefited from the strong retroactive contribution of the contract with Satori. In terms of adjusted operating profit split, 1 third came from midstream, which in this quarter was a breakeven also without the retroactive benefit of the tour negotiations recently finalized.
The remaining 2 thirds came from the retail business that generated a double a profit double the level of the Q1 of 2014. Turning to R&M and Chemicals, now combined into 1 business segment, which mirrors the new organization in place since mid-twenty 14. This business showed a marked improvement year on year with an adjusted operating profit of €121,000,000 leveraging on both scenario and industrial improvements. In particular, the refining results benefited from a strong margin increase versus Q1's 14 along with continuing operating announcements. Capacity utilization rate was 79%, up 11 percentage points versus last year as a consequence of our reduced capacity and the positive scenario.
We confirm that the breakeven margin is now in the range of $5 per barrel and we are on track to lower it to $3 per barrel by 2018. Chemicals operating performance of $29,000,000 improved by $111,000,000 versus last year, reflecting higher margins due to temporary market shortage of certain commodities as well as inefficiency gains. Finally, the debt evolution. Leverage remained flat at 22%, despite the drop in oil and gas prices. The €2,300,000,000 operating cash flow together with €500,000,000 cash in from disposals funded almost the totality of the €3,000,000,000 capital expenditure incurred in the quarter.
The net debt increased by around €1,500,000,000 from December 14 also as a result of the negative impact of exchange rate differences of about $500,000,000 as well as other cash outflows including the payment of investments accrued in the previous quarter. We confirm our leverage guidance for year end within our 30% ceiling. And now together with some colleagues, I'm ready to answer any question you may have.
Ladies and gentlemen, the Q and A session is now open. Thank you. First question comes from Mr. Oswald Clint from Bernstein. Mr.
Oswald Clint, please.
Yes. Thank you very much. Good afternoon. Massimo, thank you. Question on the disposals.
They're little and they're quite light in the Q1 so far. Obviously, you have a target for the 4 year plan and this year, I guess. Could you talk about where you are in terms of asset disposals and when we might expect some of those for 2015? And then secondly, a question on Gas and Power. Just curious if you're seeing or if you expect to see any greater demand for your pipeline gas as the lower oil price filters through those kind of long term oil linked contracts versus kind of spot prices or some of the LNG imports?
That's my two questions. Thank you.
Okay. Thank you very much. So as far as disposals, first of all, I would like to highlight that we already achieved around €500,000,000 of disposal mainly in Nigeria. And that definitely as I already outlined during previous discussion and previous conversation, we have to cash in from now to the end of the year the value of the GAAP shares that would be in the range of looking at the current capitalization of the company €850,000,000 So more or less what we could say today that we are more or less half of the way to the final result that we fixed by 2015 that you may remember would be in the range of €2,600,000,000 As far as the remaining part of the plan, might recall that there are some number of transaction ongoing. Some of them are, I would say, quite well advanced.
So what I could have today that we remain confident that the final targets we announced 1 month ago is still achievable. And as far as the pipeline maybe I leave the ground to Marco for the answer.
Thank you, Oswald. So we do see some recovery in demand. In Italy, the Q1 demand was around €24,000,000,000 compared with €21,000,000,000 cubic meters the previous Q1 of 2014. A lot of that has to do with weather, but we are seeing on the power side also some growth. Bringing that to the full year, we expect demand to recover in Italy to around 67,000,000,000, 68,000,000,000 cubic meters, up from what was 61,500,000,000, 62,000,000,000 cubic meters in 2014.
So at the European level, that should bring demand for 2015 around 450,000,000,000 cubic meters again with some recovery. So I'd say part of that is weather. Part of that is on the power sector gas and some hours being competitive especially in the U. K. Against coal.
On the LNG front, weak demand in Asia. We expect some cargoes to come over to Europe, but not to change the overall demand picture significantly.
That's great. Thank you very much both.
Next question comes from Mr. Kipan Jodlingan from Nomura. Mr. Jodlingan, please.
Yes. Afternoon, gentlemen. Three questions, please. Firstly, I was wondering if you could break down the increase or the year on year change, the €600,000,000 you talk about between costs, of improved uptime and renegotiations on the gas contract? Secondly, you talked about the cash flow being around 2 point €3,000,000,000 for the quarter.
I was just wondering, do you feel in this type of oil price environment, you'll still be able to cover certainly your CapEx commitments for this year on an underlying basis? And my third question was just on Mozambique and the FID of FLNG. Could you give us an update if that's still proposed or planned for the middle of 2015? Thank you.
So thank you very much. About the €600,000,000 of industrial improvement we accounted for in the Q1. You asked for a breakdown. So what I could say around 1 third is coming from GMP. It is made mainly by a reduction in OpEx and a reduction in exploration cost.
So as far as OpEx, I'm pleased say that we confirmed in the Q1 and we keep on confirming along with the full year our target to reduce the OpEx. Today, we are in the range of $7,400,000 If you remember, we started at the end of 2014 with an OpEx per barrel in the range of $8 So we are confirming the target that we gave during the strategy presentation. And as far as exploration, we are in line with what we disclosed as a target in term of expenditure. You might remember that this year we are mainly focused on near field exploration. That's the reason why we are, I would say, spending a little bit less.
But what has been achieved up to now in term of new resources discovered is anyway a very significant number because we are talking about 180 around 80 1,000,000 of barrel of oil equivalent. And maybe Luca that is here with me could give you some more detail. And what I could say that notwithstanding the reduction in capital expenditure expected by this year, we really think that what we are drilling or we intend to drill all along this year give us a very, very good expectation and we are very well confident that the target of 500,000,000 BOE on new resources all along this year will be definitely achieved if not overtake. The remaining part, the 2 thirds, certainly $100,000,000 are coming from the retail that as I said performed a double result versus last year also thanks to the, I would say, more favorable weather conditions. And around €150,000,000 are coming from the refinery because and not with say on top of the say the margin that you know has been much higher than the margin we recorded in the Q1 of 2014.
We are now collecting the say the gain after the turnaround exercise we put in place starting from 2014. And then the other minor, I would say, better results including the chemical one that recorded more than €100,000,000 out of which just a few coming from a better scenario and the remaining part related to the higher demand. And again, as a result of the efficiency program we put in place starting from 2014. So that's the broad view that you noted excludes the renegotiation effect of the long term gas contract that we are taking apart, but anyway giving a significant advantage this quarter versus the 1st quarters of 2014 as I remembered benefited from a strong contribution linked to the Statoil contract renegotiation. As far as the cash flow and commenting the 2.3 percent.
The broad comment is the following one. The Q1 of the year definitely is not the best one in term of cash generation because of we say some seasonality mainly in the retail gas business because this is the peak quarter for retail. But definitely just the fact that the Cashing is at least 2 months after the delivery of gas. And definitely what has been built is not being cashed yet. And this is causing something in the range of €1,000,000,000 of increase in working capital.
And then definitely what we are doing is suffering a little bit about increase that you that has been announced by Saipem yesterday. Again, it's something that more or less is seasonal. Betting on what they declare, the expectation is a reduction in the net financial position of Stifel. So as the recovery of the $1,000,000,000 in retail, we expect to recover also the capital the working capital increase announced by Saipem. And then this EUR 2,300,000 has been some way, I would say, limited by the increase in the stocks in the refinery.
The refinery definitely is benefiting of a very high margin, but at the same time due to the fact that the plants are running much faster than in the previous periods. It means that in order to feed in the plant, we increased the amount of stock that has been both just to supply the facilities. And then again, it's been something that some way created a sort of limitation. But having said that and performing a very, I would say, broad and general exercise and thinking about what we said during the strategy presentation so that the target for the 1st 2 years, so 2015 2016 would be to match the CapEx. But by the way, this is the size has been performed with a brand average price of $63 So the average between $55 as far as $15 $70 as far as $16 So this 2.3 has been achieved at 54.
Dollars We have a sensitivity for every dollar of around $150 So if you broadly speaking multiply by 4 the 2.3 add on, I would say $1,500,000,000 in term of differentials in Brent price. And you add on some contribution for working capital that is still expecting the remaining 9 months of this year, you will see that the $12,000,000,000 of CapEx that remain our guide as far as 2015 will be matched and will be I would say practically match 1 year in advance because on top of the Brent recovery definitely the expectation we made was based also on a recovery on the industrial side, I mean, an additional production from E and P and the end of the turnaround plan in the non upstream businesses. So just to conclude, I would say that this result of 2.3 represents something more than what we expected when we launched the 4 year plan. And then as far as the Mozambique maybe a little ground to Roberto that is here with me. Thank you, Massimo.
About Mozambique and specifically Coral, all activities are progressing as planned. As you probably remember, we submitted at the end of 2014 the final development plan for Coral. We continue the engagement with the authorities. It's a very fruitful and proactive engagement. So we do expect the approval of the final development plan by Q3 2015.
At the same time, the major tender activities are ongoing, In particular, the one for the floating LNG is expected to be completed in terms of receiving technically commercial offers in the next couple of months. Let's say that by the end of June, we will have the full picture of the project. At that point, we will finalize everything and we'll be ready for the final investment decision. Also an important part is the sale of gas and maybe Marco can say some words about that.
We're discussing on the commercial terms with a number of parties. Discussions are progressing well and we're perfectly in line with the project timetable to confirm FID later in the year.
Thank you, gentlemen.
Next question comes from Ms. Lydia Rainforth from Barclays. Ms. Lydia Rainforth, please.
Thanks. And I have two questions, if I could. Good afternoon, everyone. First one, just going back to the €600,000,000 recovered margin. Is that where you expect it to be at this stage in the year?
Or are you actually seeing the better progress than you might have anticipated? And then the second one was really more on the accounting side, the merging of the chemicals and the refining and marketing businesses together within the results. I think last year it was May last year when Claudio announced the new structure. Should we actually think about the change in terms of the results, I mean, purely being an accounting one? Or are the 2 divisions actually working together differently on an operational basis to what they were a year ago?
Thanks.
Okay. So as far as the again the €600,000,000 but more or less we are where we may need to be just I would say 1.5 months after our strategic presentation Libya. So what we saw through the Q1 numbers that exactly all the action we put in place in all different businesses in order to get the final target we declare. So the breakeven in Refining and Marketing in 2015, the structural breakeven in Gas and Power in 2016 And in the same year, structural breakeven in petrochemicals are going ahead in line or I would say a bit ahead of schedule on this respect. So definitely the scenario some way is helping us to reinforce this result.
That's the reason why we experienced positive results this quarter in all business, including refinery and including chemical. Definitely, I would say, the new organization is not something just related to the accounting. Chemical and refinery are working, I would say, closer together, thanks to the new organization starting from, I would say, the supply that now is even more integrated on this respect. We are after 8 months still I would say upgrading some process, but we I would say we are happy and we definitely confirm the goodness of the decision we took.
Okay. Thank you very much. Next question comes from Mr. Mark Bloomfield from Deutsche Bank. Mr.
Bloomfield, please.
Good afternoon. Thanks for the opportunity. First of all, on production, just wondered if you could remind us of the volume produced from Intesa gas storage this quarter And how long you expect that volume to be sustained for? Is that going to be continued into 2016? And then secondly, turning to Gas and Power.
Just wondered if you could give us a sense of the working capital benefit you may have enjoyed this quarter from any release of gas take to pay prepayments? Thanks.
Okay. So I'll leave the ground to Antonio to answer the production question.
Okay. So the Intisar production is going to contribute for the next 4 years and within all the volume equity allocated to Eni on the last, let's say, 25 years from the Alpha-one hundred field, the Wotifel field in Libya and the storage in Tisar. The contribution is going to be between 60,000 to 65,000 barrels per day.
On Gas and Power. Hi, Mark. It's Marco. I would say on the retail front, the Q1 usually absorbs working capital as we sell more gas than other quarters. But we also draw gas from storage, so the retail effect is quite neutral.
We have about €150,000,000 of take or pay recovery in the quarter, which is an improvement obviously of working capital.
Thanks.
Next question comes from Mr. Amish Clegg from Bank of America Merrill Lynch. Mr. Clegg, please.
Thank you. Good afternoon, gents. There are a few questions I had. Just first of all in refining, you mentioned that there was some sort of competitive pressure and retail demand was slightly lower as well. Can you tell us if there's any hedging at all in your refining business because it was somewhat lower than Q4?
2nd question is, I was wondering if you could maybe update us on Libya and how you're managing to deliver such brilliant volumes out of the country that so many people are struggling in? And my third question was, could you maybe tell us a little bit about your approach to execution and what gives you the confidence? Is it to do with your engineering capacity that you've recently acquired in the last 12 months? And how you're taking a greater control over individual projects because 3.5% growth target is ambitious in your 4 year plan. And I wondered if you could just help us understand what gives you the conviction in that target?
Okay. So I'll give you the answer about the refinery. So you noted the difference between the contribution in the 4th quarter of refining and marketing versus the Q1 this year. So definitely part of the difference is related to the marketing part of the business because the Q1 naturally is the lowest all along the year. So part of the difference is related to this.
And as far as the refinery, yes, the result has been, I would say, limited by a negative effect of farm hedging because at the very beginning this year when we saw significant higher margin than expected, but drastically declining towards the year end, we decided to hedge part of the refinery capacity. And so this result is, I would say, is discounting something in the I'm just checking the number something in the range of $40,000,000 of penalization because of this.
Okay.
And then Libya?
Okay. Libya is as you know we are producing in the range of 300,000 barrels per day. And our operating company is Melita Oil and Gas. It's accounting 5,000 Libyan employee. And most of our production as of today is coming from Sabrata, Buri Oil, Elfield and WAFA.
And gas production is the majority in condensate, because we are delivering a quite large amount on local market. We are moving between 10,000,000 to 13,000,000 standard cubic meter per day on power plant. And those guys on the oil company, which is protecting their requirements for the local power production. At the same time, we are continue our exporting from the milliter.
But about our approach on projects, as you know, we started some time ago about having more grip on all the different phases of a project starting from engineering with our engineering companies and so responsible for basic design and front end engineering design. This allowed us also to develop some more standardization and modularization of systems more than equipment. Another important tool is represented by the framework agreement, contractual framework agreement with a major supplier. So overall, this give us the confidence that we are able to control time and cost of the significant project activities as you mentioned earlier in our 4 year plan. But I have to tell you that for instance this year things are going really very well because out of the 170,000 barrels of oil per day, We are expecting from setup a new ramp up.
Already in the Q1, we secured 116,000 barrels a day. And the remaining part will come with Goliad and Perlap for which as Massimo said, we are definitely on track. You should remember also that 50% of the 650,000 barrels of oil per day we are expecting in 2018 are relevant to start up a ramp up of 2014, 2015 project. And with the new FID, with 5 FID, we are expecting this year, we will be able to secure 100% this objective. Thank you very much.
Next question comes from Mr. Martin Roth from Morgan Stanley. Mr. Roth, please.
Yes. Hi, good afternoon. Two things from my side. First of all, I wanted to ask quite a few companies have reported quite strong oil trading results in their downstream businesses. I was wondering if Eni also enjoyed a similarly strong oil trading result.
And secondly, I wanted to ask about Egypt, Just a couple of weeks ago, you announced this sizable investment program and you reiterated that in the statement this morning. It's sort of quite a sizable amount of spending at a rather interesting point in the cycle. And I wanted to ask what you're seeing in the Egyptian investments that is making you like this so much at this point in time? Thank you.
So on the oil trading at Parco High, I would say that we do less of the contango capture and of the pure speculative or proprietary activity on the oil side. We have some interesting profits coming from our gas trading, which is integrated together with our oil trading using our flexibilities that's asset backed trading. So you would see less of that compared to others who enjoy more third party and proprietary trading activity.
Okay. Antonio give you an answer about Egypt. On Egypt after we have signed the heads of agreement in Syama, the negotiation took place immediately with the oil ministry. And we are planning to close within the Q1 all the items within the heads of agreement.
So you remember Martin, the main objective, I would say were 3, the revision of some close of the main contract there, The revision of the gas price that definitely is an issue because the gas price that is very much subsidized in Egypt was limiting significantly the development of new gas resources. And at the end of the story, we see this country as I would say a very special case importing some LNG. And 3rd, definitely part of the agreement is the I would say the timeline to recover our outstanding. So all of these are very positive because give us the opportunity to exploit resources of reserves that we know very well because they are located in reservoir that from which we are producing things I would say in Velaim, 1956. All these gas discoveries we are talking about have been discovered by us.
And definitely it will in a, I would say, protected environment thinking about the outstanding recovery will allow us to exploit a significant amount of new resources. The significant part of them have already included in the CapEx plan that has been announced during the strategy, just a few of them will be added. But at the same time, we will have an addition in term of production, in term of resources.
Okay. Thank you.
Next question comes from Mr. Biraj Borkhataria from Royal Bank of Canada. Mr. Borkhataria, please.
Hi, thanks for taking my questions. 2, if I may. Firstly, for Marco on Gas and Power. It remains one of the more volatile divisions for you on a quarterly basis. And I appreciate that you only gave your updated plan a few months ago, but it does seem to be running ahead of that plan.
So I was wondering if you could provide some color on whether you see some upside relative to your expectations at the end of 2014. And then just a quick update on cash again, if you don't mind. What are the latest steps there? Are you still confident in the late 2016 start up? Thanks.
So Biraj, there is a slight improvement. So we were giving a guidance of breakeven assuming we close all pending arbitrations, the main one being the one with Gastera. I think we're ready to upgrade that to seeing marginally positive results in case we close that. So not to extrapolate the Q1 improvement and multiply that. I think we're slightly more optimistic, but the volatility is still there and Q1 is still one of our stronger quarters.
Antonio? So on cash again, we have already received the 1st batch of material aside and probably next month, we will start welding. So as of today, we are still believing on the schedule to start up on the Q2 of 2016.
Thanks very much.
Next question comes from Mr. Thomas Adolff from Credit Suisse. Mr. Adolff, please.
Hi, good afternoon. Three questions, please. The first one is on the slide 7. The €700,000,000 negative impact from others, you obviously said it's payment related for investments accrued in the past. I wondered where your balances stand today.
I'm assuming there's no fundings going forward. And also whether you can give a bit more color on the €5,000,000 FX difference what exactly that is? 2nd question on the refining restructuring plan that you announced over a year ago you've converted to Jena. It's gone a little bit quiet on the other plants. I wonder whether that's still moving ahead as planned or whether you're just taking your time given the margin environment is somewhat more favorable?
The third point is on Mozambique. I think you've been saying for some time that you've got encouraging discussions on securing offtakes. I guess industry expectations pretty much is we're in a wait and see mode and no one really expects to be able to secure any firm SPEs given SBAs given the tug of war you have on pricing mechanisms. So I wonder whether you can give a bit more color on what discussions you're having. And that aside on Mozambique, I also wanted to know whether your intention was still to farm out another stake given that's also been going on for some time?
Thank you.
Okay, Thomas. Thank you very much. So as far as the 0.7% are there. So in slide number 7, I said that the majority of this refers to payment of investment accrued in previous quarter. They amount to something in the range of 0.4, 0.5 out of the 0.7 overall.
And we think that this amount will be overall recovered in term of overall cash flow all along this year. As far as the refinery, definitely we are pleased to see this very favorable environment, but we believe that it will last sometimes, but it will be back to the structural expectation at the end of this year, beginning of 2016. So we are still, I would say, stick on the plan we announced. So mainly to reduce over an additional 20% our capacity. And on this respect, we are, I would say, in schedule.
That's the time that will be achieved from now on to the next 2 years. And then
On Mozambique, it's Marco. Let me try to add some color. I would say first point is compared to our internal timetable and the project timetable everything is on track. So we haven't had any missing of commitments or timings also in the commercial discussions. There is a lot of interest because of the nature of the project, the size of the project, the geography of the project and as Roberto said, the rather simple nature of the project.
So a number of buyers see limited execution risk when it comes to the future stages of the project compared to other projects. On the pricing front, certainly there has been a shift. A lot of the people who had moved in Asia to aggressive Henry Hub pricing and are now reconsidering the oil pricing have halted some Henry Hub based discussions. And this is only positive for a project like ours, which is oil linked. Regarding the longer term oil outlooks, I think the curves haven't moved that much.
And so we're talking about the same levels with the buyers. So I hope that's helpful.
The I think on the farm out and also the FX difference. Sorry, I had quite a few questions.
Fermat, I would say, I've just commented about disposals and nothing to add about that. So because of definitely the say the confidentiality side of this. So and as far as the foreign exchange this is related to the I would say the pure exchange rate of conversion from dollar to euro nothing special.
Okay. Thank you very much.
Next question comes from Mr. John Rigby from UBS. Mr. Rigby, please.
Hi. Just a couple of points just wanted to raise. The first is on the resegmentation. Two things. On the earnings transfer, which is looks principally to be from Refining and Marketing Chemicals to Gas and Power.
Is that related to the oil trading activities? I mean you reference it, but I don't think it's not clear to me anyway where the actual movement is. And is that a representation really of the level of earnings or EBIT generated by those activities? And then secondly, on that point, can you just confirm that the EBIT targets, cash flow targets, etcetera, by segment remain the same or not affected by the resegmentation? I'm guessing not, but just to confirm.
And then going back to the disposal program. I know in the discussions we had in March, there's a big chunk of the disposal program is exploration, which on the face of it is quite an attractive thing to be monetizing because there's no earnings and cash flow that sit with it. So it's clearly hugely accretive transaction if you can do it. So taking on board the fact you didn't want to talk about Mozambique, but can you just maybe give some color on progress towards that? And should we expect those transactions to be towards the latter end of your plan period to coincide with the rise in the oil price?
Or do you stick to your view and from your So
about
So about the re segmentation, I would say, the main rationale is the following one. So nothing to do, I would say, with the trading that definitely will help and that is something that has been done. But the real rationale refer to the industrial location. So the majority of the planning we have in refinery and chemical are located in Italy And the majority of them are leaving exactly the same issue. So the rationale has been to put under the same responsibility the management of the issue that is absolutely common between the two businesses.
And definitely this is a management approach, is a matter of responsibility, nothing to do with the redefinition or I would say change in the guidance that definitely remain exactly the same. As far as disposals, definitely I'm afraid there is a confidentiality issue. But I would say that some discussion quite ahead discussion we are having these days refer to also refers to exploration assets. So yes, you cannot say that you have closed until the very end, but we are confident that at least one of them can be concluded by this year end.
Okay. That will be encouraging. Thanks.
There are no more questions at the moment.
I think that this is the end of this conference call and I thank you all for your questions and attendance. Thank you very much. Bye.
Ladies and gentlemen, the conference is over. Thank you for calling