CMD 2020 (Q&A)

Feb 4, 2021

Slides

Hello. I'm Sjatil Bakken, the Head of Investor Relations at Aker BP. It's my pleasure to welcome you all to the Q and A session of our 2021 Capital Markets update. Since COVID prevents us from hosting a physical event this year, we have chosen a different approach and I really hope that you liked it. With me in the room today, I have our CEO, Karl Hajwick and CFO, David Toner. We also have our Head of Operations, Iain Dolve and our Head of NOAKA, Lars Heuer, on the line from separate locations. This Q and A session is scheduled to last for 1 hour. If you have any follow-up questions, please do not hesitate to contact us in the Investor Relations team. And with that, we hand it over to the operator to open up for questions. Thank We'll now take our first question from Johan Charrington from Societe Generale. Please go ahead. Your line is open. Good morning, everyone. Thanks again for the presentation this morning. I would like to thank you as well again for the transparency of Projections, you share with us. And I will have 3 questions, if you don't mind. The first two questions are on production profiles. The first one will be about the Valal area. I understand that there is a certain degree of Certainty that is associated with this newly unveiled production profile for the Valhall area. And I would like to get a better understanding of How strong it is? How confident were you with your prior production outlook when it was presented last year? And what has changed in then? The second question on production profiles again will be more focused on the Iva OSEM area, This is clearly your most recent production ad. You have invested billions in the platform. But If we look at these projections that you are showing today, there is I mean, it appears that This platform, unfortunately, does not have the right postcodes. The fee is Depating quite quickly. So I would like to get some color on how much surprise there is For this production profile to be reassessed in the future? And my 3rd and last question will be on a different topic, Which is carbon capture and storage. This appears to be of great importance to Norway's government. Do you have a mandate To play a role in the development of carbon storage within the Aker Galaxy? Thank you. Thank you, Johan. So maybe I can answer your questions. So first on the Valhall production So first let's remind everybody that Valhall is a pretty big field. It's a gigantic field. We're expecting to produce more 300,000,000 barrels now, but we're expecting about 1,000,000,000 more out of this field. But it's also a highly complex field. It's a field where we have historically that is after 2016 been testing a lot of technologies to support that long term ambition. Some of these technologies have not proven entirely successful and we've been Working on rectifying that as we've discussed in this before, for example, the single trip multi frac, which is now working. So My view on this is that the Malart production is pretty much in line with our internal expectations and we may have been a bit Optimistic previously. However, there is a lot of work ongoing to rectify the current issues and And I'm confident that we will be back on track soon. And then of course all these technologies are actually really value creative For a long term development of the ambition and the Valhall field. So while we have been working quite ambitiously on discovering new etcetera, etcetera. I think this will prove crucial when we look at the longer term ambition on the Varhall field. And then your comment on Ivar Ossen. If you look at the presentation that we have put out there on Slide 20 The 6, you will see the production profile. And you're right, there is a certain decline from 2020, which is all planned and Pretty much following the original plan as communicated also in the PDO. Then we have recently approved the drilling of 2 IOR wells In 2021, which will increase production in 2022, 2023 and 2024 compared to the existing decline, which will offset decline This field significantly. Your comment on CCS, Our strategy when it comes to climate change and let's say renewables and also accounting for CCS Yes, is that we will support these developments, but we do not necessarily attempt to participate or directly invest. As you may have observed, Aker has recently launched the Aker Clear Carbon this summer last summer And is now expanding that portfolio. There might be investment opportunities particularly related to storage In either existing Aker BP fields or Aker BP fields in the future and in that case we will come back to that. When it comes to the broader CCS picture, I see CCS as an important technology Related to electricity production from hydrocarbons in the future and we're highly supportive of that trend. However, at this point in time, we see that there are other CO2 reduction mechanism that gives a higher yield and is more important to the Aker BP Investment. We will now move to our next question from Theodor Nelson from C1 Markets. Please go ahead. Your line is open. Good morning and thanks for taking my questions. So thank you for a very, very good presentation. Two questions from me. First one on the dividends, which I guess has been a hot topic ahead of the Capital Markets Day. You said that you expect dividend to grow by value creation, which of course is nice. But How should we interpret that overall future dividend via function of EPS or free cash flow or some kind of internal NAV estimate? 2nd question is on NCS M and A market. I guess you On MCS, so that will be important to you. Is it still fair to say that it's a buyer's market out there? Any That would be very helpful. Thank you. Thank you, Theodor. I think I'll hand over to David on the dividend and Then I'll reflect a bit on the M and A question both in regards to the current market and also Aker BP strategy. So David, if you want to expand on the dividend question. Sure, I'll do that, Karl. Thank you, Thierry. So on the dividend, We have put forward a pretty clear framework for how we're thinking about dividends going forward. And as Stated, the underlying goal of Aker BP is to maximize long term value creation and Three capital allocation priorities remains the same. When we talk about following the underlying value creation, we're talking about We haven't linked The term value creation to any specific financial metric, but as indicated with the different oil price scenarios In the presentation, we expect or have an ambition for dividends to grow by at least 5% In the oil price environment, between $40 $65 a Brent. Yes. And then On the M and A, well, of course, after the temporary changes to the tax system, I think most of the CapEx projects The Norway changed appreciation. And of course, that relates primarily to the project inside the temporary taxes And that is for those with a PDO to be delivered by the end of 2022. So our strategy when it comes to M and A remain unchanged We haven't really made any modifications to this essentially from 2015 and And we're still predominantly only focused on value creation and how we can maximize value for our shareholders using M and A as a vehicle. Historically, we've been extremely active as you know, but that has also resulted in a large hopper of highly value accretive Organic projects, which we are now in the process of executing as communicated previously today. And I think the main driver right now is that most of The M and A we look at has a much lower value creation potential on the inorganic side than it has on the organic side. So if you look at that this as a kind of a use of cash to generate value, right now it's much higher value to generate to be generated By investing in organic copper, which we, by the way, mostly expanded through an M and A strategy. But that doesn't mean that we're not revisiting or looking at opportunities. If the NCS is buyers or sellers market, I think at least prices particularly on CapEx has gone Significantly following the temporary change to the tax system, particularly for those players who can utilize those tax positions. And I think right now at least NCS is a highly competitive M and A market where we are going to be cautious. Okay. Thank you. Can I just follow-up with one on the dividend question? What's the specific reason for preferring cash dividends and not the buyback? Sure. I can do that, Teodor. So as you stated, so we're pretty clear that our main distribution mechanism Will be cash dividends and the way for the way that we think about this is basically That doesn't exclude buybacks in the future, but as sort of a policy statement, we believe that that's What's great or it's the best way of returning value given also the fact that if you were to include sort of buybacks as a mechanism at various oil prices, you Buybacks would not be viewed as a distribution mechanism, but more an investment opportunity if that appears to be value accretive for us We will now move to our next question from Anders Holze from Kepler Cheuvreux. Please go ahead. Your line is open. Thank you, guys, and thank you for taking my questions. And I'd like to secretary Theodore's congratulations on a well held presentation. Now obviously, the effect on the tax changes is going to have a pretty substantial impact on the net free cash flow going forward As we look at your investment plans. So I guess that all the CapEx this year is going to be covered by the tax changes in place. But the key question becomes how much of your future CapEx that you see on your long term guidance will be covered by the tax amendment That's now available for projects that are ready for plans and development and operations handed in next year. So just to simplify to know how much going forward is related to projects that are eligible for the tax change? Thank you. Thank you, Anders. I'll hand that question over to David. Thank you, Karl. Hi Anders. So the way to look at this is that 80% to 90% of our CapEx included in this plan is either related to already sanctioned projects or projects that are going to be sanctioned With FID before end 2022, that means that most of this CapEx will be eligible for the temporary fiscal regime. And then we also given you've done you the favor of actually calculating the post tax cash outflow on Page 53 in the And we'll just pause here to ask the speakers whether any questions have come in over the web. Yes, there is. We have one question here from Mark Wilson of Jefferies and he has a question on the longer term production ambitions. It would appear that around 50,000 barrels per day has disappeared from the underlying plan and particularly the non sanctioned part. At the same time, Nuaka has got larger. And the second question, I'm not sure if that was The second question would be details on the appraisal of Lia Torna. What is the current range of resources? What does success look like? Is a flow test included? And do you expect to farm down ahead of that? And I guess that's a question you can start off, Karl? Yes, I can certainly try, Kjell. So thank you. Let's start with the production, Mark. And No barrels have disappeared. But what we have done is an optimization of the Production of the project in the harbor, where we're basically focused value, but also on making sure that the project we do execute have a sufficient maturity as we reach the end of 2020 Most of these barrels are directly linked to King Lear, which is a high pressure, high temperature project, Which will require maturity and time before we reach PDO. So our assessment was that there were better investment opportunities generating Higher returns in that portfolio and we have therefore delayed the Kingler project to both value, but also to minimize risk in the portfolio. That does not mean that the King Lear has disappeared, But it means that it's been pushed out and we have delayed that project. So I think From my perspective, this is about making the execution plan more robust as we're now speeding up a lot of the early phase project To put them inside the 2022 harbor. And let's just remember that the key to robust And successful project execution is a good early phase. So the groundwork we're doing now is the basis for a solid execution post 2022. Then on Lia Ton, the resource estimates are largely unchanged. This is a rather shallow reservoir and it means that the Size peak response is quite good. So we understand fairly well the size of the container. So the big questions are now related to oil quality And how we can design the PQ at the Nwaka field to receive the soil. So what we're looking for is not necessarily a flow test, but we are looking for a sample of sufficient size To update our design profile on the Nuakka project. And then of course Not necessarily of course, but we don't plan any changes to ownership on Aker. Yes, I guess that's A good answer to Mark's question. And then operator, we pass the word back to you. Thank you. We'll now take our next question from Al Stanton from RBC. Please go ahead. Your line is open. Yes. Good morning, guys. Well done for a very polished presentation where every word I think was chosen with consideration. So it's interesting that You never used the phrase net 0. And I would have bet my house that senior management, even in an elevator Pitch would use the phrase net 0 in any discussion about their strategy going forward. So I'm wondering, have you deliberately not mentioned it? And then more generally, what is your strategy towards achieving net 0? Thanks, Al. And I love your comments My trainers by the way. So I think our strategy when it comes To the transition and the energy change, it's quite clear. We will remain an oil and gas company. We will focus on optimizing our portfolio and reducing our Our missions and we will contribute to the energy transition by, I would say, Participating in value creation in these value chains. And then net 0 is essentially A way of optimizing your cash portfolio. And to me, the most value to be had right now is to minimize emissions And that's what we're doing. And then if you look at our portfolio, we will reach net 0. As a matter of fact, I mean, will reduce our CO2 emissions by about 50% in the 2030s and by 2,050 we will be virtually net 0 as a matter of fact. So my view on this is that we invest where we can maximize efficiency of those investments When it comes to amount of CO2 reduced per dollar or per NOK. And right now that is not necessarily On the offset side of that equation. So it's simple as that, Al. I suppose my concern then is whether you think The audience accepts virtually net 0 in 2,050 is good enough given the amount of pressure that I'm seeing on your peers Who are embracing offsetting and other initiatives to achieve net 0 much more quickly? I think that's a good question. I think so far we've had a lot of positive feedback on the clarity and obviously direct And then of course there are opportunities to reach net 0 more quickly if that is That believed to be a value later on. So it doesn't necessarily mean that we can't do it. It just means that there are better ways of Investing those money rather than reducing CO2 emissions in Aker BP. Okay. Thank you. We will now take our next question from Matthew Smith from Bank of America. Please go ahead. Your line is open. Yes. Good morning, everyone. I think sort of key questions have already been asked To be fair, so I'll just go for a quick clarification on the dividend if I can. So just to be clear, the 5% minimum Minimum annual increase. And that minimum phrase that applies So oil prices between the $40 the $65 is that right? So there could be upside to that 5% even without Oil prices above 65. Am I reading that right? Yes. So the way to read it is that we have an ambition to grow dividends by minimum 5% at oil prices atorabove40 dollars Brent and then we are also indicating in our framework Above $65 Brent, you could consider also extraordinary dividends on top of that. So it's basically lifting the floor By minimum of 5% as an ambition of oil prices above $40 And then I think just To make it very clear, right, so what we have done here is basically put in plan a financial framework, which is robust down to at least $40 Brent, including the investment plan that we have. And of course, what we're solving for is the number one priority in our pecking order, which is The financial robustness and our investment grade credit rating. And then secondly, of course, then investing in profitable growth, which Makes a lot of sense given the opportunity set that we have available. Sure. Thanks. That's clear. And we'll now move to our next question from Chris Wheaton from Stifel. Please go ahead. Your line is open. Thank you. And gentlemen, thank you very much indeed for an excellent presentation from you this morning. I would have expected nothing less. Two questions, if I may, please. Firstly, can I go back to Mark Wilson's point on no Aker? Your future production slide Shows quite a substantially bigger project than I thought. So pre production in excess of 150,000 a day in 2028. With the ownership of New Aker hasn't changed, which I don't think it has, could you talk about What's driving that bigger project upside versus before? Secondly, A question about managing all the CapEx and the projects you've got to sanction before the end of 2022. A lot of the strategy today you've outlined is because the Norwegian tax changes have enabled A really very attractive window of growth opportunities to open up for you. You've got to deliver a lot of project definition And a lot of project scope work before the end of next year to get things sanctioned, to get access to that advantageous tax structure. Could you talk about the capacity in your organization to deliver that number of projects in that compressed timescale? And also once you've delivered them, you can't all execute them at once. Is there an issue could there be an issue that There could be quite a delay between sanctioning the project in the next 18 months and then actually finally spending the money, let's say, 2025, 2026. And is the Norwegian government going to be okay with that kind of extended delay between taking advantage of the tax rate Actually spending the money. Thank you. Thanks, Chris. Maybe last, I'll hand the Neuwacker question over to you since you are the guy actually running that show. Thank you, Karl. We are working full time with our Alliance partners and also with the license together with Equinor and Lotus to find the right concept. And we're in the middle of the concept development phase now. So that's really interesting to see how we can optimize the production. But we are in the middle and we are also working with the right number of months. So it's too early to say Too much on the protection level, but we will work hard to optimize it and We will take a final investment decision end by 2022 Q4. Then we'll come back to it in more detail when we have the right solution and the optimal solution. Can I just have one follow-up at that point then please, because what is the scenario that's represented in The disclosure you've made today, is that a base case? Is that the most likely case for that $150,000 a day next year in 2028? Thanks, Chris. So just to be clear, what we have done up to now is optimizing the concept as Lars was just discussing. And the case represented in the material release today is what we believe to be most likely at this point in time. And of course, as Lars also pointed out, we're in the middle of the project development phase. So we can't exclude that there will be any changes, but this is the most likely case as we'd see it today. And Al, just to add one point from my side as well. So I think it's important to note also where we were Back in 2020 at our previous Capital Markets update with regards to discussing also commercial arrangements also With our partners, so what was assumed in the business plan at in 2020 Was roughly a 50% ownership share in the Nuakaa project, while what we are including here now, as As stated on the slides is basically our share of the different licenses, which is included in the Aker, which then accumulates to Around or above 60%. So that's also a part of why there is a bit of a difference in the size of Novakka on the slides. Thank you, David. And then your last question was a crucial one, which is about capacity. Anna, Let me guide your attention to our previous discussion in several of these Capital Market Days around alliances where we spent considerable amount of time Explaining why and with whom and how we set up these alliances. So just a very short recap. We have now established Seven alliances across the value chains from projects to drilling and into brownfield modifications and well maintenance So now topside maintenance work. I must admit that once we established these alliances, the primary driver was To optimize cost and reduce error and time. And then as we're now growing The portfolio, we also see that these alliances allow us a far higher execution capacity than would otherwise have been possible. And the simple fact is that by these alliances where we worked with a lot of these partners over quite a few years now, we have established mechanism that doesn't necessarily rely on a growing Aker BP organization. So in many ways, this alliance has actually Been a foundation for the execution strategy, which then proves far more scalable now than the previous execution strategy we had before the alliances. And it also allows us direct access and priority to resources in the market. So it It means that even if the market is heating up, particularly on, I would say, engineering, drilling and well related services, etcetera, That doesn't necessarily impact our execution strategy. So in many ways, you could probably say that this was luck, Chris. I think we actually ended up in a really good position when it comes to the execution both in terms of scale, risk And also management of fluctuations in capacity. And then finally, Your comment about plans. So the current plans does not necessarily mean that there will be a delay in terms project execution. So it's not like we're ramping up delivering the PDO and then cooling down again. These Projects are scheduled and optimized such that they will actually follow a pretty normal execution schedule. So the questions being that was asked a bit earlier today about optimization of that schedule is exactly to Minimize that, I would say, delay or possibility of delay, so that we can actually follow our continued schedule. And the reason is very simple, Chris. And that's if we ended up in a situation where you would deliver the PDO and scale up the organization To make a financial investment decision with all the associated engineering and technical studies and then cool off again, these people would have gone elsewhere And the project would have been at risk. So in reality, that is a very complicated strategy to execute and we do not plan to do that. And we'll pause here again just to check with our speakers whether any more questions have come in over the web. Yes, there are. The next question comes from James Hosey of Barclays. In the future CapEx profile on Slide 52, Novakka is clearly the largest part of the 2022 to 'twenty eight spending plans. How wide is the range of uncertainty in the budget for that project today? And second question, in the free cash flow outlook, Slide 60, We see it declining in $23 to $25 such that the $50 per barrel, The dividend would not be covered by free cash flow. Is that a constraint on your capacity to raise the payout by more than the 5% minimum in 2022 to 2023 regardless of the oil price. And I guess that last question goes to you, David. And the first question, I guess, Karl can take. So if you take the last point, And I can comment on the Aker expenditure later, David. Yes, I can do that. So I think the quick answer to that is that the dividends that we will pay, we will reflect the distribution capacity through the cycle. So considering the financial outlook And our plan now is robust at $40 Brent and we have an ambition as already stated Several times a day to grow that by at least 5% if the oil price is above. So of course, we will take a holistic view on what that increase In any given year, but the investment period with Nuaka in 'twenty four, 'twenty five And that impact on cash flow in such a scenario will not have a significant impact on our ability to pay the planned dividend. Yes. And then when it comes to uncertainty in CapEx, of course, as we are These studies and getting more market information about the cost of each of these elements, the uncertainty range will decrease. So I think it's a bit immature to state explicitly what kind of ranges we're looking at the moment as the project components are in a bit of a different So we'll come back to that a bit later on. And just to remind everybody that we're delivering the DG2 in September This year and at that point in time, we will provide much more clarity both in terms of cost and uncertainty and estimates. Thank you. And while we are on this line, There is another question here from Anne of Handelsbanken. With focus on your peak production level in 20 28 above 350,000 barrels per day. Can you comment on the range of CO2 emissions among your main fields and how much You expect to pay in CO2 tax when you reach peak production compared to the level of today. And I guess, David, this is one of your Favorite topics, so I'll pass the word to you. I think that's one for you, David. Everything that related to tax is probably your field or profession. Thank you for that, Karl, and thank you, Jan. So just to recap a bit, of course. So, Varuhall is, of course, already electrified With Power from Shore, Ivar Osen will be electrified with Power from Shore as part of Phase 2 of the Johan Sverdrup field development. The Nuaka project will be powered from shore. So If you take that as a starting point, it's basically Alvheim, Ulla and Sky, sorry, which are the 3 assets which has the highest CO2 emissions per barrel since they are not Powered from shore. So they will stand for most of the CO2 emissions at peak production. And then when it comes to The CO2 taxes that will be paid, we have outlined that in our presentation when we're talking about production costs. And what you can see there is that in absolute amounts, it's relatively flat over the period. And one of the reasons for that, of course, is that we are working to reduce CO2 emissions As we also increase production at the same time over that period, so you're talking roughly $1, $1.50 maybe production cost per barrel at peak production in terms of environmental taxes. And remember, this includes both the CO2 taxes that we pay to the Norwegian authorities and the quotas That we pay. And the assumption is aligned with the Norwegian government's updated target of paying NOK 2,000 per ton in 2,030. And that being said, Anna, there are studies ongoing, Both related to electrification on Skav and other, I would say, large scale CO2 On behalf of Anne, I thank you very much for those fantastically good questions and leave the word back to the operator. Thank you. We will now take our next question from Sasikanth Chilukuru from Morgan Stanley. Please go ahead. Your line is open. Hi, thanks for taking my questions. I had 2 related ones, please. I just wanted to touch go back to And outlook and the annual production ambition, you have pretty much the peak production coming in 2028. I was just wondering if you is that the ambition for the company for that production level to be at in Going beyond 2028, what is the ambition of a sustainable production level that maybe the company is kind of looking at? And related to this, If you do you have the resources available right now to support that sustainable production level? And should we expect CapEx to increase over the next few years, especially for 2027, 2028 over the next few years As we have more clarity on how you would actually get to that production level. Yes. Okay. I think it was breaking up a little bit, Sasse. But I think what you asked is If the production level, we're now guiding for around 350,000 barrels and do we have the resources to sustain that for a long period of time? And of course, then the associated CapEx with that production profile. Would that be correct? Yes. And also what is the ambition of sustainable production level? Is that the 350,000,000 the benchmark? Or is it lower? Thanks. So let's take those in sequence. So I think if you look at the production slide on page 32 in the Capital Market Day presentation, that will demonstrate as we usually do the outlook up to this point in time, 20 And you see the growth up with to about 350 and a little bit above in 2028 with No Aker coming on stream. And of course, this represents a little bit more than 500 1,000,000 barrels of the 2C hopper. So there is a healthy amount of reserves that are not included in that production And then we haven't there are several discoveries we have not put into the 2C reserves either because it's immature. Was a previous question around Liatona, which are not included. There might be other discoveries that are in the early phase that are not So going back to our previous statements a couple of years ago that we only included Project in this portfolio that we can name. And of course, that is also the clue to the second question. So if you're reaching 350,000 barrels or more, there's a significant resource replacement challenge, particularly in the long term. And right now, there are about 900,000,000 barrels in total in the 2C. So the math is pretty simple. And of course, there is a gap as you're approaching 2,030 or mid-2030s If you are going to sustain 350,000 barrels. So the math of that is actually quite simple. The CapEx profile also outlined in the material. But of course with that CapEx profile, which is direct Associated to the project we are now planning to execute, it's also a decline, significant decline in CapEx as you're maturing this project and then executing them associated with the production profile. So right now, I think we have a very healthy outlook. Look, I don't think there are many companies out there with roughly 200,000 barrels of production or a little bit more And then 900,000,000 barrels of opportunity set already in the hopper. So at the moment, My primary focus is not necessarily what happens post 2028 or 2029 or mid 2030s, But it's making sure that the value is maximized inside that existing hopper. And then there was another question related to M and A. I mean, Historically, we've been growing our asset base significantly through M and A and you can also see from the material that there is a sufficient Significant cash flow generation as we're maturing this project and CapEx is dropping off. So right now, I would say I'm comfortable with the position. But of course, you can calculate out there is a reserve replacement issue post 'twenty I would say mid-2030s. We'll now move to our next question from James Carmichael from Berenberg. Please go ahead. Your line is open. Hi, thanks guys. Hi. It was actually asked earlier mainly on the carbon tax But I guess just as a quick follow-up, just on interested to get your ability to hedge against any of that carbon Price rise you've outlined in the presentation. Is that something you can do, something you plan to do? That would be helpful. Thanks. I think the simple answer to that is currently no. The way that we Think about this that it's an incentive to reduce emissions and that's how we plan to cater for that. So Ine talked a lot about during around the initiatives that we have for energy optimization. So that's the general thinking around it. And then of course the project that Karl referred to, for example, larger scale investments in power from shore to a scarred would of course also significantly reduce those taxes. But I think the taxes that the Norwegian authorities are putting in place on CO2 emissions are not necessarily something that we've looked into hedging. Not sure how we would do that. I'm not really sure you could hedge the tax position. You could maybe buy quarters if you expect that price to go up and Create some sort of derivative around that. But our I think our primary driver to this is to react to the incentives that are being put into the financial So rather than speculating how we could hedge out of these We're working on minimizing the impact by reducing CO2 emissions. Okay. That's great. Thanks. We'll now move to our next question from James Thompson from JPMorgan. Please go ahead. Your line is open. Great. Thank you very much. Good morning and Carlo, maybe thanks for the presentation. Three questions, if I may. I'll just start the first one. Obviously, no Aker is a crucial part of the medium term investment case. The project itself is complex. The timeline of the project has slipped over the last 4 or 5 years. It's kind of changed form. And you're looking to sanction it right inside the deadline on the tax issuance. I mean, given it's so important to The outlook, would you still sanction the project if you don't make Q4 2022? I mean, obviously, questions have been asked about capacity. But if this If PDO can't be taken before the end of 2022 and you don't get the tax benefits, will you still sanction Nuaka to keep to that 2027 timeline? That's my first question. But just ask all your questions and I can answer them in sequence. I think that's probably best, James. Yes, sure, Bennett. I mean, the second question, just on the liquidity position, we've got 4 point 5 $1,000,000,000 of available liquidity. Looking at the medium term CapEx outlook and the dividend that you committed And your comments really on inorganic being not really the flavor of the month from your perspective. I just wonder what the rationale was to maintaining That level of liquidity, only 2025 is the point in time where it might not be twice covered on your investment plans and your So what's the rationale there and should we expect you to shrink the RCF over time would be the second question. And the third one really is really a Matt's question. When I look at your reserves and resources you reported end 2020 versus end 2019, You got 2 pieces down 64,000,000 barrels, 2C reserves down 36,000,000 barrels, there's a total of 100. You produced 76,000,000 barrels in the year. Could you Tell me what's changed in the reserves reporting? Where's the 24,000,000 barrels lost From thanks very much. Sure. So thanks. Really good. No Aker, I think the fact of the matter is that we've been working on this for a long, long time. And finally, as we were exiting the summer last year, we got significant momentum and traction. So that means that a lot of the groundwork in terms of subsurface, etcetera, etcetera is already being done. In the movie today, Lars also demonstrated that well planning is far advanced supported by digital tools. So right now, I think what I'm looking at right now is a rather robust plan When it comes to executing up to the PDO. So right now, My primary risk associated with Norka is not related to not delivering the PDO. Would we still do no Aker if we could not deliver? I think that's a bit of a hypothetical question. So I can assure you that we are going to do everything we possibly can to deliver the project inside of that tax regime. And that's where all our focus is at the moment. So to your liquidity and I'll hand that over to David. When it comes to the 2P and 2C, we have about 13,000,000 barrels in increase in 2P Related to revisions. And then there are, as we've discussed previously, some optimization that has been done on the 2C reserves as we've been pushing some of them out in time associated with the execution of these early phase projects. And then if you remember back in March, we pretty much stopped everything that was associated with the CapEx outlay and prioritized financial stability and the financial health of the company That basically meant that we prioritized cash flow over reserves generation. So that means we stopped a lot of these projects that would normally have been associated The increase in 2P and 2C reserves. And then if you start looking at that over time, this will even out, Particularly as we end 2021 and 2022, you will see a lot of these volumes coming back Into the plan and into reserve and resource equation. But it is a direct result of both the stop Back in March and also the optimization of the plan associated with execution following the temporary changes to the tax system. Yes. And on the liquidity question, I think it's a good question. But of course, reflecting over what's happened The past year, I think it's clear that having a large liquidity headroom has really served us well. And But that being said, of course, we have the $4,000,000,000 RCF now undrawn. And in addition, we have More than $500,000,000 of cash at hand. So that's something that we're continuously sort of Evaluating how to optimize the balance sheet. And It's worth noting that we have a couple of bonds which are callable this year. And then of course the half of the $4,000,000,000 RCF is a working capital facility that we can Choose to draw on or not. And then of course, we can also downsize that if we may. Our sort of policy is to have at least $2,000,000,000 of liquidity available at any point in time. So there's quite some headroom related to that. But then of course also remember that we are moving into an investment period Where we're going to invest quite heavily in profitable growth. So having liquidity is always a good thing. And we've learned that through the period of very high volatility this year. And I think the last point is important to stress. We previously said that maintaining a pretty high liquidity reserve is, I would say, Cheap way of creating insurance around our financial position. So all the way back To 2015, we've had as a strategy that we should maintain sufficient liquidity to do what we needed to do, not what we Forced to do. So you might see some optimization to liquidity position going forward, but the main strategy is unchanged. It's unchanged. Okay. Thanks for all the answers. Just in terms of following up on your Nawaka Is there a scenario where the southern part or the northern part of the Aker is sanctioned at a different time to the other one? Your operated bit could be sanctioned before in the 2022 and the Equinor 1 might be later or vice versa, Given that they are independently operated under 1 development plan? It's one coordinated field development. So there might be sequences in terms of execution of the project, but I don't foresee a situation where they are where the investment decision or the delivery of PDO is done independently, Okay. Thanks very much, Kelle. Appreciate that. Hand it over. I'll just pause here again just to check with the speakers whether any web questions have come in. No further questions on the e mail that have not already been answered. Thank you. In that case, we'll now move to our next question from Michael Alsford from Citi. Please go ahead. Your line is open. Yeah, hi there. So I just wanted to follow-up on the Barents Sea comments earlier in terms of exploration. I guess one specific project or prospect for your drilling in 2021 in the PR 858 out in the southeastern Barents Sea. It looks pretty small from kind of the headline pre drill estimates. So I just wanted to understand a little bit more about the route to commerciality if it is successful. And then secondly, I guess more broadly, are we thinking this is going to be an end to the Barents Sea exploration program over the medium term After the next two wells being drilled? That's a good question. So The 2 remaining commitment wells we have in the Barents Sea is in PL 858, Which is a stainless and well operated by Aker BP which is probably what you refer to as the East Barents Sea. And then we have the Zhengzhou in 722 operated by Equinor. The Stangustin was one of Three areas which were considered highly attractive back in the 23rd round, where Aker BP won operatorship. After that, we've reassessed both the migration, the restaurant quality and the potential for volume. And as you can see, Downgraded the pre drill volumes quite significantly, but it is a Commitment, well, and as I stated in the video previously today, we have that and Zhengzhou left and then we'll reassess the entire balance strategy. It's also quite clear that the results so far in the Barents Sea have been disappointing. And also that There's quite a lot of momentum, I would say, in the stakeholder picture around Arctic oil and all of those discussions, which have led us to reassess. So I don't think you'll see us very active in the Barents Sea going forward. But then, of course, if We are lucky and there's a small of course a small probability that one of these wells will turn out to be a standalone field development. Then you might end up with a commercial project. Right now, I probably see this more as a commitment to drill Something that we committed to in the 23rd round. Thanks, Karl. And a follow-up if I could. Just a Quick question on the portfolio. You obviously did a strategic review and the business plan is what we see today. I'm just wondering if there's any non core assets in the portfolio that you've identified that perhaps You could see early monetization of? Thanks. Yeah. So when I alluded to optimization in terms of execution, that of course Leads begs the question if there are other operators with capacity or desire to execute the project that we have not prioritized, which is one of the topics we will explore going forward. Okay, understood. Many thanks for the presentation. And we'll now move to our next question from Carl Fredrik Schott Pedersen From ABG. Please go ahead. Your line is open. Hi, guys. It was a question referring back to Potentially beyond what you have identified in your 2C plans and what you outlined as being a Core investments in the near term and into the 2022 tax program. Is it so to understand that Lia Torna is the one to Are there any other sizable or meaningful projects that you have not included in your 2C resource base? And if So what is the work required in order to assess the economics on this, call it, Almost 2C Resources. That's a good term. I'll start quoting that, Karl, like almost 2C. So Leaton is of course in the appraisal stage and therefore hasn't reached the 2C Qualifications. And then there are quite a lot of, I'd say, Walhall upside in the so called diatomite, if that's the right English term, Which is above the main reservoir at Valhall. This is a tight field where we plan production test. And Since the flow capacity of those reservoirs are untested, we know there is oil, quite a large Portion of oil as we've drilled through this quite a lot of times. We are not qualifying that as 2C. So there is a significant offset. And then there is Ronde Sloter, which is a tight oil discovery. Again, where we know there is oil, but the flow capacity of that Field is also uncertain. All of these are going through our normal appraisal stages that is we are assessing their capacity And we are of course doing technical studies to move those into the hopper. But again, let me be very clear. I mean, Apart from the necessity of appraising Liatona in terms of understanding what kind of changes It's needed on the Aker project to produce Liatona. We are prioritizing what is already in the early phase hopper that needs to be Delivered by end of 2022. But there are, as you alluded to, quite a significant hopper of resources that It's not now in the 2C hopper. There are currently no further questions in the queue. So I'd like to hand the call back to our speakers for any additional or closing remarks. Thank you. So I would like to say thank you to all of those who have Been on the call today and thank you guys for supporting us back in 2020. It's been quite a year. Now Moving into 2021, we're shifting gears and we're accelerating. And we're grateful for your support also in 2021. And then as I have the chance, I gave my IR team quite a challenge and told them that we were not going to do an ordinary CMU. What we are going to do It was a production that we could show and deliver, and I think they delivered a really good result here today. So I'd also like to say thank you to my IR team and the comps department who have I think delivered an outstanding product. And Kjetil doesn't always get a lot of praise, so I think he'll be happy about that. So thank you guys and have a good day.