A warm welcome to the second quarter 2024 presentation by BW Energy. This presentation will be hosted by Lin Espey, our COO, as well as our new CFO, Brice Morlot. And welcome to you, Brice, on this forum, and myself, Carl Arnet. We'll jump straight into the presentation. Please note our disclaimer, and then on to the first half of 2024 and the highlights from the first half. Our net production increased by 130% year-on-year and came in at 25,500 bbls per day. Our revenue increased by 104% year-on-year and came in at $346.2 million. Our OpEx reduced by 25% year-on-year and came in at $32 million.
The EBITDA increased by 143% year-on-year and came in at $185.6 million. Net income was up by 200x and came in at $61.9 million, from a very low result in the first half of 2023, and the operating cash flow came in at $85.1 million, which is up 90% year-on-year. That was the result compared to 2023. Then on to the second quarter highlights. We had a net production in the second quarter of 23.6 bbls per day, and this was after completion of an annual maintenance shutdown of the Adolo. We strengthened liquidity significantly in the quarter. First of all, we raised a bond of $100 million, and then we did a sale leaseback of the MaBoMo facility for $110 million.
Total $210 million in strengthened liquidity. We had a successful appraisal in during our drilling campaign, and we appraised Hibiscus South and Hibiscus Main, and that came in with $23 million bbls in that is a management estimate at this point in time, but very successful, and I will cover that in more detail later on in the presentation. We are on track to restore Dussafu production, and we have a well workover program and have received the conventional ESPs that will successfully replace the defective ones. Dussafu surpassed 30 million bbls of oil produced in the first half of or since 2018 in the first half of 2024, and that's of course an unmitigated success comparing to our ambitions when we started back in 2018.
The EBITDA for the second quarter was $75.9 million with a net profit of $14.5 million. We had three liftings in total of 1.7 million bbls, with an average realized price achieved of $84 per bbl. This delivered a cash flow of $63.4 million from operations, and we had a cash position close to $250 million after repaying $70 million on the RBL. Our production profile, of course, is showing that we have started to get some traction with our well workover program, and we can see that the Hibiscus production is increasing, and we expect that to be going on into the third and fourth quarter as we replace our ESPs. On ESG, we have so far recorded one LTI in 2024.
We have no environmental incidents, and we are working very actively, as always, to support local communities where we operate, then on to Gabon with some more granularity. Dussafu production, Q2 gave a net production of 1.4 million bbls, equal to 15,570 bbls per day to company. In that, we had a three-week annual shutdown of the Adolo, mainly addressing tank work, but also some topsides and some improvements. So that was successfully completed in May and June, and we are now up and running again. The OpEx came in at $29 per bbl due to the maintenance period, which of course affected volumes. We expect that to reduce down to around $20 in Q4. The program of installing the conventional ESPs is underway.
We are in the process of receiving eleven complete systems, and of these, we will use eight. On the eight producers, we will have on MaBoMo when the campaign is finished. The first successfully installed was on the Hibiscus South 2H well, and that's performing very well. And in August, we completed the 3H change-out, that is also now up, up and running, well. During the period of acquiring the new ESPs, we have juggled a bit with rig time, and this has allowed us to undertake some appraisals. And we have appraised the northern flank of the Hibiscus Main, giving us a very successful result with the seven pilots. And we have also appraised the northern flank of the Hibiscus South, which has given us the very successful now producing 2H well.
This has a conventional ESPs, as I mentioned, and has been a very fast track from appraisal to production, and is now proving to be one of our best wells, producing 7,700 bbls per day as we speak. The 7H target, that's the one that will pick up on the 7P pilot. It's extremely interesting because it's the first well that will produce from a Gamba Dentale horizon, and that we expect that to be coming on stream fairly shortly. We expect to complete all the workovers within fourth quarter, and our ambition is still in the same or in this drilling program, to also drill the Bourdon prospect or the prospect B, as we have called it before.
That has a potential gross recoverable reserve of 30 million bbls in the Gamba and the Dentale formations. Then on to Brazil, on Golfinho, we have pivoted slightly from our previous announced plans, and it's a bit the same, not surprisingly, that we discovered that the current market for subsea equipment is extremely affected by extreme cost inflation currently, and we have decided to focus our attention on optimizing the current production and stabilizing field reliability and performance, as well as the artificial lift, the lift system on existing wells. We also have some existing wells that are not being produced, and we intend to open them and get production from them, and we will also undertake some modification and upgrades to the FPSO to accept this production.
This does not mean that we intend to leave these opportunities idle forever, but we are going to focus our attentions on where we think we can get some increased income in the shorter picture, and then revisit how we will undertake these subsea developments, and hopefully we can do that with a different cost profile than what we currently see in the market. On Maromba, as I said, a bit the same story. We are currently looking at also integrating drilling facility in our wellhead dry wellhead platform, and these studies we hope to conclude by the end of 2024. Work in the yard in China is going on as we speak to detail the plans for the work scope of the upgrades of the FPSO, so that's not affected.
But we do need some more time, and we see some further opportunity in integrating drilling, as again, drilling capacity has also become, or is also coming at a premium these days in the Brazil markets. Again, the final investment decision remains subject to conclusion of the project financing activities that are going on in parallel with these studies and deliberations. Our aim is to achieve significant cost reductions in the overall development of the project, of course. Then on to Namibia. Very exciting times in Namibia, and our Kudu exploration program, we are going ahead with our plans, working on defining the first target for an exploration well. We are in the process of securing all the long lead items, we are also preparing an independent rig tender.
Saying that, we are working very closely with other operators in the Orange Basin to explore potential common use of rig and also other facilities associated with an exploration campaign. We acquired, as you may remember, some additional seismic, the so-called Link survey , and we are currently processing this to optimize the positioning of our first exploration well. The concept selection for the Kudu gas-to-power is still being discussed with the relevant stakeholders. There's not a lot of new developments there to report. We decided to expand our footprint in Namibia, with also making a small investment in ReconAfrica, and their potential high impact exploration program onshore in Namibia.
Could be interesting in a gas-to-power project scenario, and we have found ReconAfrica with its new management team to be a very experienced and interesting company to work with in this endeavor. So they are currently drilling the exploration well, Naingopo-1, which is expected completion in the fourth quarter. As you may remember, we acquired 6.6% of the company, of their outstanding shares, as well as 20% in the exploration license, PEL 73, that is associated with this campaign. We also have some warrants that we may or may not exercise. That covers my part of the presentation. I will then leave the word to Brice, that will take you through the financials and summing up our second quarter. Over to you, Brice.
Thank you, Carl. For those of you I have not talked to yet, I joined BW in July, and I look forward to meeting more of you, investors and analysts, in the coming weeks. Now, let's just dive in the Q2 financial section. We have been busy on adding new financial resources. We successfully placed a $100 million bond issued in June 2024, with a coupon rate of 10%. The placement was significantly oversubscribed, with strong Nordic and investor, and international investor demand. The bond will be listed in the coming weeks on the Oslo Stock Exchange. In addition, we entered into an agreement on a sale and leaseback for a gross $150 million, which is $110 million for BW Energy, according to our ownership of the license.
This is to fund further our growth strategy, including the Gabon development project, and it's a 10-year lease with an option to repurchase the unit from the end of year seven. $70 million of the Dussafu reserve-based lending facility has been repaid in Q2 2024, and we've also been active on other financing for Maromba, where we are working on the Chinese ECA financing and also with banks in the Middle East. To the income statement of the second quarter, we had operating revenue of $165.9 million, compared to the $185 million last quarter. We had three liftings of 1.8 million bbls in the quarter. This is one for Dussafu and two for Golfinho, versus 2 million last quarter, and it was two for Dussafu and one for Golfinho. That's the main reason for the reduction in revenue.
Dussafu production was impacted by a planned shutdown, but globally, the uptime is excellent in Dussafu, with 97% uptime. Golfinho had a lower production due to underperformance, mainly the gas compressor and production facility issue. But in August, we have our first planned shutdown on Golfinho since taking over a year ago, and we expect to improve the uptime significantly. We had a loss from oil derivatives of $1.5. This is to compare the $3.3 last quarter. Operating expenses was higher, $88.5 versus $72 million last quarter, and this is an accounting effect, mainly due to higher number of liftings on Golfinho compared to Dussafu, which gave us an EBITDA of $75.9 million for the second quarter. So another good quarter for BW Energy, with significant investment in the reliability of our assets.
Depreciation and amortization are in line, giving us an operating profit for the quarter of $40 million. We had the usual interest income. The main difference there is a bigger cash balance and interest expense of $5.6 million versus the $2.9 million in Q1. That's the main difference you can see here, is an increase due to the MaBoMo sale and leaseback interest for $2.4 million. What stands out here on other financial items, $1.6 million, it's income from Petrobras ARO receivables in Q2, an adjustment for Petrobras contingent payment for Golfinho in Q1 for $2.8 million. So, the profit before tax is $30 million and an income tax expense of $16.4 million.
This is an increase in Brazil income tax offset by a lower state profit oil in Gabon. So we end the second quarter with a net profit of $14.3 million. To the balance sheet, the decrease in right-of-use assets is explained by our lease obligation. It's just depreciation. Tangible assets we are increasing. As long as we have investing activities, we are adding assets to our net tangible assets, so that's mainly from Hibiscus Ruche developments. Intangible assets we have an increase of $6.4 million. This is mainly the seismic acquisition for Kudu and studies on Maromba. Studies are capitalized to intangible assets before FID. We have an increase on other non-current assets of $40 million compared to last quarter. This is mainly MaBoMo sale and leaseback, capitalized in non-current assets.
Inventory is stable. We ended the quarter with $244 million in cash. This is boosted by the bond and the sale and leaseback. Over to the equity liability side of the balance sheet. Here we can see the effect on the interest-bearing debt of an additional $100 million for the bond, plus $135 million for the MaBoMo sale and leaseback, and offset by a reduction of the RBL loan of $70 million. The reduction of our long-term liabilities is because of add-on lease. You can also see that we have a very high activity on investing side, giving us a high trade and other payables. It's mainly due to drilling. There is a slight decrease compared to Q1, and it's due to decrease in Dussafu accruals related to the drilling program.
And also, you can also see the effect of the addition of MaBoMo sale and leaseback on interest-bearing current debt with an additional $14 million. So all in all, still a very strong balance sheet for the company, with more than 38% equity ratio and an interest-bearing debt of about $455 million. That was $292 last quarter. To the cash flow, we had a cash flow at the end of March of $150 million, $190 last quarter. We had operating cash flow of $63 million, $99 last quarter, a net investment of $125 million, which was $80 last quarter, and it's mainly related to Dussafu developments and Maromba FPSO acquisition.
Then a net financing activity of $155 million, $40 million last quarter, and that gave us $244 million of cash at the end of the quarter, which was $150 million last quarter. Lifting schedule and hedging. Here we have some guidance to our lifting schedule and on hedging. On the graph on the right-hand side, you can see the quarterly lifting schedule for BW Energy, divided between Gabon and Brazil for Dussafu and Golfinho. On Dussafu, we had one Q2 lifting of 734 ,000 bbls, with an average realized price of $80. And in Golfinho, we had two liftings of half a million bbls in April and in June, at a realized price of $90 per bbl and $83.
We have one Dussafu and one Golfinho lifting in August. A few words on hedging. We have requirements to hedge in the RBL facility for Dussafu, 40% of year one, 40% of the production, and 25% of year two. Currently, we have 4.6 million bbl hedge for the year 2025 and 2026, and this is a mix of puts, zero cost collars, and swaps. We have also entered into swaps for some of the Golfinho barrels, hedging about 20% of the annual production. Over to the summary. Our updated production guidance is in the range 10- 11 bbls net to BW Energy, and this is within the previous guided range, but we are narrowing to the lower end due to Golfinho production reliabilities.
That said, we do expect the up time at Golfinho to materially improve after the planned shutdown. On the production cost, no change in the guidance, $30-$35 per bbl. On the net CapEx, we are having new guidance. The new numbers is around $350 million, reflects additional investment in Dussafu, following the recent drilling success in Hibiscus Main and Hibiscus South, and also investment in ReconAfrica, and additional pre-FID studies on Maromba. On the G&A, it's a slight increase to $25 million with general cost increase. To our final slide of the summary. On the production side, our target is to complete all ESP change-out with conventional ESP before the end of the year, and maximize Dussafu production.
We expect to reach 40,000 bbl per day by the end of Q4 this year with all the ESP change with conventional ESPs. We have, of course, had the great success of Hibiscus Main and Hibiscus South discovery with excellent wells, perhaps the best of the license, and that's adding significant material results. On the exploration side, we plan to drill Bourdon appraisal. That might be a high impact well, and also to complete 3D seismic evaluation to assess the Kudu potential and prepare for the exploration program. And on the development side, it's to complete Hibiscus Ruche drilling campaign, optimize Golfinho production from existing wells, and continue to optimize Maromba developments, and also continue to progress the Kudu gas-to-power project.
On the corporate side, we will continue to fund investments through a strong operational cash flow, supported by debt facility and lease financing. And we are also expanding in Namibia with strategic investment in ReconAfrica. So that brings us to the end of the presentation, and then I hand the word back to the operator for questions from the audience, and then we will continue here with the questions we have received from the web. Thank you, operator.
Thank you. We will now start the question- and- answer session. If you do wish to ask a question, please press five star on your telephone keypad. If you wish to withdraw it, you may do so by pressing five star again. There will be a brief pause while questions are being registered. As no one has lined up for questions in this call, I will now hand it back to the speakers for any written questions.
Yes, so we have a question on the web. How would you confirm that there is excess capacity above the nameplate of 40,000 bbls per day on BW Adolo? And are there one or more restricting factors, and is it possible to solve them if required?
Brice, I can take-
Yeah. Would you want to take it, Lin?
Sure, sure. Hello, everybody, this is Lin Espey. The nameplate capacity production capacity, oil capacity on the FPSO Adolo is 40,000 bbls a day, but the teams have been working on how we can increase the throughput, and I think we're well- advanced, and we're targeting to see if we can increase that by up to 10%. But first step is to get to 40,000, and the teams are making good progress on reestablishing production with conventional ESPs. And as Carl mentioned earlier in the presentation, we've got two of the conventional ESPs installed, and production's been ramping up and we're heading toward that 40,000 bbls a day toward the end of the year.
Yeah. Generally- speaking, we can say that the easiest way to test the nameplate capacity is to push more oil to it and see where you have the pinch points. Of course, you can do theoretical simulations, but they're only going to give you so much and within tolerances. So we feel very comfortable that we will be able to get more through. But we first have to establish the production, and then we will push as much as we can through and see where we have the pinch points.
Thank you. Another question from the web, from David Mizrahi: How do recent capital allocation decision, Gabon expansion, Golfinho infill wells, and ReconAfrica farm-in, would impact the timing of the company's intention to pay a dividend of up to 50% of the net profit?
I think we have been very clear that the big, the big project for BW Energy, all the way since we listed the company, has been Maromba, and getting Maromba on stream. It's taken a bit longer than, let's say, what we thought with pre-COVID, but we are very confident we will get there, and we're working hard to achieve it. As soon as we have that on the stream, I think the company will be in a position to pay dividends, as we have said from more or less day one.
Another question on how are we progressing on the financing of Maromba. Maromba is currently located at the COSCO Dalian shipyard, and we are working with a Chinese institution, China Export Credit Agency and China Export and Import Bank. It's working very well, and we hope to be able to close the financing before the Q4, 2024.
I just want to add, Brice, that what we're looking for is the most efficient financing. As everybody is aware, it is more difficult these days to finance E&P projects and particularly E&P greenfield projects. So yes, you can always finance, but the price is also relevant, the cost of financing, and we are working hard to find the most attractive financing in terms of the cost to the company, as we see that as being important for shareholder value.
Thank you, Carl. Another question from the web: To what degree to the change execution plan at Golfinho represent cost inflation, change capital allocation, prioritization, or change view on the subsurface potential?
I can... Carl may jump in. I can at least talk to the subsurface potential. It hasn't changed at all. We still very much like these tiebacks. We think they're low risk from a reservoir or subsurface perspective. I think the most dramatic change has been the cost of the capital. You know, the market is, in general, in the oil industry, has seen tremendous growth these past couple of years, and in Brazil in particular. A combination of those factors has caused us to rethink that project. We still like it very much, but we'll see how we can better do this project.
Thank you, Lin. Another question on OpEx. Could you elaborate on the higher operating expenses during the quarter?
I think that's primarily a function of a lower production in Dussafu in the second quarter. We had the shutdown, and that was scheduled. That's expected. This quarter was always gonna be our lowest production quarter, coupled with the issues that we're having with the ESPs, which we think we've resolved in the way forward, and we got through the annual shutdown. We expect to have better OpEx per bbl the second half of the year, and that was expected.
Yes. Thank you, Lin. And another question on Golfinho OpEx. How do you see the optimization on Golfinho to reduce the OpEx?
So, I also think I see another question in there, related to if we defer the Golfinho infill well project, how will the other projects to reduce OpEx be impacted? And, so as we said, as Carl mentioned, we're looking at projects to boost production from the existing wells and maybe reactivate one of the inactive wells. This won't have as great as impact as the infill wells because the increased production won't be as much. But if we successfully execute these projects, I think we would see you know, an order of magnitude, a 10%-20% decrease in OpEx per bbl once these projects have been implemented.
Thank you, Lin. Another question on Brazil also. Could you please elaborate a bit of ways to mitigate current situation and how you see this country in our strategic map?
The overall strategy, Carl, I may toss that one over to you.
Yeah. The overall strategy for Brazil remains firmly that we think Brazil is an interesting market. We believe there will be plenty of opportunities also in the future to acquire brownfield. We are also working on our greenfield development of Maromba. I don't think there's any change as such. Yes, we do see cost inflation in the market, and that's affecting certain areas, subsea developments in particular, which has caused us to pivot a bit on Maromba. And let's say, I wouldn't say stop, but pause our plans on Golfinho and focus on lower-hanging, more lower-hanging fruit. But we don't see a major. We don't regard Brazil differently due to this cost inflation.
We also think with time that as the supply improves or that supply will improve with improved prices, and that we will also see more competition going forward as the market expands to fill, let's say, the capacity or the need of the market. So the supply fills the need of capacity. So we are still, I think, quite optimistic about Brazil as a market.
.Thank you, Carl. Another question on Bourdon. What are the chances of success for Bourdon, and is Bourdon pilot, if Bourdon pilot is successful, how do you intend to develop the field, and how quick can you reach first oil? I think we are all very excited about Bourdon. The potential is great, and in case of success, we would be in a very good position to use Jasmine who's the sister jack-up of MaBoMo, that already belongs to the company. And we could develop this field in a fast and very efficient way. Lin, do you want to add anything on Bourdon?
No. You, you captured the spirit, just right. Yeah, we're very excited about Bourdon. It's scheduled. It's gonna be the last well drilled of this drilling campaign. We really like the geology and the subsurface in that Dussafu block, and, as, as Carl mentioned earlier, we've had a couple of successful appraisal sidetracks, which has increased reserves. Bourdon is not too far away, and, fingers crossed, we will be successful there as well.
Thank you, Lin. Question also on RBL. How do we use our RBL, and could we repay more of the RBL, knowing that we have quite a high cash at hand? We manage our RBL. Our RBL is a revolving facility, so it's very interesting to manage our interest costs. And we try to maintain enough liquidity in the company for the ongoing capital expenditure, and we constantly monitor our liquidity. Question on the seismic of Kudu. Do we have more news, Lin, and some updates on the study for Kudu?
Sure. The seismic is in the final throes of, or the processing of the seismic is in the final throes of being completed. I think it's scheduled to be completed the end of September now, and then there will be, that'll be the final depth PSDM, and then final interpretation on that, and so that project you know is very exciting. There's been a lot of exciting news in the region, especially our partners, or not our partners, our neighbors to the west. Galp recently announced a major discovery, and anyway, we're working toward that as we speak.
Thank you very much, Lin. Other question on Kudu: What would be the cost for an exploration well in Kudu?
Yeah, I don't know if we've officially announced that, but I think cost of exploration wells in the region have ranged from $80 million-$120 million a well, somewhere in there.
Okay. Question on Dussafu. When do we think we could reach the 40,000 bbls per day? I think we did answer that. We should reach that by the end of the year. Is that right, Lin?
Correct. Absolutely.
Excellent. Then I think we have covered the question from the web. If you have other question, please do not hesitate to send us an email on ir@bwenergy.no. Thank you very much for your participation, and I leave it to you, Carl, to close.
Thank you, Brice. Again, thank you to everybody that is following us, and lots of interesting questions today, so very good. We enjoy the interest, and to repeat what Brice said, please contact us if you have any further questions. We are happy to answer them. Without further ado, I thank you all for participating. Thank you, and bye-bye.