Earnings Call: Q2 2018

Jul 26, 2018

Ladies and gentlemen, good morning, and welcome to the Equinor Second Quarter 2018 Conference Call on what I know is an especially busy day for you all, so we aim to be very efficient. Our CFO, Hans Jacob Hegga, will run through our results in just under 15 minutes, then we will open up for questions from the phones, and we expect to complete the call within the hour. I'm also joined on the call today by Sven Scheier, Head of Performance Management and Paul Jan Kvaerner, Head of Accounting. And with that brief intro, let me pass straight away to Hans Jakob. Thank you, Peter, and good morning, everyone. Today, I'm presenting Equinor's first quarterly results after our name change in May. It's a solid set of numbers, and I'm particularly pleased with good results and cash flow from operations, strong adjusted earnings after tax, record international production and the value enhancing transactions. We presented at our Capital Markets update as Stathor. These results confirm the delivery at Equinor, and there are no changes to our strategy and guidance. The IFRS net operating income is $3,800,000,000 before tax this quarter, and adjusted earnings before tax was $4,300,000,000 Adjusted earnings after tax was a strong $1,700,000,000 and this is up 165% year on year, adjusting for Angolan profit oil benefit taken last year. I will revert to these results again in a moment. Equinor's activity level in the 2nd quarter was high. We are progressing a large portfolio development project, and I'm pleased to confirm that we are delivering according to plans. Osterholmsten, Osterberg West Flanken, Ergvino Phase 2 and Mariner are examples of strong project execution. And the biggest of them all, Johan Pydrup, is the one you can see on this picture. With the lifting in place of the bridge between the drilling platform and the riser platform. Many of you visited the living quarters at the construction site last year and know more than 800 people are currently working offshore, getting the field ready for start up in 2019 at substantially lower costs than anyone thought was possible at PDO. In our project pipeline, we already have Fede Nuor in Canada, Pekera and BMC 33 in Brazil, and Johan Castaic, Norway expansion and Troll Phase 3 on the NCS on the move. In early July, we presented the Phase 3 development plan for the Troll field. With more than 2,000,000,000 recoverable barrels, this project is among the most profitable and robust ever in the history of the company. The Troll field has already generated a massive NOK 1400,000,000,000 in revenues, and we are now extending the field's lifetime beyond 2,050 and expect to create even greater value going forward. In addition to these on schedule and on cost project deliveries, we continued to build our project portfolio for the future during this quarter. We closed the Roncador and Carcara transactions in Brazil and the North Platte acquisition in the Gulf of Mexico. And we secured attractive new exploration acreage in Brazil, the UK and Norway. The Q2 is characterized by solid results, solid cash flow from operations, high production at higher realized prices. Our after tax result is especially strong this quarter with major contributions from E&P International. And for the Q2, the board has decided to maintain the quarterly dividend at $0.23 per share. The safety of our people and the integrity of our operations is and will always be our top priority. The group's 12 month serious incident frequency was 0.5 per 1000000 hours worth. This is at the same level as in the Q1 2018, which was our strongest SIF today. The SIF for the same quarter last year was 0.7. Now on to the financial results in more detail. We delivered adjusted earnings before tax of $4,300,000,000 in the quarter, up $1,300,000,000 or 43% compared to the same period last year. High production from ramp up of new fields and new wells and higher realized oil and gas prices contributed to the strong result. Exploration and Production International's contribution is especially strong this quarter. The after tax result is very close to the record from the Q1 2012, and the oil price was above $110 per barrel. Realized liquids price for the group in the Q2 was $65.8 per barrel, an increase of 48% compared to the same period last year. Realized European gas prices were up 28%, while U. S. Gas prices were down 12%. The IFRS result was $3,800,000,000 in the quarter, influenced by net impairment reversals and derivatives. Net reversals were $300,000,000 In the quarter, we report impairments of around $760,000,000 for U. S. Onshore, largely caused by a change in our long term oil price assumption and a change in valuation methodology for Eagle Ford. Let me remind you that we, in the Q4 last year, had reversals of $1,300,000,000 for our U. S. Onshore activities. The low tax rate in the quarter of 60.7% resulted from strong earnings in areas with low or no tax. The low effective tax rate in the international segment reflects structural composition of the earnings in the quarter from areas with low or no tax. There were no one offs. Let's now move on to look at the segment. Exploration and Production Norway delivered adjusted earnings before tax of $3,100,000,000 an increase of 58% from the same period last year. High production, higher realized prices resulting in higher margins were the key drivers. In the quarter, 10 turnarounds were completed. We experienced some increase in reported costs due to new fields coming on stream, in line with what we communicated at our CMU. In addition, we had some quarter specific costs related to higher seasonal maintenance, pensions and some unplanned losses at a copper ore field. We continue our improvement work and maintain a strong cost focus across the organization. Achieved Liquids price was 50% higher than in the same period last year. Exploration and Production International delivered very strong adjusted earnings of more than $1,000,000,000 before tax, up 18% compared to the same period last year. And let me remind you that we had last year impacted in RSO for the 2nd quarter and improved effect of $750,000,000 due to a one off effect related to Angola. Adjusted for this effect, the result is 8x higher than the same quarter last year. The production in the quarter was record high with an underlying growth of 11% year on year. And at the same time, the underlying OpEx SG and A cost per barrel was stable. The cash flow after tax from our international business was very strong this quarter at $30 per barrel, which is higher than what we saw from the NCS. Then to our MMP segment, which delivered a pretax result of $302,000,000 compared to $292,000,000 in the same period last year. We achieved solid results from LNG and products trading, while the natural gas trading delivered somewhat weaker contribution. Then to during the quarter was 2,028,000 barrels per day. This is an increase of 32,000 barrels per day, corresponding to an underlying increase of around 2% year on year. Our international production was the highest ever, driven by strong production growth, mainly onshore but also offshore U. S. In addition, the Roncador field in Brazil started contributing from June 15. Production ramp up of new NCS fields like Giena Krogan Building, new wells and higher flex gas production volumes also contributed positively. In the next quarter, we expect higher impact of maintenance on group level with higher turnaround activity in our international operations. The planned impact is estimated to be around 80,000 barrels per day. Year to date, we deliver a strong cash flow from operations of more than $13,000,000,000 and a net free cash flow of $900,000,000 after the acquisitions of Martin Linge and Roncador and the Carcara farm down. In the quarter, our net debt ratio grew by 2.1 percentage points to 27.2%. Without the above mentioned transactions and the change in our working capital this quarter caused by liquid inventory growth, the net debt ratio would have been 3 percentage points lower. Year to date organic CapEx is $4,600,000,000 To sum up, we are on track to deliver on the targets we presented at our Capital Markets Update in February. We maintain our CapEx guiding for the full year at around $11,000,000,000 and our expected exploration spend this year is maintained at around $1,500,000,000 Expected production growth is still 1% to 2%, and the expected annual production growth during 2017 to 2020 is unchanged at 3% to 4%. Before I ask Peter to start the Q and A, as you may know, I'm moving to the U. S. To take over the responsibility of our global onshore assets. Let me use the opportunity to thank everyone with whom I met and spoken to during this busy, interesting and I believe quite successful period. I want to wish my colleague Lars Christian Ochter every success as CFO starting next month. It's been a great pleasure. Hans Jacob and spot on in delivery again, 15 minutes to the dots. Now let's move to the Q and A and I pass over to the operator who will run the polling. Thank you very much. Thank you. Our first question is from Oswald Clint of Bernstein. Please go ahead. Hi, good morning. Thank you very much, Peter. Thank you very much, Hans Jacob. Maybe I just wanted to clarify your comments there. You spoke about a little bit of higher unit OpEx in the NCS versus the CMD kind of ambitions, but alluding to the fact that it is pretty much quarter and field specific in the second quarter. Could you just kind of reiterate that point and why through the second half of the year, we should expect costs to come back in line with your 2018 forecast, please? And then secondly, I guess, yes, maybe going over to the U. S. Onshore, the business you're going to start running. I'm just looking at international gas and it looks like Marcellus gas is up strongly, really strongly 36%, 37% despite gas prices actually falling year over year and through 2018. Just wondering, is that still because of Marcellus is so low cost and so profitable, you can still drive up volumes there and still deliver underlying profitability there? That's the second question. Thank you, Joost for those questions. So first on the MCS cost. As we said, we will see some higher cost when new fields are brought on stream like Innoclog and Burding. Remember, costs are still very close to a 10 year low after several measures taken over the years. As you mentioned, there are some quarterly specifics related to maintenance. Pension is a one off and also some additional costs on unplanned losses on some fields. But we continue with our continuous improvement and strong efforts on cost and capital discipline. On the U. S. Onshore, you're absolutely right. It's a strong production growth of 34% overall from the U. S. The onshore is accordingly growing in the gas. This is Utica and Marcellus, new wells on stream and a record high 370,000 barrels overall U. S. Production. So this is in line with what we said at the CMU, and it's a strong contribution from this, and it contributes to the strong close to record high international results. Okay, very good. Thank Our next question comes from Thomas Adolff of Credit Suisse. Please go ahead. Good morning. I've got 2 fairly straightforward questions, please. Firstly, just to clarify on your comment on the underlying decline rate. If I'm not mistaken, you said it was 2% or thereabouts. Presumably, that's kind of better than your base case. Your base case, I think, is around 4%, 5% per annum. So I was wondering what's driving that since production efficiency is quite high already on the NCS. 2nd question, just specifically to Europe and gas demand. Can you say something on gas demand, including reloads during the Q2? And perhaps linked to that, why European trading was a bit softer this time around? Thank you. So thank you, Thomas, for those questions. On the decline rate, it's 5%. It's unchanged. I said the production growth for this year is 1% to 2% and maintained. So that's hopefully clarifying that one. On the European gas, we have seen hot weather increasing in cooling demand, reducing availability of hydro as an effect of the weather. When you go going forward, we could see some pressure since the European gas prices gained through the second quarter under pressure from high crude prices, relatively low LNG volumes and some curtailments both from the UK and the NCS. So storage injections have been relatively strong, significantly reducing Europe's deficit to the 2017 levels. So going forward, some pressure on European gas, we expect. Okay. Thank you. Our next question comes from Biraj Borkhatria of Royal Bank of Canada. Please go ahead. Hi, thanks for taking my question. I had 2, please. The first one is just following up on your comments on the Eagle Ford. You mentioned the impairment was driven by a lower long term oil price assumption, but also a change in valuation methodology for the Eagle Ford. Could you just provide some more color on what exactly has changed there? And also as part of that, could you give us an update if there is any on the world spacing issue? So that would be the first one. 2nd question, just very simply for you is looking to the second half of the year, could you just remind us what your expectations are for the Norwegian cash tax installments? Thanks. So thank you, Biraj. On Eagle Ford, in the second quarter, 1st overall in the U. S, we bought time impairment and reversals. Overall for the U. S, it's 300 net, euros 760,000,000 impairments, of which $240,000,000 of them is exploration expenses. On Eagle Ford, there is a small change in the long term price, but also a business plan update with some deferred production from Eagle Ford due to the change of the well spacing. We have, in the past, explained that we did 500 feet well spacing along with other players in the industry. We narrowed it down to 200. We did the campaign of 80 wells on 200. That didn't turn out to be successful. So we are assessing it. And while the recent drilled wells show improved production performance, the results are not mature enough to be taken into consideration for the impairment evaluation and more time is needed, realizing the production performance over a longer period of time with more wells. And this is impacting the production the long term production with some deferred barrels. The second element of changing the valuation methodology, Elian, do you want to comment on that? I can do that. So in Q3, we used the fair value. So that means that we got input from external market. And we are required to use the higher of an external market and our own assumptions. What we see from the market is an indication of that not being present any longer, and then we are moving back to our own assumptions now in Q2. So your second question was related to NCS tax installments on Spain. Do you want to cover that one? Yes, I can cover that one. As you know, the Norwegian taxes are paid half the year, they occur and half the year after. So in the first half, we have paid taxes then from last year. 1st August, we will have the 1st installment on the 2018 taxes. That is estimated to be around NOK 14,000,000,000. We will do an assessment for the 2 remaining part of it, but the first one is NOK 14 billion around SEK 14,000,000,000 which you want. Yes. And there will be a recalculation also in September, October related to the 2 remaining NCS installments. Our next question comes from Alastair Syme of Citi. Please go ahead. Hello. I also had a question on the impairments. You mentioned change in the long term oil price view. I just wanted to clarify if that's a corporate change or is that just applying to the U. S. Business? And secondly, I just wanted to ask about Roncador, which I think you mentioned completed on the 15th June. But I believe the deal was backdated to the 1st January. So I just wanted to confirm that, that backdating was flowing through the working capital and the cash flow. Thank you. So on the impairments, it's a corporate change. Roncador, Eirion, do you want to cover the question related to January, Sven? Yes. On El Ancador, the effective date was then 1st January in the settlement, but we then did the final payments on it, and we took into account the value of the production from 1st January up until until the closing debt. So that has then been taking into account reducing the payment somewhat. Okay. So it's a reduction in the payment rather than anything on the working capital items. Is that right? Is that what it appears on the cash flow? Yes. The pro and con meant that you paid a little bit less on the CapEx. And so just back to the oil price view. Are you able to say what your new long term oil price view is? On the oil price, as it is disclosed in the Note 6 in the MD and A. It is mainly then up a little bit on the short term. And then 2022, it's $75 in 20.18 dollars $80 in 20132018, which earlier was then measured as a basis year 2016. That's the nature. Okay, brilliant. Thank you very much. Our next question comes from Mehdi Enabati of Societe Generale. Please go ahead. Hi, good morning and thanks for taking my questions. First question regarding the U. S. Production, please. We can see that onshore liquids production started going up with the increasing number of fluids currently in use. Can you tell us if you intend to keep increasing the number of rigs if the WTI price remains at around $70 in H2 and also for 2019? And second question regarding your production efficiency in Norway. So you've highlighted the last quarter that you were reaching weaker high levels above 90% and you intend to stay around those levels. But can you please tell us what was the prediction efficiency level in Q2 given it looks like it went slightly down? And do you think that you will be able to reverse the situation in second half twenty eighteen despite you are increasing the impact from turnaround? Thank you. So thank you, Mehdi, for those questions. Let me start with the last one. On production efficiency, we have had an impressive performance of many of our NCS installations also this year. In the first half, we have more than a dozen installations with regularity at well above 90%. In this quarter, we had somewhat higher unplanned losses due to events on a couple of installations in April, May. Those issues have been solved. These are deferred volumes. And we think we can achieve also high regularity going forward. To your first question on the U. S. Onshore production and activity level, We have high activity level in the U. S. We continue to look closely at economics before we raise the activity. We have 4 operated rigs and 1 completion crew in each basin. And in this quarter, the production increased by 34%. And overall, it's expected to increase slightly in 2018 versus 2017 with more completions. All right. Thank you very much, Hans, and all the best for your new position in the U. S. Thank you. Our next question comes from Anne Gjohen of Handelsbanken. Hey, good afternoon. Thank you for taking my question. I have a question related to maintenance activity. You're guiding somewhat higher maintenance activity, Q3 in particular. Will this have kind of any impact when it comes to cost level due to a different product mix? Or will it impact tax to some extent if it's kind of different crop product country mix? Or where is the maintenance activity mainly taking place in Q3? Thank you. So thank you, Alne. The maintenance impact was clearly visible as guided on the NCS this quarter. The coming quarter, there will be more so in the international portfolio. We are expecting 80,000 barrels impact on the production, and we do not have any guidance on a change in the products mix as so. Thank you. Our next question comes from Rob Pulleyn of Morgan Stanley. Please go ahead. Yes. Thank you. Thank you, gentlemen. Just shifting gears slightly, could I ask about some of your maybe further out projects, including in Brazil, where I believe there are drilling plans on Greater Carcara and when we should expect an update in terms of news flow around that development? And secondly, if I can just clarify on the maintenance from the Norwegian side that those higher maintenance costs or maintenance related costs in 2Q will not be spilling over into 3Q? As you mentioned, there'll be international maintenance versus a different issue. Thank you very much. Yes. So the short answer to the second question is that, yes, the seasonal one offs and related to maintenance, you should not expect to see in the coming quarter. On the first one, we have an exciting well in Brazil called Gujansuma. It is in the BMS-eight license with the Carcara discovery. It's an ongoing operation. We have a discovery, but we have not clarified yet the size of the discovery or the commerciality. So this is something we will have to revert to. But the initial results are promising. All right. And thank you and best of luck in America. Thank you. Our next question comes from Christian Malek of JPMorgan. Please go ahead. Hi, good morning. Thanks for taking my question. Just one question on just underlying cash flow. Just for year on year looking at your CFO from ops, I mean, I understand the delta on taxes paid. But sort of with the improvement in the oil price, can you just help me understand to the extent to which basically your cash flow from ops will come down, which links into the underlying cash flow for the quarter, why is it that you're not getting as much capturing on the cash flow from ops relative to where the oil price is year on year? And then also sequentially, just help me understand where is the cash flow leakage here? And if you could just walk me through the moving parts, please. Thank you. Yes. Thank you for that question. So the cash flow from operating activities year to date is very strong, over SEK 13,000,000,000, dollars 10,000,000,000 after tax. This quarter from operations, it's $1,000,000,000 lower than the Q1. So we ended at 6.1 This is mainly due to the reduced volumes sold in the 2nd quarter compared to the Q1. It's partly offset by increased prices. We also have the derivative effects related to commodity derivatives, a loss of SEK 455,000,000 in this quarter compared to a loss of SEK 163,000,000 in the Q1. So then we have the taxes paid. They increased by SEK 1,200,000 SEK 1,200,000,000 from the SEK 1,100,000,000 that we had. So we are up to SEK2.3 billion on taxes due to the 2 tax payments in the 2nd quarter compared to only one ops have gone from EUR 4,000,000,000 to EUR 3,000,000,000. And so just trying to understand that in the context of an oil price that's up significantly. I mean put another way, is it basically high oil prices are coming with more cash taxes, more working instruments, essentially the capture on the high oil price is not as good as you thought it would be. I'm just trying to understand on the year on year improvement, Ron, sequentially, what the underlying cash flow efficacy is doing. And just with the high oil price, it's trying to square out why it's not better. So there is no change in any guidance. We are on track with the breakeven of EUR 50,000,000,000 and the EUR 12,000,000,000 free cash flow as we guided on. So no change to that. Okay, fair enough. Thank you. Our next question comes from Rafal Gutas of Bank of America Merrill Lynch. Please go ahead. Yes, good morning. Thank you for taking my questions. Just coming back to the maintenance in Norway that you highlighted, I just wanted to know the fields that were specifically the drivers behind the, I guess, disappointing performance in Q2. And I wanted to know if it was more logistics related or operational issues that led to the slower than expected ramp up back to full Pelt over there. And then secondly, you mentioned in your associated income that the weakness was partly driven by, I guess, Lundin Petroleum. I just wanted to understand whether that was owing to operational or fiscal issues. On maintenance in Norway, we had a seasonally high maintenance activity, some additional costs related to that. The turnarounds impacted the overall production, and this is normal for the Q2, but the impact was larger than in 2017. And on the regularity, the production efficiency, it was not on par with the very high results obtained in the previous quarters. As I've explained, we have more unplanned losses. This added to some of the costs, but also the lower production. So costs per barrel went up relative to the high performance we've had, but it's 2 fields. It's back in time, the issues have been solved. So the decline is expected and we had the contribution from the new fields coming on stream. So overall, we should be fine, I think, going forward on the maintenance part. The associated income of Lundin is FX impact, and I would just refer to the Lundin results. Understood. Thank you. Our next question comes from Tipan Jotalingam of Exane BNP. Please go ahead. Yes. Thank you. Good morning. It's Tipan. I have two questions actually. Just one follow-up on, could you just talk about the oil price or macro assumptions you made for the guidance on the $14,000,000,000 for the 1st tax installment? And then secondly, on CapEx, I know typically you are sort of second half loaded in terms of annual CapEx. But I was wondering how much contingency is there in the $11,000,000,000 for 2018? Okay, Stephen. Thank you. I'll do the CapEx, and I ask Sven to cover the first installments. On the CapEx, SEK 4,600,000,000 year to date, higher activity level, higher in the second quarter than in the first. Going forward, we have very good progress on our project and the activity related to Sarco Boste Hanssen, the completion of Martin Linge, Johan Sajdrup Phase 2 to be sanctioned later this year. We have delivered a PDO for Johan cost bags, Nordea expansion. So we expect higher activity. We also have Energino Phase 2 in Brazil. So there will be higher activity in the second half. Then to you, Zain? Regarding the basis for the calculations of the taxes, which then resulted in the 14,000,000,000 in the first installment. What we do then is that, yes, in the beginning of June, we take the realized prices that we have done so far up until May into context. Then we look at the outlook for the remaining of the year and looking at the forward at that point in time and then taking into account the production and investment levels. So that's what we have used. So we are into the 70s. Our next question comes from Lydia Rainforth of Barclays. Please go ahead. Thank you. And just a very big picture question for me, if I could. Just in terms of when you reflect on your time as CFO, what is the thing that you are most proud of achieving? And then what do you think is the biggest challenge for your successor coming into that role? Thank you. Thank you, Lydia. So it's been great to be a part of a team that has contributed to a significantly stronger portfolio through the value enhancing transactions. The countercyclical moves, selling at higher prices in Norway, buying at lower prices both in Norway and international And the breakeven of our next generation portfolio of US21 dollars per barrel, dollars 4,500,000,000 lower costs per year. And also, I think the share price development over the last few years has been okay. And I think looking at the biggest challenge for last season, it's more related to what to do with all the strong cash flow going forward. Wonderful. Thank you. Our next question comes from Rob West of Redburn. I'd like to go into 2 areas. The first one is on the tax losses that you're dipping into in your international business. And I'm guessing that's mostly the U. S. Where you have unrecognized losses and you're realizing those, boosting your cash flow per barrel. Is there anywhere else in the international business where you have unrecognized tax losses that we should be flowing through? And then what would make you shift those unrecognized losses to actual tax assets? That's the first question. And the second one is on Oseberg, which I asked about last quarter, but I'd like to go back there. Is performance in the first half of the year at Oseberg where you wanted it to be? And can you comment on some of the issues on field flying into the Sturer terminal? Thank you. Thank you, Rob. Ouseberg is a fantastic installation, and the organization has performed very well over a long period of time. This quarter, slightly lower on the regularity, but they will be back. On the tax losses, there are more than U. S, Ireland is an example. There are also some deferred tax losses in Brazil, and we have Canova on the list. That's great. Thank you. Our next question comes from Jon Olaisen of ABG. Please go ahead. Yes, thank you for taking my question. When I look back to the Cap Markets update earlier this year, you guided on average CapEx of USD 11,000,000,000 in 20 18, 20 19 20 20. Since then, you've done a number of rather big transactions, both in Brazil, U. S, Gulf of Mexico, Martin Link, Guyana, etcetera. I just wonder, in the over those next 3 years, does that CapEx will have been influenced by these acquisitions, I. E, will it be higher due to these acquisitions, in the medium term, the next 2, 3 years CapEx? Well, thank you, John, for that question. No, there's no change in the guidance on CapEx. You're absolutely right. You mentioned several, what we call, value enhancing transactions. These are opportunity driven. We think they make good sense in a long term perspective, and we will continue to grasp these opportunities as they appear, but there's no change on the CapEx side. So the CapEx related to the acquisitions is included in the USD 11,000,000,000 guidance? Yes. And then may I ask how many more acquisitions can you do before the CapEx yes, before the CapEx is in influence for the next couple of years? Well, organic CapEx guidance of EUR 11,000,000,000 is including the transactions. Okay. So organic includes acquisitions, non organic? It's confusing, but Guidance and the non organic is slightly higher. Okay. So total CapEx will be higher than 11%, you said? Do I understand that? Let's be clear. We provided guidance on organic CapEx. We said it would be around €11,000,000,000 in 2018. And on average, €11,000,000,000 a year, €18,000,000,000 to 20,000,000,000 euros Okay? We also said that we would be opportunistic in terms of anything that came up as we have been in the inorganic. And that will be one of the ways that we might use the additional cash flow. So that's not included in the 11%. It will be on top and opportunistic. But the guidance the CapEx that we have on some of those acquisitions, for example, Martin Linge is included in the €11,000,000,000 guidance. Okay. That's okay. Thank you. Thanks. The next question comes from Kim Fusier of HSBC. Please go ahead. Yes. Hi, everyone. I just have one question. I wondered if oil prices above $70 is starting to unlock incremental investment at the margin, for example, things like infill drilling on the NCS. So do you find that, for example, within your EUR 11,000,000,000 organic CapEx budget, you've got good execution on the big projects that you're running a little bit below that in terms of run rate. But do you think you'll be able to do more than you expected initially on things like infill drilling? Thank you. Any color you're able to offer would be helpful. Well, thank you for the question. So it's been very rewarding to see the drilling and well performance over the last year with more efficient drilling, 70% more meters today, 40% less time and 35% less cost per well. So that's been an impressive performance and that qualifies for we get more for less, and we have done more wells for these benefits and including infill drilling. So the ambition level on IR is very high. We are already at a world record on some of our fields and more than 3,000 engineers work on moving resource classes, getting ready for this additional drilling. So this is part of the ambition level of our EUR and part of the efficiency program that we are going through. That's great. Thank you. It appears that there are no further questions at this time. I'd like to turn the conference back to your host for any additional or closing remarks. Thank you. Yes, no more questions. I'd just like to thank everybody for participating. I know it's a busy day. As always, if there are any follow-up questions, don't hesitate to contact us in Investor Relations. I'd also like to thank Hans Jacop for his time as CFO. I wish him the very best of luck as he moves over to the States and to welcome Lars Christian. And with that, I'll bring the call to a close. Thank you very much indeed.