Good morning and welcome to our presentation of the third quarter results. My name is Bjørgulf Haukelidsæter Eidesen. I'm one of the two co-CEOs of the company. With me, I have two colleagues today. So, Siri.
Siri Melberg, responsible for branding and communication.
And my co-CEO.
Leiv Kallestad. So I think we are ready to go straight to the presentation this morning. We start, as usual, with the highlights. And one of the key activities or key initiatives that was initiated during quarter is the fact that we have started a strategic review initiated by the board and the major shareholders. And the purpose of that is to explore what options are available to Horisont, to develop the project portfolio within the CCS and among our business areas. We need to look at what opportunities that we have and evaluate them so we can see what is the best way then to realize value for the shareholders and then also see the potential to execute on the strategy and the business plan that we are following. And the timeline is, of course, of essence here.
And our expectation is that we will be as far down the road by year-end to allow the board to assess the options and see what that means and then be able to decide on the way forward for the company. And in the meantime, we continue to work on the project activities and move them forward as much as we can. And we have been focusing on commercial maturity now for many months, and we continue to do so. And I think as the numbers show as well, that we have driven down costs and the spending significantly over the last couple of quarters, and we continue to work on that. On the CCS side, of course, the fact that we have submitted a license application for a license in the North Sea in August is exciting.
And of course, it will be even more exciting to learn what the Department of Energy thinks about that when the day for an award comes down the road.
Good.
There are some subsequent events. Typically, the quarter starts in July with vacation time, August vacation time, and then things start to pick up, and we have experienced that this fall as well, so just a couple of days ago, we entered into a collaboration agreement with Ecolog to develop really a part of the European CCS corridor, more specifically here, a Norwegian-Dutch CO2 corridor, and then also look at how we can enable then industrial-scale transportation between the Netherlands and the Gismarvik CO2 hub. And as a part of the Gismarvik project, we have also submitted then an application for the EU PMI or Project of Mutual Interest Initiative, where the expected feedback with respect to an award is in Q1 next year, and then on the carbon side, we have entered into a collaboration agreement for CO2 storage developments in Europe with a large global technology company.
The purpose is then to develop capture and storage projects in Europe, not in Norway, where our role would be to develop the storages. As you know, Orlen pulled out of the Polaris license. We have been working with the ministry, then, and have a dialogue with them to look at how we can continue to work Polaris and have applied for a 12-month extension to the BOK or decision of concretization deadline. On Horisont Ammoniakk, we have been assessing CO2 storage options in the North Sea for the Barents Blue project as an alternative to Polaris. There are two reasons for this. One is, of course, the uncertainty Polaris was facing with Orlen pulling out. The other aspect is that when we started Barents Blue, we didn't have any storages but Polaris.
And now we can at least look at what would be the best option for us going forward. So I think we go to the next. Financial highlights. As I pointed out early on, we have continued to reduce spending and thereby also extending the capital runway we have. We had to implement layoffs during the quarter, and we have continued to reduce the use of external consultants. And then, of course, we work on commercial cost-saving initiatives. So we have seen then a reduction in the operating losses compared to last year, compared to the previous quarters. And the burn rate now is down significantly compared to what it has been in previous years and also this year. What we are trying to do now is something that we have said for a while is that we have spent a lot of money over the last four years.
But by doing so, we have done a lot of work. We have done a lot of studies. We have a lot of documentation. We have a lot of knowledge. And we try to use this knowledge and thereby be able to use Horisont employees to move commercial and technical work forward. And we are less dependent on external consultants to do the work for us. And this obviously helps. And then I think we are trying to work smarter as well. So we are more efficient in how we are doing things. Given that we have a capital runway and we know it quite well, we will continue to make efforts to reduce costs further down to a critical minimum. So we expect then the spending rate to go down further.
We see that we get full effect of the other measures as well now into the fourth quarter. We also believe that the fact that we have done these things, that we are leaner, that we are more efficient, that will also allow us to work more, have a more leaner business model going forward. We think that this will help us as well when we're trying to pan out how to run the company when we go into 2025. On the cash side, we had NOK 98 million available at the end of Q3. That will give us a runway now into the second half of 2025. Then, Bjørgulf Haukelidsæter Eidesen, if we go into the projects in more detail.
Yeah, thank you. So starting off with Horisont Infra. And Infra is our subsidiary where we have midstream CCS terminals and pipelines. So the project focus there is the Gismarvik CO2 terminal, as illustrated on this slide, where we, like with the Tata Steel press release, develop value chains with large CO2 emitters from the European continent and the Nordics into Gismarvik hub. This is one of the largest CO2 hubs in Europe. So it's planned in a three-stage development with the final step bringing the capacity up to 24 million tons per year. So just to repeat shortly, we planned an investment decision in 2026, started in 2029, aligned with connected licenses. We are currently having a full ownership of this terminal, so 100% share being in full control. And it's located at the largest regulated industrial park in Norway. So we have a high maturity for this project.
I spent significant time and efforts developing it. We are now, as Leiv said, focusing on the commercial maturity and closing the commercial agreements to have a complete commercial setup for this value chain. In this quarter, there was a lot of progress. We had done eight feasibility studies, both for emitters wanting to deliver CO2 into the terminal and also for emitters wanting to deliver CO2 in different ways, ship or truck into the terminal. We have been working with the licenses in the North Sea area. All of the licenses is within reach, you can say, of the terminal, except for Polaris, which is in the Barents Sea. But all of the world licenses are within reach of the terminal. So we're working with them to become a central part of the solution, the value chain solution.
So we also have done feasibility studies for licenses and are doing feasibility studies for licenses. And we are looking into both, let's say, how to connect and how to perform logistics and other important aspects of the work or the value chain for these licenses. We are preparing for concept studies based on having the complete commercial agreement set up and then be able to start up those in Q1. This would be extended concept studies. So not to do concept studies anew because we already done concept studies, but it is to finalize the work before so we are ready to enter into FEED. The commercial negotiation with CO2 customers and CO2 storage are progressing. And it's been one of the big activities, I would say, related to the Gismarvik CO2 hub. It's really where we are focusing to make sure that we have the value chain complete.
That's what we call the DG2 preparedness level or maturity level, DG2 being the last milestone before the actual FID. We submitted a funding application, which is for the Connecting Europe Facility, the CEF funding, which is only eligible for projects of mutual interest. Gismarvik CO2 hub is a part of the Nautilus PMI project headed up by Eric Keed. We have a pilot CEF application, and that will provide feedback at Q1. That is for costs up to FID. Then we enter into collaboration with Ecolog and also with Tata Steel, which is part of that. Tata Steel is a major industrial steel company. They will provide a significant amount of CO2 through this value chain into the Gismarvik hub. It adds on to the large amount of CO2 emitters wanting to deliver CO2 to the Gismarvik hub.
There are some previous milestones that we have reported in earlier quarters. Moving on to Horisont Ammoniakk. This is our subsidiary for the ammonia business, where the main focus is the Barents Blue project. This project is the only of its kind in Europe. It's the only world-scale blue ammonia plant. It's also had its main competition in the Middle East and in the US. We are well positioned for the European market with this project. Also here, the main focus is the commercial maturity to complete the commercial agreement setup. Investment decision is 2026. We're looking at startup in the change of 2029-2030, early 2030 or late 2029. It's one million tons of clean ammonia production annually, which brings it to what we call the world scale. We have a 50% share. This project is located close to Hammerfest.
It is an IPCEI hydrogen project. That means that we have access to funding. We've been awarded NOK 4.2 million. That funding is meant to be used partly for FEED and then partly for CapEx. That is. Okay, we had a small technical problem. It's now being fixed. I'll restart the slide so that you can follow from the beginning. In the Barents Blue project, we are focused on the commercial maturity and to make sure that we get the commercial agreements in place and signed. In the Q3, we focused on progressing the term sheets for ammonia offtake. We're working with large European industrial offtakers to make sure that we get the term sheets in place. That is a key focus, of course, to complete those term sheets. We have a good group of large companies we're working with.
There's a good demand for the ammonia. Also, the gas supply is, of course, important. We're also progressing and working with, negotiating wanting to have those term sheets in place. Finally, we are making sure that we have the CO2 storage term sheets in place as we need. We also reported that we are working with alternative storages to Polaris so that we have options where we get to our Concept Select decision. We will have to make certain decisions of how to move forward, either with alternative storage or with Polaris. We will get back to that when we come to the Concept Select decision. But now the key focus is to finalize the commercial agreements. There has been a lot of progress overall in the Barents Blue project that we reported on previously, but that's included here for completeness.
But of course, our main focus is now the commercial maturity. Horisont Karbon is our subsidiary where we work with CO2 storage licenses. We have worked up until now mainly in Norway. But as we reported, we have started also to work outside of Norway with CO2 storage licenses. So we are expanding our business. In this subsidiary, we focus from, let's say, emitter all the way to storage. So we also try to close the value chain depending on the customer need. In Norway, we are focused on taking CO2 typically from shipping terminals on the continent in Europe and in the Nordics. When we expand into or outside of Norway, we focus mainly on the storage side and work with partners for the other elements. But we still, as I say, do the same type of business outside of Norway that we do.
For the Polaris, it was started up in 2020 and awarded in 2022. We spent a lot of time with Polaris in developing it. It is close to the Barents Blue and a very, let's say, attractive storage for Barents Blue. But we did change the legal entities both for Barents Blue and for Polaris. So there are two different commercial entities. So in terms of the commercial distance, we also have now alternatives. So that Barents Blue has its alternatives to Polaris. But Polaris is also working very hard to be an attractive storage for Barents Blue. On the progress, we have reported that we need to set up a new license group as Orlen of Norway has left the project. So we have applied for an extension of the deadline to move into the next license phase. And we will get back to you with more information when we have that.
We also worked with third-party clients for some time in Northern Norway. We looked at hubs, for instance, in Narvik and other locations, and now there is work that will be administrated by SINTEF and is supported by the Climate Program or financed by Climate, and this involves looking into CO2 storage value chains for Northern Norway CO2. We also previously reported that we have worked with both North Swedish and North Finnish CO2, so that's also part of the potential value chains into the Polaris storage. Other milestones we reported on earlier, I would just like to mention that we have worked to mature the license to be able to prove that there is sufficient storage and injection capacity for Barents Blue. That has been done, and also to prove that there is a containment of the CO2 in the storage has also been done, so it's a mature storage.
We are now focusing on reestablishing a license group to be able to be an attractive solution for Barents Blue. Back to the work outside of Norway. For us, this is a new growth platform where we can utilize all the things we have developed while being in Norway in projects outside. I think we have a significant competence to bring to the table both in technical, commercial, and for the value chain aspects. All of this, we are able to monetize. As Leiv said, with all the work we have done and all the technical bases that we have, we are able to do a lot of things with the team that we have for these new projects. This is a very, very exciting opportunity for us.
We see that it's the same frameworks that we're used to in Norway, the European frameworks, as many of the same large emitters. So in a way, it's very close to home when you're working with these types of projects outside of Europe or outside of Norway in Europe. Yes, Leiv, please.
Yes. Let's try to sum up what we have been through on the presentation this morning. So on the strategic review, the goal is to look at what opportunities are available to Horisont. And the focus is shareholder value. It is to ensure that we are as well positioned as we can be to secure the funding that's required to move the company forward and also execute the strategy. But of course, we can't guarantee the outcome of such processes.
So management and the board, of course, work jointly together to look at all options in this regard. We have done good commercial progress on the Gismarvik CO2 hub. Exciting work going on. The studies that we have been performing and are performing on behalf of both emitters as well as the licenses are very interesting. And we believe that there is a growing realization both from an emitter's point of view, but also perhaps from the licenses without speaking for them, that common infrastructure is perhaps a good way to move forward. Because if all the storages in the North Sea are going to have their own solutions, negotiate their own deals with emitters, etc., well, it's feasible. It's possible. But at least our view is that that might take a lot of time to realize projects that way.
The collaboration with Ecolog and Tata is a good example of how Horisont is working. We really try to look at the whole value chain, put the pieces together as a key element in developing the projects that we are involved in. The collaboration with the technology provider, and again, we can only apologize for not being allowed to say who it is, because I know some of you are curious about that, is really interesting. We should say that this is not an initiative that is going to cost Horisont a lot of money before we are at the project stage where it's possible to actually raise money to fund it outside our existing sort of operating cost base.
Then we will continue to reduce spending, take measures required to make sure that we can operate in a responsible manner going forward and make the steps necessary to make sure that we can act on short notice whenever that's required when it comes to our business projects. So with that, I think we are into the Q&A session.
Y es. So we have already started to get questions.
I just wanted to add one thing. I didn't comment on the picture on the last slide. It was a very nice picture of a biographer signing the Ecolog agreement in Hopper and Denberg. Yes. Sorry about that.
Yeah. Thank you. Thank you. No, no, it was a good event with Norway and the Netherlands. So we have one question here regarding the license application. So we have submitted license applications. When will this license be awarded?
Leiv, do you want to comment on the license application award?
Yes. Yes. We have a dialogue with the ministry, and they will never tell us exactly when things will happen. But the understanding we have is that information about the award will either be just before the end of the year or early in the next year.
Yeah. So we'll know more later. Then there's a question. When do you start receiving money from the Enova support? I guess that is the Barents Blue. So maybe when do we get the IPCEI funding made available?
Yeah. This is something we have tried to explain before. For us to move forward with Barents Blue, we need to have gas purchase agreements, and we need to have offtake agreements in place.
And we talk here. It doesn't have to be the final agreements, but we need to have term sheets, which is the term that we use. When that is in place, then we can form the partnership we need to move forward and take the Concept Select for Barents Blue. So we are waiting. And move into FEED. So when we go to that stage, then we can start drawing on the Enova support. So what month that can happen, I don't know. So the first thing is first, and that is gas purchase term sheets and ammonia offtake term sheets. Then we will be ready to go into the next phase.
Good. And as I said, we are delivering studies to both licenses and emitters. So what license are we delivering to?
Maybe I can just say that we can't disclose who the licenses are, but we are delivering several studies to several licenses and project licenses with quite high level of maturity, so we are quite happy about working closely with the licenses and emitters, and we are getting paid for the work, so it's a clear, let's say, sign of licenses wanting to work with the Gismarvik terminal, but we might be able to get back and say who they are later, and yeah, when will we know who that technology company is? I guess that refers to the work outside of Norway on CCS projects. Leiv, you partly answered it.
I partly answered it, yes, and it's work that has been done, needs to be done in Europe to mature the projects.
Before those projects are at that stage, we are not allowed to disclose who we're working with. We can only apologize for that, but that's the name of the game.
Then there's a question on the number of employees. We have 30 employees, it says, and we're only running what have we created of value within our debt? Or what values have we created with those employees, I guess, is the question. Maybe I can start. Yeah, you can start. Because I think there were projects we are developing. I guess the real value of the projects is realized when you get the commercial agreements in place. I think we have done, let's say, a lot of work to move the projects to where they are now.
As you see from the report this time, you see that we are, let's say, we are maturing the commercial agreements and focusing on getting those signed. I guess there is a lot of value already in those projects, but you really get the realization of that value when you get to sign commercial agreements. It is, let's say, there are two answers to the question in a way. There is a significant inherent value, but it will be much more when we sign the commercial agreements. That would be the real value of the work that we have been doing. To add anything, Leiv?
Y eah, I mean, stock market valuation is what it is. Sometimes it's too high, sometimes it's too low. The board and management are working together to realize value.
You will always come to a point in time where you see, is there more to gain by moving forward rather than not doing anything at all. I think we as a company look at all kinds of opportunities. But as Biogrip said, we believe that the parts are more worth today than the sum of the parts. Otherwise, there wouldn't be a basis for us to continue working. So I think the key work we can do is actually to mature the project commercially, as Biogrip says. And then getting to that stage is easier to actually visualize how much value there is in the company. Yeah. It will always be a subjective issue.
Yeah. And next one, what is the significance of the agreement you signed with Equinor and Tata Steel?
In terms of, I guess, significance in terms of maybe importance and value or what opportunities it can bring. You want to comment?
Yeah. I think for those who are working with us, they see that we actually have. We try to have a big picture thinking. We are not only working on a license and see how we can put a subsea template and some type of equipment out there and hope ship will come with CO2. We try to work with emitters. We try to work with those who sit at the other end that are working on logistics in Europe, and we try to see how we can piece these things together, including shipping to get CO2 to Norway and therefore also increase the chances of creating a commercial option for Gismarvik and make that a commercially viable project.
So the significance is that we have serious companies that are working with us. They see the merit of what we are doing. We think it contributes to increase the chances of Gismarvik becoming a success.
Yeah. Thank you. There's a question about the strategic review. I know we are actively working with selling parts, I guess, or raising capital. I guess that's the other part of the question. That is implicit. So what can you say about, let's say, what we are doing in a strategic review at this point?
The board, we call it a strategic review because it has you can work that in different ways. And since we have a structure that we are a listed company with a parent company owning the subholdings in Horisont, the strategic review will look at different options.
I can't go specifically into those, but we will look at all alternatives that are viable to make sure that we can work Horisont as a going concern going forward. We work on the premise of success. If the outcome of the review is unsuccessful, then the board will make the decisions required to make sure that we are acting in a good manner. We are working closely together, the board, management, and our financial advisor, to make sure that we get the best possible outcome of this review.
Yeah. Good. It's also a question of this project outside of Norway. You have reported that you want to enter a provision to develop CO2 storage outside of Norway. Where are these projects? I think specifically where these projects are, we have come into those details. I guess we will do at a later time.
I think in this phase, when we are developing the projects in the early stages, I think we will work with several projects, to put it like that. And the first project that we will put forward into a, let's call it a FID track, I guess we will report to the market. But for now, I guess in this phase, we will not go specifically into which of the countries we are developing projects.
And we should call it project opportunities at this stage because we need to mature it before it becomes a real project.
Yeah. So it's early phase projects, and we are not putting them into an FID track at this moment. And then there is a question of how many employees the company has today. What do you think?
Yeah. Today, we are actually 36 employees. Not all of them are full-time employees.
So that's the specific number today. As we said, we have laid off employees in the quarter, which is not a good thing to do, but it's something that we felt that we had to do. So the people actually that are actively working now is below 30.
Yeah. Thanks. And I think that is what we're able to answer this time. So thank you for all the questions. Thank you for attending, for listening in. Sorry about the technical issues we had. Anything you want to add?
Thank you very much for listening today.
Thank you. Bye-bye.
Bye.