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Gwen Randall
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1 No puedes leer este correctamente? Míralo en tu NAVEGADOR Dear * FNAME *, Please find attached Repsol s quarterly newsletter which contains a video overview of the company s results for the third quarter of Additionally the newsletter contains details of our progress on the strategic plan during the first nine months of 2016 and some highlights from our Sustainability Day held in London, on November 7th. I encourage you to take a look through the newsletter. Enjoy our newsletter. pferneyhough.ir@repsol.com Interview of the month Paul Ferneyhough provides an overview of Repsol s results for the third quarter of Trending topic Delivery of Repsol s Strategic Plan and highlights from the Sustainability Day. Quarterly Results Repsol s third quarter figures for file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 1/12

2 FAQs Current Frequently Asked Questions to the IR team. On the road Our activities in November and December. Official Notice Repsol guarantees that the information contained in this section is exactly the same as the forwarded to the CNMV, CNV, SEC and OTCQX. Paul Ferneyhough provides an overview of Repsol s results for the third quarter of 2016 Despite lower Brent prices, lower Henry Hub, we ve been able to demonstrate across all our business lines increased profitability compared to 12 months ago. The upstream business is so far produced on average, for the first 9 months of the year, 694 kboe/d. ago. Upstream earnings were up by $650 M compared to 12 months All OF the business lines across our integrated downstream portfolio continue to produce better profitability than months ago. file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 2/12

3 One of the most important projects that is ongoing is our focus on synergies and efficiencies. I m very pleased to say, that there are projects in place already this year, that will secure 100% of our initial target of 1.1 B of benefit for the business by the end of Net debt in the period reduced by close 1.7 B, that means that our net debt is now below 10 B. Our business is broadly cash flow breakeven at current commodity prices. Delivery of Repsol s Strategic Plan It is now over a year since Repsol released it s current Strategic Plan for the period The plan was well accepted by the market; the objectives (expenditure optimization, efficiencies and synergies and divestments ) were considered the right goals to cope with the volatile business environment. Since the release, Repsol has updated the market frequently, in its quarterly results, on the progress being made. On this first anniversary it seems appropriate to share a summary of the achievements made during the last 12 months: Capex flexibility: The Talisman acquisition effectively doubled the size of the Upstream business. As such Repsol is currently focused on value rather than upstream growth. In October 2015 the company announced a planned capex reduction, for the period , of 35% from the levels recorded in 2014 by Repsol and Talisman combine. During 2016 this target has been updated to a 46% reduction. For 2016, Total CapEx is projected to come in well below the previous 3.9 billion guidance for the year. Based on results to date in 2016 it is expected to be around 3.5 billion and the initial plan process for 2017 is indicating a similar level for the following year. This reflects ongoing project optimization, strict cost control and the deferral of non critical investments. file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 3/12

Efficiencies and Synergies Program: the original target was 2.1 billion/year by 2018 and achieving more than 50% ( 1.1 billion /year) of the objective by the end of 2016.

This program has continued to accelerate in the third quarter and is now expected to deliver around 1.4 billion this year. The overall target of 2.1 billion/year by 2018 remains unchanged.

4 Efficiencies and Synergies Program: the original target was 2.1 billion/year by 2018 and achieving more than 50% ( 1.1 billion /year) of the objective by the end of During the first half of the year, terrific progress has been made and in June 2016 the original target was increased to 1.2 billion/year. This program has continued to accelerate in the third quarter and is now expected to deliver around 1.4 billion this year. The overall target of 2.1 billion/year by 2018 remains unchanged. Divestment Program: In October 2015 Repsol announced the intention to divest non core assets worth 6.2 billion with an expectation of completing half of the objective ( 3.1 billion) by the end of Since October 2015 the company has announced proceeds and benefits from disposals of around 5 billion, therefore already surpassing the interim 3.1 billion target for the end of The 5 billion announced to date, represents more than 10% of our capital employed, and has been delivered at good value multiples and without sacrificing future optionality or delivery. file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 4/12

Finally it s worth mentioning that during the last 12 months the company has been able, despite the volatile environment, to maintain its investment grade, a critical long term objective for Repsol.

5 Finally it s worth mentioning that during the last 12 months the company has been able, despite the volatile environment, to maintain its investment grade, a critical long term objective for Repsol. In summary Repsol is well placed to deliver on this year's target and is making strong progress towards longer term strategic goals. Highlights from the Sustainability Day REPSOL held it s 3rd Sustainability Day in London on November 7th. Around 35 investors, Analysts, and ESG experts attended the session that was hosted by our CEO, Mr. Josu Jon Imaz. Topics discussed this year covered the integration of Talisman Assets and associated ESG challenges and Repsol s progress towards a low emissions future. As in previous years, presentations were delivered by REPSOL Executives and ESG managers, who are directly involved in the company s day to day operations. Our CEO reinforced the company s focus and reiterated that Sustainability issues are fully embedded within the company strategy and taken into account in every single decision process. Being sustainable is the best and only way to be profitable in the long term During the presentations the presenters confirmed Repsol s commitment to Climate Change and it s support of the 2ºC scenario, as well as advocating for the application of a fair Global Carbon pricing mechanism. Among other topics, the company explained its position regarding its development in renewables, mitigation of methane emissions and flaring, and water and waste management. Other topics, such as the progress made on the integration of both Talisman and REPSOL, our commitment to zero accidents to 2020, Board composition and independence of its members, as well as other Corporate Governance issues, were also discussed during an extended Q A session. file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 5/12

6 The Sustainability Day Presentations, along with a video, are already available on our website from the following link: Repsol s third quarter figures for 2016 file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 6/12

7 Current Frequently Asked Questions to the IR team How do volatile gas prices impact Repsol s financial performance? file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 7/12

8 Repsol is a gas weighted company with 2/3 of its proved reserves being gas. Having said that, it is important to bear in mind the following facts: 65% of Repsol s current daily production is gas of which: 29% is linked to Herny Hub, 21% to Brent, 41% to fixed contracts and the remaining to other references (NBP, JKM, Algonquin )*. Overall 50% of Repsol production is linked to gas pricing and the remainder to crude. In terms of its impact in Repsol s accounts an increase of +$0.5/Mbtu in Henry Hub has an impact, during the 5 years of our Strategic Plan, of 0.8 billion in our FCF and 0.6 billion in our adjusted net income. * Figures estimated in the Strategic Plan Why did refining margins improve in October vs 3Q16? After a weak third quarter, refining margins have recovered strongly during the fourth quarter with the indicator ranging between approximately 7 9 $/bbl so far. Strengthening demand and widening differentials, both heavy light crude and middle distillates and gasolines, explains the recovery. Agreement with PDVSA regarding Petroquiriquire? PDVSA and Repsol signed, in Caracas on October 6th 2016, an agreement to provide a $1.2 billion credit line to the Petroquiriquire joint venture. This reinforces the financial structure of the JV and secures funding for the investment program over the next five years. Under the terms of this agreement, Repsol has secured future dividends and debt servicing by linking payment security to existing PDVSA debt instruments. Thereby, reducing overall financial risk to Repsol. Update on the main Brazil assets: Sapinhoa and Lapa? Projects in Brazil are performing as expected. We continue to have excellent performance from the FPSO at Sapinhoa South, with uptime close to 99%, and the plateau on Sapinhoa North has been achieved. The plateau of both, Sapinhoa South and North, is around 40 Kboe/d net to Repsol. Regarding Lapa first oil is expected shortly. file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 8/12

9 Meeting with Rating agencies? On 19th of November Repsol s CFO held meetings with the rating agencies in London. The agencies reviews the delivery of our commitments: capex has been reduced, synergies are being delivered better than initially expected, efficiencies are being implemented faster than originally expected, the divestment program objectives for end 2017 have been exceeded overall Repsol is delivering on it s obligations. The update was well received by the agencies and demonstrated the progression Repsol has made during Why did the Working Capital increase during the 3Q16? During the third quarter the working capital increased mainly due to four factors: receivables increased in Venezuela, higher oil prices, capex reductions resulting in lower accounts payable and finally with the contango situation our traders are taking a more aggressive position with inventories. During the last quarter of the year the company expects to reduce our working capital by $ M vs 3Q16. Which are main drivers of the improvement in the upstream operating results during the year? After the Talisman acquisition, the company shifted from growth to value delivery. The improvement in the upstream operating results is mainly due to our synergies and efficiencies program and the optimization of our exploration program to focus on lower cost lower risk prospects (reduced risk and lower impact on results). IR activities in November and December file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 9/12

10 The following list of events will be attended by members of the IR team along with representatives from the business. file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 10/12

11 Repsol guarantees that the information contained in this section is exactly the same as the forwarded to the CNMV, CNV, SEC and OTCQX Webcast 3Q16 Interim Condensed Consolidated Financial Statements 3Q2016 Press releases on the results for the third quarter of 2016 Information on the results for the third quarter 2016 Repsol reports the expected timetable to implement the second paidup capital increase approved by the Annual Shareholders Meeting held on 28 March 2014 ("Repsol Flexible Dividend") file:///volumes/working/repsol_inversores/2016/03.newsletters/investors/06.noviembre/web/index.html 11/12

No puedes leer este correctamente? Míralo en tu NAVEGADOR

No puedes leer este correctamente? Míralo en tu NAVEGADOR * IFNOT:ARCHIVE_PAGE * * END:IF * No puedes leer este email correctamente? Míralo en tu NAVEGADOR Dear * FNAME *, The upcoming newsletter contains a video in which I offer an overview of the results for