London Investor Update November 2015 Philippe F. Mathieu, Senior Vice President, Head of Finance Fride Seljevold Methi, Vice President, Head of Corporate Financing
Forward-looking statements This presentation contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as "ambition", "continue", "could", "estimate", "expect", "focus", "likely", "may", "outlook", "plan", "strategy", "will", "guidance" and similar expressions to identify forward-looking statements. All statements other than statements of historical fact, including, among others, statements regarding future financial position, results of operations and cash flows; changes in the fair value of derivatives; future financial ratios and information; future financial or operational portfolio or performance; future market position and conditions; business strategy; growth strategy; future impact of accounting policy judgments; sales, trading and market strategies; research and development initiatives and strategy; projections and future impact related to efficiency programs, market outlook and future economic projections and assumptions; competitive position; projected regularity and performance levels; expectations related to our recent transactions and projects, completion and results of acquisitions, disposals and other contractual arrangements; reserve information; future margins; projected returns; future levels, timing or development of capacity, reserves or resources; future decline of mature fields; planned maintenance (and the effects thereof); oil and gas production forecasts and reporting; domestic and international growth, expectations and development of production, projects, pipelines or resources; estimates related to production and development levels and dates; operational expectations, estimates, schedules and costs; exploration and development activities, plans and expectations; projections and expectations for upstream and downstream activities; oil, gas, alternative fuel and energy prices; oil, gas, alternative fuel and energy supply and demand; natural gas contract prices; timing of gas off-take; technological innovation, implementation, position and expectations; projected operational costs or savings; projected unit of production cost; our ability to create or improve value; future sources of financing; exploration and project development expenditure; effectiveness of our internal policies and plans; our ability to manage our risk exposure; our liquidity levels and management; estimated or future liabilities, obligations or expenses and how such liabilities, obligations and expenses are structured; expected impact of currency and interest rate fluctuations; expectations related to contractual or financial counterparties; capital expenditure estimates and expectations; projected outcome, objectives of management for future operations; impact of PSA effects; projected impact or timing of administrative or governmental rules, standards, decisions, standards or laws (including taxation laws); estimated costs of removal and abandonment; estimated lease payments, gas transport commitments and future impact of legal proceedings are forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons. These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including levels of industry product supply, demand and pricing; price and availability of alternative fuels; currency exchange rate and interest rate fluctuations; the political and economic policies of Norway and other oil-producing countries; EU directives; general economic conditions; political and social stability and economic growth in relevant areas of the world; the sovereign debt situation in Europe; global political events and actions, including war, terrorism and sanctions; security breaches; situation in Ukraine; changes or uncertainty in or noncompliance with laws and governmental regulations; the timing of bringing new fields on stream; an inability to exploit growth or investment opportunities; material differences from reserves estimates; unsuccessful drilling; an inability to find and develop reserves; ineffectiveness of crisis management systems; adverse changes in tax regimes; the development and use of new technology; geological or technical difficulties; operational problems; operator error; inadequate insurance coverage; the lack of necessary transportation infrastructure when a field is in a remote location and other transportation problems; the actions of competitors; the actions of field partners; the actions of governments (including the Norwegian state as majority shareholder); counterparty defaults; natural disasters and adverse weather conditions, climate change, and other changes to business conditions; an inability to attract and retain personnel; relevant governmental approvals; industrial actions by workers and other factors discussed elsewhere in this report. Additional information, including information on factors that may affect Statoil's business, is contained in Statoil's Annual Report on Form 20-F for the year ended December 31, 2014, filed with the U.S. Securities and Exchange Commission, which can be found on Statoil's website at www.statoil.com. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot assure you that our future results, level of activity, performance or achievements will meet these expectations. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Unless we are required by law to update these statements, we will not necessarily update any of these statements after the date of this report, either to make them conform to actual results or changes in our expectations. 2
Investor Update - Agenda Strategy and Outlook Financial Performance Funding & Debt Strategy Appendices Introduction to Statoil 3
Statoil s strategic priorities NORWAY: Deepen and defend Statoil s position INTERNATIONAL: Create materiality, focus and profitability SUSTAINABILITY: Transition into a lower carbon future 4
Capital Markets Update, Feb 2015: Firm priorities, stepping up commitments 3Q 15: >3% annual organic production growth in 2015 High value growth 3Q 15: Reducing organic capex level to USD 16.5 bn 1) in 2015 FCF to cover dividend in 2016@100, 2017@80 and 2018@60 Robust financials: Maintaining 15-30% net debt to capital employed Increase efficiency USD 5 bn in cash improvements Increasing efficiency programme target by 30% Cash flow neutrality reduced by USD ~30 per barrel Prioritise capital distribution Firm dividend policy 3Q 15 dividend of USD 0.2201 5 1)Assuming NOK/USD of 8.00
2q 2015 Efficiency improvements coming through Operational efficiency improvements July 2015 1) 2014 2015 Q2 status 6 1) Field cost NCS = Installation subsea and topside operation and maintenance, logistics, catering, administration, HSE and reservoir management.
USD bn Prepared to use material flexibility Material flexibility in portfolio Flexibility from onshore and non-sanctioned projects 1) Capital expenditure 20 Flexibility US onshore Snorre 2040 Johan Castberg Bressay Krafla Trestakk Vito Bay du Nord Tanzania LNG Pão de Açúcar King Lear Asterix Peon Lavrans Opportunity to enhance value Prioritising high value projects Lower costs Simpler concepts 15 5-7 10 Growth to 2020 based on projects under execution 1) Start-up year 2015 2016 2017 2018 2019 5 Valemon Goliat Edvard Grieg Corrib Ivar Aasen Julia Heidelberg Aasta Hansteen Stampede Gina Krog Mariner Gullfaks Rimfaksdalen Hebron Johan Sverdrup Peregrino phase II 0 2015/16 2017/18 Non-sanctioned projects US onshore & capitalised exploration Johan Sverdrup Sanctioned capex Statoil-operated projects Partner-operated projects 7 1) Project lists not exhaustive
Investor Update - Agenda Strategy and Outlook Financial Performance Funding & Debt Strategy Appendices Introduction to Statoil 8
Third quarter 2015 Consistent strong operational performance Adjusted opex and SG&A down 15% YoY 1) Lowering 2015 capex guidance by USD 1 bn to USD 16.5 bn Strong cash flow generation Delayed schedule on Mariner and Aasta Hansteen 3Q dividend of 0.2201 USD 9 1) All segments weighted in main underlying currency
Strong production performance Continued high production regularity Value over volume Flex-gas moved from 2014 to 2015 and sold at higher prices Equity production mboe/d 1909 1829 1927 7% underlying growth 1) 10% on NCS Gas Liquids 10 1) Production change YoY adjusted for divestments
Adjusted earnings by segment D&P Norway D&P International MMP Strong operational performance give solid adjusted earnings Higher European gas prices 10% underlying production growth with production efficiency >90% 10% reduction in adjusted opex and SG&A per boe DD&A per boe up 1% due to ramp up of new fields Low realised prices lead to negative adjusted earnings Adjusted earnings impacted by USD/NOK development Ramping up new oil fields 22% reduction in adjusted opex and SG&A per boe in USD DD&A per boe reduced by 17% in USD 1) Strong delivery continues High reliability captured high refining margins Strong results from liquid trading in a contango market Higher after tax contribution NOK bn Pre tax After tax Pre tax After tax Pre tax After tax 3Q 15 15.5 5.1 (4.2) (4.5) 6.0 3.3 3Q 14 23.2 6.6 3.5 0.7 4.4 1.8 11 1) DD&A per boe based on entitlement production
Financial results Solid operational performance Strong results from MMP Low oil prices resulting in negative results in D&P International Impairment of exploration assets and provision for redetermination impacts IFRS 3Q 2015 NOK bn (2.8) 7.3 9.4 16.7 (13.0) 3.7 N/A (57%) (46%) (60%) Net income 3Q 2014 Reporte d NOI Adjustment s Adjuste d earnings Tax on adj. earnings Adjuste d earnings after tax NOK bn (4.8) 17.0 13.9 30.9 (21.8) 9.1 12
Cash flow 2015 Strong cash generation 2015 YTD; NOK bn High earnings after tax from MMP Proceeds from divestments Adjusted net debt to capital employed of 24% 13 1) Income before tax (7) + Non cash items (123)
Outlook 2015 Capex USD ~16.5 bn 1) Production >3% annual organic growth Maintenance 40 mboe per day 15 mboe per day in 4Q Exploration USD ~3.0 bn 1) 14 1) Assuming NOK/USD of 8.00
Investor Update - Agenda Strategy and Outlook Financial Performance Funding & Debt Strategy Appendices Introduction to Statoil 15
Net debt to capital employed Robust financial framework 30% Strong balance sheet to be maintained 25% 26% $60/bbl A-category rating on standalone basis 20% 21% 20% $80/bbl $60/bbl Net debt to capital employed at 15-30% 15% 10% 12% 15% $100/ bbl $80/bbl Long term financing Average ~9.3 years to maturity 5% $100/ bbl 0% 2010 2011 2012 2013 2014 2015/16E 2017/18E 16
Issue activity and strategy Key Elements: Strong credit rating: Aa2 (Stable) / AA- (Negative outlook) USD 5 bn revolving credit facility Refinanced in 2015: 5+1+1 years 21 banks Bond issued at corporate level Long term funding raised when a need is identified or when market conditions are favorable Access to a diversified investor group Geographic and investor type Bonds can be issued in a variety of currencies: USD, EUR, GBP, CAD, CHF, NOK and JPY Market Tools US CP EMTN US Shelf Bond issues since 2009* Proceeds USD ~31 bn Portfolio mgt. Since 2010* Proceeds > USD 23 bn * Updated 30.09.2015 17
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 USD Millions Maturity profile limited refinancing risk -4000-3500 -3000-2500 -2000-1500 -1000-500 Maturity profile: Split per currency Updated per 30.09.2015 0 EUR GBP NOK USD Total long term bond debt: USD ~ 31 bn Average years to maturity: ~9.3 years 18
Investor Update - Agenda Strategy and Outlook Financial Performance Funding & Debt Strategy Appendices Introduction to Statoil 19
Key figures EQUITY PRODUCTION 1.927 million barrels of oil equivalent per day in 2014 MARKET CAPITALISATION* NOK ~420 billion 22 billion barrels of oil equivalent in resources Oil production mboe per day 1400 1200 1000 800 600 400 200 0 2010 2011 2012 2013 2014 Total equity liquids production * 12 Nov 2015
The world s largest offshore operator Upstream focus World s largest offshore operator Operating more than 3 mill. boed NORTH SEA & NORWEGIAN SEA ARCTIC RUSSIA NCS legacy position CANADA OECD exposure 50% of resources on NCS CASPIAN Leading global exploration company Leading European gas supplier GULF OF MEXICO NORTH AFRICA Building strong US gas value chain Statoil listed 2001; OSE and NYSE Market cap; ~NOK 420 bn, USD ~50 bn SOUTH AMERICA WEST AFRICA Norwegian state; 67 % of the shares Current production of oil and gas 21
Investing for profitable growth Investment profile 2015-16 100 % 80 % 60 % Exploration Rest of world North America MPR and Other Gas MPR and Other Nonoperated New assets Non-OECD MPR and Other E&P INT 65% in liquids 55% in new assets 60% in operated assets 90% upstream related 40 % OECD 20 % NCS Liquids Operated Producing assets E&P NCS 0 % Upstream per region Gas/liquids share Operated/ non-op MPR and Other Producing/ growth OECD/ non-oecd Upstream/ downstream 22 1) Producing assets Including IOR
Significantly reduced modification cost Modification 1) cost down 24% as a result of Cost reduction Stricter prioritisation 40% Leaner scope Increased productivity Troll A - fire & gas detector Cost reduction whilst maintaining technical condition 35% Gullfaks C - freshwater unit 23 1) Modification cost include Statoil operated modifications.
Deutsche Bank 12th European Issuer and Bond Forum, London, November 2015 24