Aker BP to spend $350M on exploration, $450M on dividends in 2018

Aker BP plans to spend $1.3 billion in 2018, of which $350 million will be spent on exploration, and $450 million on dividends.

The company, focused on the Norwegian Continental Shelf, on Monday also said it would spend $350 million on decommissioning, with the increased decom amount reflecting the increased ownership at Valhall field.

“Aker BP has a strong cash flow outlook and a robust balance sheet with a $2.9 billion liquidity reserve, enabling the company to increase dividends for 2018 to $450 million, and further strengthen its position as the leading independent E&P company offshore,” the company said.

“We are well positioned for further growth. The acquisition of Hess Norge in 2017 significantly enhanced our production and resource base, and the submitting of three PDO’s late 2017 represents further important building blocks in our growth ambition,” says Aker BP CEO Karl Johnny Hersvik.

Aker BP’s pro-forma production in 2017 was 160 mboepd, including the production from Hess Norway. About 80 percent was oil and 20 percent gas. 2018 production is expected to be between 155 and 160 mboepd, with an average production cost of $12 per barrel of oil equivalent. With its current portfolio, the company has the potential to produce 330 mboepd in 2023 (from both sanctioned and non-sanctioned projects), representing a compound average growth rate of 13 percent.

Aker BP has a balance sheet with $2.9 billion in available liquidity, “providing the company with ample financial flexibility and dividend capacity.”

“Our financial position has been strengthened. We have seen a rapid de-leveraging, and foresee a solid cash generation combined with a strong liquidity position. We are proposing to increase dividends for 2018 to $450 million, and have a clear ambition to grow dividends further in the coming years by $100 million annually to 2021,” says Hersvik.

Aker BP has an ambition to discover a net of 250 mmboe oil and gas in the 2016 – 2020 period. The company plans to drill 12 exploration wells in 2018 with risked pre-drill estimates ranging from 50 – 150 mmboe net to Aker BP.

Offshore Energy Today Staff

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