Release Date: August 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BW Energy Ltd (BWERY, Financial) reported a significant increase in net production, up 130% year-on-year, reaching 25,500 barrels per day.
- Revenue surged by 104% year-on-year, totaling $346.2 million, while operating expenses decreased by 25%, enhancing profitability.
- The company successfully raised $210 million in liquidity through a $100 million bond and a $110 million sale and leaseback of the MaBoMo facility.
- BW Energy Ltd (BWERY) achieved a net income increase of 200 times compared to the first half of 2023, reaching $61.9 million.
- The company is on track to restore Dussafu production, with plans to reach 40,000 barrels per day by the end of the year, supported by successful well work-over programs.
Negative Points
- Golfinho production faced challenges due to underperformance and technical issues, impacting overall production levels.
- Operating expenses were higher in the second quarter, primarily due to lower production in Dussafu and scheduled maintenance shutdowns.
- The company is experiencing cost inflation in the subsea equipment market, affecting projects like Golfinho and Maromba.
- BW Energy Ltd (BWERY) has deferred some projects due to high costs, impacting the timeline for potential production increases.
- The company faces challenges in financing E&P projects, particularly greenfield developments, due to current market conditions.
Q & A Highlights
Q: How would you confirm that there is excess capacity above the nameplate of 40,000 barrels per day on BW Adolo, and are there any restricting factors?
A: Lin Espey, COO, explained that the FPSO Adolo's nameplate capacity is 40,000 barrels per day. The team is working on increasing throughput by up to 10%. The first step is reaching 40,000 barrels per day, with progress being made through the installation of conventional ESPs.
Q: How do recent capital allocation decisions impact the timing of the company's intention to pay dividends?
A: Carl Arnet, CEO, stated that the main project for BW Energy is Maromba. Once Maromba is on stream, the company will be in a position to pay dividends, as previously stated.
Q: How are you progressing on the financing of Maromba?
A: Brice Morlot, CFO, mentioned that Maromba is at the Cosco Dalian Shipyard, and they are working with Chinese institutions for financing. They aim to close the financing before Q4 2024.
Q: To what degree does the change in execution plan at Golfinho represent cost inflation or changed capital allocation prioritization?
A: Lin Espey, COO, noted that the subsurface potential remains unchanged. The most significant change is the cost of capital due to market growth and cost inflation, particularly in Brazil.
Q: Could you elaborate on the higher operating expenses during the quarter?
A: Lin Espey, COO, explained that higher OpEx was due to lower production in Dussafu during the scheduled shutdown. They expect better OpEx per barrel in the second half of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
