Q2 2020 Results: Despite the pandemic - unaffected production and stable operations
Wintershall Dea, Europe’s leading independent gas and oil company, today reported its second quarter 2020 results.
Mario Mehren, Wintershall Dea Chairman & CEO, says: “The quarter was without doubt one of the most challenging that the industry has seen in a long time. However, I am pleased with the underlying business performance, and the way the company is dealing with the challenges that face us.
The COVID-19 pandemic has had a major impact on large parts of the global economy, and we continue to see a great deal of uncertainty ahead of us. Oil and gas prices again fell sharply in the second quarter, impacting our financial performance. Nevertheless, we remain well positioned: we have further increased safety precautions to protect our employees, allowing us to keep our production stable at 606,000 boe/d. In addition, we have reduced our peer-leading production costs further to $3.5/boe, providing a robust and resilient cost structure. And, we reacted quickly and decisively to protect our balance sheet.
We continue to keep our strategic goals firmly in sight. Our 2020 project delivery is on track: we have successfully completed drilling at our gas project Dvalin in Norway, and the project will go on stream as planned around the turn of the year. Achimov 4A and 5A in Russia and Raven in Egypt will follow at the beginning of 2021. By delivering in this way we can continue to successfully navigate the uncertainty brought about the pandemic.”
Q2 2020 Summary:
Strong liquidity position with operations continuing to perform well:
- Significantly weaker commodity price environment (Brent and European gas down more than 50% YoY);
- Production of 606,000 boe/d, broadly flat YoY;
- EBITDAX of €254 million; reflecting the sharp decline in commodity prices;
- Production and development capex of €356 million;
- Record-low production costs at $3.5/boe;
- Free cash flow of -€294 million; expect to end the year in free cash flow positive position;
- Strong liquidity of around €1.8 billion.
(1) Excluding Libya onshore production
(2) Q2 2019 figures represent an aggregation of April figures for Wintershall Group and Dea Group and May-June for Wintershall Dea Group
(3) Net debt to LTM EBITDAX as of June 30, 2020
About Wintershall Dea
Wintershall Dea is Europe’s leading independent natural gas and oil company with more than 120 years of experience as an operator and project partner along the entire E&P value chain. The company with German roots and headquarters in Kassel and Hamburg explores for and produces gas and oil in 13 countries worldwide in an efficient and responsible manner. With activities in Europe, Russia, Latin America and the MENA region (Middle East & North Africa), Wintershall Dea has a global upstream portfolio and, with its participation in natural gas transport, is also active in the midstream business.
Wintershall Dea was formed from the merger of Wintershall Holding GmbH and DEA Deutsche Erdoel AG, in 2019. Today, the company employs around 2,800 people worldwide from over 60 nations.