Empresa Nacional del Petróleo 2Q 2014 Results

Transcription

1 Empresa Nacional del Petróleo 2Q 2014 Results Santiago, August 2014

2 Disclaimer Forward-looking statements are based on the beliefs and assumptions of ENAP s management and on information currently available to the Company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of ENAP and could cause results to differ materially from those expressed in such forward-looking statements This presentation contains certain performance measures that do not represent Chilean GAAP and IFRS definitions, such as EBITDA and Net financial debt. These measures cannot be compared with the same previously used by ENAP and the same used by other companies 2

3 Table of Contents 1. ENAP Overview 1.1 ENAP in a Nutshell 1.2 Refining & Marketing 1.3 Exploration & Production 2. Investment Highlights 3. Relevant Financial Metrics 3

4 ENAP in a Nutshell Support, control & supervision (100% ownership) Fully owned by the Chilean State, ENAP has a strategic role in fuel supply in Chile (63% Market Share in Refined Products) Empresa Nacional del Petróleo (ENAP) Profile Created by law by the Chilean state in 1950 Only refiner in the country More than 3,000 employees 3 refineries, marine terminals, storage facilities for crude and refined products, pipelines, and partial ownership of the southern hemisphere first LNG terminal Solid credit ratings CHILE Aa3 (Stable) AA- (Stable) A+ (Stable) direct ownership ENAP Baa3 (Stable) BBB- (Stable) A (Stable) Business highlights Refining and Marketing (R&M) Total aggregate refining capacity of 225,000 bbl/day Exploration and Production (E&P) (1) Proved Oil & Gas Reserves: 112 MM boe (2) Oil production: 36,200 bbl (2) per day Gas production: 17,800 boe per day (1) Developed and undeveloped reserves and O&G Production as of Jun, (2) (3) bbl: Oil barrel (US barrel) / boe: Barrel of Oil equivalent 2Q 14 EBITDA by Business Line (6m) 2Q 14 Revenue by Business Line (6m) Downstream Upstream 7% Refining and Marketing (R&M) Exploration and Production (E&P) 41% 59% 93% R&M E&P R&M E&P EBITDA 2Q 14 (6m) US$ 311 MM Revenues 2Q 14 (6m) US $5,255 MM 4

5 ENAP in a Nutshell Government support evidenced by Relationship with the owner Capital injections US$ 250 MM capital increase in In May, 2014 President Bachelet announced an Energy Agenda for the country that considered a capital increase of US$ 400 MM for ENAP. This capital injection will be made in conjunction with a Corporate Governance law for the company. The law is expected to be sent for discussion in Congress no later than 1Q Corporate Governance Integration A new Corporate Governance law is in development, in order to give more stability to the company in terms of long-term plans, following best practice of private side. Chilean government and its regulatory bodies closely supervise operations Capitalization of retained earnings (Subsidiaries) Capitalization of retained earnings at ENAP s subsidiary level. Capitalization is approved on a yearly basis Board The Chairman of the Board is the Minister of Energy (Mr. Máximo Pacheco) Dividends The government has waived its right to receive any dividends for the past six years, strengthening ENAP s capital base Finance Budget and debt issuance approved by the Ministry of Finance Gas Sales Subsidy in Magallanes Compensation for subsidized natural gas sales to the Magallanes region which was granted for up to CLP 31,999 MM (US$ 57.9 MM as of Jun 30, 2014) for Subsidy started in 2013 and is approved on a yearly basis Management Professional and experienced management team 5

6 Table of Contents 1. ENAP Overview 1.1 ENAP in a Nutshell 1.2 Refining & Marketing 1.3 Exploration & Production 2. Investment Highlights 3. Relevant Financial Metrics 6

7 Refining & Marketing Leading position based on refining capacity and extensive oil and gas wholesale distribution network in Chile which delivers natural gas and refined products to key energy centers Unmatched asset base of critical importance to Chile Three refineries, crude oil storage facilities, refined products storage facilities, marine terminals, gas pipelines, among others The three refineries owned by ENAP are the only refining facilities in Chile ENAP s refineries produce a full range of refined petroleum products including LPG, olefins, gasoline, jet fuel, diesel fuel, fuel oil, and pitch, among others ENAP distributes and markets most of these products domestically ENAP s refineries process crude oil, substantially all of which is purchased from foreign third parties ENAP s Refining Rates (%) 633 km 2Q 14 (6m) Sales breakdown by client 1 2 Concón: Aconcagua Refinery Santiago: ENAP Headquarters Linares: Terminal Hualpén: Bío Bío Refinery Main Locations 4,270 km 3 Santiago: ENAP Sipetrol S.A. (HQ) Maipú: Fuel Storage Terminal San Fernando: Terminal Chillán: Pumping Station Punta Arenas: Gregorio Refinery 2Q 14 (6m) Sales breakdown by product 1 2 Refining capacity Aconcagua Refinery 43% Products Gregorio Refinery 7% Gasoline LPG Natural Gas Biobío Refinery 49% Refining capacity: 225,000 bbl / day Kerosene Diesel Petrochemicals 76% 71% 75% 77% Industrial sales 4% Others 15% Copec 45% 4% 10% 8% 4% 3% 34% 3 Storage Refineries, facilities and oil and gas pipelines Enex 21% 4 Main customers Q'14 Petrobras 14% 37% Gasoline Diesel Fuel Oil LPG Kerosene Natural Gas Others 7

8 Undisputed Leadership in the Chilean Market Key strategic asset for Chile ENAP has a dominant position in the domestic refining market, representing up to approximately 40% of Chile s energy matrix and 63% of Chilean demand for refined oil products. ENAP utilizes a pricing policy based on an import parity formula Sets the benchmark for the implied cost of importing refined petroleum products The consistent use of import parity pricing has reinforced ENAP s ability to effectively compete with international competitors. Almost 40% of Chile s energy matrix is supplied by ENAP Crude Oil Natural Gas Coal Hydroelectricity Firewood and others 100% 90% 14% 14% 15% 12% 15% 15% 80% 17% 18% 15% 19% 13% 13% 70% 12% 13% 13% 16% 60% 12% 17% 9% 5% 7% 13% 50% 13% 12% 40% 48% 41% 38% 30% 47% 33% 32% 20% 47% 49% 47% 46% 43% 43% 10% 0% ENAP s share (Oil + Gas) Refined oil products market share 100% 100% 100% 100% 100% 75% 50% 52% 48% 66% 71% 74% 60% 64% 63% 25% 28% 20% 0% Diesel Gasoline LPG Fuel Oil Kerosene Other Average Jun-13 Jun-14 8

9 US$/bbl US$/bbl 1,771 1,930 1,748 1, ,253 1,381 1,163 1,034 1,500 2,591 2,279 Supply and Production Crude Oil Supply by Country Crude Oil Volume Processed (Mm 3 ) Brazil 42% Ecuador 39% Angola 6% UK 3% Canada 3% Colombia 3% Peru 3% Total Crude Oil Purchases: 31,320,000 bbl (2Q 14) ENAP s Refining Margin ( Margen Primo ) (1) Refined Products Production (Mm 3 ) jun-13 jun-14 Light Medium Heavy Other gross inputs ENAP's Refining Margin ENAP's Oil Cost ENAP's Products Prices Brent (1) It represents the difference between ENAP s product prices and their direct cost (Oil), excluding others like energy and G&A costs jun-13 jun-14 Diesel Gasoline LPG Fuel Oil Kerosene Others 9

10 Table of Contents 1. ENAP Overview 1.1 ENAP in a Nutshell 1.2 Refining & Marketing 1.3 Exploration & Production 2. Investment Highlights 3. Relevant Financial Metrics 10

11 Exploration & Production Operations Geography ENAP s E&P operations have allowed the Company to develop field expertise and deepen relationships with E&P partners and crude oil suppliers from different parts of the world The Company s operations are focused on Latin America & North Africa with fields in Chile, Argentina, Ecuador and Egypt, producing crude oil and natural gas ENAP s main goal for its E&P operations is to increase oil and gas reserves both in Chile and abroad, and manage its E&P portfolio through sales and acquisitions In average during the last years, approximately 2% of the crude oil used by ENAP s refineries has been produced in Magallanes Investments totaled US$ 93,5 MM during 2014 (as of Jun-14) Total crude oil production from ENAP s E&P division represents approximately 15% of the crude oil required by ENAP s refineries Ecuador PBH (100%) MDC (100%) PBHI (100%) Block 3J (100%) Chile Magallanes Chile (100%) Egypt East Ras Qattara (50.5%) Argentina Area Magallanes (50%) CAM 2/A Sur (50%) E2 (33%) * Camp. Central (50%) * Pampa del Castillo (100%) (%) Ownership * Blocks where ENAP is not an operator Oil and gas production Proved oil & gas reserves (1) (in 000 barrels per day) Oil Q' Gas Q'14 Argentina 16% Ecuador 26% Egypt 10% Chile 48% Argentina Ecuador Egypt Chile Argentina Chile Jun-14: 112 MM boe (1) Developed and Undeveloped reserves 11

12 Table of Contents 1. ENAP Overview 1.1 ENAP in a Nutshell 1.2 Refining & Marketing 1.3 Exploration & Production 2. Investment Highlights 3. Relevant Financial Metrics 12

13 E&P R&M World Class Operator with Unmatched Asset Base Refineries Three refineries with a total aggregate refining capacity of ~225,000 bbl/day Aconcagua: Capacity: ~97,000 bpd / Refinery complexity factor Solomon: 12,1 Biobío : Capacity: ~111,000 bpd / Refinery complexity factor - Solomon: 10,2 Gregorio : Capacity: ~ 16,000 bpd / 1 vacuum topping Midstream assets Crude oil storage facilities with an aggregate storage capacity of 1.1 MMm3 Refined products storage facilities with a total capacity of approximately 1.5 MMm3 Marine terminals with capacity to receive 100% of the refineries requirements Gas pipelines in the Magallanes region LNG Terminal First Liquefied Natural Gas (LNG) regasification terminal of the region: GNL Quintero (GNLQ) ENAP s Ownership: GNLQ (20% of stake) / GNL Chile (33.3% of stake) GNLQ s Regasification capacity: 10 MM m3/day During 2014 GNLQ will be developing an capacity expansion to reach 15 MM m3/day Investments of US$ 63.2 MM during 2014 (as of Jun-14) Oil reserves of 6.1 MMbbl and gas reserves of 7.8 MM m3 as of Jun-14 3 blocks in exploitation / development and 5 blocks under exploration Exploration of new gas reserves in unconventional reservoirs as well as conventional oil and gas reserves Investments of US$ 15.9 MM during 2014 (as of Jun-14) Oil reserves of 12.7 MMbbl and gas reserves of 0.9 MM m3 as of Jun-14 3 blocks in development, 2 blocks in exploration phase Investments of US$ 9.4 MM during 2014 (as of Jun-14) Oil reserves of 30.2 MMbbl as of Jun-14 Operates under Service Contracts 2 blocks under development and 2 under exploration phase Investments of US$ 4.8 MM during 2014 (as of Jun-14) Oil reserves of 11.9 MMbbl as of Jun-14 1 block under exploration / development 13

14 US$/bbl US$ / bbl International Market Prices :2:3:1 Basket (US$/bbl) Spread 6:2:3:1 Basket vs. ICE Brent (US$/bbl) Título del gráfico ICE Brent (US$/bbl) WTI Nymex (US$/bbl) ENAP is making better use of its refineries given refining margins in the current market an the estimated demand of the contracts in place Despite oil price volatility, several factors have helped ENAP s efficiency and operations: Advanced and capable refineries Import parity pricing mechanism Dominant market share in Chile High-value and quality products 35 ULSD USGC(US$/bbl) vs. ICE Brent (US$/bbl) Unl87 USGC (US$/bbl) vs. ICE Brent (US$/bbl) F.O N 6 3% S. USGC (US$/bbl) vs. ICE Brent (US$/bbl)

15 US$/MWh US$/MMBtu Significant Increase in Energy Prices During the Last Decade Relationship between Power Marginal Cost and Brent Prices Q' Gross Heating Value, MMBtu/Bbl : 5.77 Mg C Quillota [US$/MWh] Brent [US$/MMBtu] 15

16 Table of Contents 1. ENAP Overview 1.1 ENAP in a Nutshell 1.2 Refining & Marketing 1.3 Exploration & Production 2. Investment Highlights 3. Relevant Financial Metrics 16

17 Financial Summary Period ended in Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Jun-13 Jun-14 Summary Income Statement (US$ million) Sales 7,098 8,180 10,835 11,612 11,211 5,722 5,255 COGS (6,835) (7,934) (10,663) (11,778) (10,638) (5,376) (5,019) Gross profit (166) % margin 4% 3% 2% (1%) 5% 6% 4% SG&A (82) (104) (85) (88) (270) (134) (120) EBIT (254) Other expense (income) (40) 25 D&A EBITDA EBITDA (LTM) Interest expense Net income (67) (319)

18 Financial Summary Period ended in Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Jun-13 Jun-14 Summary Balance Sheet (US$ million) Total current assets 2,231 2,283 2,919 2,778 2,832 3,077 2,363 Cash & equivalents Accounts Receivables Inventories 1,060 1,090 1,487 1,498 1,301 1,479 1,171 Total non-current assets 3,328 3,450 3,284 3,534 3,442 3,472 3,416 Net PP&E 2,598 2,634 2,672 2,648 2,637 2,616 2,597 Total assets 5,560 5,733 6,203 6,312 6,274 6,549 5,780 Total current liabilities 2,151 1,961 2,516 2,906 2,239 2,973 1,794 Short-term debt ,052 1, , Total non-current liabilities 2,965 3,315 3,306 3,324 3,804 3,376 3,704 Long-term debt 2,434 2,819 2,985 3,013 3,416 3,037 3,348 Total liabilities 5,116 5,277 5,822 6,230 6,043 6,350 5,498 Shareholders' equity Minority interest Total equity Total liabilities + SHE 5,560 5,733 6,203 6,312 6,274 6,549 5,780 Total debt 3,045 3,466 4,037 4,155 3,902 4,132 3,649 Total net debt 2,968 3,404 3,753 3,974 3,433 3,767 3,523 Total net debt / EBITDA (LTM) 5.4x 8.5x 10.1x 69.6x 5.1x 9.4x 6.0x EBITDA / Interest expense 3.2x 2.3x 2.2x 0.3x 3.5x 4.2x 3.8x 18

19 Financial Summary: Debt Profile Financial Debt and Supplier Credit (1) (US$ in millions) 4, , , , , ,286 3,668 3,897 3,362 3,443 Cash Supplier s Credit Net Financial Debt (Banks and Bonds) (1) Does not consider MtM (Mark to Market) of derivatives (as of June 30, 2014) Maturity profile (US$ in millions) 900 Local Bonds International Bonds LT Bank Debt ST Bank Debt Project Financing % 37% Banks Bonds 19

20 Relevant Financial Metrics EBITDA and EBITDA margin (US$ in millions) Capital Expenditure (1) (US$ in millions) % 6.0% 3.4% % 0.5% Q'14 EBITDA Margin Q'14 (1) Only include investments in new projects (Maintenance CAPEX is not considered in this chart) Total assets (US$ in millions) Equity (US$ in millions) 5,733 6,203 6,312 6,274 5, Q' Q'14 20

21 Highlights 100% State owned, the second largest Chilean state-owned company (in terms of revenues) 2013 Revenues and EBITDA of US$ 11,210 MM and US $678 MM, respectively 2Q 14 (6m) Revenues and EBITDA of US$ 5,255 MM and US $311 MM, respectively A key strategic asset for Chile and the only refiner in the country Represents approximately 40% of Chile s energy matrix Satisfies approximately 63% of Chilean demand for refined oil products World class operator with state of the art facilities and an extensive logistics network in Chile 3 refineries, marine terminals, storage facilities for crude and refined products, pipelines, and the southern hemisphere first LNG terminal (GNL Quintero) Stable & long-term relationships with a diverse base of suppliers & buyers Proven access to multiple sources of financing Experienced and professional management Investment grade ratings since 2002 in the international market (Baa3/BBB-/A ) and the local market (AAA/AA-) 21

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