Per-share NAV amounted to NOK 580 as per 30 September 2019, compared to NOK 603
as per 30 June 2019 and NOK 562 as per 31 December 2018.
“Our portfolio is exposed to volatile industries and performance will fluctuate
with capital market sentiment and commodity prices. While these factors are
outside of our control, it is gratifying to see that things we can control -
namely operational excellence and consistent strategy on maintaining a steady
course through market changes - continue to bear fruit,” said Øyvind Eriksen,
President and CEO at Aker ASA.
As per 30 September 2019, the Aker share has increased 9.6 per cent year-to-
date, including dividend paid. The share price decreased 1.4 per cent in the
third quarter, compared to a 2.5 per cent increase for the Oslo Stock Exchange’s
benchmark index. The total value of Aker’s Industrial Holdings portfolio
declined by NOK 1.9 billion in the third quarter to NOK 47.7 billion. The value
of Aker’s Financial Investments portfolio stood at NOK 6.4 billion at the end of
the quarter, compared to NOK 7.1 billion at 30 June 2019.
“Shortly after the closing of the quarter, the Johan Sverdrup field came on
stream more than two months ahead of schedule and NOK 40 billion below budget.
The field will be a significant value contributor for Aker BP for years to come.
It is also a mark of excellent project execution by everyone involved. The field
has a record-low break-even price of less than USD 20 per barrel, and operating
costs below USD 2 per barrel at plateau. We also see the massive impact of new
technology and digitalisation with the record-low CO(2) emissions, well below 1
kg per barrel. This is a result of willingness to develop, supply and invest in
products and technologies that are leading the way in efficiency and in tackling
the industry’s climate and environmental challenges. Priorities that are setting
the stage for the industry at large,” said Eriksen.
Aker’s liquidity reserves, including undrawn credit facilities, stood at NOK
5.2 billion as per 30 September 2019.
The value-adjusted equity ratio for the third quarter was 80 per cent, compared
to 79 per cent at the end of the second quarter and 78 per cent at year-end
Aker Energy continues to be a priority for Aker. The company’s intention from
day one has been to develop a business, including development of local industry
and corporate social responsibility beyond minimum requirements, that is
attractive both to Aker’s shareholders and to the people of Ghana. In the Plan
for Development and Operations (PDO) for the main reservoir, Pecan, Aker Energy
has assumed that all resources, including future tie-ins and new discoveries,
would be produced as part of an area development similar to best practise in
other offshore oil and gas regions. Aker underestimated, however, the complexity
of such a holistic approach the entire DWT/CTP block. The strategic direction
impacted issues like regulatory framework, technical concepts prepared for
increased recovery, and execution models based on alliance contracts with global
Due to several significant regulatory differences between the Ghanaian and
Norwegian regulatory systems, which have impact business cases, progress and,
ultimately, production, Aker Energy proposed amendments to the regulatory
framework to make development and operations more predictable.
“Aker Energy genuinely believed that such an approach would be to the benefit of
the host country, Ghana, but that it would also enable operators to take a
strategic perspective beyond individual fields. Some regulatory changes are
likely to be proposed by the government of Ghana, though not to the extent
requested in the PDO. Hence, Aker Energy is changing its strategic approach,”
Going forward, the priority will be to work with Ghanaian authorities to further
optimise and de-risk the development of the already discovered 450-550 million
barrels of contingent resources in the Pecan reservoir and tie-ins within the
applicable regulatory framework and agreements.
“Our sole objective will be to make the Pecan development even more economically
robust on a stand-alone basis. Opportunities to simplify the technical concept,
reduce the amount of investment and cost reductions will be implemented.
Furthermore, execution models including involvement of local industry and
commercial terms offered by alliance partners will be benchmarked against
proposals from other suppliers,” said Eriksen.
The Petroleum Agreement already approved by the government of Ghana contains a
stability provision protecting Aker Energy from adverse consequences of changes
in legislation or administrative practices after it was approved by the Ghanaian
Parliament in 2006.
“The change in strategy is likely to trigger delays, but I am confident that it
will de-risk the project and, hence, protect significant values in Ghana,” said
Eriksen, and continues:
“The next milestones will be to have the Pecan PDO approved under the Petroleum
Agreement and regulations from 2006, and ultimately make a Final Investment
Decision (FID). Aker Energy will in parallel explore M&A opportunities that may
grow and diversify the portfolio beyond the organic approach we have pursued to
The full report and presentation can be downloaded from www.akerasa.com
Net asset value (NAV) is Aker ASA’s core performance indicator. Aker is an
investment company with a majority of listed companies in its portfolio.
Therefore, NAV is a more relevant indicator of the development of Aker’s
underlying value than the company’s consolidated accounts.
For further information, please contact:
Torbjørn Kjus, Chief Economist and Head of Investor Relations
Phone: +47 94 14 77 30
Atle Kigen, Head of Corporate Communications
Phone: +47 90 78 48 78
This information is subject to the disclosure requirements pursuant to Section
5-12 of the Norwegian Securities Trading Act.