Wintershall DEA

Wintershall Dea Strategy

Wintershall Dea's strategy is to strengthen its position as a European gas and oil company by delivering safe and profitable growth, a sustainable return to shareholders, and playing an active role in the energy transition.

Competitive Shareholder Returns in Volatile Low Oil Price Environment

Wintershall Dea expects continued high volatility in commodity prices, as a result of the interplay between rising energy demand, the standoff between Saudi Arabia and Russia over OPEC oil production quotas, economic volatility post COVID 19, and the impact of this on continued growth of low-cost oil and gas production from unconventional sources.


Wintershall Dea's competitive position is underpinned by its efficiency, scale, strong operating capabilities and competitive operating costs. As a result of the merger, Wintershall Dea is better equipped to upgrade its portfolio through strategic optimisation measures and to further reduce its already low production costs, which averaged $ 4.3 per boe in 2019.

By 2022, Wintershall Dea aims to achieve cash synergies of around € 200 million per year before tax, which will be derived from operating synergies, capital expenditure and production-related synergies. It expects to realise cost savings through a combination of procurement as well as exploration research and development functions. The company also intends to optimise cash flow and capital expenditure by actively managing its combined operating portfolio in addition to prioritising the most profitable assets and most probable discoveries.

Value capture impact will be derived evenly from the following categories:

  • Operating costs: savings in overlapping German and Norwegian operations, significant reduction of FTEs, reduction of other general and administration costs;
  • Production/investments: optimised procurement contracts and commercial activities, accelerated production across several business units, drilling optimisations in countries with overlapping activities;
  • At the end of 2019, more than €100m had already been captured mainly through production initiatives in Mexico, Egypt and Norway, procurement CAPEX savings as well as the first organisational reductions.
insight

Oil and gas companies will have a role to play for many years to come

Article by Lord Browne, Executive Charman L1 Energy

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Wintershall Dea Operational and Financial Performance

Wintershall Dea Operational and Financial Performance

Wintershall Dea's production in the calendar year 2019 was 642 mboe/d, or 617 mboe/d excluding 25 mboe/d of Libyan onshore production, of which gas was 445 mboe/d (72%) and liquids 172 mboe/d. This represents an increase of 9% compared to 2018 on a like-for-like basis.

EBITDAX was impacted by the weaker commodity price environment, with Brent down 10% to $64 per bbl, and European gas down 44% respectively year on year. For the full calendar year 2019, EBITDAX amounted to €2,828m (2018: €3,591m). The business generated €88m of free cash flow in 2019.

As at 31 December 2019, Wintershall Dea held 2P reserves of 3,826m barrels of oil equivalent, an increase of 3% compared to 2018 on a like-for like basis.

 

$4

Low production costs which average $4 boe

9%

Production growth YoY.

Following completion of the merger, Wintershall Dea successfully issued four bonds in public markets, raising €4bn at an average interest rate of just over 1%. This represented the largest ever debut offering and the longest Euro-denominated tranche for a company without any prior access to capital markets.

Other highlights include:

  • Norway - progress on major operated projects, with completion of subsea template in Dvalin, and Nova pipelines and umbilical’s, as well as the sale of the Nyhamna terminal and Polarled pipeline
  • Argentina - Farm down of 45% share in the Aguada Federal and 50% in Bandurria Norte unconventional oil blocks to ConocoPhillips
  • Brazil - successful exploration bid round with award of two offshore blocks
  • Germany - closed the sale of the company's underground storage facility in Blexen, and completed the sale of interests in certain non-operated oil and gas assets in Emsland and Grafschaft Bentheim.
  • Libya - signed two Exploration and Production Sharing Agreements (EPSAs), relating to the Libyan onshore business.

 

Committed to Reducing its Emissions

Wintershall Dea systematically monitors its energy consumption and strives to increase the energy efficiency of its machinery and facilities. It aims to reduce energy consumption in its operations and associated emissions while delivering low-cost energy. Energy consumption and emissions performance are a key element for new projects. Its future climate approach is based on portfolio optimisation, energy efficiency, and the use of innovative technologies and is complemented by offsetting.

Wintershall Dea has already eliminated routine flaring at operated assets and uses the associated gas for generating power, heat, and steam. It has voluntarily committed itself to the World Bank’s “Zero Routine Flaring by 2030” initiative. In addition, it is exploring technologies to prevent flaring in non-routine operations.

The company has set its own reduction targets and continues to further reduce emissions through portfolio management, emissions management, technology development, and offsetting. It is committed to comprehensive reporting and its future participation in the Carbon Disclosure Project (CDP), and as supporter of the Task Force on Climate-related Financial Disclosures recommendations to implement it over time. Wintershall Dea is consolidating the relevant data from the company and carried out a materiality analysis in 2019. It’s goal is to establish comprehensive sustainability reporting according to the Global Reporting Initiative (GRI) standards for the reporting year 2020.

While oil production and nature conservation are usually mutually exclusive practices, Wintershall Dea has demonstrated with its Mittelplate platform in the North Sea that oil production and high-level nature conservation can go hand-in-hand. Operated in the World Natural Heritage Site, Wadden Sea, the platform has been in operation for the past 32 years and exemplifies many “best practice” solutions for safe oil production.

case study Hydrogen from natural gas without CO2 emissions: Wintershall Dea and KIT launch cooperation project

Wintershall Dea and Karlsruhe Institute of Technology (KIT) have signed a cooperation agreement on research into a climate-friendly means of producing hydrogen from natural gas.

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WINTERSHALL DEA

Wintershall Dea, Europe’s leading independent gas and oil company.

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