investor presentation - Galp

0

January, 2016

INVESTOR PRESENTATION An integrated energy player focused on exploration and production INVESTOR PRESENTATION – JANUARY 2016

DISCLAIMER

1

RCA figures except otherwise noted. By attending or reading this presentation, you acknowledge and agree to be bound by the following limitations and restrictions. This presentation has been prepared by GALP Energia, SGPS, S.A. (“GALP Energia” or the “Company”) and may be amended and supplemented, but may not be relied upon for the purposes of entering into any transaction. This presentation is strictly confidential, is being distributed to a limited range of persons solely for their own information and may not (i) be distributed to the media or disclosed to any other person in any jurisdiction, nor (ii) be reproduced in any form, in whole or in part, without the prior written consent of the Company. Although the Company has taken reasonable care in preparing the information contained herein, no representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein or any other material discussed at the presentation. Neither the Company nor any of its affiliates, subsidiaries, shareholders, representatives, agents, employees or advisors shall have any liability whatsoever (including in negligence or otherwise) for any loss or liability howsoever arising from any use of this presentation or its contents or any other material discussed at the presentation or otherwise arising in connection with this presentation. This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or otherwise acquire securities of the Company or any of its subsidiaries or affiliates in any jurisdiction or an inducement to enter into investment activity in any jurisdiction. Neither this presentation nor any part thereof, nor the fact of its distribution, shall form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever in any jurisdiction. This presentation is made to and directed only at persons (i) who are outside the United Kingdom, (ii) having professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant Persons"). This presentation must not be acted or relied on by persons who are not Relevant Persons. Neither this presentation nor any copy of it, nor the information contained herein, in whole or in part, may be taken or transmitted into, or distributed, directly or indirectly in or to the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws. No securities of the Company have been registered under the United States Securities Act of 1933 or the securities laws of any state of the United States, and unless so registered may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe”, “expect”, “anticipate”, “intends”, “estimate”, “will”, “may”, "continue”, “should” and similar expressions usually identify forward-looking statements. Forward-looking statements may include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; energy demand and supply; developments of GALP Energia’s markets; the impact of regulatory initiatives; and the strength of GALP Energia’s competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other data available from third parties. Although GALP Energia believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Important factors that may lead to significant differences between the actual results and the statements of expectations about future events or results include the Company’s business strategy, industry developments, financial market conditions, uncertainty of the results of future projects and operations, plans, objectives, expectations and intentions, among others. Such risks, uncertainties, contingencies and other important factors could cause the actual results of GALP Energia or the industry to differ materially from those results expressed or implied in this presentation by such forward-looking statements. The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice. GALP Energia and its respective representatives, agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forwardlooking statements contained in this presentation to reflect any change in events, conditions or circumstances.

INVESTOR PRESENTATION – JANUARY 2016

AN INTEGRATED OIL & GAS COMPANY

2

Galp Energia Group Market capitalisation c.€9 bn1

Exploration & Production

Refining & Marketing

Gas & Power

Key Financials  2014 Ebitda: €1.3 bn

2014 Ebitda: €444 m

2014 Ebitda: €412 m

2014 Ebitda: €438 m

 2014 capex: €1.1 bn

 Brazil2

 Refining

 Natural Gas

 87% capex allocated to upstream

 Mozambique

 Marketing Iberia

 NG infrastructure

 Net debt/Ebitda: 1.1x3

 Angola

 Marketing Africa

 Power

 Liquidity: €3.1 bn3

Committed to sustainable and responsible growth

1Market

capitalization as of the end of December 2015 Energia holds 70% and Sinopec holds the remaining 30% 3As of the end of Sept-15, including loan to Sinopec as cash. Ratio considers net debt including loan to Sinopec as cash equivalent, plus €168 m Sinopec Shareholder Loan to Petrogal Brasil as debt, and LTM Ebitda RCA €1,661 m 2Galp


FREE FLOAT EXPECTED TO INCREASE IN THE NEAR FUTURE Galp Energia shareholding structure

3

Free float evolution Free float Of which, institutional investors in:

2.45%

2.11% 2.05% 2.03%

2.01% 2.01%1

North America UK France

7.00%

c.35% c.25% c.10%

7.00%

61.66%

Parpública exchangeable bonds (September 2017)

Potential Free float @2017

54.66%

54.66%

38.34%

Free float @Jan 2016

1Qualified

holding announced on December 18, 2015 which includes the funds managed by CI Investments and Black Creek Investment Management. Black Creek announced on December 9, 2015 an indirect qualified holding of 2.05% Note: Parpública’s 7% stake placed through exchangeable bonds


LIST OF CONTENTS

4

DELIVERING GROWTH IN UPSTREAM STEADY CONTRIBUTION FROM DOWNSTREAM AND GAS ACTIVITIES STRONG FINANCIAL POSITION KEY TAKEAWAYS

APPENDIX


GALP ENERGIA HOLDS WORLD-CLASS UPSTREAM ASSETS

5

Development plans of Atapu, Berbigão and Sururu fields submitted to ANP GREATER IARA

Carbonate reservoir with excellent porosity and permeability

Supergiant development project with four FPSOs already producing

CARCARÁ

JÚPITER/SÉPIA

LULA/IRACEMA

Development concepts of Júpiter giant reservoir of oil, gas and condensates being studied and Sépia development project being prepared

ROVUMA – AREA 4 GIIP over 85 tcf, ranking Rovuma LNG project as one of the largest in the world


LULA/IRACEMA: EXECUTION OF A WORLD-CLASS PROJECT

6

BM-S-11 (LULA/IRACEMA)


LULA/IRACEMA: SOLID TRACK-RECORD

7

Production ramp-up

FPSO #3 (CID. MANGARATIBA) Iracema South (150 kbopd)  5th producer well connected in Nov., leading to plateau  Full ramp-up achieved in 13 months

(kboepd)

FPSO #2 (CID. PARATY) Lula NE (120 kbopd)  Plateau production since Sep-14  Average availability of c.95%

FPSO #4 (CID. ITAGUAÍ) Iracema North (150 kbopd)  Production started on July 31 and three producer wells currently connected  14 wells already drilled

FPSO #1 (CID. ANGRA DOS REIS) Lula Pilot (100 kbopd)  Plateau production since Jun-12  Average availability of c.95%

YE2010 First oil

YE2011

YE2012

YE2013

YE2014

9M15

# wells drilled/year


LULA/IRACEMA: FPSO #5 AND #6 ON TRACK

8

FPSO #6 (CID. SAQUAREMA)

FPSO #5 (CID. MARICÁ) (150 kbopd)

(150 kbopd)

 FPSO left BRASA/SBM shipyard in December 2015 to final location at Lula field

 Topsides integration performed by BRASA/SBM at Mauá shipyard, in Brazil

 Expected to be deployed in Lula Alto during 1H16

 Expected to be deployed in Lula Central during 1H16


LULA/IRACEMA: EXECUTING MITIGATION MEASURES ON REPLICANTS

9

 Gas/CO2 injection and compression modules awarded in May  New contracts with lower execution risk and neutral impact on cost and on Galp’s expected delivery timings

 Three replicants expected for Lula during 2017 and 2018 (Lula South; Lula North; Lula Ext. South)

REPLICANTS (150 kbopd)


LULA/IRACEMA: COST OPTIMISATION OPPORTUNITIES

10

Drilling and completion (# days)

-21% YoY

 Benefitting from learning curve and optimised well design

 Negotiating new rig rates


LULA/IRACEMA: SIGNIFICANT RECOVERY FACTOR UPSIDE

11

Recovery factor (oil) %

40%  Water/Gas injection 28%

 4D seismic  Infill drilling  WAG  Subsea separation  Technology development

Current recovery factor

Ambition

Each 1 p.p. increase in oil recovery results in incremental c.200 mmbbl gross

Note: Galp Energia view


GREATER IARA: MULTISTAGE DEVELOPMENT FOR THREE SEPARATE ACCUMULATIONS

12

 Significant resource base in a challenging heterogeneous reservoir  Development plans of Atapu, Berbigão and Sururu fields submitted to ANP in June  Three FPSO replicant units: Atapu South and Atapu North in 2018 and Berbigão/Sururu in 2019

BERBIGÃO/SURURU/ATAPU

 Pilot tie-back of Sururu to Atapu North FPSO expected by 2018 to further appraise this field


DE-RISKING OTHER RELEVANT PRE-SALT PROJECTS

CARCARÁ BM-S-8  Carcará North and Carcará NW confirmed the discovery of light oil and the extension of the discovery

13

JÚPITER BM-S-24  Reviewing timing of appraisal activity

 DST in Carcará North proved high quality and productivity

 Focus on maturing development solution for oil and condensates

 DoC submission extended until March 2018 and gas evacuation solution crucial for development

 Sépia East to be unitised with Sépia and expected to start production in 2019 INVESTOR PRESENTATION – JANUARY 2016

MOZAMBIQUE: PROGRESSING WITH AREA 4 PROJECT DEVELOPMENT

14

 Over 85 tcf GIIP identified

 Project well located to benefit from LNG market dynamics between Asia, Europe and South America  Potential for economies of scale in onshore LNG project  Supportive legal framework established at YE2014

ROVUMA - AREA 4


MOZAMBIQUE: FOCUSED ON INITIAL DEVELOPMENT PHASE

15

CORAL FLNG PROJECT

MAMBA ONSHORE LNG PROJECT

1 FLNG (2.5-3.5 mtpa)

2x5 mtpa LNG trains (1st phase)

 FEED and EPCIC proposals received for FLNG project

 Onshore development project progressing

 LNG long term offtake agreements at advanced stage of negotiation

 Advanced unitisation negotiations with Area 1


ANGOLA: MATURE FIELDS BEING COMPLEMENTED BY NEW DEVELOPMENTS

BLOCK 14/14K

16

BLOCK 32

 Producing fields Kuito, BBLT and Tômbua-Lândana already reached plateau production

 Kaombo project being developed with 2 FPSO (2x125 kbopd)

 Lianzi started production in 4Q15

 First oil expected by 2H17

 Development studies for other areas being matured and exploration upside identified

 Potential upside from CNE hub INVESTOR PRESENTATION – JANUARY 2016

SANCTIONED UNITS SUPPORT PRODUCTION GROWTH

17

2016

2017

2018

2019

2020

Lula / Iracema 4 Leased FPSOs 520 kbopd

Lula Alto Leased FPSO 150 kbopd

Lula South Replicant FPSO 150 kbopd

Lula North Replicant FPSO 150 kbopd

Berbigão / Sururu Replicant FPSO 150 kbopd

Lula West1 Leased FPSO

Lula Central Leased FPSO 150 kbopd

Lula Ext South Replicant FPSO 150 kbopd

Atapu South Replicant FPSO 150 kbopd

Brazil

Current

Angola

Atapu North / Sururu Pilot Replicant FPSO 150 kbopd

Kaombo North Leased FPSO 125 kbopd

Block 14 2 Units 355 kbopd

1To

be awarded

Kaombo South Leased FPSO 125 kbopd


YIELDING SIGNIFICANT PRODUCTION GROWTH

18

Working interest production (kboepd)

 Developing existing portfolio CAGR 2014-20 ≈ 25%-30%

20

31

 IOR/EOR  Exploration

> 50


TECHNICAL COSTS DRIVEN BY HIGH MARGIN PROJECTS

19

Technical costs¹ ($/boe)

 Large scale of projects drives lower unit costs  High quality assets reduce capex requirements

27 ≈22

2014

Lifting costs

 Lifting costs in 2019 expected to be below $6/bbl

2019E

DD&A + Leasing costs

1Technical

costs based on working interest production. Excludes royalties, overheads and oil taxes


LIST OF CONTENTS

20


APPENDIX


STRONG CASH FLOW FROM MODERN DOWNSTREAM ASSETS

21

OIL MARKETING

REFINING  Flexible refining system with 330 kbopd refining capacity and combined Nelson complexity of 8.6

 1,437 service stations of which 133 in Africa

 Leveraging refineries’ logistics flexibility

 Stable cash flow generator supported by focus on cost optimisation

12014 figures.

 Oil sales to direct clients of 9.3 mton1

Includes retail, wholesale and LPG businesses in Iberia and in some African countries


STEADY CONTRIBUTION FROM GAS & POWER ACTIVITIES

SUPPLY & TRADING

NG INFRASTRUCTURE

 2nd natural gas player in Iberia, with total annual sales of 7.5 bcm1 and developing a strong trading activity

12014 figures,

 Extensive distribution network in Iberia based on a RAB of €1.1 bn with rate of return of c.8%, and stakes in pipelines

and including LNG trading volumes

22

POWER

 205 MW of total capacity installed and expected c.3 TWh of annual electricity generation


LIST OF CONTENTS

23


APPENDIX


2014-19 GROUP’S EBITDA1 CAGR OF C.20%, DRIVEN BY UPSTREAM GROWTH Upstream Ebitda

R&M Ebitda2

G&P Ebitda

(€m)

(€m)

(€m)

 R&M Ebitda expected to benefit from supportive refining margins in 2015

 G&P activities supporting Ebitda of €350 m - €400 m/yr plus €60 m from stakes in pipelines

24

CAGR 2014-2019 > 35%

 Production ramp-up driving growth over time

2015 group Ebitda guidance of c.€1.5 bn, with integration providing a cushion to current low oil prices

1Based

on a $55/bbl oil price in 2015 and reaching $80/bbl in the long term Ebitda calculated based on estimated benchmark refining margin, from $4.1/bbl in 2015 and gradually decreasing to $2.2/bbl by 2019. Low and high cases based on a sensitivity of +$1.0/bbl and -$1.0/bbl, respectively 3R&M


CAPEX FLEXIBILITY AND FOCUS ON HIGHER MARGIN PROJECTS Capex profile

25

Committed vs. uncommitted capex Committed Lula/Iracema Angola E&A 2015

Total capex

Lula/Iracema Other development projects 2014

2015E

Uncommitted Other projects E&A 2016-19 2016E

2017E

2018E

2019E

 Capex guidance for 2015-19 of €1.2 bn - €1.4 bn

 Around 40% of E&P capex planned for 2015-19 still to be committed

 Upstream accounts for up to 90% of capex, of which c.90% corresponds to development

 2015 capex expected at c.€1.3 bn


RESILIENT CASH FLOW FROM INTEGRATED BUSINESS MODEL

26

Free Cash Flow¹ (€m)

 Integrated model stabilising free cash flow in a lower oil price environment  Group expected to turn free cash flow positive during 2018 and Brazil in 2017  Under a flat $60/bbl Brent price scenario, Group free cash flow would become positive during 2019

1Post

interest, taxes and dividends. Base case based on a $57/bbl oil price in 2015 and reaching $80/bbl in the long term. Low case based on a $60/bbl oil price from 2016 onwards


CURRENT LIQUIDITY SUFFICIENT FOR THE NEXT THREE YEARS

27

Sources and uses 2015-2017  Liquidity of €3.1 bn1: Cash and equivalents of €1.2 bn; loan to Sinopec of €0.8 bn; available credit lines of €1.1 bn Available liquidity Capex

 Net debt to Ebitda2 to remain under 2x (peaking during 2016)  Brazil fully funded with own equity sources

Post-tax cash flow from operations

Debt service

 Unchanged dividend policy3

Dividends Sources

Uses

1As

of the end of September 2015

2 Considering

loan to Sinopec as cash and equivalents

3 €0.3456 dividend

per share, related to 2014 fiscal year, growing on average 20% per year until 2016


DIVERSIFIED SOURCES OF FUNDING Debt breakdown¹ €3.6 bn

28

Debt reimbursement profile¹ Part of proceeds from Brazil capital increase lent back to Sinopec. Being gradually reimbursed according to Capex needs in Brazil

€1.2 bn

Public Bonds

(€m)

€0.8 bn

Private Placements

€1.6 bn

Multilaterals

Bank loans Gross debt

Cash and cash equivalents

Loan to Sinopec

 Net debt to Ebitda of c.1.1x3

Net debt

 Gross debt of €3.6 bn1 with average maturity of 3.3 yr and average cost of funding2 of 3.82%

1As

of the end of September 2015 cost of bank guarantees and credit lines 3Ratio considers net debt including loan to Sinopec as cash equivalent, plus €168 m Sinopec Shareholder Loan to Petrogal Brasil as debt, and LTM Ebitda RCA €1,661 m 2Including


3Q15 EBITDA UP 9% YOY WITH A SOUND CAPITAL STRUCTURE Profit & Loss

Balance Sheet¹

(€m)

(€m)

3Q14 Turnover

2Q15

3Q15

9M15

YoY

12,082

(10%)

9%

1,255

37%

(26%) (32%)

304

(11%)

70%

635

n.m.

(22%) (27%)

295

(13%)

QoQ

YoY

4,693

4,253

3,906

379

446

411

E&P

131

120

89

R&M

144

224

245

G&P

99

92

72

243

303

263

(13%)

8%

816

58%

11

17

17

0%

55%

60

36%

Financial results

(36)

(10)

(11)

(14%)

69%

(94)

0%

Taxes

(76)

(108)

(69)

36%

9%

(247)

37%

Non-controlling interests

(21)

(15)

(20)

(37%)

5%

(46)

(10%)

Net Income

121

189

180

(4%)

49%

490

n.m.

(8)

100

27

(73%)

n.m

117

74%

Ebitda

Ebit Associates

Net Income (IFRS)

1IFRS

(8%) (17%) (8%)

9%

Figures

2Does

not include loan to Sinopec as cash

29

Sep.2015 Jun.2015 Dec.2014

Sep-Jun Sep-Dec

Fixed and LT assets

7,638

7,778

7,599

(140)

39

Work in progress

2,016

2,093

1,768

(77)

248

Working capital

577

852

968

(275)

(392)

Loan to Sinopec

781

835

890

(55)

(109)

Other assets (liabilities)

(536)

(591)

(512)

55

(24)

Capital employed

8,459

8,874

8,945

(415)

(486)

Net debt2

2,387

2,330

2,520

57

(133)

Equity

6,072

6,545

6,425

(473)

(352)

Net Debt + Equity

8,459

8,874

8,945

(415)

(486)


LIST OF CONTENTS

30


APPENDIX


GALP ENERGIA KEY TAKEAWAYS

31

Unique profile in the industry, delivering outstanding growth

2.4

25%

Production CAGR

bn boe resources in place

2P reserves + 2C resources in world class projects

2014-2020 expected production growth from operating and sanctioned upstream projects

>20%

Group free cash flow estimated to turn positive during 2018 and growing rapidly thereafter

Ebitda CAGR

2014-2019 expected Ebitda growth considering oil price gradually increasing to 80$/bbl in the long term

2018

free cash flow positive

̴1x 15%

ROACE by 2020

from c.5% in 2014, with capital employed in E&P growing to 70%

NetDebt/Ebitda

Committed to solid capital structure, with ND/Ebitda ratio always under 2x


LIST OF CONTENTS

32


APPENDIX


KEY OPERATING INDICATORS

33 2014

Exploration & Production Average working interest production1 (kboepd) Oil production (kbopd)

YoY

30.5 28.8

24%

27.1

26%

3Q14

2Q15

3Q15

YoY

31.8 29.7

43.8 40.5

45.7 42.2

+44% +42%

28.2

40.9

43.9

6.9

7.4

6.1

+56% (11%) +77% (53%) (19%)

Angola

7.2

30% (13%)

Brazil

19.8

58%

21.3

33.5

37.8

88.7 13.4

(12%) (2%)

93.2 11.8

53.0 7.6

43.8 9.5

92,864 2.8 2.4 16.8

(9%) +30% (28%) (2%)

25,368 4.7 2.3 4.5

29,800 7.3 2.6 4.7

29,814 6.7 2.9 4.8

9.3

(2%)

2.4

2.3

2.4

+18% +43% +23% +9% (1%)

7,472

5%

1,682

1,869

1,909

+14%

Sales to direct clients (mm3)

3,759

(7%)

966

919

933

(3%)

Trading (mm3)

3,713

22%

716

951

976

3,792

8%

972

1,120

1,219

+36% +25%

Average net entitlement production1 (kboepd)

Average realised sale price (USD/boe) Operating cost (USD/boe) Refining & Marketing Raw Materials processed (kboe) Galp Energia refining margin (USD/boe) Refining cash cost (USD/boe) Total refined product sales (mton) Sales to direct clients (mton)

Gas & Power NG supply total sales volumes (mm3)

Sales of electricity (GWh) 1 Includes

production of natural gas which was exported (excludes gas which is consumed or injected)


OUTLOOK

34

Galp Energia assumptions 2015E

2016E

2017E

2018E

2019E

Brent price ($/bbl)

57

65

70

75

80

Refining margin benchmark1 ($/bbl)

4.1

2.6

2.5

2.4

2.2

EUR:USD

1.13

1.20

1.20

1.20

1.20

Key operational targets Medium-long term

Working Interest production growth Refining utilisation rate (%)

CAGR 2014-20 ≈ 25% to 30% 80 - 85

Oil sales to direct clients (mton)

CAGR 2014-19 ≈ 3%

NG/LNG sales (bcm)

5-7 1Benchmark

refining margin = 42.5% cracking margin + 45.0% hydrocracking margin + 5.5% aromatics margin + 7.0% base oils margin


2015-19 EBITDA SENSITIVITIES

35

Change

Approximate impact in 2015

Approximate annual medium/long term impact

Brent price

$10/bbl

€100 m

€350 m

Refining margin benchmark1

$1/bbl

€90 m

€80 m

0.10

(€70 m)

(€200 m)

EUR:USD

1Benchmark

refining margin = 42.5% cracking margin + 45.0% hydrocracking margin + 5.5% aromatics margin + 7.0% base oils margin


KEY INDICATORS ON GALP ENERGIA DEBT

36

YE2013

YE2014

9M15

Gross debt

€3.7 bn

€3.7 bn

€3.6 bn

Cash and equivalents

€1.5 bn

€1.1 bn

€1.2 bn

Net debt

€2.2 bn

€2.5 bn

€2.4 bn

Net debt considering loan to Sinopec as cash

€1.3 bn

€1.6 bn

€1.6 bn

1.1x

1.2x

1.1x2

Available credit lines

€1.2 bn

€1.2 bn

€1.1 bn

Average life of debt

3.6 yr

3.7 yr

3.3 yr

Average cost of funding

4.64%

4.21%

3.82%

% Debt @ floating rate

67%

57%

58%

Net debt to Ebitda ratio1

1Considering

loan to Sinopec as cash considers net debt including loan to Sinopec as cash equivalent, plus €168 m Sinopec Shareholder Loan to Petrogal Brasil as debt, and LTM Ebitda RCA €1,661 m 2Ratio


HIGHLY COMPETITIVE PROJECTS COMPARED TO OTHER UPSTREAM PLAYS

37

Break even oil prices by different oil plays ($/bbl) 120

Deep water 100

Oil sands

Extra heavy oil

North america shale

80

80 60

48

20

20

Onshore Middle East

53

Offshore shallow water

57

54

Onshore Russia

36

40

54

61

Onshore rest of the world

Average Galp Energia sanctioned projects break even

0 0

10

20

30

40

50

60

70

80

90

100

Total 2020 liquid production (mmboepd) Source: Rystad Energy 2014. Note: Break even NPV10. Ranges represent 75% break even price confidence interval for each category.


GALP ENERGIA RESERVES AND RESOURCES PORTFOLIO

38

Reserves and resources (mmboe)1 Reserves 1P 2P 3P

2013 178 579 707

2014 232 638 833

% Chg. 31% 10% 18%

2013 319 1,853 3,923

2014 332 1,672 3,496

% Chg. 4% (10%) (11%)

2013 2,495 342

2014 1,605 217

% Chg. (36%) (36%)

Contingent resources 1C 2C 3C Exploration resources Unrisked Risked

1Exploration

resources and contingent resources on a working interest basis. Reserves figures on a net entitlement basis. All figures are based on DeGolyer and MacNaughton report as of 31.12.2014


2015 SCHEDULED EXPLORATION AND APPRAISAL ACTIVITIES

39

Spud

Duration

Well

date

(# days)

status

A

1Q15

-

Concluded

14%

A

1Q15

-

Concluded

Carcará NW2

14%

A

3Q15

-

Concluded

Pitu North

20%

A

3Q15

-

Concluded

Amazonas

Jan-1

40%

E

1Q15

-

Concluded

Amazonas

Sil-1

40%

E

2Q15

-

Concluded

Target

Interest

E/A1

BM-S-11

Iara RDA 4

10%

BM-S-8

Carcará North

BM-S-8 Potiguar

Area Brazil

1E

– Exploration well; A – Appraisal well drilling phase.

2Second


PORTFOLIO PIPELINE Exploration

Namibia

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Appraisal

Guanxuma Tango

Pre-development

Júpiter

Iara #1 to #3

Development

Block 32 Kaombo

Iara

Amazonas Block 32 CNE

New ventures

Peniche Araraúna

Pitu

Lula/ Iracema #4

Lula/ Iracema #2

Block 14/14K

Coral FLNG

Carcará Alentejo

Production

Mamba LNG

Lula/ Iracema #5 to #10

Lula/ Iracema #3

Lula/ Iracema #1

Barreirinhas


KEY EXPLORATION AND APPRAISAL CAMPAIGN

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 One of the best rock quality identified in the pre-salt Santos basin

 Pitu DST on oil accumulation confirmed good permeability and porosity

 Intensive appraisal campaign performed in 2015

 Pitu North well confirmed the existence of oil in that area

BLOCK BM-S-8 (BRAZIL)

POTIGUAR BASIN (BRAZIL)

 Apollonia well confirmed the extension of Júpiter discovery and DST performed in Bracuhy

 Seven offshore blocks in Alentejo and Peniche basins  First well in the Alentejo basin, expected to be drilled in 1H16

 Reviewing current appraisal program

BLOCK BM-S-24 (BRAZIL)

PORTUGAL


BRAZILIAN PORTFOLIO STILL HOLDS EXPLORATION POTENTIAL

BARREIRINHAS BASIN  Acquisition of a 10% stake in four blocks in 2013

 Three blocks in deep waters and one in shallow waters

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PERNAMBUCO BASIN  Frontier area with multiple objectives identified to be matured  Second phase of exploration includes 3D seismic acquisition and geological studies


UNDEREXPLORED AREAS IN THE E&P PORTFOLIO STILL TO BE EVALUATED

URUGUAY  Several leads identified with significant upside potential  3D seismic acquisition already acquired

NAMIBIA  Potential for oil was proved  Reprocessing 3D seismic and analysing data gathered

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SÃO TOMÉ  High potential area, close to proven oil provinces  Acquisition of an operator position in Block 6 with a 45% stake


A FOCUSED AND EXPERIENCED MANAGEMENT TEAM

Chief Executive Officer Carlos Gomes da Silva

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Over 25 years of experience in different industries, including oil & gas, energy and beverages. Member of the Board of Directors of Galp Energia since 2007.

Chief Financial Officer

COO Exploration & Production

COO Supply, Refining & Planning

COO Iberian Oil Marketing & International Oil

COO Gas & Power

Chief Corporate Officer / New Energies

Filipe Silva

Thore E.Kristiansen

Carlos Silva

Tiago Câmara Pestana

Pedro Ricardo

Carlos Costa Pina

Former CEO of Deutsche Bank in Portugal

Held positions as Senior Vice President of Statoil for South America and was also Chairman of Statoil Brasil

Professional career in the area of procurement and engineering at Galp Energia.

Former CEO of Dia Portugal, which operates 640 stores in mainland Portugal

Over 20 years of experience in the Gas sector. Previously responsible for supply and trading of natural gas

Former Secretary of State for Treasury and Finance and member of the BoD of the Portuguese Securities Market Commission


ACRONYMS

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# ≈ % & € $ (or USD) x 1C; 2C; 3C 4D 1P 2P 3P A

Number Approximately Percentage And Euros Dollars Times Contingent resources Four Dimensional Proved reserves Proved and probable reserves Proved, probable and possible reserves Appraisal

DJSI DoC DST E E&A E&P Ebitda EIA EOR EPCIC FEED FCF FID

Dow Jones Sustainability Indices Declaration of Commerciality Drill Stem Test Exploration Exploration and Appraisal Exploration and Production Earnings before interest and taxes, depreciation and amortisation U.S. Energy Information Administration Enhanced Oil Recovery Engineering Procurement Construction Installation Commissioning Front-End Engineering Design Free Cash Flow Final Investment Decision

m mmbpd mmboepd mmbbl mmboe MSc mton mtpa NE NG NOCs NPV NLNG

ANP

Agency of Petroleum, Natural Gas and Biofuels

FLNG

Floating Liquefied Natural Gas

OPEC

bcm bbl BBLT BoD bn c. Capex CAGR CEO Cid. CIF CFO CNE CO2 CDP COO D&G DD&A

Billion cubic metres Barrel Benguela, Belize, Lobito and Tomboco Board of Directors Billion cubic metres Circa Capital expenditure Compound Annual Growth Rate Chief Executive Officer Cidade Cost, Insurance and Freights Chief Financial Officer Central North East Carbon dioxide Carbon Disclosure Project Chief Operating Officer Downstream and Gas Depreciation, Depletion and Amortisation

FPSO FOB FTE GDP GeoER GIIP GIIGNL HSE ICE IEA IHS CERA IMF IOR ISPG kboepd kbopd LatAm LNG

Floating Production Storage Offloading Free On Board Full-time Equivalent Gross Domestic Product Reservoir geoengineering Gas Initially in Place International group of liquefied natural gas importers Health, Safety and Environment Intercontinental Exchange International Energy Agency Information Handling Services Cambridge Energy Research Associates International Monetary Fund Improved Oil Recovery Instituto do Petróleo e Gás Thousand barrels of oil equivalent per day Thousand barrels of oil per day Latin America Liquefied Natural Gas

Opex p.p. PoD PPSA Q&A R&T R&M RCA RDA ROACE RRR ToR US vs. WAG YoY YE Yr

Million Million barrels per day Million barrels of oil equivalent per day Million barrels Million barrels of oil equivalent Master of Science Million tonnes Million tonnes per annum Northeast Natural Gas National Oil Companies Net Present Value Nigeria Liquefied Natural Gas Organisation of the Petroleum Exporting Countries Operational expenditure Percentage points Plan of development Pré-Sal Petróleo S.A. Questions and Answers Research and Technology Refining and Marketing Replacement Cost Adjusted Reservoir Data Acquisition Return on Average Capital Employed Reserve Replacement Ratio Transfer of Rights United States of America Versus Water alternating gas Year over Year Year End Year


NOTES

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Investor Presentation
