BW Energy Ltd

OSE:BWE

Earnings Call Analysis

BW Energy's Fourth Quarter and Full Year of 2023

BW Energy presented a strong finish to 2023 with gross production from Gabon and Brazil reaching 33,000 barrels per day, which is a 20% increase from the previous quarter. They reached a company milestone in October with 50,000 barrels of operated production per day. Financially, the EBITDA was $133 million with a net profit of $80 million, which is part of a larger annual increase in net production by 100%, revenue by 83%, EBITDA by 56%, and net income by 80%. For 2023, their accomplishments included first oil from Hibiscus/Ruche, closing the Golfinho transaction, and acquiring the FPSO Cidade de Vitoria.

Growth Milestones and Challenges

Despite achieving internal milestones and discovering Hibiscus South, BW Energy faced challenges with multiple Electric Submersible Pumps (ESPs) failures, causing a significant loss in production from the Hibiscus area. Recovery efforts have been made with the recompletion of two wells and resumption of natural production from another. Environmental performance was strong with no incidents, and support for local communities continued. BW Energy updated it's 2P and 2C reserves with promising figures, particularly from Dussafu and Golfinho.

2024 Production and Financial Guidance

Looking towards 2024, BW Energy projects net production of 10 to 12 million barrels, with production costs expected to range from $30 to $35 per barrel. They plan a net Capital Expenditure (CapEx) of $250 million to $300 million for sanctioned projects, with General & Administrative expenses (G&A) anticipated to be between $22 million and $24 million.

Operational Detail and Recovery Initiatives

Operationally, Q4 net production was marked by recovering failed ESPs and ordering new conventional ESP systems. A new discovery, Hibiscus South, is on track for production, estimating gross recoverable reserves of about 6.6 million barrels. BW Energy extended their drilling contract until the end of July 2024 to address ESP issues and continue the Hibiscus/Ruche drilling program. Increased lifting frequency through co-lifts with partner Panoro aims to stabilize revenue and cash flow. Golfinho's field performance exceeded expectations, and plans to execute two in-field well projects could significantly boost production from 2027.

Strategic Developments and Infrastructure Progress

Strategic maneuvers included towing the FPSO BW Maromba to China for upgrades, with annual peak production projected between 30,000 and 40,000 barrels per day. For the Kudu project, 3D seismic survey analysis is underway, and BW Energy intends to set up a data room with survey findings while advancing a gas-to-power project with Namibian stakeholders.

Corporate Prospects and Shareholder Returns

Strengthening its corporate structure, BW Group became the majority shareholder, now holding 74.4% of the company. Future plans involve funding investments through strong operational cash flow from both Golfinho and Dussafu, bolstered by existing and prospective debt facilities. The company intends to pay dividends once Dussafu and Maromba are fully operational, setting the stage for sustained investor returns.

Earnings Call Transcript 2023-Q4

[Operator]

Hi, and welcome to BW Energy's Fourth Quarter and Full Year 2023 Presentation. [Operator Instructions] This call is being recorded.I'll now turn the call over to speakers. Please begin.

[Carl Arnet, executive]

Thank you, operator. A warm welcome to the fourth quarter and full year 2023 presentation of BW Energy. This presentation will be hosted by Knut Saethre, our CFO; and Lin Espey, our Chief Operating Officer; and of course myself, Carl Arnet. Please note our disclaimer.Q4 highlights. Our gross production from Gabon and Brazil was 33,000 barrels per day, which is up 20% from Q3. We achieved an internal company milestone of 50,000 barrels of operated production in October. And we completed the acquisition of FPSO Cidade de Vitoria, and we took over operation of the same FPSO simultaneously. We also made a discovery of Hibiscus South, and we signed an MoU with Cosco shipyard in China for the upgrade of the FPSO BW Maromba.The EBITDA for the fourth quarter was $133 million, with a net profit of $80 million. We did 4 liftings in total from Gabon and Brazil of 2.7 million barrels. This gave $101 million of net cash, and we had a cash position at the end of the quarter and end of the year of $194 million or close to $200 million.Key achievements for 2023. Some of the key events were we had first oil from Hibiscus/Ruche. We closed the Golfinho transaction. We acquired the FPSO Cidade de Vitoria and took over operations of the same FPSO. And we did a 3D seismic acquisition on Kudu.Our net production increased by a 100% to 5.9 million barrels. Our revenue increased by 83% and came at $507 million. And our EBITDA increased by 56% and came in at $241 million. This gave a net income, so an increase, of 80% of $81 million. Our adjusted ROE, and we have defined the adjustments made, increased by 95% and came in at 15.6%.And I think we are rightly proud of our achievements although, as I will cover on this slide, we could have done even better. This shows the development of our production in 2023, and we see here we reached our target of more than 50,000 barrels per day of operated gross production in October. And then we experienced the unfortunate situation with our ESPs where we had multiple failures. And not only practically, but we totally lost production from Hibiscus as you can see from this graph.We have been able to regain some of the production while we are continuously, of course, trying to find the final solution to the ESP problems we have experienced. So we have today been able to restart some of our wells after having re-done a recompletion of 2 of the wells, and we have natural production from one well. But I'll cover that in more detail later in the presentation.Our environmental track record. We did very well on the Hibiscus/Ruche development and had 0 lost time incidents through the whole execution of that development. And I think we are rightly proud of that. We did suffer 2 LTIs in 2023 related to subcontractors and our operations. We had no environmental incidents in 2023. And of course, we are supporting local communities where we are operating and have programs in place where we support those.The next slide shows our net reserve and resource update. As you can see -- and this is third-party verified numbers. As you can see, we have updated our Dussafu and Golfinho reserves. The reserve situation has developed very well. And with the additional resources discovered, we have basically managed to keep our 2P, 2C in spite of producing oil. And the situation on Golfinho is also positive in that regard. The figures for Maromba and Kudu are from '22 as there's been no production and no further upgrades to the figures.Our 2024 guidance for production is net production of 10 million to 12 million barrels, in line with what we have told the market previously. This will give production costs of $30 to $35 mainly, of course, due to the net production we will achieve. And we have a net CapEx of $250 million to $300 million, and that is for the sanctioned projects. And we expect a G&A of $22 million to $24 million.Then some more granularity on the situation on this group. Our Q4 net production was 152 million barrels or equal to 16,500 barrels per day. We had an OpEx at $28 per barrel. And we have now managed to recover 2 of the failed ESPs and sent them back to the manufacturer for the diagnosis. We have also ordered 3 conventional ESP systems. And they are under delivery, and we expect these deliveries to be compete shortly.The year-to-date Dussafu net production is 16,200 barrels per day. We had 2 Hibiscus wells producing after we changed the ESPs. They are changed for the same access ESPs that have previously failed, but new ESPs and new docking stations in the completion. And so far, these are performing to our expectations, although at a slower -- somewhat lower rate. We have one well flowing naturally. That is also pending recompletion. And we have one well also that is not operating, that is pending recompletion.We did a discovery of a new field called Hibiscus South in the quarter. And we have decided to go ahead and complete that for production. And that is currently ongoing. We are just in the process of putting in the total production completion. And we expect this well to start operating very shortly, early March.The Hibiscus South, we estimate gross recoverable reserves of about 6.6 million barrels. And we are, of course, very pleased with this, let's say, significant extension of our resources in the Dussafu. And it shows the significant potential we have. And this is not the only one. We have several interesting targets, and we see more and more potential around the Hibiscus area that is proven to be very prolific for us.The ongoing Hibiscus/Ruche drilling program. We are aiming, of course, to fill the production capacity of Adolo, the nameplate capacity of 40,000 barrels per day. The remaining activities we have, we have extended the drilling contract until end of July 2024 due to our ESP problems. The current program is to complete the Ruche well that we drilled previously, but we had a casing problem. Now we have the new casing, and we will complete that well. Then we will drill a fifth Hibiscus well. This is really a replacement of one of the plant Ruche wells, and that's the 7H well of Hibiscus. And then we will compete the ESP work orders.If the program allows, we will also drill Prospect B as the second appraisal well in this program. So we are hopeful that we can have the rig time required to do that, but that will be towards the end of our program, so third quarter for this year.Lifting schedule on Dussafu. We had a 2023 net production of 4.6 million barrels with an annualized average OpEx of $33 per barrel. We had 2 liftings in the fourth quarter: 1 large lifting of 960,000 barrels where we achieved $90 and 1 slightly smaller lifting of 720,000 barrels where we achieved $75.We will in Q1 2024 start co-lifting with our partner Panoro. The benefit of that is that we will have an increased lifting frequency and more even revenue and cash flow. And, of course, BW Energy will have about 80% of these co-liftings. We have 2 liftings planned in the first quarter: 1 950,000 barrels early March, and 1 650,000 barrels end of March. And that's shown in the caption to the right.Then onto Golfinho and a bit more granularity of our operations on Golfinho. We took over the FPSO Cidade de Vitoria from Saipem in November, and we took over as well the operations that has fortunately gone absolutely glitch free. And we are pleased that we have a very -- well, we have a very competent organization to undertake this transfer of operatorship, and it's proven to be work extremely well. So we are pleased with the outcome.And we are also very pleased with the field performance as the production has exceeded our expectations since takeover. We are now working full blast to plan for execution of 2 in-field well projects: the so-called GLF-51, which is an oil well, and the GLF-50, a gas well to provide more gas for our operations. This is expected to significantly increase the production from 2027.Q4 production came in at close to 1 million barrels or equal to 10,400 barrels per day. And as I mentioned, this has exceeded our expectations, which were around 9,000 barrels per day. The production cost, excluding royalty, averaged $44 per barrel. We had 2 liftings in the fourth quarter: 1 of 521,000 barrels and 1 of 500,000 barrels. And we achieved $84 and $77 per barrel, respectively. We had an inventory of 325,000 barrels at the end of the period. And we did one lifting in February of 490,000 barrels, and you can see that in the caption to the right.Then on to Maromba. Main news on Maromba is that we have towed the now renamed FPSO, the BW Maromba, to China and she has arrived at the Cosco yard in Dalian. And we have signed an MoU for the upgrade of the unit with Cosco Dalian. The expected annual production at peak from Maromba remains 30,000 to 40,000 barrels per day according to our projections. And we are still working away to have the project concluded and the financing as soon as we have the financing in place.On Kudu, the main activity is the analysis of the 3D survey we carried out in 2023. Based on our initial findings from this survey and the initial data sets, we are ordering long lead items for an expiration program. We are planning to put together a data room for the Kudu which will contain, of course, then our findings from the 3D survey in third quarter or thereabouts, while we are progressing, of course, still on the gas-to-power project with the Namibian stakeholders.Then I will leave the word to Knut that will cover the Q3 financials and the full year.

[Knut Sæthre, executive]

Thank you, Carl. Welcome everyone to the financial part of this presentation. We have this morning made public the full annual report, and we encourage all of you to have a good look at that one. It includes, obviously, a lot of good information about our company not at least the financials with all the notes. So in addition, we have published the report on payments to governments and also the annual statement of reserves. So that's all been posted on our website.Then we're over to the Q4 income statement. We had a very good quarter. The main reason is that we had 4 liftings. I mean, that gives a very good accounting effects, the 4 liftings. That call just went through compared to the previous quarter. So that gave an increase in revenues up to $240 million.We also had some gains on from our commodity hedges of 9.4 and increased operational expenses. Bear in mind, we have the first full quarter of Golfinho in here, so we took over end August in '23. And then in the fourth quarter, we had a full impact from Golfinho, which of course changes a lot of these figures that you see in the fourth quarter.So a very good EBITDA of $133.4 million. Depreciations increase with the inclusion of Golfinho mainly and giving us then $90.1 million of operating profit. Interest income and interest expense -- and it's a positive interest expense that is due to a capitalization of interest, gave us a positive results there. Then we had some minor issues on the financial instruments that is related to the interest rates, what we have in place. And that gave us then a net financial expense of $1.1 million and a profit before tax in the quarter of $89 million.The tax expense is somewhat lower. That is mainly due to -- that was a lower production, that follows production in Gabon. But the main reason for the lower tax expenses, also a reduction due to the deferred tax assets that we have in Brazil resulting from previous accumulated tax losses. So in total, we had a profit for the quarter of $80.2 million.The income statement for the full year of 2023, as mentioned by Carl, we had a doubling of production and, of course, that gives a much higher revenue. So we passed the $500 million, which is of course a record to do date on the revenue side, and also on EBITDA for the full year, $241 million compared to the $154 million we had in 2022.Depreciation increases with increased activity in both in Gabon and Brazil. And the operating profit for the full year was that $141 million compared to $94 million in the previous year. Then on the net financial expenses, we had $18.6 million compared to $10.3 million. We had a lot more debt. We increased our reserve-based lending facility, and we also added a prepayment facility, which gave more interest expense. However, some of that has been capitalized as part of the developments in Dussafu, but also related to Maromba and Kudu. Those interest expenses are capitalized.So the net financial expense $18.6 million compared to $10.3 million. Profit before tax of $122.5 million, and a tax expense of $41.5 million, giving us a full year profit of $81 million compared to the $45 million we had in 2022.Over to the balance sheet for the full year of 2023. In the quarter, you can see there has been some movements between right-of-use assets, E&P tangible assets and intangible assets. Those are reclassifications. We have added the BW Maromba as E&P tangible asset. We have also added Vitoria and we have some reclassification of our appraisal wells. So that is the reason for these different movements. The increase in total on the non-current assets is mainly done due to the continued investments in Dussafu and the acquisition of the FPSO BW Maromba, the previous Polvo.So the balance sheet is still very strong. We have on the liability side of the balance sheet increased the asset retirement obligations. That is mainly due to the Golfinho asset. So in total there we have $224 million, an increase compared to last quarter. But again, a very strong balance sheet with an equity ratio of 40% and a net interest bearing debt of $178 million.The cashflow overview for the fourth quarter. We started off with close to $200 million in cash. We had a very good operating cash flow as well. The 4 liftings, they were mainly paid in the same quarter as lifted. So $101.7 million in operating cash flow. Still a lot of investments going on mainly then in Dussafu, but also for Maromba. I'm coming back to that on the next slide. And net financing activities of $27.1 million, giving us a cash position at the end of the year of $194.2 million.So here we have the investments in assets. Here you can see all the way back to the start of or at least when we listed the company back in the first quarter of '20. And then COVID happened and we stalled all our investments before we started to continue with the different phases in Dussafu, increasing the Tortue mainly before we then added the other assets.As you can see here, if we go towards the end of the year, you can see the Golfinho acquisition coming in the third quarter. And in the fourth quarter, you can also see that Maromba has a substantial investment. And that is for the first payment for the BW Maromba, the FPSO that was paid in the fourth quarter where the remaining part of that will be paid this year.So that concludes the financial part of the presentation. Then we move on to the summary. Here's the production outlook. We have shown this all the way back to the inception of the company or when we at least started production back in 2018 with the first 2 Tortue wells. And here you can see the development of the first years of the Tortue production. Then in '23, we have added Hibiscus/Ruche production and also 4 or 5 months of Golfinho.We will have another step-change in production in 2024 where we'd obviously done a full year of Golfinho and also an improved production when we have resolved these ESP issues from Hibiscus/Ruche. And third round then to '27 where we expect then Maromba to kick in with the first production and further on to '28. So with our plans, we will still have a very good production increase in the years to come.This is the final slide, increased diversification and step-change in production. So in the different areas, these are the imperatives. Production is obviously then to stabilize the Dussafu output, resolve our mechanical issues. As we have mentioned many times before, the reservoir is performing excellently. So we just need to get the mechanical issues behind of us and stabilize that production. Bringing first oil from Hibiscus South into production, that is expected now in March. And then in Brazil, we're preparing for the Golfinho infill well campaign that will later on double the Golfinho production.On the exploration side, as mentioned, we will drill the Bourdon or Prospect B appraisal well, and then complete the seismic evaluations on Kudu, and prepare for the exploration program. On the development side, it's to complete the Hibiscus/Ruche drilling campaign that will continue until late July. And then we might pause it before we then continue again in 2025. On Maromba, it's to finalize the development plans and get the financing in place. And also then to progress the Kudu gas-to-power project.On the corporate side, BW Group now owns 74.4% of the company after the mandatory offer that came into place because of the 40% threshold that was passed in the fourth quarter. So that ended up with BW Group getting another 12% of the shares. And after that, BW Offshore and BW Group did a transaction on the BW Offshore shares. So now BW Group is the main owner besides of the free float of 74.4%.So our plan going forward is to fund investments through our strong operational cash flow that will come both from Golfinho and from Dussafu supported then by the debt facilities that we have in place, and also further debt facilities that we're working on. And the intention is then to pay dividends when Dussafu and Maromba are in full operation.So that concludes our presentation from today. Then we move over to the Q&A session. And I leave the word back to you, operator, for questions from the audience. And I already see that we have several questions coming in on the web. So over to you, operator.

[Operator]

[Operator Instructions] The first question will be from the line of Teodor Sveen-Nilsen from SB 1 Markets.

[Teodor Nilsen, analyst]

A couple of questions. I have 3 questions actually. So first on production guidance. Should we expect that the 2024 production to be slightly back-end loaded? And if so, could you disclose some details on the profile we should assume? Second question is on Maromba. What's your current estimate for total Maromba CapEx until first towing? And my third question is on -- so a pretty technical one on the deferred tax that you talked about, Knut. What triggered that you recognize that deferred tax now and where in the balance sheet can you find that? I didn't see it there.

[Carl Arnet, executive]

Okay. Let's go to the first question then on the production guidance and if we could give some flare on the guidance -- sorry, on the profile.

[Lin Espey, executive]

Sure. This is Lin Espey. And you're right, the production forecast is back-end loaded. The first part of the year, we're going to be a little bit choppy as we reestablish production as Carl mentioned in the presentation. And we're making progress on that, working with our ESP providers. New equipment's coming in, new models, but it's going to take a little while for us to reestablish production in all those wells. And as well as we're bringing on new wells. We're just about to bring on Hibiscus South well in a couple weeks. So we're very excited about that. And then we'll finish out the drilling campaign. But we do expect to ramp production back up in Gabon closer to that 40,000 barrels a day gross in the second half of the year.I think the second question was --

[Knut Sæthre, executive]

That was on Maromba CapEx for the total project. We're still working on the concept, but of course we have some idea of where it will be. So it's around $1 billion. I think that's what we can say now. And then we've got back to details when we get closer to FID and secured financing.

[Carl Arnet, executive]

Yes, the question is a bit because we definitely hope to start production already when we have the first well up and going so that we can produce and drill at the same time. So it's a question of how many wells do you include before first oil. We expect a total development to be around $1.25 billion, of which, yes, I think it's a good assumption that we'll be at around $1 billion when we have first order.

[Knut Sæthre, executive]

And then the last question, Teodor, was on the taxes that we have recorded for the fourth quarter and the tax income related to Brazil. So those are due to the previous losses we had in our Brazil companies that we now deduct from the taxes that are paid for the Golfinho operations. I don't have all the details in front of you. We have a fully annual report out there with notes and I have to get back to you to look into the details.

[Teodor Nilsen, analyst]

That's fine. And just back on the production question, Lin. They should interpret that the second half for 2024 we should expect 40,000 barrels gross from Dussafu?

[Lin Espey, executive]

That's what we're forecasting.

[Operator]

As no one else has lined up for questions in this call, I'll hand it back to the speakers for any written questions online.

[Knut Sæthre, executive]

Good. We have a few questions that have come in from the web. First of all, it's related to some numbers on CapEx, a breakdown of the CapEx for '23. We have a slide in there. I don't have the exact numbers in front of me, but I just went through the slide where we had the graphs where you can at least get some idea of where the money is going on the investments.For the guidance of 2024, we also have the guidance in the presentation in a total. We could or might add some additional CapEx when we get to sanctioning of these projects. But right now on Dussafu, it looks like between $150 million to $200 million, Golfinho is about $10-ish million. Maromba is $60-ish million and Kudu is $20-ish million. That should give you some. And then hopefully we'll land in the middle of the $250 million to $300 million that I just mentioned.Then can you please give a separate cost guidance ranges for Dussafu and Golfinho? So we've given a range of $30 to $35 on the OpEx per barrel. That will, of course, depend on what kind of production we're having. For Dussafu, we're looking at then an OpEx of $160 million to $170 million. On Golfinho, we are at the around $150 million. So that's where we are on these 2.Then there is another question. Can you say what 2P reserve numbers you have for Hibiscus, excluding Hibiscus South, and for Ruche? We have today posted the annual statement of reserves. We are not disclosing the, let's say, separate fields within the Dussafu license in that report. Unfortunately, I don't have the numbers in front of me. So that the question came from you, Nick. So I hope I can get something to you when I see you later in next week in Oslo.Then there is another question. In your production outlook slide, when do you assume you are drilling Hibiscus/Ruche Phase 2? Can you say something about that, Lin?

[Lin Espey, executive]

So the original development plan called us. We separated the 12-well drilling program in 2 different phases. Not only 6 wells in the first phase and then followed, I can't recall off the top of my head, about 18-month or 2-year break before we started drilling Phase 2. But as we've drilled this program, we've made a discovery in Hibiscus out. We're starting to change it and optimize that program. So I think we're going to end up with at least 7 wells in the first part of the drilling program. But we're taking a look at the reservoir. We're quite pleased with the results of the reservoir and the outcome that we may take some advantage and add a well or 2 before the second phase. But that's to be determined. We'll come back with you on that.

[Knut Sæthre, executive]

Good. And then another question to you, Lin.

[Carl Arnet, executive]

Well, I could add that I think the recent history has taught us that it is sensible to have some extra well capacity. I mean, we are relying on ESPs. We, of course, had a very different expectations on the life of the ESPs than what we have experienced. But our plan maybe then to add well capacity to have a higher assurance of reaching a full Adolo nameplate production.

[Knut Sæthre, executive]

Good. And to the ESPs, there's a question here. What is your current best understanding on what caused the ESP failures? Are the 2 ESPs you have put into Hibiscus wells so far operating normally? Do you expect them to remain online for the rest of the year or probably fail?

[Lin Espey, executive]

All good questions. We are right in the middle of -- we did the work over and we pulled 2 of the ESPs out of the ground. And we've sent them over to the factory and they're undergoing a detailed failure analysis. That report hadn't concluded. But I think there definitely was an issue with the down hole components but the technical team is sorting through that.And then I guess the second part of that question is that we have reinstalled these ESPs. Now what we reinstalled was the same model of the ones that we had trouble with. We did make some adjustments on the top side electrical power, and we are operating the ESPs in a little different fashion. We're hopeful that these ESPs' life will extend a little bit longer, but we're not a 100% sure at this point.

[Knut Sæthre, executive]

Okay. And then --

[Carl Arnet, executive]

I think we can add that we are working hard to fast-track conventional ESPs to have more optionality and more assurance of our production.

[Lin Espey, executive]

Absolutely. That's a good point. So we've been working with our ESP provider Baker, and they've done a really good job at fast-tracking a more historical traditional system. And the first 3 sets are arriving in country, and they're going to be available to us in this coming month to install. So we're pleased about that.

[Knut Sæthre, executive]

Good. And then there is a question. Can you talk a little about the relationship between production/revenues and multiple expansion in the sense that bigger companies attract higher multiples, and whether scale is more important than in the market today? How does this influence your decisions around organic versus inorganic growth?That was a long question on organic growth versus inorganic growth. I mean, we have a lot of growth plans in the company, and we have a lot of on our plate. Don't know, Carl, if you would add something.

[Carl Arnet, executive]

Well, say it again.

[Knut Sæthre, executive]

On the organic growth versus inorganic growth.

[Carl Arnet, executive]

I mean, it's very difficult to comment on inorganic growth because yes, we are of course, obviously looking at all available opportunities to us constantly. I mean, we're quite active and we have significant business development activity. So timing of those opportunities is, of course, something that is totally arbitrary. What we have control over is our organic growth, and we are progressing quickly. And we do absolutely agree that its size matches.So we are very focused on growth, and I think we have been very clear in our communication on that since we listed that our focus now is to build a company of significance and a meaningful company in this space because we think that's important to establish. And that will be the basis and the vehicle for dividend and payout. And hopefully we will be rewarded both for dividend payouts and also we will have some capital expansion in getting better multiples by our share size. So yes, we're working on it.

[Knut Sæthre, executive]

And it's a correct observation that the multiples are a lot lower, of course, in companies with a size like ours. And also I guess that's also reflecting some of the growth plans. And if you come to the higher companies with the more production, you get higher multiples. That's just the way it is.A question here to Kudu. Can you please tell us a bit about Kudu prospects after recent Galp discoveries on Mopane and the timing of the first drill prospect? Are you awaiting Galp conclusions or rig capacity?

[Lin Espey, executive]

Well, I'll handle the part about the -- so we've shot our seismic. We're still in the processing phase of the seismic. So that's not complete. We are getting some of the early products in, and I think we've said before, we're already quite excited about that. And we're also quite excited that our neighbors to the west, Galp, have made a discovery, have announced a discovery. So I think that's all beneficial for the prospects on our block. But it's too early to say anything definitive because the processing and interpretation is still going on. However, as Carl mentioned earlier in his presentation, we have made the decision to order long-lead items to be in preparation for a drilling program.

[Knut Sæthre, executive]

Okay. Good. Then there is a question on the status of the financing for Maromba. As we chart in the presentation, the FPSO has now been towed from Dubai to China, and we have entered into an MoU. So with that comes also an ambition to get Chinese financing from SINOSURE and China EXIM. So that's on the FPSO side of it. And we're also in discussions with banks on smaller RBL facility. So that is the main financing activities for the Maromba.So that I believe concludes all the questions on the web. So then I'll leave it to you, Carl, for closing.

[Carl Arnet, executive]

Well, I thank you again for listening in and for your questions. We appreciate that you follow the company and we look forward to speaking to you again in about 3 months' time. Thank you.

[Knut Sæthre, executive]

Thank you all.

[Lin Espey, executive]

Thank you.

[Operator]

This now concludes the call. You may now disconnect your lines.