EFTA01367378

31 May 2015 Integrated Oil US Integrated Oils Primary Growth Drivers Volume growth over the next two years is primarily driven from re-developed mature assets (Ekofisk II) as well as from the bringing on-line of several growth projects in both the UK and Norway. However, the longer-term viability of North Sea production growth is most strongly correlated with the successful (i.e. timely) development of the massive Johan Sverdrup field which was recently sanctioned in February. We estimate North Sea crude production to hold broadly flat (-2.5 MMb/d) through 2016 before declining to 2.2 MMb/d in 2019 w/ recovery in 2020 as Johan Sverdrup is brought on-line. Primary Risks In our view, the impact of project delays is mostly muted as all growth projects are currently either on-stream or under development with growth from the currently producing Ekofisk field alone, estimated at -15% of 2014-2016 North Sea. Post 2016. we expect a decline in the North Sea until the end of the decade/ramp of the massive Johan Sverdrup field (+300 Mb/d of production growth in 2020). The chief risk to North Sea production on a go-forward basis will focus on managing declines. We note, however, that Statoil (covered by our European counterparts), alone, accounts for -20% of the oil production growth from the North Sea over the next 3 years and any announcements of a change to the company's planned activity in the region would likely have a material impact on the forecast. Managing Declines: For a more detail look at North Sea decline, please see our case study on page 20 of this publication. In summary, we assume a decline rate (ex growth rates and redevelopment projects) of -12% during our forecast period and assume a contribution of -3% from prior year production in normalized outages within the forecasted 12% forecast. We see some upside to our forecasted decline rates as operators (in the Norwegian North Sea) benefit from exchange rate tail-winds that will soften cuts to brown field spending. Assuming that -20% of a company's NCS spend is denominated in the local currency (S Kroner), we estimate that a 25% YoY reduction in SUSD denominated capex (proxy for an industry average) will likely result in an "actual" 10% YoY cut spend. Further, a reallocation of capital away from more costly frontier plays in the Barents Sea towards more immediate cash flow accretive brown-field projects can also provide upside to our current forecast. On our base case assumes declines of 12%, and estimate a 1% revision to the assumed decline to result in a swing of - 125 Mb/d to our 2017 outlook. [Figure 1 1$.* Key Growth Projects, 2014-2020 POSITI Cato, Ice Opav On1.1 fp Crofton MS And ban Upyr Ptak Pod Yr 24,14701.7"ed 3014190IIMI rahedGinig One* Nino/ Coma/ hallo S. .atin hinisan 2 ullys LW. awoken.' SS 2312 AY ID 24 MP, A turns. Arno Gat Atio II,OI. Ax • 'wan Yon•ary I.od ne Morn. W.11 Oat Sr. <n/rd lutil“..ea In ia, Oro,. elfin • ne OW SAItn. llmilwOredaterall 4.: KS 516 2'1.. 35 171) }:11 ”:4 2w t, 0) OS n. 'a tide ttglarlien Ya..., Wog.. sin net: ill.... wept tamp" Ot LAC Celt/ Pia* Sea \alien Pa% ea knilutattalim semi S,,'dl am... hoefrien At. Tarp" Ma.' 0.Vst et Sal. Ornt/jalo. IA) 1 at MO NI, AY 20t, ,C.14 XV' feD ..} II 2r• 'a II vac Ann Ary• taill An. La w• 10 ry Wavy a... gIrenI ',orb tra liateani N4•SI loa af I Vane e6 Talc.. OW .1./.1(h.A.-4•••^I Lisa*. OPatcpmait 1, 41. 2014 MS }It Ff., t' P 9 U %orb]. fernil%orth1t, u016nnant Sao. Lb*, Gw.toperia: 41 nu z.".” a a San* Onwl* ark Woo0 Moat:nee Page 60 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0058911 CONFIDENTIAL SDNY_GM_00205095 EFTA01367378