Full Year 2021 Results - Repsol Sinopec returns to profitability and renews focus on corporate strategy

Repsol Sinopec Resources UK Limited (“the company”) and its subsidiary companies (“the group”) announces its Full Year Results for the year ended 31 December 2021.

The results have been filed at Companies House, covering Repsol Sinopec Resources UK Limited (the 'consolidated results') and those of its various subsidiary companies.

Nicolas Foucart, Chief Executive Officer, commented today:

“Thanks to the hard work and commitment of our workforce, as well as an increase in commodity prices, 2021 saw a return to profitability. Our operating revenue increased by $210.5 million, generating positive cash flow to reinvest in our business. Our aim is to continue to deliver against our corporate strategy, which is focussed on safe and sustainable oil and gas production, efficient decommissioning, and Net Zero, which for us means emissions reduction whilst contributing to the UK’s domestic energy supply.

“2021 was marked by a decrease in production, mainly driven by the impact of the Tartan area having ceased production towards the end of 2020. Production was also impacted by the ramp-up to normal levels of activities across our assets following the implementation of an industry-leading response to the pandemic during the previous year.

“In 2021 our focus was to review our asset strategies to define clear development roadmaps and to identify opportunities for each asset. This was done within a continuing challenging operating environment.

“The group generated a tax credit in 2021, primarily derived from a combination of tax recoveries associated with decommissioning activity, some profits being offset through utilisation of brought forward trading losses, and other deferred tax movements.

“As noted in the financial statements, the group expects the introduction of the Energy Profits Levy (EPL) will result in an additional tax liability.”

2021 FULL YEAR RESULTS SUMMARY

• Production volumes decreased by 13,597 boe/day to 37,929 boe/day in 2021 from 51,526 boe/day in 2020.

• Operating revenue increased by $210.5 million to $1,011.6 million in 2021 from $801.1 million in 2020. The group benefited from a significant increase in hydrocarbon prices with an average price increase of 33% year on year, partially offset by the impact of reduced production volumes.

• Operating expenses decreased by $648.3 million to $894.9 million in 2021 from $1,543.2 million in 2020. Operating expenses include operating costs of $654.9 million (2020: $534.7 million), depreciation charges of $432.1 million (2020: $427.3 million), a net impairment credit of $152.6 million (2020: net impairment charge of $604.7 million) and other net operating income of $133.3 million (2020: $62.9 million).

• The net impairment credit totalling $152.6 million includes a $1.4 million charge in relation to IFRS 16 right of use assets and a net $154 million impairment reversal relating to oil and gas assets held within the North Sea.

• Operating costs per barrel were $47.31/barrel (2020: $28.33/barrel).

2021 KEY FINANCIAL RESULTS

The group’s key financial and other performance indicators for the financial year were as follows:

	2021 $000	2020 $000
Revenue	1,011,593	801,121
Operating expenses	(894,936)	(1,543,189)
Production (boe/day)	37,929	51,526
Operating cost per barrel	$47.31	$28.33

ENDS