Summary of Galp Energia SGPS Conference Call Company and Industry - **Company**: Galp Energia SGPS - **Industry**: Oil and Gas, specifically focusing on upstream assets in Namibia Core Points and Arguments 1. **Partnership with TotalEnergies**: Galp has established a strategic partnership with TotalEnergies to develop the Mopane asset in Namibia, which is part of the Orange Basin PEL83 block [3][4][5] 2. **Significant Achievements**: Galp successfully drilled five wells in just over a year, which is seen as a remarkable achievement and has led to the partnership with TotalEnergies [3][4] 3. **Development Plans**: The partnership aims to accelerate the development of the Mopane asset, with plans to launch an exploration and appraisal campaign that includes three wells over the next two years [4][6] 4. **Production Goals**: TotalEnergies has a clear development plan for the Venus asset, targeting 160,000 barrels of oil per day with potential first oil by 2030 [5][6] 5. **Financial Structure**: The transaction involves an asset swap where Galp will exchange a 40% interest in Mopane for a 10% interest in Venus and a 9.4% interest in another block [6][7] 6. **Funding Agreement**: TotalEnergies will carry 50% of Galp's investments towards the first development in Mopane, significantly de-risking Galp's financial exposure [7][8] 7. **Production Forecast**: Galp anticipates average production to be close to 110,000 barrels per day by the end of 2025, with competitive break-even levels around $20 per barrel [9][10] 8. **Long-term Growth Strategy**: The partnership is expected to support Galp's growth strategy well into the 2030s, with several high-potential developments already in the pipeline [10][11] Important but Potentially Overlooked Content 1. **Valuation of Assets**: The valuation of the transaction is driven by two main components: the asset swap and the carry agreement, with approximately 70% of the value hinging on the carry [17][18] 2. **Exploration and Appraisal Wells**: The three planned wells are crucial for de-risking the Mopane asset and will help in determining the best development approach [21][22] 3. **Gas Handling Challenges**: Discussions with TotalEnergies have included solutions for gas handling, which is a challenge at Venus, and the implications for Mopane's gas content are still being assessed [57][59] 4. **Timing of the Transaction**: The decision to proceed with the partnership was influenced by the need to mitigate risks associated with continuing development independently and the information gathered from previous drilling [62][63] 5. **Future CapEx Considerations**: The CapEx profile for Venus is still being finalized, with expectations for a significant investment once the FID is made, which is targeted for 2026 [30][83] This summary encapsulates the key points discussed during the conference call, highlighting the strategic partnership, development plans, financial implications, and future growth prospects for Galp Energia SGPS in the oil and gas sector.