Wintershall Dea sees strong performance despite difficult environment

In a challenging market environment, Wintershall Dea ended the 2020 fiscal year with strong operational momentum in the fourth quarter.

In the fourth quarter of 2020, Europe’s leading independent gas and oil company increased its production to more than 650,000 barrels of oil equivalent per day (boe/d) – the highest level so far since the company’s merger two years ago.

“2020 was undoubtedly a difficult year for everybody and I’m proud of the way that Wintershall Dea responded to the challenge. We took early and decisive action at the beginning of the pandemic to keep our colleagues safe and to ensure continuity of operations which have allowed the company to end an extremely challenging year in a strong position,” said CEO Mario Mehren at the company’s virtual annual press conference.

Wintershall and DEA merged in May 2019. “We are fully on track with integration and associated cost savings,” Mehren said. The company also managed to cut its underlying production costs, which were already low by industry standards, by a further 8 percent to €3.5/boe. Wintershall Dea was therefore able to achieve a result in 2020 of €1.6 billion EBITDAX (2019: €2.8 billion), despite a challenging environment with low gas and oil prices.

In the past fiscal year Wintershall Dea, which is active in 13 countries, produced an average of 623,000 boe/d worldwide (2019: 617,000 boe/d), achieving its production target for 2020.

The portfolio for reserves and production continues to be focused on gas (70 percent gas, 30 percent oil). “This puts us in a very good, competitive position,” Mehren said.

Wintershall Dea has set itself ambitious climate targets for the future. “We want to achieve net-zero greenhouse gas emissions in our upstream activities as early as 2030,” Mehren explained. In addition, the company will reduce the methane intensity of its production to below 0.1 percent by 2025.

To achieve these targets Wintershall Dea is investing around €400 million in energy efficiency, strict emissions management, and nature-based mitigation solutions over the next ten years. The company is also working on new technologies to decrease emissions generated from producing and using gas and oil. A new department is dedicated to CCUS (Carbon Capture Utilization and Storage) and hydrogen, as they are such important themes for the future.

Wintershall Dea has already started a hydrogen research cooperation with the Karlsruhe Institute of Technology (KIT), to develop turquoise hydrogen. “Our initiatives demonstrate our clear commitment. Because we firmly believe that the energy transition can only succeed with gas. And Wintershall Dea knows gas – both classic natural gas and hydrogen,” Mehren emphasised.

“Looking ahead, 2021 will certainly be a year with continued high levels of uncertainty as well as volatility, and while we remain cautious, we look forward to an exciting year”, said Mehren. The company expects to increase its production in 2021 (620,000 to 640,000 boe/d) and to invest €1 to 1.1 billion in production and development (capex), which is slightly below the previous year’s level. Exploration expenditure is expected at €200 to 250 million, a slight increase on 2020 (€154 million).