埃尼石油 (E) 2006 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to your Eni 2006 first quarter results conference call with Mr. Marco Mangiagalli, Chief Financial Officer. My name is Mark and I’ll be your coordinator for today’s conference. [OPERATOR INSTRUCTIONS]. Over to you, Mr. Mangiagalli. Thank you.

Thank you. Good afternoon, ladies and gentlemen, and welcome to this conference call in which we will comment on the 2006 first quarter results and business trends. The results we are reporting today are solid and have been helped by the positive external environment, as well as by the strong industrial performance achieved.

First, a glance at the scenario. As you are perfectly aware, the key feature of the first quarter has been the steady increase in oil prices, the Brent average price was close to US$62 per barrel, up 30% compared to the same period of last year and it has continued to rise to over US$70 per barrel in April and May, a decline in the average European refining margin, -31% compared to the first quarter of 2005, averaging around US$3 per barrel, and finally an appreciation of the U.S. dollar, around 8% versus the euro.

As usual, I would like to remind you that Eni results are affected by several issues, including the seasonal factor affecting the demand for natural gas and petroleum products pertaining to residential heating, the demand for which is highest in the first quarter of the year, being the coldest months, and lowest in the third quarter, being the warmest months. Therefore, Eni’s operating profit and change in net debt in the first quarter cannot be extrapolated for the full year.

Let me remind you that, as a consequence of the position adopted by the International Accounting Standards Board, Saipem and its subsidiaries have been once again included line by line in the Eni IFRS consolidated financial statements. For the sake of comparison we have accordingly restated our 2005 accounts.

Having said this, let us now comment the results. In the first quarter, net profit amounted to €2.97b with an increase of around 22% if compared to the same period of 2005. Excluding special items and inventory gains, the adjusted net profit totaled €2.95b, with an increase of around 24%.

Such a strong performance is the result of a 27% increase in the operating result, plus €1.2b, mainly as a consequence of the strong performance in the upstream sector.

A positive financial income for €42m, mainly due to the recording at fair value of the derivatives financial instruments and to the decrease in the average net borrowings.

Higher income from investments for €106m, the most part related to the higher contribution of gas and power affiliates accounted for with the equity method, mainly Union Fenosa Gas and Galp.

These positive effects were partially offset by higher taxes amounting to around €800m related to the higher taxable income and to the higher contribution to the E&P result from countries with a higher tax rate.

In the first quarter of 2006, reported and adjusted EPS, based on an average number of shares of 3.72b highlighted, in euro, an increase of 23% and around 25%, respectively, if compared with the same period of last year. As to the cash flow per share in euro, we can see an increase of more than 25% on a reported basis and of more than 27% on an adjusted basis.

Leveraging on the robust industrial performance and on the positive market environment, first quarter reported operating profit amounted to around €5.6b with a 26% increase versus the corresponding period of 2005.

Excluding net negative special items for €32m and inventory gains for €94m, mainly related to R&M and gas and power, the first quarter 2006 adjusted operating profit totaled €5.53b, up 27% on a like-for-like basis.

Let me now go into more detail for each business.

In the upstream sector, Eni showed an impressive production increase, confirming the positive trend recorded in the past months. In the first quarter of 2006, hydrocarbon production totaled 1,827,000 boe per day, an increase of 7.3% versus the corresponding period in 2005. Excluding the impact of the high oil price on the Production Sharing Agreement and the buyback contracts, production growth rate is of 9%.

First quarter 2006 production growth is entirely organic, and has been achieved thanks to the build up of WAFA in Libya, Kizomba A in Angola and Rod in Algeria, and the start-ups of Bahr Essalam in Libya, Kizomba B in Angola, Barboni in Egypt, Bayu Undan LNG in Australia, and Block BBLT, again in Angola.

These positive effects were partially offset by disruptions in Nigeria, the slower than expected recovery from the outages in the Gulf of Mexico, which accounted for around 14,000 boe per day, and finally, the decline of mature fields, mainly in Italy.

Let me highlight that you cannot assume this trend to be an indication for the full year production growth rate, because of the impact of the unilateral termination of the operating service contract on hydrocarbon activities in Venezuela starting from April 1, as well as the Nigeria disruptions. On this basis, therefore, the 2006 growth rate should be in the range of 3%.

The first quarter reported operating profit in the E&P business amounted to €4.3b, a 68% increase year on year. The result includes positive special items for €57m, mainly related to asset disposals. On an adjusted basis, the operating profit amounted to €4.25b, showing a robust increase of more than 63% on a like-for-like basis.

The strong operating profit is mainly related to higher hydrocarbon realization prices denominated in dollars, following the positive oil market scenario, which accounted for €1,222m; higher hydrocarbon production sold [technical difficulty], and the U.S. dollar’s appreciation versus the euro, which accounted for [€348m]. These positive effects were partially offset by higher operating costs and DD&A, for about €175m, as well as higher exploration expenses of [€22m].

As for the gas and power, the overall gas volumes sold, both consolidated and associated, rose by around 6% in the first quarter of 2006, amounting to around 30 bcm. The gas volume sold increased both in Italy and abroad. Particularly, gas sales in Italy increased by around 4% as a result of higher volumes sold to industrial and thermoelectric customers, as well as higher self-consumption, 1.3 to 1.5 bcm, mainly related to the expansion in powergen activity.

These positive elements were partially offset by lower sales to wholesalers. Without considering self consumption, Eni sales in first quarter ’06 were up by 2.8%.

International gas sales rose by more than 9%, reaching 11.1 bcm, mainly as a result of higher gas sales through the Bluestream and Greenstream pipelines, as well as higher volumes sold in France and Germany.

Turning to the gas and power results, first quarter reported operating profit decreased by around 23% to about €1.2b. First quarter result includes negative special items related to redundancy incentives, environmental provisions, as well as €30m positive special items relevant to inventory. Gas and power adjusted operating profit amounted to €1,203m, down around 22% over the same period of 2005.

Let me elaborate on the adjusted operating profit by activity areas, which was around 22% down compared to the same period of 2005, mainly due to the lower result accounted for in the marketing activity.

The result in market and distribution activities shows a decrease of around 36% due to lower margins related to the impact of the provision posted for the authority resolution number 248, and to increased supply cost for an overall amount of around €150m, part of the impact of the [298, in the range of €214m].

These negative effects were partially compensated by higher volumes sold in Italy and abroad. Transportation activities abroad showed a 47% increase, mainly as a result of a higher contribution of the Greenstream project, on schedule with the volume build up.

The Snam Rete Gas contribution decreased as a consequence of the new tariff set by the authority [for the second regulatory period]. This negative effect was partially compensated by the higher volume transported, mainly thanks to the Greenstream build up.

Finally, the higher contribution of the power-generation business is due to the higher electricity prices and to the increase of electricity production sold, thanks to full contribution of the first unit and the start up of the second unit of the Brindisi plant, as well as the full contribution of the Mantova plant.

Finally, in order to have a full view of the economic results of this business, it is important to focus on the adjusted net operating profit, by adding on top of the operating profit the contribution of the net equity income from associates. The contribution from associates in the first quarter 2006 increased significantly, reaching €135m, 146% up if compared to the same period of 2005.

Most of the increase comes from the remarkable performance achieved in our marketing activities in the Iberian Peninsula, particularly in Union Fenosa Gas [technical difficulty] and in Germany. A major contribution came also from the distribution activity in Italy, mainly thanks to Toscana Energia, formerly consolidated on a line-by-line basis, as well as from the Bluestream project, coherently with the volume build up.

Let’s now turn to the R&M sector. First quarter 2006 reported operating profit totaled €89m, down 67% versus the same period of 2005. The result includes negative special items for €47m, mainly related to provisions for risks and contingencies relevant to environmental laws and site decommissioning. In addition, we also accounted for €47m for inventory gains compared to €143m of inventory gains accounted [for in the same period of] 2005.

On an adjusted basis, the operating profit amounted to €89m, showing a decrease of 41% over the same period of 2005. The result was related to the lower contribution of the refining activity in Italy, due to lower refining margins, as well as higher maintenance activity. These negative elements were partially offset by the U.S. dollar appreciation [versus the euro] and the higher volume [processed].

In addition, we accounted for a lower contribution of marketing activities [in Italy] as a consequence of a decline in margins due to the increase of international prices of products not entirely reflected in the selling price, as well as to the rise in competitive pressure. This negative effect was partially compensated by a higher result in the marketing activities in the rest of Europe, thanks to higher margins and volumes.

The first quarter of 2006, the petrochemical [business] posted an adjusted operating profit of €23m, with an 86% decrease compared to the €159m of operating profit [in the same period of 2005]. This was mainly due to the decrease in base chemical margins as a result of the increase in feedstock costs not transferred to sale prices. This negative effect was partially compensated by higher volumes sold, efficiency improvements and continuing cost cutting efforts.

First quarter 2006 the oilfield services and engineering business accounted for an €83m adjusted operating profit, up 28% versus the same period of last year. This result was due to the higher contribution of both the offshore drilling activities and onshore construction.

In the others activities, that now refer to Syndial only, we accounted for an operating loss of €63m, compared to the [€53m of the same period of] 2005, mainly due to the decline in unit margins related to the increase in the petrochemical feedstock costs, not entirely reflected in selling prices, as well as higher utilities costs.

Lastly, corporate activities posted an adjusted loss of €46m, in line with the overall consolidated loss of the first quarter [technical difficulty].

The first quarter 2006, the overall investments were €136m [sic - see documentation], a 9% decrease compared to [the same period of] 2005. CapEx amounted to €1.34b, 9% down on a like-for-like basis. Around 97% of capital investments were concentrated [in the core business. In particular], around €1b were invested in the upstream sector, down by around 9%, mainly due to the fact that in [the first quarter] 2005 Eni acquired from British Gas 1.85% additional stake in the Kashagan field, with an overall expenditure of around $200m.

In the gas and power division, €151m were invested, a decrease of around 40%, [mainly due to the completion] of several power plants.

This CapEx profile is in line with our forecast for the full year 2006, in which we expect to post an overall amount in the range of €9.7b.

On top of this, in the first quarter of ‘06 we bought back more than 13m shares with a cash out equal to €313m. From the beginning of our share buyback program, we have bought back around 7.4% of our share capital with an overall cash out of more than [€4.6b].

Thank you for listening. Now we are pleased to answer any questions you may have.

Now we can start the Q&A session.

Okay, ladies and gentlemen, your question and answer session has now started. [OPERATOR INSTRUCTIONS]. The first question comes through from the line of Mr. Iain Reid. Please go ahead with your question.

Hello. Good afternoon, Marco.

Hi, Iain.

Can you hear me? I couldn't hear you very well. There's a lot of distortion on the line.

I'm sorry. Can you -- I can hear you perfectly.

Okay, well I think you need to speak up because there's a lot of distortion on the line. I hope it's not -- we're not just the only ones. Firstly, on CapEx, you said that you intend to spend €9.7b this year, but I seem to remember from the strategy review you were indicating a lower amount for 2006 and 2007 of around €9b. Now, did I not hear your guidance properly at the strategy review, or has there been an increase here?

Secondly, on production, you've given guidance for 3% production growth for the year. But if you take out what you've lost in Venezuela on Dacion, you would, I think, have approximately flat production for the year. So can you just say where the extra volumes are coming from, over and above what you were talking about at the strategy review?

And thirdly, I just wondered whether you can tell us what the realized oil price was in the first quarter. Thanks very much.

Iain. I’ll begin with the CapEx. Well, I wouldn't say that in fact [put in the] [inaudible] strategy presentation, we mentioned that roughly we have incurred a €9b average over the period itself. And this €9.7b was, in fact, a component of the average 9% which we commented. So I would stress the fact that this 9.7 is absolutely in line with the overall amount foreseen over the [four year’s] plan.

Okay.

As regards realization prices, in the first quarter '06 we had an increase of 33%. It was 57.1, while we had [inaudible] [point 8].

Sorry about that, I couldn't hear. Could you repeat those numbers?

57.1. Did you get it?

Yes, I did.

Fine. 47.5, if we look at Europe, and if [technical difficulty] versus the Brent was minus 4.6.

Dollars, yes, okay.

I don't remember the third question, or in fact it was the second.

Yes, I was just asking, given the fact you've lost Dacion, which was about 60,000 barrels a day, I'm just wondering where the production is coming from to make quite a lot of that up, since you're talking now about production growth of 3% for the year, whereas before [inaudible].

Yes, in fact the 3% is given as a guidance, considering already, as I said, the [temporary] [technical difficulty] interruption in the Venezuela constitution, the major components of the 3% growth will come from Libya, Angola and Egypt.

So you think you can do a little bit better out of those fields, perhaps, than you did when you gave us the guidance?

Sorry? I didn't get here.

Yes, I'm just saying that so you think you can do a little bit better out of some of those fields than at the time of when you gave us the initial guidance?

Well, yes, definitely. That's where we expect we'll be in a position to get that 3% which, we have to admit, is slightly lower than the average which we had anticipated when we hadn't clear evidence of the Venezuelan issues.

So are you still maintaining your longer-term target of around 4% growth?

Yes.

Okay.

That's on the long run. It's the 2006, which will be, I would say, affected in a major measure by April 1 and/or to the Venezuelan order production.

Okay, Marco. Thanks very much.

Okay, thank you. We have a second question coming through from the line of Mr. Jason Kenney from ING. Please go ahead with your question.

I was just looking for some taxation guidance for the year. I see you were at 46.7% for the first quarter. I was expecting closer to 50% on taxation. So, yes, just guidance for the year, really.

Yes, I understand what you mean. In fact, as I had the chance to comment already in the past, to give a quarterly indication of the tax rate is probably, or could be, a little bit misleading. In fact, in the first quarter of the year, where we have a stronger than in the rest of the year contribution of the natural gas activities in Italy, the composition of the several tax rates are a little bit lower than in the rest of the year, when the contribution to the result comes from the E&P activities which are substantially carried out abroad, where the tax rate is higher than the overall tax rate is higher. So I would say that, on a full-year basis, we should project something close to 48.

Sorry, did you say 48 there?

48, yes.

Okay, many thanks.

Okay, the next question comes through from the line of Mr. Edward Westlake from Credit Suisse. Please go ahead with your question.

Hello. Yes, good afternoon. Obviously probably another follow-on question on CapEx. We've seen some of the other companies through the reporting season talk of delays to projects, and obviously capital inflation. Given that you're spending €9.7b, is there not some risk with capital inflation, if the oil price stays high that CapEx has to move up quite substantially for you to deliver the longer-term growth that you're targeting?

Well, listen, the capital inflation component which we are presently assessing is in the range of 15%, Ed.

Okay. So that's 15% relative to what period, or is that at per annum or --?

No, that's over the Four Years Plan.

Okay, right. Okay. That's a very useful number. Thank you very much.

Great.

Okay, thank you. The next question comes from -- through, sorry, from the line of Sven Del Pozzo from John S. Herold. Please go ahead with your question.

Good afternoon. Could you comment on the work-over program in Italy and in the North Sea in the first quarter of this year versus the first quarter of last year, and also elaborate on the availability of work-over rigs and crews in these regions?

Well, listen, in general terms, I would say on a wider kind of answer, I would say that we are reshaping the decreasing schedules of our projects with additional wells and work-overs with the aim of maximizing production, evidently, in this phase of the scenario. Rather than focusing on the U.K. and in Italy, I would say that, in addition to the U.K. and Italy, this kind of exercise is focused also in Australia, U.S., Egypt, Algeria and Congo.

And where do you have least problems with obtaining capable crews and rigs?

Rigs. Listen, I'm sorry, I didn't get entirely the question, and so probably Jadron will come back to you trying to give you an indication.

Alright. And my second question, your 6b of exploration upside disclosed at the strategy meeting, does that include the Kashagan satellites?

No. Kashagan satellites haven't been included in our figures so far.

Alright. And my last question, could you give me an indication of your lease operating expenses in the first quarter of '06 versus last year, and I mean excluding royalties and taxes?

Listen, it's such a detailed question, I'll try to give you an indication of the operating costs, if that could be a good proxy to what you are asking for, and then you can report to -- refer to Jadran and his team for more details.

As regards operating cost, the first quarter OpEx per barrel are slightly higher versus the first quarter of 2005. We had $3.4 per barrel versus $3.1 per barrel in '05, with an exchange rate of 1.23. A guidance on the full year, we expect to post something like a 5% increase versus '05, which means $3.7 per boe versus $3.5 in '05. And I hope this answers at least part of your question.

Yes, it does. At the strategy meeting, Stefano Cao had mentioned 8 to 9% escalation in '06 versus '05, so this would signal an improvement?

In fact, we are acknowledging a better than expected performance.

Thank you very much.

You're welcome.

Okay, thank you. The next question comes through from the line of Huw Williams from Cazenove. Please go ahead with your question.

Afternoon, Marco. I've got two questions, one on the gas business and then one on the downstream business. For the gas business, if I'm correct, you are still going through a process of renegotiation of supply contracts with a number of offtakers, including maybe Edison. I just wondered whether - I don't know, it could be early days - but if you could give us a view as to when those negotiations might be completed and whether, as and when they are, they will be retrospective as well as future-looking in terms of those new contracts, and also, whether you are negotiating with other offtakers as well.

Second question is if you could just give us a view for how you see both marketing and refining margins going in through the rest of the year, please.

Listen, as regards [inaudible] aspects with our customer, I think that it’s reasonable not to anticipate anything on that subject. It’s such a sensitive issue that I'm sure you will understand. That is my reason.

As regards [how can see] the projection of the expected refining margin, we are presently considering for our planning purposes a $4.65 per barrel refining margin over the full year.

Okay, thank you. And also how -- can you just give a view on how you see marketing margins going, both in your domestic market and across Europe?

Well, marketing margins are not expected to have major impact.

Great, thank you.

Okay. The next question comes through from the line of Paul Spedding from HSBC. Please go ahead with your question.

Good afternoon. Could you please tell us what the status, legal status, is towards Resolution 248 at the moment? The court case seems to have been delayed to June. I'd be interested in what has occurred during the first half of the year.

And secondly, whether you have spoken to the regulator about how Resolution 248 might change?

Well, listen, I thank you for the question. I think that the order of magnitude of the impact of the resolution [inaudible] that it deserves time. First, we, as regards the legal status [inaudible], we expect the final judgment beginning of June. So this is, let me say, from the legal point of view.

As regards the – how can we say – talks with the authorities, [if] together -– well, not together but we, as other players in the domestic market, are carrying out, I would like to mention that the authority [recently], the end of March, passed a resolution, Order Resolution number 65, which, if you want, represents a first step towards what we think could be a revision of the Resolution 248. Because the consequence of this Resolution 65 is the presentation, the issue by the authority of a consultation paper, which we expect to see in the not too long future, a couple of weeks. And through this consultation paper the authority will ask the operators -- for the operators' questions and ideas to implement a new pricing mechanism.

So, at the end, we think that [we] can say we are confident that the process that will be triggered by the 65 Resolution should lead to a more sustainable system. So, in a nutshell, if you want a message [which] I can pass onto you is that probably it wouldn't be totally correct to extrapolate on a full-year basis the impact which we have accounted in the first quarter. It will be evidently our duty, our pleasure, to keep you updated as soon some significant news will come from that point of view.

Thank you.

If you want further guidance or, as I -- when I said that we would recommend not just to simply transfer on a yearly basis the impact of [inaudible], we have in mind that probably divisional EBIT on a full-year basis should be at least in the range of the 3.2b. But this is, again, just not to give a guidance and not to let you be maybe driven by your models only. Let me say so.

Thank you. Our next question through from the line of Neil McMahon from Bear Stearns. Please go ahead with your question.

Yes, it's actually from Bernstein. I wasn't aware I'd changed company. I've got a few questions. First of all, could you give us some forward guidance on the upstream tax rates, not just the corporate tax rates, for this year and next year, given the fact that given, as your production is growing and other areas with higher tax rates that could be going up?

Secondly, with regard to the timing of divesting your -- part of your shares in Snam, could you tell us if that has accelerated, or you've got any clarity around that post the Italian elections?

And lastly, given the strong run-up on Canadian oil sand prices and the movements of some of your competitors in acquiring oil sands, have your views on being interested in Canadian oil sands companies changed over the last few quarters?

Let’s begin with the tax rate in the upstream. The guidance is that it should be in the range of 52% which, considering also the recent increase in the U.K., could be probably better forecasted in the range of [53]. We had given a guidance of 52, but then the [petrol revision] in the U.K. occurred so it probably would be [technical difficulty].

As regards, if I understood properly, your comment was if the new government will, in a certain way, speed up or slow down [technical difficulty]. To be quite frank, we did not even have the new government in place, so it's really too early to comment on that. [Technical difficulty] it's not in our capacities to add anything to what we have said so far, anything new [we'll have to give] if the new government has different ideas on this subject.

Canadian oil sands, well, we -- I think we stated clearly, even during strategy presentation, that Canada is a part of the world where we are dedicating a part, [big part], of our capacities. I would say [inaudible] also under more [satellite] technological point of view, and implemented on [further] offerings on the competitive advantage which the application of the [ESD] technology is supposed to give us the processes of having oil, heavy oils, on the [technical difficulty].

I would say that there are no changes. It’s not the fact that we are looking [at this] as much as they are with the degree of interest [technical difficulty].

Okay, thank you very much.

You’re welcome.

Okay. The next question comes from -- through from the line of [inaudible] Michele della Vigna from Goldman Sachs. Please go ahead with your question.

Hi, Marco. It’s Michel della Vigna here. I had a question on Angola, where it looks like you got 35% of the concession for the released equities from Block 15 for $900m. Now, my first question is whether the $900m refers to 100% of the field or only to your 35%.

And secondly, if you could give an idea of which size of reserves you could be expecting from those equities?

And then second, I wanted to know how the -- could I have an update on how the negotiations with Pedevesa are going about the Dutch oilfield and your concession there? Thank you.

Listen, as regards -- Michele, as regards Angola, obviously $900m is the amount for the 100% of the cost of the block. And we have [been] awarded a working interest of 35%, which by the way is included in our 9.7 CapEx profile.

Well, as regards the order of magnitude of reserves there, it’s really too early. We haven’t been formally awarded yet the block. What we can say is that we are of the opinion that Block 15 is a highly prospective acreage. Area of the block is 30,000 square kilometers and to date there has been probably now over -- well, for sure, 17 oil discoveries with a rate of success higher than 80%.

And so, I would say that we feel quite excited on Block 15. But, well, it’s too early to [give] guidance on expected [reserves].

The second question was about Venezuela. Well, [technical difficulty] mentioned this before. On April 1, Pedevesa notified our Dutch subsidiary that in our facilities in [technical difficulty] Dacion field is about the termination of the operating service agreement for the Dacion area. And from that day, Pedevesa is responsible of the conduct of the production operation. We have given full availability to reach an agreement with the local authorities on the compensation due as a result of the [inaudible] submission of the service contract.

We can say and we are confident both that [inaudible] amicable settlement [part]. If not, we will carefully evaluate any other issue by [inaudible] to protect our interests as part of the [inaudible]. But the terms we are in here, we are confident [it] is our right to receive fair compensation which, according to both internal and external independent evaluation, [should] be not lower than the book value of the Dacion related part.

Any other questions?

Yes, we do have a further question coming through from the line of [Giuseppe Irraladi] from [Banca Brasilia]. Please go ahead with your question.

Good morning to -- good afternoon to everybody, Giuseppe Irraladi speaking. I don’t know if you have already answered to this question, but the line is really bad. So, I have two questions.

Could you explain if interest -- if positive interest income are a one-off event, or do you think that this trend will be positive also in the rest of the year?

And the second question is related to Galp. How does Galp contribute to your other income? Thank you.

Yes. Listen, as regards the interest positive contribution, most of it derives from the valuation of derivatives. It would be depending on the market situation at the time of the valuation itself. So, really that’s one of the subjects which, with the introduction of the new standard, has been identified from the very beginning as an element which would have increased volatility in our results.

Then the other question was about Galp?

Yes.

In the contribution of our associates, it is in the range of €40b in the first quarter.

Billion, million?

Million.

Okay. Sorry, the line is really bad, sorry.

I also apologize. It’s not my fault.

Okay, okay. €40m. And, excuse me, what these derivatives are linked to?

Well, to the financial instruments which are put in place for hedging the currency position.

So, only currency?

Currency and marginally also commodities.

Okay, thank you.

And interest as well, of course. I forgot interest.

Okay, thank you very much.

Okay. There are no further questions in the queue. [OPERATOR INSTRUCTIONS]. And we do have a question coming through from the line of Lucy Hawkins from Lehman Brothers. Please go ahead with your question.

Afternoon, gentlemen. Lucy Haskins here. I wanted to just follow on a little bit in terms of the negotiations on Dacion. Is there any chance that you might actually be able to come to a sufficient agreement with the Pedevesa that you could still be involved with that field and that, therefore, there might be some upside to your 3% production steer for this year?

Well, listen, [evidently any] positive solution is we have got the cancellation of the contribution of the Dacion field to our production starting from April 1. Any solution which might lead to the opening of the contribution of the Dacion field to our production would automatically be increasing the presently anticipated 3% growth rate.

And perhaps as another question, if I may. Could you give us any steer in terms of your exploration successes or otherwise during the course of the first quarter?

Well, we normally do -- well, listen, come back to you on that subject. I don’t have it. We normally consider that on a yearly basis -- quarterly basis.

Okay, thanks.

Not the kind of KPI which we [monitor].

Okay. That was the final question in queue. I’ll now hand you back to your speaker to wrap up your conference. Thank you.

Okay. Thank you and if you have any additional questions on some details that probably we missed, the IR team is available later. Thank you. Bye-bye.

Since the quality of the -- we can’t realize that. I understand that the quality of the line was bad. I have to apologize for that, even if it’s out of our capacity to influence on the quality of the line. We will do our best for the next time. Please forgive us.

Thank you. Goodbye.