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First half of 2017 Results

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Repsol
Repsol

Repsol discovered the largest gas volume in Trinidad and Tobago in the last 5 years, estimated at 2 million cubic feet. In the first half of 2017, Repsol achieved a CSS EBITDA of €3,194 million, a 33% increase over the same period last year. Repsol's net debt decreased by €667 million compared to the same period last year. Upstream production was 685 kboe/day, in line with 2017 objectives.

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Exploratory discovery in Trinidad and Tobago Upstream On 6 June, Repsol and our joint venture partners discovered the largest volume of gas to be uncovered in the last 5 years. The company estimates resources of some 2 million cubic feet of gas, equivalent to two years’ consumption in Spain. Continuing solid cash generation achieving CSS EBITDA of €1,604 M, in line with that obtained in the same period of the previous year. The refining margin indicator was $6.6/bbl, 3% higher than the $6.4/bbl recorded in the same period of the previous year. Downstream Repsol’s adjusted net income improved significantly compared to the same period of 2016. The average hydrocarbon production was 685 kboe/day, in line with the objectives set for 2017. First half results 2017 During the first half, Repsol materialised and accounted for 50% of the €2,100 M objective of the Efficiency and Synergies programme set for 2017. Solid financial position On 25 July 2017, Standard & Poor’s published a note in which Repsol’s rating outlook was revised from stable to positive, BBB-/A-3 ratings were affirmed. Achieved CSS EBITDA of €3,194 M, a 33% increase compared to the same period of the previous year. Repsol’s net debt at the end of June was €7,477 M, €667 M lower compared to the same period in 2016. higher than the recorded in the same period of 2016, reflecting the strength and sound operation of Repsol’s businesses. Repsol’s adjusted net income was 1,126 million euros 23% Our main businesses1 Upstream Exploration and Production Latin America and the Caribbean: 289 kboe/day Europe, Africa & Brazil: 135 kboe/day North America 174 kboe/day Asia & Russia: 87 kboe/day Upstream production reached an average of 685 kboe/d, 3% lower year‐on‐ year mainly due to the sale of TSP (Trinidad and Tobago), Tangguh (Indonesia) in December 2016, Ogan Komering (Indonesia) in March 2017, the cessation of production in Varg (Norway) in June 2016 and the impact of fluctuating gas demand in Bolivia. Upstream adjusted net results have reached €339M, €276M higher than the recorded in the same period in 2016, mainly due to: Higher realisation prices. Resumption of production in Libya, production increased in Peru, and start-up of Monarb in UK, the ramp up of Lapa and Sapinhoa in Brazil. Initiatives carried out as part of the Efficiency and Synergies programme. Downstream adjusted net results have reached €929M, in line with the result obtained in the same period of the previous year. January - June1 €63 M2016 2017 €339 M Downstream Refining, Chemicals, Marketing, Lubricants, Trading, LPG and Gas & Powert January - June1 €934 M2016 2017 €929 M The Refining business increases its contribution to the results, with more distillation and the refining margin indicator for Spain reached $6.6/bbl. H igher results in the Trading and Gas & Power businesses, supported by the increase in volumes sold in North America and Marketing, which increased its sales. In line with its commitment to sustainability, during the first half of 2017, Repsol became the world’s leading oil and gas company in terms of issuing certified Green Bonds 1 The company carries out a good part of its activities through joint ventures. This means that, when it comes to making decisions on fund allocation or performance assessment, the operating and financial figures of joint ventures are analysed from the same perspective and as thoroughly as those of companies consolidated by global integration. This is the reason why all sector figures include, according to percentage shares, those of joint ventures or companies managed as such. In fiscal year 2014, Repsol decided to take into account the current business environment and use an accounting method for better comparison with the results of other companies in the same industry. Now, Repsol reports its recurring net income based on restocking costs of continued operations (adjusted net income), excluding both discontinued operations and inventory effects. This document does not constitute an offer or invitation to purchase or subscribe shares, pursuant to the provisions of the Royal Legislative Decree 4/2015 of the 23rd of October approving the recast text of the Spanish Securities Market Law and its implementing regulations. In addition, this document does not constitute an offer to purchase, sell, or exchange, neither a request for an offer of purchase, sale or exchange of securities in any other jurisdiction. This document contains statements that Repsol believes constitute forward-looking statements which may include statements regarding the intent, belief, or current expectations of Repsol and its management, including statements with respect to trends affecting Repsol’s financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production volume and reserves, capital expenditures, costs savings, investments and dividend payout policies. These forward-looking statements may also include assumptions regarding future economic and other conditions, such as future crude oil and other prices, refining and marketing margins and exchange rates and are generally identified by the words “expects”, “anticipates”, “forecasts”, “believes”, estimates”, “notices” and similar expressions. These statements are not guarantees of future performance, prices, margins, exchange rates or other events and are subject to material risks, uncertainties, changes and other factors which may be beyond Repsol’s control or may be difficult to predict. Within those risks are those factors described in the filings made by Repsol and its affiliates with the Comisión Nacional del Mercado de Valores in Spain and with any other supervisory authority of those markets where the securities issued by Repsol and/or its affiliates are listed. Repsol does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected performance, conditions or events expressed or implied therein will not be realized. The information contained in the document has not been verified or revised by the External Auditors of Repsol. In October 2015, the European Securities Markets Authority (ESMA) published the Guidelines on Alternative Performance Measures (APM), of mandatory application for the regulated information to be published from 3 July 2016. Information and disclosures related to APM used on the present Q2 2017 Results Earnings Release are included in Appendix IV “Alternative Performance Measures” of the Interim Consolidated Management Report for the 1H 2017 and Repsol’s website. Repsol will publish today the Interim Condensed Consolidated Financial Statements and Management Report for the 1H 2017 and they will be available on Repsol´s and CNMV’s (Comisión Nacional del Mercado de Valores) websites. 2016-2020 Strategic Plan Value and Resilience

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First half of 2017 Results

  • 1. Exploratory discovery in Trinidad and Tobago Upstream On 6 June, Repsol and our joint venture partners discovered the largest volume of gas to be uncovered in the last 5 years. The company estimates resources of some 2 million cubic feet of gas, equivalent to two years’ consumption in Spain. Continuing solid cash generation achieving CSS EBITDA of €1,604 M, in line with that obtained in the same period of the previous year. The refining margin indicator was $6.6/bbl, 3% higher than the $6.4/bbl recorded in the same period of the previous year. Downstream Repsol’s adjusted net income improved significantly compared to the same period of 2016. The average hydrocarbon production was 685 kboe/day, in line with the objectives set for 2017. First half results 2017 During the first half, Repsol materialised and accounted for 50% of the €2,100 M objective of the Efficiency and Synergies programme set for 2017. Solid financial position On 25 July 2017, Standard & Poor’s published a note in which Repsol’s rating outlook was revised from stable to positive, BBB-/A-3 ratings were affirmed. Achieved CSS EBITDA of €3,194 M, a 33% increase compared to the same period of the previous year. Repsol’s net debt at the end of June was €7,477 M, €667 M lower compared to the same period in 2016. higher than the recorded in the same period of 2016, reflecting the strength and sound operation of Repsol’s businesses. Repsol’s adjusted net income was 1,126 million euros 23% Our main businesses1 Upstream Exploration and Production Latin America and the Caribbean: 289 kboe/day Europe, Africa & Brazil: 135 kboe/day North America 174 kboe/day Asia & Russia: 87 kboe/day Upstream production reached an average of 685 kboe/d, 3% lower year‐on‐ year mainly due to the sale of TSP (Trinidad and Tobago), Tangguh (Indonesia) in December 2016, Ogan Komering (Indonesia) in March 2017, the cessation of production in Varg (Norway) in June 2016 and the impact of fluctuating gas demand in Bolivia. Upstream adjusted net results have reached €339M, €276M higher than the recorded in the same period in 2016, mainly due to: Higher realisation prices. Resumption of production in Libya, production increased in Peru, and start-up of Monarb in UK, the ramp up of Lapa and Sapinhoa in Brazil. Initiatives carried out as part of the Efficiency and Synergies programme. Downstream adjusted net results have reached €929M, in line with the result obtained in the same period of the previous year. January - June1 €63 M2016 2017 €339 M Downstream Refining, Chemicals, Marketing, Lubricants, Trading, LPG and Gas & Powert January - June1 €934 M2016 2017 €929 M The Refining business increases its contribution to the results, with more distillation and the refining margin indicator for Spain reached $6.6/bbl. H igher results in the Trading and Gas & Power businesses, supported by the increase in volumes sold in North America and Marketing, which increased its sales. In line with its commitment to sustainability, during the first half of 2017, Repsol became the world’s leading oil and gas company in terms of issuing certified Green Bonds 1 The company carries out a good part of its activities through joint ventures. This means that, when it comes to making decisions on fund allocation or performance assessment, the operating and financial figures of joint ventures are analysed from the same perspective and as thoroughly as those of companies consolidated by global integration. This is the reason why all sector figures include, according to percentage shares, those of joint ventures or companies managed as such. In fiscal year 2014, Repsol decided to take into account the current business environment and use an accounting method for better comparison with the results of other companies in the same industry. Now, Repsol reports its recurring net income based on restocking costs of continued operations (adjusted net income), excluding both discontinued operations and inventory effects. This document does not constitute an offer or invitation to purchase or subscribe shares, pursuant to the provisions of the Royal Legislative Decree 4/2015 of the 23rd of October approving the recast text of the Spanish Securities Market Law and its implementing regulations. In addition, this document does not constitute an offer to purchase, sell, or exchange, neither a request for an offer of purchase, sale or exchange of securities in any other jurisdiction. This document contains statements that Repsol believes constitute forward-looking statements which may include statements regarding the intent, belief, or current expectations of Repsol and its management, including statements with respect to trends affecting Repsol’s financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production volume and reserves, capital expenditures, costs savings, investments and dividend payout policies. These forward-looking statements may also include assumptions regarding future economic and other conditions, such as future crude oil and other prices, refining and marketing margins and exchange rates and are generally identified by the words “expects”, “anticipates”, “forecasts”, “believes”, estimates”, “notices” and similar expressions. These statements are not guarantees of future performance, prices, margins, exchange rates or other events and are subject to material risks, uncertainties, changes and other factors which may be beyond Repsol’s control or may be difficult to predict. Within those risks are those factors described in the filings made by Repsol and its affiliates with the Comisión Nacional del Mercado de Valores in Spain and with any other supervisory authority of those markets where the securities issued by Repsol and/or its affiliates are listed. Repsol does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected performance, conditions or events expressed or implied therein will not be realized. The information contained in the document has not been verified or revised by the External Auditors of Repsol. In October 2015, the European Securities Markets Authority (ESMA) published the Guidelines on Alternative Performance Measures (APM), of mandatory application for the regulated information to be published from 3 July 2016. Information and disclosures related to APM used on the present Q2 2017 Results Earnings Release are included in Appendix IV “Alternative Performance Measures” of the Interim Consolidated Management Report for the 1H 2017 and Repsol’s website. Repsol will publish today the Interim Condensed Consolidated Financial Statements and Management Report for the 1H 2017 and they will be available on Repsol´s and CNMV’s (Comisión Nacional del Mercado de Valores) websites. 2016-2020 Strategic Plan Value and Resilience