Welcome to Eni's 2014 Fourth Quarter Results Conference Call. Of that Claudio Descalzi, Chief Executive Officer and Massimo Mondazzi, Chief Financial and Risk Management Officer. For the duration of the call, you will be in a listen only mode. However, at the end of the call you have the opportunity to ask questions. I am now handing your over to your host to begin today's conference. Thank you.

Good afternoon and welcome to our fourth quarter result presentation. 2014 was a year of base change. In May, we started a deep review of our cost structure and accelerated the execution of strategic programs. This action allowed us to beat our cash flow growth target, grow our leverage, bring gas and power back to profit, progress the turnaround of R&M and chemicals. The first step of the new action plan was to change the organization from a divisional company to a fully integrated one in order to enhance the flexibility and efficiency. The new simplified organization brought immediate benefit in terms of speeding up processes, reallocating staff and allowing G&A cost reduction of €250 million. Material results have been achieved in the different businesses. In upstream, we continue to obtain outstanding exploration results with 900 million barrel of discovery, mainly in Congo, Ecuador, Egypt and Ghana, with a competitive exploration cost of around $2 per barrel. These new resources, mainly liquids, are conventional and can be developed in phases using existing facilities to release our upfront investment. As a result, the project has strong economics, also in the current weak scenario. We acquired new blocks in the Caspian region, West Africa and the Far East, regarding our asset base with an additional 100,000 square kilometers of new exploration acreage. We fast tracked the startups of recent discoveries in Angola, in Egypt and in Congo with an overall year-end gross production of 60,000 barrels per day of oil. Thanks to the contribution of new projects and the strict control of operations, we fully met the production targets. And finally, also this year, the organic reserves replacement ratio was in excess of 110%. In mid-downstream, we proceed with major gas renegotiation to align the supplies to the abstractors, bringing forward gas…

Thank you, Claudio. For Q4 2014, the adjusted operating profit was €2.3 billion, down 34% versus the same period last year. This was mainly due to the fall in Brent, which averaged $76 per barrel in the quarter. The major impact was on E&P, where the benefit of €350 million build up for improvement, cost and volumes were more than offset by the scenario impact that accounted for €1.6 billion. On a full-year basis, the operating result is down €1.1 billion due to the reduction of €3.1 billion for E&C, mainly due to the negative oil and gas prices effects, while all the other businesses delivered a €2 billion improvement in performance. The adjusted net profit for the quarter amounted to €464 million. The year-over-year decline is principally due, other than the formation scenario, the negative fair value contribution of our remaining stakes in Galp and Snam, evaluated at the share prices of 31st of December 2014. Since then, these prices have moved up significantly and if we had to adjust the valuation since the base levels, the reported loss would have been reduced to around one-half. The fair value valuation also [Technical Difficulty] tax rate that was 15 percentage points above the fourth quarter 2013. Net of this effect, the tax rate would have been in line with the guidance. For the E&P sector, on a full-year basis, net of the effect of the sale of Russian assets, production was slightly higher than in 2013. Looking at fourth quarter versus third quarter, the increase is largely attributable to better performance and recovery from lower production in third quarter related to maintenance and the contribution of new startups, such as in Angola Block 15/06, Abo in Nigeria, Abu Rudeis [ph] and Emry Deep in Egypt, Nene in Congo and finally,…

Thank you, Massimo. To conclude, 2014 was a year of important achievements for Eni, where we delivered remarkable economic and financial results. Even taking into account the weaker price environment, our cash flow from operations was over €15 billion, a 40% increase over 2013. This very positive cash generation, including cash from disposals, has covered our need with regard to CapEx and distribution policy and also contributed to reducing the leverage. Based on these results, I'm pleased to announce that the 2014 final dividend proposal is confirmed at €0.56 per share. So, thank you very much for your attention. And now we're glad to take your questions.

[Operator Instructions]. First question comes from Mr. Oswald Clint from Bernstein. Mr. Oswald Clint, please.

Claudio, I really want to just talk about 2009, obviously similar environment and through the year, some of your businesses within the Eni Group became a lot weaker. And then by October that year, the Board decided to reduce the level of dividend. Can you talk about whether you see Eni as in a better or worse position today going through 2015 as it kind of talks about the dividend level for 2015, please? And then maybe a second question, maybe for Massimo. I'm just curious about the gas and power business. I know 60% of the volumes have been renegotiated to hub linked. On the 40% remaining which is oil linked, is the price of that at the moment -- is it actually low enough or sufficiently low enough to start generating a profit as you import that and sell it through Italy parts of Europe? Thank you.

I think that this comparison between 2009 and 2014 is very interesting. But, I'm sorry that I cannot elaborate further on that because that is a part of our presentation in March, our strategy presentation. So, I cannot. I'm not in position to anticipate anything. In March, we're going to elaborate and make comparisons. In any case, I think that we're in a strong position. We're in a strong position, but the policy is something that is related to our decision. So, I cannot anticipate anything.

Regarding gas and power, it's Marco. You don't see in these results any benefit from the drop in oil for two reasons. First, there's a time lag, which on average on these contracts is nine months between when the price changes and the impact is felt through on the gas contracts and also, we have a number of sales contracts that are also oil index. So, they fluctuate together when the growth will come.

Next question comes from Mr. Theepan Jothilingam from Nomura International. Mr. Jothilingam, please.

I just wanted to come back to your guidance on CapEx. Could you just reclarify what the explicit number on CapEx is for 2015 on a stable sort of euro environment to last year? Secondly, I think you talked about the reductions. I was interested in the 50% of that reduction being rephrasing in complex projects. So, could you maybe clarify again what projects you've deferred spend on for this year? Secondly, on cash flow and working capital release, a significant release in the second half of the year, I think you've talked about the reduction in the take-or-pay commitments again. Could you clarify what you expect at current prices in terms of working capital release for 2015? Thank you.

So, CapEx, so, I can repeat that our expectation, our plan, is to have about €2 billion of CapEx reduction. That is practically equivalent to 14% reduction respect to 2014. So, we're in a range of about 12.-something billion euro of total investment. As I said, we have different chapter with different items. We have a 20% of reduction of this €2 billion between non-upstream CapEx in -- practically in R&M and chemicals, the other 30% reduction in exploration. And that is quite clear because we have been so successful in the last six years. And we collected about 10 billion barrels of resources. And now, we want to be more focused on the short-term value. And that means to work around our existing fields, our existing facility to be able like we did this year to have good exploration results immediately tie into the -- to our existing field to have a short time to market. Going to the remaining 50% that is the CapEx project without now telling exactly the name of the projects, I'll refer to a more big and complex budget that, fortunately, we already phased and so in different phase of development. So, we're able to reduce and postpone and move this CapEx, reduce amount of CapEx to our faster projects because we have this flexibility because we discover a lot of good oil in the West Africa or in Egypt. So I'm talking about Angola, I'm talking about Congo, where we can in a very short time -- last year, we just had a nine-month of time to market to develop and create cash flow. We have the timeframe and that doesn't imply any impact on the foreign plane growth rate and also is not impacting the long term one. So I think that during the strategy, we will be able to explain in more detail what we plan to do. You have to consider that half of this -- 30%, 40% of this remaining CapEx reduction is due to contract renegotiation. And as what we experienced in the recent past, in the last four, five months, that we were able to renew contracts, especially on the rig, on the rig on the [inaudible] contract of about between 15% and 35%. So, that is already acquired or something that we already acquired is a quite important result. And that is why also the reason why we're -- we can reach the €2 billion of cost reduction.

Okay. So, Massimo speaking. I'll try to give you some more color about the working capital movement and expectation as far as 2015. So, you have seen from the balance sheet that the full-year contribution working capital to the cash has been €3.1 billion. That means €2.6 billion additional contribution versus 2013. I would like to say that the more direct way to look at this number is to, I would say, eliminate the gross-up effect due to the write-down of stocks that definitely occurred at the end of 2014 because of the price. This effect accounted for €0.7 billion. So, I mean, the more direct way to read the number is to increase the result contribution to the cash from operation of 2014 by €700 million, reducing the working capital contribution for the same amount. It means that I'm back to the €1.9 billion I just commented together with Claudio all along our presentation. Let me now elaborate a little bit more about this €1.9 billion. The major contribution to this €1.9 billion definitely has been the take or pay. Take or pay contributed €700 million in 2014 versus a cash absorption of €200 million in 2013. So, it means an additional contribution of around €900 million. At the end of 2014, the stock in take or pay amounted to €1.3 billion. That, as already commented, takes into consideration €400 million already accrued in 2014 that will be cashed in at the beginning of 2015. On top of this, we expect an additional cash in, in 2015, of around €400 million. It means that, overall, in 2015, we expect €800 million in contribution in terms of cash. The second big contributor has been the reduction in overdue in -- mainly in Egypt. You remember that we had $1.5 billion…

And just a final question, I guess, what do you see gearing at year end? I mean, lots of moving parts but at $60, do you see gearing flat, up or down?

Again, I'm referring what Claudio's already said. So, everything about the financial projection as far as 2015, sorry, but we elaborate a bit more on this during our strategy presentation in March.

Next question comes from Mr. Nitin Sharma from JPMorgan. Mr. Sharma, please

Two questions, first one on Mozambique. I think you've indicated in past that further sale of stake in Area 4 is possible. And my question is, is this still on agenda, given the recent oil price pullback and [inaudible] appetite for deals? So, that's the first one. And the second one on gas marketing, performance in Q4 2014, both have been ahead of guidance. You also mentioned that you've completed the planned contract renegotiations or substantially completed those renegotiations. So, therefore, is it fair to assume a year-over-year improvement in operating earnings for this business in 2015? Thank you.

Okay. So, the first question, yes, is Mozambique is still in our agenda. So, the 10% is still in our agenda.

It's Marco. Regarding guidance for gas and power, as Massimo said, in 2014, there are some retroactive elements. The way we look at the business, we put the take-or-pay contracts and logistics together. And in 2014, excluding the retroactive elements, combination of take or pay and logistics is still not positive. The result is due to the performance on what we call value-added segments, which is LNG, power and trading. Looking ahead, we have avoided Statoil. We've exited arbitration with Statoil. We've avoided arbitration with Sonatrach and Gazprom. We're still in arbitration with GasTerra. So, we give the same guidance we gave last year, which is that, assuming we successfully close the GasTerra arbitration in 2015, we're at breakeven. However, we also confirm the guidance that, in 2016, regardless of this arbitration, we will be in a structural breakeven position.

Next question comes from Martijn Rats from Morgan Stanley. Mr. Rats, please.

There have been some press reports about a potential sale of the gas and power division or at least some sort of disposal IPO. I was wondering if you could comment on those. And in the same sort of train of thought, if you could update us on your latest thoughts on the Saipem sale.

So, the first question is about gas and power. We don't like to comment on rumors or speculation on the press. What I can say and repeat what I say during the strategy presentation in July, we consider, first of all, the possibility to give more value to our retail gas. So, we're not talking about gas and power, first of all. So, we really want to give more value to our retail gas, that is a very strong segment. We have 10 million clients. It's a very large one. It's not just in Italy, but also in Europe. And we think that a specialized structure, because that is a specialized business, quite far from our core business, can be more value. There is something that is under evaluation. There are different possible options. But, we never talk about this option. We never talk exactly about any plans so that, at the moment, that is just rumors. And Saipem, so, Saipem, I think we have two main objectives for Saipem. The first one, because we're the most important shareholders, is to really improve the value of Saipem. That is a very good company and has -- is doing very well, so is in our interest to improve the stock value of the company and that is our first priority. And the second priority, because we're also the lender and we redeem money from Saipem, is to reduce our debt or reconsolidate its debt. That represents about 33%. So, that's our two main objectives. We said few months ago that we suspended what we were doing because of the market that is very volatile. And we prefer to have a stable situation to go ahead. It's clear that, meanwhile, we confirm our strong support to Saipem.

Next question come from Mr. Iain Reid from BMO. Mr. Reid, please.

Yes, I wondered if you could just update us on your oil price sensitivity for earnings and cash flow per $1 or per $10 or so, as obviously, we've seen a big differential from what you were guiding to a few months ago. And maybe secondly, I heard you say that you're more confident about the dividend in this kind of iteration of Eni. I just wondered if you could update us on what you think about the share buyback at current oil price levels.

Okay. So Iain, just to give you some flavor about sensitivities, in terms of Brent, our steam is that every dollar as I say minus $1, for example means on the EBIT adjusted at the Group level around minus or plus €280 million. In terms of net results, it's in the range of €140 million, more or less the same amount as you refer to the cash flow. I don't remember Iain, if you mentioned also the request to have sensitivity on refining margin or exchange rate but by the way, I give you this anyway, this number. So, in terms of margin for -- as far as the refinery, in terms of EBIT-adjusted, $1 means €150 million difference, in terms of net result €100 million, the same for the free cash flow. In terms of exchange rate, our net -- it is $0.05 in terms of exchange rate. So, $0.05 means around €280 million at the EBIT level, €100 million at the level of net adjusted result, a bit less in terms of free cash flow, in the range of €60 million because of the compensation of CapEx.

Iain, I like and thank you for the opportunity. I'd like to clarify what I said before. And I said that I don't want to talk about dividend because the subject will be treated and discussed during our strategy presentation. So, I never said that I'm confident or not confident. I said that I didn't talk -- I cannot talk now about dividend, just to be clear and thank you for the question. And the buyback is the same.

Really? Okay. Have you renewed the mandate for the buyback or when do you have to renew it again?

In May.

Next question come from Mr. Thomas Adolff from Credit Suisse. Mr. Adolff, please

A couple of questions please as well, firstly on CapEx, again, upstream specifically. And you gave a bit of color on where the cut is coming from, exploration and some of the rescheduling or rephrasing of the larger projects which makes sense. But, can you perhaps also comment whether you have trimmed some of the base CapEx because base CapEx sometimes is based on the two-year payout ratio according to some of your peers and the current oil price environment doesn't justify that. And if you have, what sort of impact that may have on portfolio decline rate. The other question I had was on Mozambique. I wondered whether your CapEx guidance for this year assumes the FID to be taken on those, the floating and the onshore and whether you have sight on Mumbai being offtake agreements or HOAs or whatever you want to call it. Thank you.

First, on the CapEx, when you talk CapEx there, I think that you are talking about the production utilization or CapEx or what we expand on the existing field to maintain production. And that is something that we didn't reduce because that's very fast recoverability and after the high internal rate of return. So, that remains our base CapEx. That is also one of the elements or a strong element to find decision. So, that is not part of the yearly reduction for 2015.

Mozambique, well, we're progressing very well on both struggling and non-struggling reservoirs, in particular for Coral, the non-struggling reservoirs. As you know, the FEC tender is ongoing with a major consortia and we're expecting to receive the offers by the end of May. In addition to that, as you probably remember during the last call, we mentioned the roadmap to FID. Well, we achieved the first three out of four steps, the submission of the plan of development. And just a few days ago, we completed also the process for the environmental impact assessment, which is a very important step for the approval of the field. So, certainly, we do see the FID around mid-2015. About the gas, I will ask--

It's Marco. On the commercial discussions, I would say we're in advanced talks with a few very interested parties. Our aim is to agree key terms in the next few months. And I would like to add that even in the current low oil price environment; the appetite for a project remains very high because of its geography, its size and I think buyers see it as a way to diversify risk in their portfolio.

Can I just quickly follow up on Mozambique on the onshore side? Presumably, the mid-2015 FID is linked to the floating. But, on the onshore side, do you expect intent to submit the development plan to the government separate from Anadarko or jointly?

Well talking about the onshore, first of all, as you know, at the end of 2014, the Mozambique authorities issued the decree law, which is the legal, fiscal, administrative framework to implement the project. And this is a very, very good move from the Mozambique side. As part of this decree law, we have the possibility to run independently from but in coordination with Anadarko, the first phase for 10 million ton per year. For this project, again, all the tenders are ongoing. If you see a tender for the onshore plant and the tenders for the subsea systems, we're planning to submit in the next three weeks also the plan of development. So, all activities are on track.

Next question comes from Ms. Lydia Rainforth from Barclays. Ms. Rainforth, please.

If I could go back to the chart on page five around the cost data, could I just ask you to clarify for me what unit that's based on? Is it your own operated production or is it as the entire [inaudible] production? And partly linked to that, what are you assuming in terms of cost reductions of your non-operated production side?

Our equity production.

Okay. So, within the cost of--

Yes, equity production, our entire [inaudible].

Okay. And so, within that, what are you assuming for cost reductions from your non-operated production side? I'm assuming that most of that cost reduction is purely related to your own actions on--

Yes, what we're doing, we're working with the operator, the other joint ventures, trying to push on each project to get the same level of reduction. You have to consider that more than 80%, 80-something percent is operated. So, that represents a really important part of our production. It is clear that we're working with the operators and we rely on operators. Most of our operators are the top company in the industry. So, the following, they are doing the same kind of process. They are trying the same kind of process. So in this case, we're considering just our equity cost and our operated production. No, yes, that was all production but with our equity cost, yes.

Next question comes from Mr. Massimo Bonisoli from Equita. Mr. Bonisoli, please.

Just a couple of questions, regarding Libya, could you give us some color on the current production and safety situation in the country? And also, could you also comment on the market share decline in marketing volumes in Italy in Q4? Thank you.

So for Libya, we're clearly constantly monitoring the situation because the environment is very volatile. And our priority is to protect our people, so the security of our people and the security of our installation. What we have done until now is, especially onshore, we create protection for all our activities. And at the moment, we didn't have any damage to our facilities. 2013, we close 2014 with an average production of above 240,000 barrels per day. The last quarter was very, very high because we reached practically our full capacity. We're at close to 275,000. And at the moment, we're producing like in the last quarter, close to 300,000 barrels a day also because in Libya, we're really negotiate some gas, storage gas in the east that we sell because it was tender for us but useful for the east part. So, we will have additional production also from this agreement.

And as far as probably you was referring to the oil falling demand that we recorded even in 2014 over in the range of 1%, but there is nothing more, unfortunately to comment in the sense that the fall kept on even in 2014 because of the -- I would say the overall depressed market. The only positive news on this respect is the -- I would say the stock in the fall we justify at the end of 2014, beginning of 2015. So, the expectation is to see at least a stable number as far as 2015.

Can I just follow up? Can I just shoot another question? On the outlook for E&P and the outlook was positive for the production increases in 2015. But, given there are rates very strong in Q4, do you feel more confident on achieving higher growth rates versus the guidance of the plan for 2015 or should we assume more or less the same level? I don't want you to spoil the strategy presentation.

No, I don't want to spoil either. No, I just want to say that, from a production point of view, I think that we will be able to increase our production about, as you said, 3% at the old plant level because if you consider new plant level, we can reach because of the price effect of the PSC also 5%, but the 3% are the custom price level, price scenario. I think that we can confirm the 3% of increase as -- because in 2015, we have big projects that start production. We talk about [inaudible] and we talk about West Hub. And that is the situation. Clearly for 2015, we kept some important contingency, production contingency because of Libya, but also considering this contingency, our growth is 3% on average.

Next question comes from Mr. Marc Kofler from Jefferies. Mr. Kofler, please.

Two questions, please, I just wanted to come back to the major project scheduled for this year and potential FIDs. I noticed you've moved forward Sankofa, offshore Ghana. And clearly, there's quite positive commentary around Coral. Are there any more major projects which you'd expect to be sanctioning this year? And then secondly, I was hoping if I could just double check on the prior operating cost saving target which you communicated. Was that €500 million for this year? Thanks.

Okay. So, I think I can answer -- if we can, we're anticipating too much because we're talking about FIDs for 2015, but we can give you some view, preview on this. Roberto, please.

Yes well as I said earlier, Coral will be one of the major FID this year. In addition to that, I can also mention Congo, obviously and Angola.

Well, when you talk about OpEx and the reduction of OpEx, we talk about €300 million, not $500 million, so €300 million that the figures and on average, our operating cost for 2015 will be about $8 per barrel unit cost.

Right. Okay. And so the prior guidance today [ph]?

Can you repeat please because I can't hear you very well?

Sure. I was just wondering if -- what the prior guidance ahead of today's presentation was for 2015.

No, that is the first time that we give a guidance to OpEx reduction because one talk -- maybe you mix up on the G&A because, last year, we started with our G&A reduction cost, efficiency cost. It was when you talk about €250 million on G&A. And that was the guidance last year. For this year, the G&A guidance, €500 million, but the G&A, not OpEx. OpEx is €300 million and talking about euro only.

Next question comes from Ms. Irene Himona from Societe Generale. Ms. Himona, please.

I had a couple of questions, please. Firstly, on working capital, obviously, it's already went from 145. You released about €3 billion. Now, in Q1, we've gone from 45 to 62, but you still have the release of take-or-pay prepayments in gas. So net-net, what guidance can you give us for the present quarter, please on working capital? And secondly, on refining and marketing, obviously, the recovery in refining margin in Europe is seen on this temporary. Can you split refining from marketing or give us some estimate of roughly how much of the improvement we saw is self-help rather than margin? Thank you.

Okay, Irene. I give the answer to your question. So, as far as the working capital, again, we wouldn't like to release any kind of guidance even for the first quarter 2015. You exactly mentioned what we expect in this quarter from items such as the take or pay. What we're doing is to pay the utmost attention to all the other items in working capital. And this is happening also thanks to the reorganization that took place since May 2014 that allow the corporate people to have much more grief on this item all over the world. But again, in terms of -- so the expectation is to keep on delivering on the exceptional items I mentioned and to -- not to have any kind of worsening scenario on all the other items. As far as R&M, you asked about the breakdown of the refining versus marketing. I'm referring to the full-year economic results that you know are around minus €200 million. This is the net effect of around €600 million negative from refinery and €400 million positive from marketing. The margin helped this result, especially in the fourth quarter, that has been positive, even if you refer just to refining result in the range of €30 million. And fairly speaking, on a year-on-year basis, the upgrade of the result that is in the range of €200 million has been a 60% scenario and a 40% result, all the efficiency measure, closure of additional capacity we just mentioned.

Next question comes from Ms. Robert West from Redburn.. Mr. West, please.

I just wondered around the downstream and the refinery closures that we're talking about last year. Looks like more of those are going to come in as turnarounds or conversions to green facilities. Can you offer some color on the differential cost of converting something to a green bio-refinery versus shutting it down completely? And then secondly, I noticed one of your partners in the U.S. has elected to defer paying the interest charges on some of its debt. And the equity has basically gone to zero. How does that affect you within your U.S. partnership and any desire if you could take -- pick it up basically for free equity value to up your exposure in those shale plays? Thank you.

The compression of the refinery, like the green refinery in Gela that has been announced in November, consists in the conversion of some assets into a better refinery, since the one that we have developed in Venice. The expectation of this technology, the refining technology, will allow us to process about 750,000 tons per year. The overall cost is estimated in about €200 million, €220 million. And the timing for completion of the project is about 24 months after the approval is being obtained.

We're not sure that we catch complete -- we got completely your question about -- I think that you refer about quicksilver.

Yes, I'm sorry.

Yes, there is no intention to make any acquisition in the unconventional or increase our share there. We're working with them, but there's not any intention to make any acquisition.

Next question comes from Mr. Jon Rigby from UBS. Mr. Rigby, please.

Thank you very much. Two questions, one on gas and power you would be surprised to know. Can you help me a little bit in -- first there is a comment actually. I think some of your disclosure's increasingly obsolete as you develop a different business. I think I might've said that couple of quarters ago as well. So, is it possible, Marco, that you can break out or disaggregate a little bit further the impacts of the things you name checked, power, LNG, etcetera. on the delta on your performance? And maybe also is, how much of that is maybe a seasonal effect or a temporary effect or whatever? Just give a bit more insight into that, if that is possible. And then the second question is on the exploration and the cut in exploration spend. And I guess it's an easy thing to cut, but you're fairly unique in the industry by actually appearing to drive quite a lot of value through your exploration business. So, I guess, two questions. One, is there still a relatively high level of activity if you're not going to have to lose some of the momentum that you've clearly got in that business by shutting down spending? And second, are you still able -- do you think you're still able to monetize some of those discoveries? I think you said last year that one of the things that you would like to do is to accelerate the value in exploration by monetizing. You've gone very conscious that the market right now might not let you do that.

Okay. Well, Jon, in keeping consistent with the disclosure that we do give and what I said before is the take-or-pay contracts, we bundled those together with logistics. Excluding retroactivity, you should assume that remains negative in 2014 and also remains negative in 2015, when we expect to recover some one-offs with the GasTerra arbitration. The other segments, which is power, B2B, trading, LNG and retail, are all positive throughout 2014 and expected to be positive in 2015. As we discussed previously, there's been a sharp decline in B2B compared to 2013, which we're still living off what the market was like in 2012. And I think the other value-added segments are stable and increasingly recovering, with the power business being exposed to the spark spreads. So, you can use your own curves and make those assessments going forward.

So, exploration, first of all, I want to assure that we're still explorationists. So, we like exploration and evidence is that, in 2014, we acquired about 100,000 square kilometers of new acreage. It is clear that we're going to continue to work on our best skill and that that is sure. We study our plans clearly and in details because we don't want to hurt ourselves. And we didn't do that in the past and you -- after all the success, you can be sure that we're still more convinced about our potentiality. What happened that, in the last seven years, without spending a lot, we found out the resources also in frontier exploration. Today, we really feel initiative look at value and resilience. So, that is really our big title for all our businesses, value and resilience. And that means that, for our exploration unit, that is very efficient, effective, is to go close to our field or our near field or in fielding our appraisal and put all our skills to find oil and find oil very quickly or gas, find oil -- gas very quickly. So, that is a -- is not a strategic move. That is a tactic move. And so, I think that is -- I can assure everybody that we don't want to hurt ourselves. We continue strongly with our exploration target and strategy.

And the monetization angle?

Monetization, that -- I forgot this point. I was so focused on exploration. No, I think that exploration, that's a completely different kind of asset. It's not producing one for long term. So, it's less impacted by the fluctuation of the market, of the price. And our asset are very good, are very -- we can say cheap from a development point of view, are conventional and it's clear that it's a good business also for the buyers. We can tell that it's a good investment for the buyer. And they are not impacted as they -- by the price. So, we're continuing and we're in discussions with different kind of people, entity groups. And we don't see any reduction in interest of talking about exploration assets. I think that they are recognizing a lot of value in it.

Next question and the last question comes from Mr. Neill Morton from Investec. Mr. Morton, please.

Two numbers questions, please. The first relates to the upstream business in Q4. Could you perhaps explain why there is such a big increase in the depreciation charge in the quarter on an adjusted basis? And following on from that, there is an implied very sharp fall in your cash costs in Q4. And then just secondly, I wondered if you could give us an up-to-date rule of thumb with regards to PSC sensitivity, for every $1 move in the oil price, how your entitlement battles are affected. Thank you.

Neill, the most important reason why the Q4 D&A increased in E&P is because of the ramp up of the new production and the startup of new fields. That's, as you well know, taking into consideration the higher the position cost because of the higher cost that has been spent recently in order to develop the field.

The PSA.

The PSA effect is in the -- as far as 2015, in terms of volume, it's in the range -- it's a little bit less than one. So, it's in the range of 0.8, 0.9 thousand boe per day every $1 Brent.

Is that Q4 charge then a sort of ratable number for 2015?

Definitely, the D&A is expected to increase in time as the production ramp up, yes.

Because we have a lot of projects coming in, yes.

Okay. I think that the call is over. Thank you for all the attendants.

Thank you very much. Bye, bye.

Thank you. Bye.

Ladies and gentlemen, the conference is over. Thank you for calling Eni.