Claudio Descalzi - Chief Executive Officer, Director & GM Massimo Mondazzi - Chief Financial & Risk Management Officer Umberto Vergine - Chief Midstream Gas & Power Officer.

Hamish Clegg - Bank of America Merrill Lynch Oswald Clint - Sanford C. Bernstein Ltd. Jason S. Kenney - Banco Santander SA (London Branch) Irene Himona - Société Générale SA (Broker) Dario Michi - Banca Akros SpA Henry M.

Tarr - Goldman Sachs International Kim Anne-Laure Fustier - HSBC Bank Plc (Broker) Massimo Bonisoli - Equita SIM SpA Biraj Borkhataria - RBC Europe Ltd. (Broker) Lydia R. Rainforth - Barclays Capital Securities Ltd..

Good afternoon, ladies and gentlemen, and welcome to Eni's 2015 Fourth Quarter and Full-Year Results Conference Call hosted by Claudio Descalzi, Chief Executive Officer; and Massimo Mondazzi, Chief Financial and Risk Management Officer. For the duration of the call, you will be in listen-only mode.

However, at the end of the call, you have the opportunity to ask questions. I'm now handing you over to your host to begin today's conference. Thank you..

production growth and cost efficiencies. In production, we grew 10% in 2015, doubling the initial target, thanks to the flexibility of our portfolio, we brought forward to 2015 part of the production growth that we planned in the four-year plan.

This performance was due to 10 main startups in West Africa, the Americas, Italy, and the North Sea; the fast tracking of near-field discovery in Egypt; the contribution of Libyan gas field; the one-off contribution from Iran and Libyan cost recoveries that account for 42,000 barrels per day; and PSA effect that account for 3.8% of this growth For 2016, we will maintain the same production level as last year, excluding the contribution of one-off factors.

The key startups will be Goliat, Kashagan, and other main fields in Angola, Egypt, and Gulf of Mexico. Let's now turn to cost. On CapEx, in 2015, we achieved a reduction of 17%, thanks to the large optionality of our portfolio.

We re-phased more expensive and longer-term projects in favor of the development of near-field exploration successes, and we leveraged the renegotiation of rates (6:04) of services, reducing the total cost by €500 million.

In 2016, leverage in the same drivers will further reduce CapEx by 20% versus the last year, even including Zohr, which is set to become a major contributor of additional production to the four-year plan, replacing longer-term development.

After two years of strict spending control and thanks to our focus on conventional and low-cost play, we have materially reinforced the resilience and competitiveness of our upstream portfolio, while preserving our profitable growth targets.

Upstream investing for barrels produced remains at the lowest level of our peer growth and this will be further reduced by 43% by the end of this year, versus 2014's level, to $14 per barrel. Moving now to operating costs, there in 2015 we reduced OpEx to $7.2 per barrel, down by 13%, doubling the original target.

Contract revisions, optimization of maintenance, lower energy feedstock prices, and logistic costs are at the basis of these savings. In 2016, we plan to further improve and deliver an OpEx per barrel down to $6.4 per barrel, 23% lower than in 2014. Our commitment to cost efficiency has also strongly impacted on G&A costs.

In this area, we beat July 2014's target of €500 million of savings by 20%, main reduction had come from communication, logistics and ICP (8:09). These savings will be confirmed in the four-year plan. And finally, I would like to highlight, how we will continue to fuel our future.

Last year, we discovered 1.4 billion barrels, two-thirds of the 2016-2018 plan target at the unit cost of $0.70 per barrel. We achieved these results through a very well balanced exploration activity that focused on specific targets, limiting our investment to €800 million.

These resources which were mainly discovered in North and Sub-Saharan Africa are highly synergic with existing production ops. Thanks to these discoveries, we will maximize the opportunity of our portfolio through the optimization of the development plan and the potential disposal of stakes where we have a high participating interest.

In terms of reserves replacement, we achieved a ratio of 148%, with around seven billion barrels of entirely conventional proven reserves. We have kept our reserves life index at around 11-years. This result does not take into account the contributions of Zohr and Coral, which will be sanctioned in 2016.

And now, Massimo will give you the highlight of 2015 economic and financial results..

Thank you, Claudio. First of all, let me remark that the pro forma group figures exclude Saipem and Versalis contribution as they've been reclassified as available for sales.

By the effect of the Saipem transaction now closed, by the way this morning we cashed in the latest part of euro proceeds – are in this representation anticipated at December 31, 2015. Anyway, in the press release, you can find all detailed information to reconcile the reported versus the pro forma figures.

Passing now to the numbers, adjusted operating profit in 2015 was €4.1 billion, down 64% versus last year.

The deterioration of scenario estimated at €8.8 billion and some 2014 retroactive benefits in Gas & Power of €0.7 billion, were partially offset by €2.2 billion of positive performance, mainly volume growth and increased operating efficiency and flexibility.

In detail, upstream accounted for the vast majority of this result, with an EBIT of €4.1 billion. This was actually a strong performance pulled by a higher production and lower OpEx and exploration cost counteracting a very negative scenario that weighted minus €9 billion.

Gas & Power was close to breakeven; notwithstanding, the worse than expected outcome of one commercial arbitration. Yet, this result is in line with our guidance of being close to breakeven, despite the delay of the GasTerra arbitration now expected by the second quarter of this year.

Excluding the positive contribution in 2014, our retroactive effects implied in some gas renegotiation, 2015 results were much better than the previous year, thanks to the rollover of revised gas contracts including one-off items. R&M recorded strong year with EBIT adjusted improvement of around €450 million over 2014.

Refining breakeven was achieved, thanks to better scenario and refining optimization. Adjusted net income in 2015 was €336 million, down 91% versus 2014. It was affected by 92% tax rate, mainly driven by the larger weight of some trends, namely PSA effect in E&P that recorded an 81% tax rate.

PSA are, in fact, much more resilient in economic terms than concessions, but with higher tax rate. Second, the overall group losses of other sectors, mainly in Italy, with no deferred tax asset associated. And third, non-deductible costs such as exploration that in 2015 represented a higher percentage of the depressed pre-tax profit.

On the latter effect, it's worth saying that the adoption of (12:57) would reduce the E&P tax rate by five percentage points. This, combined with normalization of non-deductible costs I mentioned before, would reduce E&P tax rate to around 70%.

Finally, to complete my comments about taxes, let me highlight that from a cash perspective, in 2015 we paid E&P a cash tax rate of around 34%, slightly lower than in 2014. And now, I would like to highlight that these days, we completed the Saipem deal and we are now cashing-in the full proceeds.

The deal, you might remember, was composed of three main steps. First, the sale of 12.5% of Saipem to the Italian Strategic Fund occurred at 22 January, 2016, which implied a cash-in of €463 million. With the sale, we entered in a 50-50 shareholder agreement with FSI, represented 25% combined shareholding.

Second, we reported a (14:10) subscription of Saipem capital increase for slightly more than €1 billion. And third, the full repayment of Saipem inter-company net debt amounting to €5.4 billion. As a result, the net debt reduction has been €4.8 billion. Saipem will be equity accounted for Eni starting from January 2016.

And now, I will like to stress our positive financial performance. Pro forma net debt at the year-end was down to €11.7 billion, implying a leverage at 22%.

This significant improvement versus 2014, in spite of the challenging scenario, was achieved mainly; thanks to the resilient contribution from operations sourced by lower cost PSA as well as further improvement of working capital.

It's worth mentioning that the working capital contribution is partially due to non-recurring action amounting to €2.2 billion, €1.6 billion more than 2014, benefiting from take-or-pay recovery, cash-in of fiscal credits, recovery of commercial overdue and liquids de-stocking.

Second, the Saipem transaction, I just commented, entered a €2.1 billion of cash from disposals, including the proceed from Galp and Snam. The later only partially cashed-in in 2015, as well as from the sale of non-strategic upstream and R&M assets. And now I will hand you over to Claudio for his final remarks..

Thank you, Massimo. 2015 was a crucial year for the implementation of our transformation plan. Eni is now more focused on core business and more resilient to deal with the lower oil price environment. In summary, we beat all our main targets and lowered our cash breakeven.

And now, we have a (16:17) company with a higher degree of optionality and positioned to overcome a longer downturn. In 2016, we will maintain our current production level without the contribution of one-off factors recorded for last year. We will further reduce CapEx by 20%, and OpEx by 11%.

And concerning the organic coverage of CapEx at $50 per barrel, without the contribution of the working capital recovery that we had in 2015. On the basis of these results, I am pleased to announce that the 2015 final dividend proposal is confirmed to €0.40 per share. Now together with the management team, we will be happy to answer your questions.

Thank you..

Ladies and gentlemen, the Q&A session is now open. First question comes from Mr. Clegg Hamish (sic) [Hamish Clegg] from Bank of America. Mr. Clegg, please..

Few quick questions. First of all, I was wondering if you could tell us a little bit about the precise timing of Saipem cash hitting your balance sheet. I assume it's going to be in Q1? Secondly, on Gas & Power, there were a few slight sort of bumps in the road.

Could you give us a little bit of an update on where we are with that? And are you still considering a disposal at the retail side of the business? Also, could you tell us a bit more about Versalis and the disposal you've alluded to, in this set of results that's led to you treating as a discontinued item? And if you're in the updating mode, Goliat, it would be a nice to have a bit of an update on as well in terms of how things are progressing there with meeting those safety standards and producing first oil?.

Massimo?.

Thanks. So, in term of cash-in in the first quarter from Saipem transaction, so the overall cash-in amounted to €5.8 billion. So, starting from a €5.4 billion net debt of Saipem, which is the net value, plus €0.6 billion of liquidity, totals €6.2 billion (19:06) was the third-party debt.

So, we cashed-in €5.8 billion, out of which €0.6 billion has been utilized to complete the Saipem transaction, I mean to subscribe the capital increase in the range of €1 billion as I just said before, minus €460 million in term of price we cashed for the shares.

And as far as the remaining part of the proceeds, cash-in, we utilized or we will utilize €.5 billion in term of debt repayment and the remaining €1.7 billion is an additional liquidity..

For retail gas, what we said in July 2014, was that Gas & Power, the retail business is not a typical business of an oil and gas company. And we wanted to – and we want to fully unlock the value in this segment.

For the near future, we will focus on announcing retail gas performance, so we are focused on the company – we are focused on this segment to announce and create more efficiency – and more efficiency. That is what we are focused at that moment.

On Goliat?.

Versalis and Goliat, were the last two – I was wondering about that?.

Okay. So, I'll continue on Versalis. So, you know, that Versalis is a part of our transformations and to go through all the integrated oil and gas company. As you know what we are doing now is to dilute our acquisition, our interest in Versalis. There are ongoing negotiations. And before we started two years of turnaround and we got very positive result.

We got positive result after 20 years. And now we are discussing that, because there's a commercial negotiation ongoing, so I can't say more than that..

Okay..

About Goliat, the consent to put in service has been obtained around mid-January in addition to other important permits from the environmental point of view. So, now, according to the Norwegian procedures, there are five weeks for public hearings. Immediately after, we will prepare a platform for the startup..

Okay. Thanks..

Okay. I don't know if my first answer has been clear in term of timing, so all the numbers I just mentioned would be cashed in, or it's being cash in these days. So, starting from the 22, of January, about this year to today. So, everything would be according to first quarter..

Excellent. Thanks a lot, guys..

Next question comes from Mr. Clint Oswald (sic) [Oswald Clint] from Bernstein. Mr.

Clint, please?.

Thank you. Just on the CapEx reduction for 2016, it's kind of split between the re-phasing of projects, the exploration selectivity, and contract renegotiation.

Can you say which of those was the key toggle that allowed you to reduce CapEx or is it all of them? Or, is it one of them? And which one could be used further if prices kind of stay below our $50 scenario for this year? And then, secondly, just a quick one on – obviously, your liquids production strong last year.

You mentioned Iraq and Libya contributing to that. Can you give us some indication of what you expect for those two countries for 2016, please? Thank you..

Okay. Thank you.

First of all, in 2016 the flexibility and the CapEx reduction is clearly that concerned all the three points you said, but I think that they are optionality that Eni has because of the large amount of resource that we found, give us the possibility to move from complex and longer and expensive project to projects that are simpler and that can put in – that we can put in production as faster with a less cost.

So, that was a very important component and that is something that we're going to continue and give the benefit in the next few years, with also a reduction in the supply chain that we can account for some percentage, because mainly we have reduction in the drilling rigs, for example, and in some materials, so that are the two components.

It's clear that supply chain for the future will improve, because we are negotiating a lot of contract and that will be a very important part of our cost reduction for the next period. Full production, when we talk about – during the presentation, we talked about Iraq and Iran.

We were talking about – I'm sorry, Libya, they are different, yeah – because we are talking about past cost that we recovered and increase in production for example in some Libyan gas fields. So, some of this production is one-off that were related to costs in Iran and some costs in Iraq and the other that the production is also for the future.

It's a continued organic production growth..

Okay. Perfect. Thank you..

Next question comes from Mr. Kenney Jason (sic) [Jason Kenney] from Santander. Mr.

Keeney, please?.

Hi there, good afternoon and thanks for hosting the call. I'm very excited about Zohr in Egypt as I'm sure you are as well. I don't know if you put a CapEx number in place specifically for the project, but I'm thinking $7 billion to $8 billion for the project. And I'm wondering....

I'm sorry, can you repeat amount you said?.

$7 billion to $8 billion..

Okay..

I'm wondering if that displaces particular spend on other assets and which regions we should be looking at for displaced spend or deferred commitments? And maybe just breakout the ins and outs on where CapEx could be medium-term.

I mean, I'm not looking for a very specific number on CapEx on a 2018-2019 basis, but just which projects are going to be falling by the way side, so that Zohr can be focused on? And then maybe just on the back of the Zohr focus, any commentary on the domestic gas price outlook in Egypt would be much appreciated?.

Okay. So, it's clear that we are using our CapEx and Zohr is a new one, is entering – is entering and is replacing other long-term projects as I said, that are maybe more expensive or more longer in term of first production that – so we are replacing the project that is going to deliver production in the full year plan in a couple of years.

And we are displacing out our other projects that are longer and more expensive. I can talk about Iraq, I can talk about Israel and some project in Indonesia that we are not operating and some projects in Norway that we're not operating. So, we found replacing other and pushing our other projects.

But we found place for Zohr also with a cost reduction (28:00). So, our plan is more efficient than before, because we took advantage of the supply chain that improved in terms of cost efficiencies. So, that is the reason..

Excellent. Thanks..

The second question was about?.

Egypt gas prices?.

Egypt gas prices, domestic gas. So, most of the gas will be delivered to the domestic gas and for that domestic gas we negotiate a securitization agreement, not just in terms of CapEx, but also in terms of payment. Also, we negotiate a new formula for price to stabilize the value and give stability to the return of this project..

Okay..

Thanks you..

Next question comes from Ms. Irene Himona from SG. Ms.

Himona, please?.

Thank you. Good afternoon. I had two questions, please. Firstly, on Coral Floating LNG, can you clarify what percentage of the capacity you have either pre-sold or are about to pre-sell? Because according to BP, you are still in negotiations with them, which may or may not reach agreement.

And are you prepared to sort of discuss the issue of CapEx for launching the project? My second question, on refining. You mentioned that you broke – refining broke even in 2015. Obviously, that was partly thanks to record high margins, which are unlikely to be sustainable.

Can you clarify where you are in terms of the restructuring? So, what has been achieved so far on costs and capacity? And importantly, what remains or needs to be done in an environment where margins are likely to weaken? Thank you..

Very good. Thanks. So, Umberto Vergine will answer....

Thank you. We're in these days in the final stage. We have a binding sales and purchase agreement with BP. The (30:32) the negotiation is finished and we are through the document customization.

BP is sole buyer of all the production from Coral and this for a contract lasting 20 years and this includes also any upside production that the vessel would be able to produce..

first of all, the rationalization of the weaker assets; second, the optimization of processes and costs; and thirdly, the continuous improvement in efficiency.

What we have done so far? The rationalization has been achieved on the 33% of our original refining capacity through the conversion of Venice refinery in between 2012 and 2013, we started out the new plant. Secondly, we shut down at the end of 2014 of the Gela refinery, a milestone in turnaround strategy.

Thirdly, we sold the CRC stake and rationalization was done in April 2015 and we also closed some minor lines like that is breaking thermal cracking in Toronto 3% of our capacity.

In terms of CRC, last year only, we reduced the fixed cost of refinery by bios by 25%, $100 up and this was the breakeven margin of our refinery have been lowered from $6.5 to per barrel around $5 per barrel. Now what is still to be done, we will focus on our current assets to further enhance the profitability.

The drivers of this enhancement in profitability is the ramp-up, a full deployment of the (32:39) technology in Sannazzaro that is a really strong competitive advantage in view of the bunkers specifications change occurring in 2020.

Secondly, the conversion of green refinery of Gela and we are working to complete the mechanical – completion of the plant by 2017 and finally we continue the efficiency cost..

Thank you very much..

Thank you..

The next question comes from Mr. Dario Michi from Banca Akros. Mr. Michi, please..

Good afternoon. Thank you for taking my questions. The first one refers to the growth, you are the only company sanctioning new projects in this context and this is sustaining your growth in the coming years.

But as regards 2016 and the flat guidance you have provided for, what's the level of contingencies embedded in your guidance? But the second question is on the leverage. Even in this case, you have a quite unique approach in the sector, pointing to reduce it. And the pro forma leverage is among the lower in the sector, at 22%.

What's the theoretical value factoring in the deconsolidation on Versalis, if possible? Thank you..

Thank you. So, I'm going to answer to the first question and Massimo to the second one. First of all, I'd like to specify and highlight that we said that we are going to produce the same amount of barrels in 2016, but it's not a flat production.

Why? Because in 2015, we had one-off production coming, as we said from Iran and from Iraq and for 42,000 barrel per day. That means that this one-off will not be present this year. So, that means that we are going to increase this year about 42,000 barrel per day, because we are going to keep this same organically, so we'll keep the same production.

So that is an additional contribution. Then we have contingency. We have contingency and we have contingency for the four-year plan. So, we don't want more to disclose contingency today. But clearly, we have a good range of contingency to capture all the possible situations that we can face in the next four-year plan geopolitical and other.

So, we are growing first; and secondly, we have contingency that we will be in a better position to disclose or describe it during the strategy presentation in March..

Okay. Dario, I cannot reveal in the exact number about Versalis because you understand it's a sensible number. But as we have classified Versalis is available for sale by the end of this year. You may understand that the advantage could be, I would say, there would be an advantage about not so much after this reclassification..

Thank you..

Next question comes from Mr. Henry Tarr from Goldman Sachs. Mr.

Tarr, please?.

Hi, and thanks for taking my question. And just a couple of quick questions. So, firstly, what visibility do you have on the OpEx reductions at this point? So, you're talking about sort of 11%, I think, on a per-barrel basis.

And then, is there potential beyond that? Secondly, please, could you give a quick update on the outlook in Libya? And then, just thirdly, obviously your balance sheet is significantly strengthened now with the Saipem cash coming in, et cetera. Have you any comment on or interest in talking about potential acquisitions at this point? Thanks..

Okay. Now, first of all, OpEx. Yeah, we have a clear vision about OpEx reduction, because we declared that and it's clear that we're going to continue as we said on the same track, on the same pace we had in 2015.

And that is mainly due to logistics and other specific item linked to the – for example, the global maintenance of our different plant and also the fuel.

So, that we have different kind of renegotiations that we already closed and some ongoing for the operating cost in the different place and that will allow us to work on about $6.4 per barrel that is really a very, a very low value.

But, there is a something that we can consider close in term of supply chain and in term of activities, in term of downturn of some plant. For Libya, so the environment, I think that you heard that in the recent days, in the past days, we had some issues not far from our facilities. Our facility has not been touched.

So, our colleagues are working without any problem. From an environment point of view, I think that we can remark some progress in the negotiation and in the positive, a concrete and pragmatic talk between the different parties. Now they're talking, they're working to complete and approve the government.

And what we notice that it is very positive that the different malicious. Now we can call no more malicious, but the Libyan army is reacting very positive and they are defending their territory.

So, what's happening to that, I think that has been a clear example that different malicious from this different part and different comp work together to create and stabilize the situation that work very, very positive. From our side, they are maybe Libyan armies protecting the installation.

So, we have a strong protection also passive protection, because in the last year we had time to create a strong defense to all the installation. We have a clearly very important security emergency plan to evacuate our people and there will be strong defense – our installation (40:03) we can have all the time to put our people in a safe position.

So, the situation with respect to one year ago, also there are a lot of – some trouble in the recent past, the situation is improving, is much better. And equation and discussions are progressing and from what I understood are progressing positively..

Okay. Henry, about acquisition, as Claudio indirectly explained talking about our project portfolio, we don't need any acquisition to perform the production growth we would promise.

So, we are even in the position to select – Zohr is just an example of this, select the best project to start in this environment to keep as low as possible the cost include to perform the better – the better project.

So, unless for we do not envisage anything like this opportunistic occasion on this, again, acquisition are not in our radar screen today. It is like I am asking to other few things about that, just to reinforce and explain, why we don't think that we need. If you look at our cost, we worked a lot in the last of couple of years on our cost.

Now we reached an exploration cost per barrel of $0.70 per barrel. We have a OpEx of $6.4 per barrel and a CapEx per barrel of $14. So, we can see that our assets are – in our asset we are reducing drastically the breakeven price and I think that there is no other better opportunity that develop our asset and that is what we are going to do..

Very clear. Thank you..

Next question comes from Ms. Kim Fustier from HSBC. Ms. Fustier, please..

Hi, yeah. Good afternoon. I had a couple of questions, please. The first one is just a clarification question on CapEx.

Just wanted to confirm that the 20% reduction for this year is from a 2015 base number that includes only the continuing businesses, i.e., that excludes the CapEx on Saipem and Versalis? And the second question is just around the definition of your free cash breakeven.

Could you just clarify whether you expect to cover CapEx with cash flow from operations at $50 or also to cover dividends, but with help from disposals? And what would that free cash breakeven be without the disposals? Thanks..

Okay. In terms of cash projection, I think that the better opportunity to talk about this kind of projection forward is our Strategy Presentation mid-March, so in the coming days.

What we could anticipate talking about 2016, as Claudio highlighted, is that what we succeeded to do in 2015 that we can confirm in 2016 even without significant contribution from working capital that we highlighted during our presentation. We can match our CapEx at around $50 per barrel.

So, in this way, we will anticipate by the $13 per barrel the target that we set when we presented our strategy last March. So, on the longer term, we'll be back on this issue talking about the strategy. Yes, I can confirm that the 20% reduction in CapEx is without Versalis and without Saipem.

So, this – what we call a continuing operation in this presentation..

Thank you..

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

Bonisoli, please?.

Thank you, and good afternoon, gentlemen. Two quick questions. Regarding Zohr field, again, could you give us some color on the OpEx level in 2019 when you target to produce 500,000 barrels per day? I imagine they are pretty low in the first development phase.

So, just to understand the profitability contribution in that year? And the second question, at $50 oil price in 2016, what would be the underlying tax rate and cash taxes implicit in the guidance of free cash flow breakeven?.

So, the first answer to your question is $2.5 per barrel. And now Massimo for the longer one..

Okay. As far as the tax rate – so I just commented the tax rate in 2015 has been high, I said 92% because of the reason I just explained and so the low level of Brent that emphasizes some non-taxable, non-deductible items. So in 2016, when we are projecting $40 per barrels, by definition this phenomenon would be emphasized at some way.

But turning on the cash perspective of this issue I just said that on a cash basis, we recorded in 2015 a cash tax rate in the range of 34%. What I could say that in 2016 these cash tax rate would be in the range of 30% or even slightly lower than 30%.

So, this is what I just mentioned is the E&P, because my comment during the presentation related the E&P tax rate. And if you would like to add some guidance on the corporate and the overall tax rate the trend is exactly the same what you should do is to adjust very few percentage points..

Very good. Thank you..

You're welcome..

Next question come from Mr. Biraj Borkhataria from RBC. Mr.

Borkhataria, please?.

Hi, thanks for taking my questions. Just thinking longer term, you lowered your oil price outlook to $65 a barrel. So, I was wondering what kind of return on capital can you generate at that oil price in, let's say, 2017 or 2018? That would be my first question.

And then, the second question, just going back to one of the previous questions, but asking it in a slightly different way, if you're covering your CapEx organically from cash flow at $50 per barrel, I know previously you've given sensitivities on your free cash flow for each dollar move in Brent.

And using that, it would imply your free cash flow post dividends would be around $70 a barrel. So, I'm just wondering would there be any reason that those previous sensitivities would no longer be valid or would have changed since the last time you gave them? Thanks..

No. So, sensitivities remain substantially the one that we mentioned – as we previously mentioned. In term of -- as I said before our – and let's say coverage including dividend in the longer term what we would like to do and maybe is to postpone this kind of treatment during our first strategy presentation in the March and....

$65, the internal returns....

$65. In terms of return, I cannot give you the overall internal rate of return, but following what Claudio just said, so every project that now we are performing, we say has a breakeven that is well below the scenario that we are projecting.

So, the $65 longer-term Brent price that we are projecting the new – in the new scenario, do not have any kind of effect in the portfolio project we are performing. So, every project will remain higher than the weighted average cost of capital there in place..

That's for everybody; we have to keep something for the strategy, I believe so. Otherwise, the strategy will be completely empty. We are going to really elaborate on these initial price and returns, different kind of price in our scenario during the start of the presentation. Thank you..

Understood. Thanks for the color..

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

Rainforth, please?.

Thank you. Thank you very much for taking the questions. Just two on the cost base, if I could? The first one, on the G&A reduction of 30%, which has clearly been impressive, since last year. It does look like 2016 implies a bit flat year-on-year.

Is that a reflection of just being conservative in terms of the guidance? Or, do you now think that the headquarters and that corporate cost center is as efficient as it possibly can be? And then, the second one was on the OpEx side, and again, I suspect this might get pushed to the strategic presentation – but the last time that we were at an oil price of $50 a barrel, which is exactly where you're looking to be cash flow breakeven at, the OpEx per barrel was about $4 on run rate.

So, is it possible to actually get back to that with the level of costs, do you think, over the next two years to three years? Or, has the portfolio changed significantly from that? Thank you..

No, I can answer about G&A..

Actually on the OpEx – we couldn't – you're very, very – the figures, so if you can maybe repeat the question on the OpEx, yeah..

Sorry. The question on the OpEx was, if I'm looking at your company being cash flow breakeven at $50 a barrel, the last time we were at $50 a barrel was back in 2005-2006. The OpEx per barrel was about $4, roughly, from memory.

And I'm just wondering whether or not over the next two years to three years it's feasible to think about this getting back to that sort of level of OpEx? Or, whether the portfolio really is slightly different now to where it was then?.

Okay. I'll give you the answer about G&A, so you said -- you mentioned that maybe that we've been a bit conservative in giving the guidance. We entered this G&A cost saving project one half year ago with some target and we recognized performing this exercise that day-by-day we can do more.

So, this €100 million is exactly the result of what has been achieved in addition versus the original target. And this is what is envisaged in existing project that's already in place and relate to savings that has been already achieved. So, now Claudio said that this level is definitely confirmed for the four years to come.

I cannot exclude that presenting this – the Strategy Presentation maybe completed – have been completed some more exercise in term of potential cost savings addition we will have something more to say..

About the $4 per barrel in term of OpEx. I sincerely – I don't know..

Sincerely we don't have right now a projection to come back to the $4 per barrel, really. But maybe as Claudio said you can elaborate a little bit more maybe mid-March, Lydia..

Thank you very much..

It was the last question..

Okay. Thank you..

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