2007 Interims Presentation FINAL - Premier · PDF fileexploration plays in Pakistan ... Asia...

2007 Interim Results Presentation 20th September 2007

| 2007 Interim Results Presentation

Forward looking statements

This presentation may contain forward-looking statements and information that both represents management's current expectations or beliefs concerning future events and are subject to known and unknown risks and uncertainties.

A number of factors could cause actual results, performance or events to differ materially from those expressed or implied by

these forward-looking statements.


Highlights


Highlights

• 42 mmboe of reserves and resources added at ~$2.0/bbl

• Scott acquisition will have one year payback

• Completion of acquisitions in UK and Indonesia

• Steady progress in defining development projects

• Zamzama Phase 2 startup• Progress on Gas sales in Indonesia• Engineering & project planning progressing

in Vietnam, Indonesia & Norway

• 1H production up 5% from 2H 2006 with current run rate of 37,000 boepd

• 50,000 boepd by end 2010 and rising

• Rising production profile – on track to meet targets

• Continuing to build high impact exploration pipeline

• Testing in India• Anne well to spud in September 2007• Norway, Congo and Vietnam wells planned

for 2008 and 2009

20000

Daily Production(boepd)

0

10000

40000

30000

50000

2008

70000

80000All projects earlierAll projects laterBase producing fields

2009 2010 2011

60000


Asia• Optimise Natuna

Sea position• Build new core areas

in Vietnam and North Sumatra

• Fully exploit exploration play in Vietnam

Regional strategies

Middle East / Pakistan• Continuing growth in

Pakistan gas business• Seeking new

exploration plays in Pakistan

• Progressing new JV in the region

West Africa• Pursue high impact

exploration in Congo and elsewhere

• Exit Mauritanianposition

North Sea• Add to existing

producing fields• Exploit Norwegian

development projects• Pursue high impact

exploration


Exploration strategy

• Drill up programme of high impact new plays (Congo)

• Fully exploit plays as follow-ons to success (Vietnam)

• Maintain focus on new areas for future drilling (Eastern Indonesia, Barents Sea)

• Through commercial activity, ensure operating cash flow more than twice covers exploration spend


Financial results


Financial performance

• Balance sheetMaintained balance sheet strength pre-funding investment programme

• Operating profit Reduced by exploration write-down and non-cash charges

• Operating cashflowbefore working capital

Strong underlying cashflows driven by rising production and high prices

• Operating costsUnderlying costs stable at $6.90/bbl (including certain one-off items)

108.8

69.7 82.8

147.6 155.2 143.3

5.06.5 6.9

-26.2

43.8

-24.1


North SeaWytch FarmScottKyleOthers

AsiaAnoaKakap

PakistanQadirpurBhitZamzamaKadanwari

West AfricaChinguetti

Total production

kboepd (net)FY 2006

6.93.20.42.01.3

11.67.93.7

12.13.92.94.11.2

2.42.4

33.0

kboepd (net)1H 2007

8.33.01.92.21.2

11.87.93.9

12.54.02.94.31.3

1.41.4

34.1

Production


Scott acquisition

Scott Economics

• Pre-emption purchase price $60m

• Adjusted final price (including inventory of $26m) $53m

• After-tax cash flow (May 19th-August 31st) $38m

5.16%5.16%Maersk

10.47%10.47%ExxonMobil

0.00%20.95%Hess

20.64%20.64%Petro-Canada

41.89%40.99%Nexen

21.84%1.79%Premier

AfterBeforeCompany

Scott Field • Anticipate cash pay-back within 12 months of acquisition

• Further in-fill drilling opportunities

• Expected field life 2020


Production and income statement

Working Interest Production (mboepd)Realised oil price ($/bbl)Realised gas price ($/mcf)

Sales and other operating revenuesCost of salesGross profitExploration/New BusinessGeneral and administration costsOperating profit Financial ItemsProfit before taxationTaxationProfit after taxProfit/loss from discontinued operationsProfit for the period

12 months to31 Dec 2006

6 months to30 June 2006

33.064.90

5.11

$m358.8

(126.6)232.2(37.1)(16.6)178.5(5.7)

172.8(86.7)

86.1-

(18.5)

32.566.50

5.26

$m196.2(65.6)130.6(13.8)

(8.0)108.8(18.5)

90.3(53.7)

36.6(2.9)33.7

Highlights

Including Guinea Bissau writeoff of $25.7 million

Non cash mark to market hedging loss of $9.9m

3% premium to Brent oil prices


34.165.00

5.03

$m239.4

(114.4)125.0(34.4)

(7.8)82.8

(14.3)68.5

(48.0)20.5

-20.5

50% effective rate on profits pre-exploration writeoffMauritanian assets maintained at fair value estimate of $83.5m


143.3(22.3)(34.3)86.7

(188.5)(7.9)

(109.7)

Cashflow

Operating cash flowWorking capital movementsTaxation paidNet cash from operating activitiesCapital expenditurePre licence exploration costsNet cash flow before financing


$m

12 months to31 Dec 2006

$m

302.858.2

(116.2)244.8

(156.5)(19.2)69.1

147.676.9

(50.0)174.5(95.9)(6.8)71.8

2007 2006

Development

188.5 95.9

Exploration 39.939.0

Acquisitions 17.089.637.961.0


$m

Before working capital movements

Cargo proceeds of $42.0m received on 3 July

Expenditures ($m)


Balance sheet

Cash and equivalents

Bank debtConvertible BondsNet (debt)/cash

Net assets

Balance sheet gearing

Undrawn facilities

As at31 Dec 2006

$m

As at30 Jun 2007

$m

240.8

(68.0)(196.9)(24.1)

582.5

4.6%

207.0

40.9

--

40.9

449.1

-

275.0

Invested at an average 5.28%

As at30 Jun 2006

$m

43.8

--

43.8

412.4

-

275.0

$250 million issue in May at 2.875% coupon, $51.9 million attributed to equity reserve


Development update


Middle East – Pakistan – Producing fields

• Zamzama Phase-2 first production is imminent– Incremental 150 mmscfd of production capacity– On time and on budget

• Badhra first production at year end– Initial development of 30 mmscfd

• Qadirpur capacity expansion in April 2008– Plant capacity increasing from 500 to 600 mmscfd

• Qadirpur Power Generation Project in 2009– Further 70 mmscfd of gas to a new power station

• Further potential projects exist with Badhraextension and Qadirpur Deep

20000

Pakistan Production Graph(boepd net)

18000

16000

14000

12000

100002006 2007 2008 2009 2010

Further potentialDevelopment projectsProducing fields (including development drilling)

The historical picture of reliable production growth looks set to continue:


Other key producing fields

Scott• In 2006/7 a successful infill drilling

campaign reinvigorated production– Production increased from

18 to 35 kboepd gross– Added 11 mmbbls reserves at

$10/barrel

• After further study work a new campaign is being planned for late 2008/9

• Upgrades to power generation and water injection will increase production

Kyle• Completion of the gas lift project has

significantly increased production


Asia – Vietnam – Blackbird / Dua

• First production targeted for 2010 but 2009 may be possible• Market survey of FPSOs completed• Development team in place in Ho Chi Minh• Reservoir studies and development cost estimating are ongoing• Gas options under review

Q12008

Q2 Q32009 2010

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Q42007

RAR FDP

PV Approvals

FPSO

Specify

Tender

Convert

Install

Wellhead Platforms

Specify

Tender

EPCI - Blackbird

Install - Blackbird

EPCI – Dua

Drilling

Drill Blackbird Wells

Tieback Blackbird Wells

Drill Dua Wells

First Production


Asia – Indonesia – West Natuna Block A GSA 2

• Confident of Indonesian ministerial approval to export gas

• A further expansion of the JurongPetrochemical complex has been announced

• Evaluating the possibility of an offer from Sembgas (GSA1 Buyer) as an additional buyer to ExxonMobil

• Development planning continues– Pre-FEED work is ongoing

• First production target of Q4 2010


Asia – Indonesia – North Sumatra Block A

• Targeting POD approval at end of October– Gas sales negotiations with PIM (fertilizer

manufacturer) are progressing – POD has been submitted to BPMigas for review– Tendering process for FEED is underway

• First production targeted for Q4 2010

• Early production project of 15 mmscfd to an IPP for late 2009

• Study work on re-development of the old oil fields has commenced


North Sea – Norway – Frøy

• Development concept has been selected– Jack-Up with Drilling, Production, Storage & Offtake– Either a converted rig or a purpose built jack-up– Installation in autumn 2010 or 2011– First production will be three months later

• EPCIC contract has been tendered– 5 potential bidders with responses due in October– Facility will be leased

• Expecting POD submission in Q1 2008


2007 2008 2009 2010

PakistanBlackbird / DuaWNBA GSA-2NSBAFrøyRatna

Field developments schedule

NB: Projects are shown at “earlier” case start dates, for “later” case dates add one year

ProjectInitiation

ConceptSelection

ProjectSanction

FirstProduction

Study Design ExecuteOperated

Non-operated


Production forecast

20000

Quarterly Production (boepd)

0

10000

40000

30000

50000

Q32009

70000


60000

Q42009

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

15,00010,0006,0008,000Net rates (boepd)FrøyNSBAWNBA GSA2Blackbird/DuaField


Exploration update


North Sea


North Sea – Norway – PL407 – Bream

• Undeveloped Brent age oil field discovered 1971• First well planned 2008• Operator estimate of 80 mmbbls• Premier 20% equity share

PL407 Bream Appraisal

PL406 Bream Exploration

Yme Field Re-development

10km

Gardrofa prospect


Lomond field

NW SE

North Sea – UK – 23/22b – Sparrow Prospect


West Africa


West Africa – Guinea Bissau


West Africa – Guinea Bissau – Espinafre Map


West Africa – Guinea Bissau – Espinafre interpretation

Pre-drill Post-drill


West Africa – Guinea Bissau – Eirozes map

Tied to Sinapa-2


Themis Marin PSCPremier 18%• Rig contracted for 4Q 2007 • Admiral-1 planned for Dec 2007

West Africa – Gabon – Themis – Admiral-1


Tertiary (Turbidite Channel) Play• ~ 14 BBO Reserves & Growing• ~ 100 Expl. Wells since 1994

Cretaceous (Albian-Cenomanian Raft) Play• ~ 5 BBO Reserves• Significant Producer: Congo & Angola

Pre-Salt (Syn-rift Sand) Play• ~ 2.6 BBO Reserves • Under Explored - MPN Block (1 Well)• Most of Wells: Pre-1980• Recent Seismic Pre-Salt Imaging has

rejuvenated this play

(From third party analysis using IHS and in-house reserve estimates)

West Africa – Congo – Block Marine IX


Marine IX Block (Premier 58.5%)• Significant reserve potential • 3D reprocessing and interpretation in 2007• Largest prospects – Frida and Ida• Exploration well 2008/9

Frida Miocene Channel

Frida Prospect

Ida Prospect

Moho110 mmbbls

N’Kossa280 mmbbls

Kitina & Kitina Sud150 mmbbls

Frida Structure

Ida Structure

West Africa – Congo – Block Marine IX


Middle East / Pakistan


Middle East / Pakistan – Offshore Indus – Anne-1

Anne-1• Spudding September 2007• Targeting 300 mmbbls• First well in offshore Indus delta• 1,300 metres water depth• Premier 12.5%

SW NES N


Asia


Asia – India – Cachar – Masimpur-3

Masimpur-3ASurface Location


SC43 – Ragay GulfPremier 21%• Monte Cristo-1 Well planned for Dec 2007• Well costs carried, farmed out equity to Pearl Energy

Monte Cristo Reef ProspectOffshore target drilled from shoreline

Asia – Philippines – Ragay Gulf – Monte Cristo


Asia – Indonesia – Kakap – Pancing

Kakap, 18.75% • Discovery announced

23rd August 2007• Tested and flowed oil

to surface• Opens up

prospectivity of Lama reservoir across the Natuna Sea


Asia – High impact pipeline – North Sumatra Block A


• Buton Island has a highly active oil generative petroleum system. Oil seeps to the surface are abundant and prolific

• Carbonate reservoirs have been mapped as closed structures in the subsurface

Asia – High impact pipeline – Indonesia – Buton


• Seismic shows excellent indications of oil-prone source rocks

• Direct Hydrocarbon Indicators (DHIs) confirm working petroleum generative system

Asia – High impact pipeline – Indonesia – Tuna

DHIs


Asia – Vietnam Block 12W


Block 12WJay ProspectPremier 37.5%• Exploration Candidate

for 2008

10 km

Mang Cau

Mid Dua

2.5km

NESW

Dua sands

10km

Jay

Asia – Vietnam Block 12W – Jay


Block 12WGo Kien ProspectPremier 37.5%• Exploration Candidate

for 2008

10km

WSW ENE

Mang Cau

Mid Dua

Dua sands

2.5km

Go KienDua

Asia – Vietnam Block 12W – Go Kien


Block 12WFalcon ProspectPremier 37.5%• 3D seismic programme completed Q2 2007• Exploration Candidate for 2008

10km

Asia – Vietnam Block 12W – Falcon


Peacock Prospect

Block 12WFalcon ProspectPremier 37.5%

• 3D seismic programme completed Q2 2007

• Exploration Candidate for 2008

Peacock Prospect

Peacock Prospect

Asia – Vietnam Block 12W – Peacock


Late Middle Miocene Carbonate

Top Upper Dua

Top Cau

Basement

Silver Sillago

NW

10 km

Asia – High impact pipeline – Vietnam – Block 07/03

10 km

Red Grouper

Silver SillagoBlue Marlin

Mang Cau

SE


Exploration drilling schedule

Contingent wells

M/East & PakistanEgypt : NW Gemsa Gemsa Well-1Pakistan : Indus Anne-1

West AfricaCongo: Marine IX Frida

IdaGabon : Themis Admiral-1

AsiaIndonesia : Tuna

ButonNorth Sumatra Block A

Vietnam : Block 12 Falcon-1 Jay-1Go-Kien-1Peacock-1

Block 07/03Philippines : Ragay Gulf Monte Cristo

North SeaNorway : PL407 Bream Appraisal

PL406 GardrofaUK : 23/22b

2007SEP OCT NOV DEC FEB

High impact wellsFirm wells

2008JAN MAR APR JUNMAY JUL AUG SEP

2009OCT DECNOV


Summary


Impact of major projects on Premier group production

20000

Daily Production(boepd)

0

10000

40000

30000

50000

2008

70000


2009 2010 2011

60000


Forecast development expenditures

50

($millions)

0

150

100

200

2008

300

350All projects earlierAll projects laterBase

2009 2010 2011

250


Summary

• Delivering a rising production profile

• Key developments are moving forward, which are capable of an additional 30,000 boepd

• High impact exploration programme over the next two years exposing shareholders to more than one billion barrels

• Low cost funding in place for our entire forward investment programme

• Completed two successful value-adding acquisitions during the period

| 2007 Interim Results Presentationwww.premier-oil.com September 2007

2007 Interims Presentation FINAL - Premier · PDF fileexploration plays in Pakistan ... Asia...

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