13 th March 2008 2007 Preliminary Results Presentation Forward - - PowerPoint PPT Presentation

2007 Preliminary Results Presentation 13th March 2008

13th March 2008

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.

13th March 2008

Agenda

Strategy and highlights Simon Lockett 2007 Financial results Tony Durrant Production and development update Neil Hawkings Exploration update Robin Allan Summary Simon Lockett

13th March 2008

Strategy and highlights

13th March 2008

2007 highlights

• Delivered value through acquisitions
• Signed gas sales agreements
• Advanced development projects
• Added significant reserves and resources

13th March 2008

Strategy

Strategy

• Targeting

production growth to 50,000 bopd by end 2010

• High impact

exploration programme within disciplined spend

• Acquisition focus
• n core areas
• Addressing post

2010 growth Progress

• On target to deliver

50,000 boepd by end 2010 with potential to achieve 80,000 boepd in 2012

• 13 exploration and

appraisal wells planned for 2008, focused on Vietnam and Congo

• People, funding and

capability in place to execute planned projects

13th March 2008

2007 regional highlights

North Sea

• Completion of Scott acquisition and infill well programme
• Kyle gas lift project completed
• Bream licences awarded
• Frøy development planning progressed
• Qualified as an operator to work in the Norwegian sector

West Africa

• Progressed Congo prospects to drill ready status
• Mauritania sale terminated
• Working with new operator on progressing Banda and

Tiof developments

• Exited Gabon and Guinea Bissau

13th March 2008

2007 regional highlights

Middle East/Pakistan

• Record production from Pakistan (12,700 boepd)
• Project to increase Qadirpur capacity to 600 mmscfd

progressed

• Qadirpur Deep well drilled, now awaiting testing
• Kadanwari K-18 successfully drilled and tested
• Zamzama Phase 2 development onstream
• Bhit phase 2 completed increasing capacity to 315 mmscfd
• Execution of shareholder agreements for EIIC JV

Asia

• Significant progress on gas sales to Singapore, Batam and

North Sumatra Block A

• 2 discoveries in Indonesia
• Acquisition of additional 25% interest in North Sumatra

Block A

• Subsurface facilities and planning for Vietnam progressed
• Block 12W 3D seismic completed
• Block 12W well planning progressed

13th March 2008

2007 financial results

13th March 2008

2007 financial highlights

• Operating profit
• Operating cashflow
• Production
• Reserves

Up 35% to $219 million (2006 - $163 million) Up 10% to $270 million (2006 - $245 million) Up 39% to 212 mmboe (2006 – 152 mmboe) Up 8% to 35.8 kboepd (2006 - 33.0 kboepd)

13th March 2008

Production and income statement

Average gas pricing ($/mcf) 2007 2006 Singapore $11.3 $9.4 Pakistan $3.0 $3.1 Working Interest Production (kboepd) Entitlement Interest Production (kboepd) Realised oil price ($/bbl) Realised gas price ($/mcf) Sales and other operating revenues Cost of sales Gross profit Exploration/New Business General and administration costs Operating profit Financial Items Profit before taxation Taxation Profit after tax

Prepared in accordance with IFRS

12 months to 31 Dec 2006 33.0 28.9 64.9 5.11 $m 402 (179) 223 (44) (17) 163 (6) 157 (89) 68 Highlights 12 months to 31 Dec 2007 35.8 31.5 72.3 5.60 $m 578 (268) 310 (74) (18) 219 (72) 147 (108) 39 Effective tax rate of 35% of gross profit (2006 – 40%) In line with Brent average oil price Operating costs per barrel 2007 2006 UK $18.5 $13.6 Indonesia $7.1 $6.0 Pakistan $1.8 $1.8 Includes hedging provision of $65m (pre-tax)

13th March 2008

Hedging

Accounting

• No revaluation on oil hedges required post

1st July 2008 due to embedding hedges within physical offtake contracts

• Cumulative oil provision of $39.5m will be

written back to income statement over 5 years

• No changes in underlying hedge position
• Minimal cash impact during 2007

45 24 21 2007 Post-Tax 65 Total 24 Gas 41 Oil 2007 Pre-Tax

600 HSFO (1 month average) 2007 ($/tonne) 400 300

J F D

100 200 500

J J M M A A S O N

Cap $500 1 month average Floor $245 120 Oil (6 month average) 2007 (Brent $) 80 60

J F D

20 40 100

J J M M A A S O N

Cap $100 6 month average Floor $39.90

2007 mark to market revaluation impact ($m)

13th March 2008

Cashflow

361 (116) 245 (176) 69 (26) (2) 41 Cash flow from operations Taxation Operating cash flow Capital expenditure Net cashflow Opening net cash/(debt) Net cash from financing Closing net cash/(debt)

12 months to 31 Dec 2007 $m

360 (90) 270 (269) 1 41 37 79

Operating Cashflow Capex MEP North Sea 104 24 West Africa 32 13 270 59 97 269 Asia 109 101 Regional split ($m)

12 months to 31 Dec 2006 $m

2007 2006 Development Pre-licence 22 90 Acquisitions 17 89 269 67 8 176 Exploration 47 105

13th March 2008

Premier’s financial strength

• Strong balance sheet position ($332m cash at 31 Dec 2007)
• Pre-funded $1bn capital programme, even at much lower oil prices:

– 7-year $250m convertible issued on favourable terms in May 2007 – Undrawn bank facilities of $224m at year-end – $300m post tax annual operating cashflow at forward curve

• 2008 outlook:

– Target exploration spend of $100m (pre-tax) – Planned Development spend of $150-$175m

13th March 2008

Production and development update

13th March 2008 40000

Production (Working Interest) (boepd)

30000 25000 10000 5000 2005 2006 2007 15000 20000 35000

Asia Pakistan West Africa North Sea

Producing fields update

North Sea

• Production run rates are touching 12,000 boepd
• Strong production from Scott and Kyle
• Scott infill programme expected Q4 2008
• 2008 full year infill drilling campaign on Wytch Farm
• Suspension of production on Fife

West Africa

• Two new wells and three workovers on Chinguetti planned

for 2008 Pakistan

• Production run rates are touching 15,000 boepd
• Badhra field came on stream in January
• Increased production from Zamzama, Kadanwari and

Qadirpur

• An appraisal well on Badhra is currently being drilled, and

testing of the Qadirpur Deep Well is expected in June Asia

• Production run rates are touching 12,000 boepd
• Singapore gas demand remained strong
• Extensive drilling campaign planned for 2009/10 on Anoa

13th March 2008

Field development schedule

2008 2009 2010 2011

Gajah Baru Alur Siwah Chim Sáo / Dua Frøy

Project Initiation Concept Selection Project Sanction First Production Study Design Execute Operated Non-operated

13th March 2008

Asia – Indonesia - Gajah Baru

Gas contract update

• HoA for a DCQ of 90 bbtud to Sembgas was

signed in November 2007

• HoA’s for up to 40 bbtud to Batam for power

generation were signed in December 2007

• Fully termed GSA was initialled with Sembgas

at the end of February 2008

• Gas transportation agreements (GTAs) under

negotiation with the West Natuna Transportation System Gajah Baru development update

• A draft POD has been submitted to BPMigas

for approval

• The tendering process for the EPCI contract is

about to commence

• Formal project sanction now expected in mid

2008 after GTA completion

• First gas targeted for Q4 2010

13th March 2008

Asia – Indonesia - North Sumatra Block A

• GSA signed with PIM for the sale of 110 Bbtud in December 2007
• Plan of Development has been approved by BPMigas
• Engineering/subsurface work underway to optimise development
• Negotiations ongoing with:
• ExxonMobil for Gas Transportation Arrangements
• PLN for an additional gas sale to their IPP
• BP Migas for PSC extension expected imminently
• Project sanction is anticipated mid year, first gas Q4 2010
• Re-activation of wells and production at Tualang and Lee Tabue planned for 2008
• Conceptual studies are underway re Kuala Langsa development

13th March 2008

Asia – Vietnam - Block 12W

• RAR has been approved. Outline

Development Plan has been submitted. Final Development Plan approval expected mid year

• First production from Phase 1 Development is

targeted for mid 2010 from Chim Sáo

• Chim Sáo North appraisal well expected to

spud imminently

• Tie-back possibilities of field extensions and

adjacent exploration prospects are being evaluated

• 59 mmbbls of oil and 16 mmboe of gas over

Chim Sáo and Dua

• Project team in place in Ho Chi Minh
• Design FEED competitions for floating FPSO

and fixed facilities ongoing

• FPSO supplier candidates are Modec, EOCP,

Viking and SBM

• Discussions ongoing with PV Gas

13th March 2008

North Sea – Norway - Frøy

• EPCIC contract has been tendered
• Availability of a suitable JUDPSO is limited, installation planned for autumn 2011
• Project costs have risen in line with industry cost environment
• Preferred supplier identified and negotiations are proceeding
• Seeking cost reductions/optimisation prior to PDO submission later in the year
• Break even at ~$60/bbl, 20% return at $90/bbl oil price

13th March 2008

Illustrative project metrics

30 8 4 7 Opex/boe $ 50.0 31.875* 41.667 28.67 Premier Equity Interest % 90 340 210 180 Net Capex 2008-11 $m 15 Norway: Frøy (Lease case) 14 Vietnam: Chim Sáo/Dua (Lease case) 11 Indonesia: North Sumatra Block A 7 Indonesia: GSA2 Net Peak Working Interest Production kboepd

*Equity level assumes Petrovietnam exercise their right to back in to the project

Illustrative project metrics will be refined as tender processes are completed and partner/Government approvals are received

13th March 2008

Production forecast

20

(kboepd Net)

10 40 30 50 2008 70 90

Frøy Gajah Baru, Chim Sáo/Dua, Alur Siwah Existing producing fields

60 80 2009 2010 2011 2012

13th March 2008

100

($ Millions Net)

50 200 150 250 2008 450

Frøy Gajah Baru, Chim Sáo/Dua, Alur Siwah Existing producing fields

300 2009 2010 2011 2012 350

Development capex forecast

400

13th March 2008

4.0

($ per boe)

0.0 2.0 8.0 6.0 10.0 2008 12.0 2009 2010 2011 2012

Opex forecast per boe

13th March 2008

North Sea

• Bream
• Further Scott Infill
• Wytch Farm Beacon
• Wytch Farm EOR
• Kyle K16
• Fife Redevelopment

West Africa

• Chinguetti Phase 3
• Banda
• Tiof

Middle East/Pakistan

• Qadirpur Deep

Asia

• NSBA Oil
• Kuala Langsa
• Swan Gas

Other contingent resource projects

13th March 2008

End 2007 2P reserves and contingent resources

369.4 20.4 62.7 205.5 80.8 Total Reserves & Contingent Resources 2C Contingent Resources 2P Reserves 44.5 2.3 18.4 23.8 Development pending 61.2 17.1 3.7 11.9 28.5 Un-clarified or

• n hold

52.2 50.9 1.3 Development not currently viable 157.9 17.1 6.0 81.2 53.6 Total Contingent Resources 56.7 2.1 5.9 48.7 MEP 124.3 62.9 24.9 36.5 Asia 211.5 3.3 27.2 Total Reserves 68.9 1.3 2.7 Justified for development 34.7 1.0 2.8 Approved for development 107.9 1.0 21.7 On production Total West Africa North Sea

These figures include no provision for prospective resources

13th March 2008

Year end 2006 vs 2007 reserves and resources

100

2P Reserves and Contingent Resources (mmboe)

50 200 150 250

2006

350 400

Contingent Resources Acquisitions Additions and Revisions Production Reserves Production 2007

300

Additions and Revisions Acquisitions

13th March 2008

Exploration update

13th March 2008 North Sea

• Bream appraisal – Norway - 20%
• Sparrow – UK - 25%

West Africa

• Banda appraisal – Mauritania - 4.62%
• Frida – Congo - 58.5%

Middle East/Pakistan

• Al Amir 2 – Egypt - 10%
• Al Amir 3 – Egypt - 10%
• Badhra deep – Pakistan - 6%
• Qadirpur deep 2 – Pakistan - 4.75%

Asia

• Chim Sáo appraisal – Vietnam - 37.5%
• Chim Ung – Vietnam - 37.5%
• Chim Công – Vietnam - 37.5%
• Follow on prospect – Vietnam - 37.5%
• Monte Cristo – Philippines - 21%

2008 exploration and appraisal drilling

13th March 2008

Bream 18/10-1 Brisling Letfetti Alsvid Gardrofa 18/10-1 ext PL407 PL406

North Sea – Norway - Bream appraisal

Bream update

• Undeveloped Brent age oil field discovered 1971
• Appraisal well and contingent test planned June 2008
• Operator estimate of 80 mmbbls
• Premier 20% equity share

13th March 2008

West Africa – Congo - Marine Block IX - Frida

Block Marine IX – Frida update

• Farmout nearing completion – current interest 58.5%
• Well planned Q4 2008/Q1 2009
• 260 mmbbls gross prospect size
• Cretaceous target (1 in 7 commercial success rate)
• Water depth 580m

2 km

Frida

13th March 2008

Asia – Vietnam – initial 2008 programme

Block 12W

• 37.5% operated equity
• Jackup Wilboss on location 11th March
• Chim Sáo Appraisal
• Chim Ung North
• Chim Công
• Up to 2 year programme

13th March 2008

Chim Sáo Chim Ung Chim Công

Block 12W

• 37.5% operated equity
• Block 12W program targeting 200 mmbbls

Asia – Vietnam – Chim Sáo

13th March 2008

Asia – Vietnam – Chim Ung

Chim Sáo Chim Ung Chim Công

Block 12W

• 37.5% operated equity
• Block 12W program targeting 200 mmbbls

Top Dua M Dua MDS 5 12W-CU-1X Proposed well location Chim Ung (Falcon) Area Depth Map Chim Boi Chim Se Chim Ung

13th March 2008

Chim Sáo Chim Ung Chim Công

12W-CC-1X Proposed well location

Chim Công Chim En

Asia – Vietnam – Chim Công

Block 12W

• 37.5% operated equity
• Block 12W program targeting 200 mmbbls

12W-CC-1X Chim Công Chim En Chim Công / Chim En Top MDS-5 Depth Map

13th March 2008

2009 exploration drilling

North Sea

• Gardrofa

(Norway) West Africa

• Ida

(Congo) Asia

• Block 07/03 drilling

(Vietnam)

• Tuna drilling

(Indonesia)

• Buton drilling

(Indonesia)

• North Sumatra Block A drilling

(Indonesia)

13th March 2008

West Africa – Congo - Marine Block IX - Ida

Block Marine IX – Ida update

• Farmout nearing completion – current interest 58.5%
• Operated well planned Q4 2008/Q1 2009
• 320 mmbbls gross prospect size
• Cretaceous target (1 in 7 commercial success rate)
• Water depth 580m

2 km

Ida

13th March 2008

Sidewinder North Sidewinder

Block Marine IX – Sidewinder

• Joint study over Tertiary prospects completed with

SNPC in 2007

• Tertiary targets (1 in 3 commercial success rate)

West Africa – Congo - Sidewinder

13th March 2008 Matang prospect Alur Siwah field

20 km

Structure Map showing the main carbonate build-ups on structural highs in the block North Sumatra Block ‘A’ Exploration

• 41.67% equity interest
• 2 wells planned 2009
• 9 leads identified
• Unrisked potential of 1.9 tcf gross

Asia – Indonesia - North Sumatra Block A

13th March 2008

Asia – Indonesia - Tuna

Tuna

• 65% operated interest
• Farm out planned
• First wells expected in 2009
• Unrisked potential of ~1.5bn barrels gross
• Possible logistical synergies with planned 2009 Vietnam

campaign

NW SE Gajah Laut

10km

13th March 2008

Asia – Vietnam - 2009 programme

Block 07/03

• 45% operated interest
• 2 wells planned 2009
• 21 leads identified
• Unrisked potential of >3bn barrels gross
• Rig identified and negotiations at an advanced stage
• Planning to farm down interest

13th March 2008

5 km NW

Asia – Vietnam - 2009 programme - Silver Sillago

Silver Sillago

• 45% operated interest
• Well candidate for 2009
• Potential of 300 mmbbls

Silver Sillago SE

13th March 2008

Asia – Vietnam - 2009 programme - Blue Marlin

W Blue Marlin E Blue Marlin

• 45% operated interest
• Well candidate for 2009
• Potential of 500 mmboe

13th March 2008

Asia – Vietnam - Block 104-109/05

• Licence awarded February 2008
• 50% operated interest
• 9,087 square kilometres
• 2006 Technical Cooperation agreement with Petrovietnam identified 21

leads

• Water depths of 20-60 metres
• Firm commitment of seismic acquisition and one exploration well
• Carried through first exploration well by MOECO (50% interest)

13th March 2008

Exploration drilling schedule

2008 MAR Contingent wells High impact wells Firm wells

M/East & Pakistan

Egypt : NW Gemsa Al Amir SE-1X Gemsa Well-2

West Africa

Congo: Marine IX Frida Ida Mauritania : PSC-A Banda Appraisal

Asia

Indonesia : Natuna Sea Block A Tuna Buton North Sumatra Block A Vietnam : Block 12W Chim Sáo North (Blackbird) Chim Ung North (Falcon) Chim Công (Peacock) Block 12W Prospect Block 07/03 Philippines : Ragay Gulf Monte Cristo

North Sea

UK : P1181 Sparrow (23/22b) Norway : PL407 Bream Appraisal PL406 Gardrofa APR JUN MAY JUL AUG SEP 2009 1H OCT DEC NOV 2009 2H

13th March 2008

Summary

• Major progress in 2007:

– Delivered value through acquisitions – Signed gas sales agreements – Advanced development projects – Added significant reserves and resources

• On target to deliver 50,000 boepd by end 2010

– Potential to achieve 80,000 boepd in 2012

• High quality forward exploration programme within disciplined

spend

– Focused on Vietnam and Congo

• Seeking further core area acquisitions

– Including via JV with EIIC

• Funding and people in place

13th March 2008 www.premier-oil.com

13th March 2008