13 th March 2008 2007 Preliminary 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. 13 th 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 13 th March 2008
Strategy and highlights 13 th March 2008
2007 highlights • Delivered value through acquisitions • Signed gas sales agreements • Advanced development projects • Added significant reserves and resources 13 th March 2008
Strategy Strategy Progress • Targeting • On target to deliver production growth 50,000 boepd by to 50,000 bopd by end 2010 with end 2010 potential to achieve 80,000 boepd in • High impact 2012 exploration programme within • 13 exploration and disciplined spend appraisal wells planned for 2008, • Acquisition focus focused on Vietnam on core areas and Congo • Addressing post • People, funding and 2010 growth capability in place to execute planned projects 13 th 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 13 th 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 13 th March 2008
2007 financial results 13 th March 2008
2007 financial highlights Up 8% to 35.8 kboepd • Production (2006 - 33.0 kboepd) Up 39% to 212 mmboe • Reserves (2006 – 152 mmboe) Up 35% to $219 million • Operating profit (2006 - $163 million) Up 10% to $270 million • Operating cashflow (2006 - $245 million) 13 th March 2008
Production and income statement 12 months to 12 months to 31 Dec 2007 31 Dec 2006 Highlights In line with Brent average oil price Working Interest Production (kboepd) 35.8 33.0 Entitlement Interest Production (kboepd) 31.5 28.9 Realised oil price ($/bbl) 72.3 64.9 Average gas pricing ($/mcf) Realised gas price ($/mcf) 5.60 5.11 2007 2006 Singapore $11.3 $9.4 Pakistan $3.0 $3.1 $m $m Sales and other operating revenues 578 402 Operating costs per barrel Cost of sales (268) (179) 2007 2006 Gross profit 310 223 UK $18.5 $13.6 Exploration/New Business (74) (44) Indonesia $7.1 $6.0 General and administration costs (18) (17) Pakistan $1.8 $1.8 Operating profit 219 163 Financial Items (72) (6) Includes hedging provision of $65m (pre-tax) Profit before taxation 147 157 Taxation (108) (89) Effective tax rate of 35% of gross profit (2006 – 40%) Profit after tax 39 68 Prepared in accordance with IFRS 13 th March 2008
Hedging • No changes in underlying hedge position • Minimal cash impact during 2007 HSFO (1 month average) 2007 Oil (6 month average) 2007 Cap $500 Cap $100 ($/tonne) (Brent $) 1 month average 6 month average Floor $245 Floor $39.90 600 120 500 100 400 80 300 60 200 40 100 20 0 0 J F M A M J J A S O N D J F M A M J J A S O N D Accounting 2007 mark to market revaluation impact ($m) • No revaluation on oil hedges required post 2007 Pre-Tax 2007 Post-Tax 1st July 2008 due to embedding hedges within Oil 41 21 physical offtake contracts Gas 24 24 • Cumulative oil provision of $39.5m will be Total 65 45 written back to income statement over 5 years 13 th March 2008
Cashflow 12 months to 12 months to 31 Dec 2007 31 Dec 2006 Regional split ($m) $m $m Operating Cashflow Capex 360 361 Cash flow from operations North Sea 97 104 (90) (116) Taxation Asia 101 109 270 245 MEP 59 24 Operating cash flow West Africa 13 32 (269) (176) Capital expenditure 270 269 1 69 Net cashflow 2007 2006 41 (26) Opening net cash/(debt) Pre-licence 8 22 37 (2) Net cash from financing Exploration 105 47 79 41 Closing net cash/(debt) Development 67 90 Acquisitions 89 17 269 176 13 th 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 13 th March 2008
Production and development update 13 th March 2008
Producing fields update Production (Working Interest) North Sea Asia • Production run rates are touching 12,000 boepd (boepd) Pakistan • Strong production from Scott and Kyle West Africa North Sea • Scott infill programme expected Q4 2008 • 2008 full year infill drilling campaign on Wytch Farm 40000 • Suspension of production on Fife 35000 West Africa • Two new wells and three workovers on Chinguetti planned 30000 for 2008 25000 Pakistan • Production run rates are touching 15,000 boepd 20000 • Badhra field came on stream in January • Increased production from Zamzama, Kadanwari and Qadirpur 15000 • An appraisal well on Badhra is currently being drilled, and testing of the Qadirpur Deep Well is expected in June 10000 Asia 5000 • Production run rates are touching 12,000 boepd • Singapore gas demand remained strong 0 • Extensive drilling campaign planned for 2009/10 on Anoa 2005 2006 2007 13 th March 2008
Field development schedule 2008 2009 2010 2011 Gajah Baru Alur Siwah Chim Sáo / Dua Frøy Study Design Execute Operated Project Concept Project First Non-operated Initiation Selection Sanction Production 13 th 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 13 th 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 13 th 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 13 th 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 13 th March 2008
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