2001 I I NTERIM NTERIM R R ESULTS ESULTS P P RESENTATION 2001 - - PowerPoint PPT Presentation

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2001 I I NTERIM NTERIM R R ESULTS ESULTS P P RESENTATION 2001 RESENTATION 17th September 2001 2001 Interim Results Presentation PRESENTATION Key Issues Charles Jamieson Results John van der Welle Operations Richard Liddell

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2001 2001 I INTERIM

NTERIM R

RESULTS

ESULTS P

PRESENTATION

RESENTATION

17th September 2001

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2001 Interim Results Presentation

Make a Difference

  • Key Issues
  • Results
  • Operations
  • Summary

PRESENTATION

Charles Jamieson John van der Welle Richard Liddell Charles Jamieson

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2001 Interim Results Presentation

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RESULTS OVERVIEW

  • Production 35.3 mboed (2000 : 25.9 mboed)

up 36%

  • Operating profit £44.6 million (2000 : £17.8 million) up 151%
  • Profit before tax £24.8 million (2000 : £12.6 million)

up 97%

  • Net profit £12.4 million (2000 : restated £7.9 million)

up 57%

  • Gearing 149% (2000 : 153%)

down 4%

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2001 Interim Results Presentation

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PORTFOLIO MANAGEMENT - SUMMARY

  • Restructuring of Pakistan business

– New joint venture with Kufpec – Increased production, reduced capex

  • Disposal of non-core Indonesian interest (Pangkah)

– Raises cash – Reduced future capex

  • Proceeds of $135 million realised
  • Pro forma gearing reduced by 42% to 107%
  • Reduction in future capex of $85 million
  • Exceptional accounting gain of £35 million
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2001 Interim Results Presentation

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KEY ISSUES FOR INVESTORS

  • Shareholder structure
  • Production
  • Portfolio management / cash flow / gearing
  • Commercialisation of gas reserves
  • Exploration and replenishment of portfolio
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2001 Interim Results Presentation

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SHAREHOLDER STRUCTURE

“ It is widely acknowledged by analysts and other commentators that Premier’s share price does not adequately reflect the value of our oil and gas reserves or the potential of the business. I said in my interim statement to you in September that the Board and alliance shareholders Amerada Hess and Petronas were aware of the perceived depressive effect of the 50% alliance shareholding on the share price and were working together to find a way forward for the best interests of all shareholders. I remain confident that we can find a suitable way.”

Sir David John

Annual Report 2000

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2001 Interim Results Presentation

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PRODUCTION IN 2001

  • Forecast physical production for 2001 revised

to 40,000 boepd from 50,000 boepd:

– 3,500 boepd covered by Yetagun and WNG take or pay – 1,700 boepd re: delayed Kyle production – 1,700 boepd re: changed Chestnut arrangements (Brovig - Amerada Hess) – 1,700 boepd re: Fife, Fergus and Flora fields partially covered by business interruption insurance – 1,400 boepd other production losses in UK and slower ramp up of WNG

10000 20000 30000 40000 50000 60000

2001 Net Boepd

Shortfall in Production Fife, Fergus, Flora Production Delay Kyle Chestnut ToP due 2002 Forecast Physical Production

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2001 Interim Results Presentation

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PORTFOLIO MANAGEMENT - DETAILS

INDONESIA

  • Pangkah

– Sale to Amerada Hess for $30m

PAKISTAN

  • Shell

– Termination of joint venture – Acquisition of 49.9% of PSP shares – Reduction in interest in Bhit to 12% (from 20%)

  • Kufpec

– New 50/50 joint venture with Kufpec – Consideration $105m + 15.8% Kadanwari

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2001 Interim Results Presentation

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Before Movement After

Qadirpur 4.75%

  • 4.75%

Kadanwari 7.89% +7.89% 15.79% Zamzama – pre commerciality 11.88%

  • 11.88%

Zamzama – post commerciality 9.38%

  • 9.38%

Bhit 20%

  • 14%

6% Cash

  • +$105m

$105m

PREMIER INTEREST IN PAKISTAN

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2001 Interim Results Presentation

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COMMERCIALISATION OF GAS RESERVES

  • Pakistan

– Zamzama - allocation of 350 mmscfd (gross)

  • negotiations concluded by end of year
  • Indonesia

– WNG - negotiations in progress for sales to Malaysia

  • signature targeted first quarter 2002
  • Indonesia

– Pangkah - sold for $30 million

Indonesian and Pakistan reserves at or near commercialisation represent ~100 million boe, 95% of unbooked reserves

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2001 Interim Results Presentation

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EXPLORATION AND REPLENISHMENT OF PORTFOLIO

  • 2001 programme

– Indonesia - Pangkah programme - Q1 – Pakistan - Kadanwari West - Q3

  • Zarghun North - Q4

– Significant seismic programmes in Area IV in Indonesia and Dumbar in Pakistan

  • Planned 2002 exploration programme

– Pakistan - 2 Dumbar wells – Indonesia - Natuna Block A Area IV oil well – Myanmar - MF1 well – Guinea Bissau - well – Kirthar (near Bhit) - well

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2001 Interim Results Presentation

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Figure 00

This is an under explored area

  • only 10 wells have been

drilled offshore Guinea Bissau None of these wells has tested the play type being evaluated by Premier Most wells recorded live

  • il shows, one tested oil

If successful a number of additional prospects are present on the acreage Exploration success would provide the opportunity to establish a new core area

GUINEA-BISSAU

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2001 Interim Results Presentation

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RESULTS

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2001 Interim Results Presentation

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RESULTS OVERVIEW AND PORTFOLIO MANAGEMENT

  • Production 35.3 mboed (2000 : 25.9 mboed)

up 36%

  • Operating profit £44.6 million (2000 : £17.8 million)

up 150%

  • Profit before tax £24.8 million (2000 : £12.6 million)

up 97%

  • Net profit £12.4 million (2000 : restated £7.9 million)

up 57%

  • Gearing 149% (2000 : 153%)

down 4%

  • Impact of take or pay accounting - SORP
  • Financial impact of portfolio management
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2001 Interim Results Presentation

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PROFIT & LOSS ACCOUNT

Production (mboepd) Realised oil price ($/bbl) Realised gas price ($/mcf) Turnover less: share of JVs turnover Group turnover Operating costs Amortisation Gross profit Administration costs Operating profit / (loss) Operating profit in JVs Total operating profit / (loss) Net interest Exchange gain Profit / (loss) before tax Taxation Profit / (loss) after tax Earnings per share - basic and diluted (pence)

* restatement is for FRS19 (Deferred tax) adopted in 2000

2000 (restated)*

25.9 21.38 2.16 54 (5) 49 (12) (17) 20 (4) 16 2 18 (8) 3 13 (5) 8 0.5

£m 2001

35.3 26.71 2.19 94 (19) 75 (17) (19) 39 (4) 35 10 45 (21) 1 25 (13) 12 0.8

£m

Excludes Yetagun ToP (SORP) 1999 hedging - no impact in 2001 Higher production and higher prices Unit opex (incl JV’s) £3.96/boe - up 4% Unit DDA (incl JV’s) £3.30/boe - down 9% due to lower cost gas production Increased contributions from Myanmar and Pakistan Higher debt and cessation

  • f capitalisation on

Yetagun and WNG Higher UKCT due to higher revenues, plus

  • nset of Yetagun

production

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2001 Interim Results Presentation

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CASHFLOW

Net cashflow from operations Net interest Taxation Operating cashflow (after interest and tax) Capital expenditure Disposals (net) Net cashflow Exchange/other Movement in net debt Yetagun interest accrued Opening net debt Closing net debt 36 (14) (11) 11 (29)

  • (18)

(17) (35)

  • (323)

(358) 25 (11) (10) 4 (64)

  • (60)

(15) (75)

  • (171)

(246)

Much reduced capital expenditure - completion of major developments Increase in line with higher net revenues

Exploration Fields Other Group £m 5 20 4 29 JV £m 3 5

  • 8

Total £m 8 25 4 37

2001 (As reported) £m 2001 (Incl. JVs) £m 2000 (As reported) £m

62 (14) (11) 37 (37)

  • (20)

(20) (7) (445) (472)

Mainly exchange losses

  • n $ debt
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BALANCE SHEET

2001 (incl. JVs) £m

Cash Debt Net debt Shareholders’ funds Gearing ratio 61 533 472 317 149

2001 (As reported) £m

36 391 355 NA NA % 100 346 246 NA NA

2000 (As restated) £m

Gearing well within debt covenants

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IMPACT OF SORP ON TAKE OR PAY - YETAGUN

Deferred turnover Reported net profit Deferred profit Profit including deferred profit

2001 HY £m

8.4 12.4 5.3 17.7 11.8 6.1 8.9 15.0

2000 FY £m

Cumulative deferred profit of £14.2 million equivalent to 77%

  • f reported net profit
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2001 Interim Results Presentation

Make a Difference 30/6 Pangkah Sale Pakistan Restructure Proforma 30/6 £m £m £m £m Fixed assets 696 (21) (39) 636 Net current assets 47 21 73 141 Long term creditors (426)

  • 1

(425) & provisions Net assets 317

  • 35

352 Cash 36 131 Net debt 472 377 Gearing 149% 107%

FINANCIAL IMPACT OF PORTFOLIO MANAGEMENT

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2001 Interim Results Presentation

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OPERATIONS

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OPERATIONS HIGHLIGHTS

  • West Natuna Gas project delivery
  • Rapid response to operations challenges
  • Premier delivering operations performance
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2001 Interim Results Presentation

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WEST NATUNA GAS PROJECT

  • AGX Platform installed May 2001
  • On time and under budget
  • Development cost $265m (gross)
  • Production operations established

The AGX main deck being lifted from the transportation barge onto the AGX Jacket.

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RAPID RESPONSE TO OPERATIONS CHALLENGES

Assets under management – rapid acquisition of development and production capability Proportion of production from Premier operations - Premier in control

  • Creativity delivers world class developments
  • Production operator track record established

100 200 300 400 500 600 700 800 900 1996 1997 1998 1999 2000

$mm Gross

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2000 2001 2002 2003 2004 2005

Non Operated Operated

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2001 Interim Results Presentation

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DELIVERING OPERATIONS PERFORMANCE

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2001 Interim Results Presentation

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SUMMARY

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SUMMARY

2001 Objective Delivery Improved financial returns

– higher production up 36% – increased profits up £4.6m

Strengthened balance sheet

– improved cash flow up £42m – reduced gearing down 42% after portfolio management

Commercialisation of reserves WNG 2nd sale well advanced Zamzama GSA expected Portfolio management Pakistan restructuring Pangkah sale New venture activities Guinea-Bissau

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2001 2001 I INTERIM

NTERIM R

RESULTS

ESULTS P

PRESENTATION

RESENTATION

17th September 2001

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APPENDIX

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Premier interests Oil fields Gas fields

Scotland England Wales Eire Northern Ireland

Wareham Scott, Rob Roy, Ivanhoe, Hamish, Telford 15/21a & 15/21b Flora Block 31/26a, 31/26c Fergus 39/2 Fife 31/26a Galahad, Mordred 48/12a & 48/13b Wytch Farm Kyle Chestnut

In Production:

  • Kyle
  • Wytch farm
  • Fife Area
  • 15/21 Area including Scott
  • Galahad
  • Chestnut EWT

Potential Developments:

  • Chestnut full field
  • Perth
  • Ettrick

UKNWE

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PAKISTAN

  • US$ revenue generating business with significant gas upside
  • Nearing commercialisation of Zamzama

Premier interests Gas fields Kadanwari Ghauspur Qadirpur Dadhar Bolan Kirthar Dadu KNS Dumbar Zarghun Discovery Bhit Field Badhra Discovery

Pakistan

Zamzama Discovery

Pakistan

Significant gas reserves Three gas fields on production - 4000 boepd One field in development

Kadanwari

Miano tie-in extends field life

Qadirpur

Increased production capacity to 340 mmscfd Agreed development for 400 mmscfd

Bhit and Badhra

In development First gas end 2002

Zamzama

Reserves ~2tcf EWT in production from March 2001 Full field GSA negotiations nearing completion

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Thailand Myanmar

Wang Noi Surat Thani Khanom Ratchaburi

M13 M12

Yadana

M14

Mergui YANGON PHUKET

Andaman Sea

BANGKOK

Gulf of Thailand

Yetagun

  • 1990 - Premier takes M12/13

licences

  • 1992 - Gas discovered
  • 1997 - GSA signed with PTT
  • 1997 - Premier takes operatorship
  • May 2000 - First gas

MYANMAR

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INDONESIA

Malaysia

Port Dickson Kerteh

Dumai

SINGAPORE

Port Klang

Duyong

West Natuna

October 1996 - Premier purchased Chevron's 66.7% interest in Block A December 1996 - Premier took over Discovery Petroleum NL thereby gaining an 18.75% interest in Kakap January 1999 - Signed Gas Sales Agreement with Singapore January 2001 - First gas into Singapore July 2001 - Start date of main gas contract 1Q 2002 - target for signature of 2nd gas sale

Kuala Lumpur