2001 P P RELIMINARY RELIMINARY R R ESULTS ESULTS P P RESENTATION - - PowerPoint PPT Presentation

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2001 P P RELIMINARY RELIMINARY R R ESULTS ESULTS P P RESENTATION 2001 RESENTATION 13th March 2002 2001 Preliminary Results Presentation PRESENTATION Sir David John Introduction John van der Welle Results Richard Liddell

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2001 2001 P PRELIMINARY

RELIMINARY R

RESULTS

ESULTS P

PRESENTATION

RESENTATION

13th March 2002

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SLIDE 2

2001 Preliminary Results Presentation

Make a Difference

  • Introduction
  • Results
  • Operations
  • Summary and Outlook

PRESENTATION

Sir David John John van der Welle Richard Liddell Charles Jamieson

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SLIDE 3

2001 Preliminary Results Presentation

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RESULTS

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2001 Preliminary Results Presentation

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RESULTS OVERVIEW

  • Production 40.9 mboed (2000: 27.3 mboed)

up 50%

  • Turnover £213.8m (2000: £115.7m)

up 85%

  • Operating profit(1) £88.6m (2000: £35.2m)

up 152%

  • Proforma(2) profit after tax £34.5m (2000: £14.2m)

up 143%

  • Gearing 122% (2000: 153%)

down 31%

  • Gearing including sales proceeds 113%

down 40%

(1) Before exceptional items (2) Proforma for Take or Pay

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2001 Preliminary 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 and royalties Amortisation Gross profit Other income Administration costs Operating profit Operating profit in JVs Total operating profit Net interest and exchange gains Profit / (loss) before tax Taxation Profit / (loss) after tax Earnings per share - basic and diluted (pence)

2000

27.3 21.6 2.64 115 (16) 99 (33) (32) 34 2 (7) 29 6 35 (18) 17 (11) 6 0.4

£m 2001

40.9 25.2 2.97 214 (47) 167 (53) (44) 70

  • (7)

63 26 89 (40) 49 (29) 20 1.3

£m

Working interest volume 1999 hedging - no impact in 2001 Higher production and higher realised prices Unit opex (incl JV’s) £3.65/boe - down 11% Unit DDA (incl JV’s) £3.18/boe - down 7% due to lower cost gas production Increased contributions from Myanmar and Pakistan Higher debt and cessation

  • f capitalisation on

Yetagun and WNG Higher taxes due to higher profits, including higher

  • verseas deferred tax
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2001 Preliminary Results Presentation

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PROFORMA NET PROFIT - TAKE OR PAY

Reported profit after tax Deferred net profits on TOP Proforma net profit 2001 £m 20.3 14.2 34.5 6.1 8.1 14.2 2000 £m

  • Cumulative deferred profits are 85% of reported profits (2000-01)
  • Proforma profits are a better measure of underlying profitability
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2001 Preliminary Results Presentation

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2001 £m

EXCEPTIONAL ITEMS

  • Realised gain on Pakistan (cash received) cf book provisions in

balance sheet (no impact on asset economic value)

42 (18) (8) (16) – Gain on Pakistan joint venture restructuring Exceptional provisions:

  • Write-off Albania
  • Mark AWE shares to market value
  • FRS11 write-downs

Net exceptional items

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2001 Preliminary Results Presentation

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CASHFLOW

Net cashflow from operations Net interest Taxation Operating cashflow (after interest and tax) Capital expenditure Disposals Net cashflow Exchange/other Movement in net debt Yetagun interest accrued Opening net debt Closing net debt 111 (30) (23) 58 (73) 73 58 (7) 51

  • (323)

(272) 52 (17) (17) 18 (160)

  • (142)

(27) (169) (8) (268) (445)

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

Excl JV JV Total £m £m £m Exploration 14 6 20 Fields 48 3 51 AWE 2

  • 2

Other 7

  • 7

JV funding 2 (2)

  • 73

7 80

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

Mainly exchange losses

  • n $ debt

152 (34) (23) 95 (80) 73 88 (13) 75 (9) (445) (379)

2001 (Incl. JVs) £m

  • Operating cashflow covers exploration 4.75x (2000: 0.8x)
  • Interest cover now 4.4x (2000: 3.1x)
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2001 Preliminary Results Presentation

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BALANCE SHEET

2000 (Incl JVs)

  • Gearing 113% after including 2001 sales proceeds of £28

million now received

30 475 445 290 153 Cash Debt Net debt Shareholder’s funds Gearing ratio % % 2001 (Incl JVs) 97 476 379 312 122 2001 (As reported) 84 356 272 312 NA

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2001 Preliminary Results Presentation

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OPERATIONS

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2001 Preliminary Results Presentation

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OPERATIONS

  • 2001 Performance Delivery
  • Operations Highlights
  • Production
  • Reserves
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2001 Preliminary Results Presentation

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2001 PERFORMANCE DELIVERY

Commercialising discoveries

  • Zamzama development plan & GSA
  • Qadirpur upgrade and GSA
  • WNG 2nd sale development plan

Creating new assets

  • Dumbar EIA and seismic
  • Zarghun North well
  • Guinea Bissau acreage

Developing assets

  • WNG platform/pipeline on time/budget
  • Yetagun upgrade advanced
  • Kyle onstream

Improving operations performance

  • Reducing cost base
  • HSE excellence
  • Business improvement

Premier achieving in all phases of the business cycle

Cash generated

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2001 Preliminary Results Presentation

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DEVELOPING ASSETS

World class, on time and budget, operationally fit for purpose

INDONESIA

  • New West Natuna gas platform installed

May 2001

  • Commissioned ready for contract gas

deliveries July

  • All nominations to date successfully delivered

MYANMAR

  • First full operational year for Yetagun
  • All nominations to date successfully delivered
  • Work on Phase 2 on schedule
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2001 Preliminary Results Presentation

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COMMERCIALISING DISCOVERIES

PAKISTAN - ZAMZAMA

  • EWT commenced March 2001
  • Production expectations exceeded - 90 mmscfd
  • Full field gas sales agreement signed
  • Full field development commenced

PAKISTAN - QADIRPUR

  • Qadirpur expansion to 400 mmscfd
  • Further increase to 500 mmscfd in prospect

INDONESIA

  • Block A reserves commercialisation/development
  • Sale to Malaysia in negotiation

– all significant outstanding points agreed – target to have GSA signed this year

  • Development plans advanced

Malaysia

Kuala Lumpur

Port Dickson Kerteh Port Klang Duyong

Malaysia

Kuala Lumpur

Port Dickson Kerteh Port Klang Duyong
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2001 Preliminary Results Presentation

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CREATING NEW ASSETS

PAKISTAN - DUMBAR EXPLORATION LICENSE

  • National Park EIA approved
  • Seismic operations completed
  • Drilling programme on target

PAKISTAN - BOLAN EXPLORATION LICENSE

  • Zarghun North drilling in progress

WEST AFRICA - GUINEA BISSAU

  • Secured exploration acreage
  • Drilling in progress
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2001 Preliminary Results Presentation

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PRODUCTION OUTLOOK

  • Achieved 40,000 boepd target as indicated in interim announcements
  • Production in early 2002 over 49,000 boepd
  • 100% availability of production facilities
  • Production set to grow over the next 3 years

Working Interest Production

10,000 20,000 30,000 40,000 50,000 60,000 70,000 2001 2002 2003 2004

boepd

Indonesia Myanmar Pakistan UK

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2001 Preliminary Results Presentation

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RESERVES MOVEMENTS

B l

  • c

k A P a n g k a h Zamzama Chestnut

Pakistan 61 mmboe UK 45 mmboe Other 17 mmboe Indonesia 188 mmboe Myanmar 177 mmboe Unbooked 114 mmboe

602 mmboe 517 mmboe

Unbooked 48 mmboe Pakistan 66 mmboe UK 40 mmboe Indonesia 186 mmboe Myanmar 177 mmboe

End 2000 End 2001

  • Reserves movement due to: Divestments (Pangkah, Bhit)

Production in 2001 Revisions (Albania) 58 15 12 85

  • Production replaced with booked discoveries by 340%
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2001 Preliminary Results Presentation

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SUMMARY AND OUTLOOK

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2001 Preliminary Results Presentation

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PERFORMANCE REVIEW 2001

2001 OBJECTIVE DELIVERY

  • 1. Improved financial returns
  • profits up 128%
  • cashflow up £76m
  • 2. Strengthened finances
  • net debt down £95m
  • gearing down 40%
  • interest cover up to 4.4x
  • 3. Operational success
  • production up 50%
  • reserve replacement 340 %
  • WNG onstream
  • 4. Portfolio management
  • Pakistan restructuring
  • Pangkah sale
  • sales proceeds received £101m
  • 5. Commercialisation of
  • booked/sold 53% b/f unbooked reserves

unbooked reserves

  • Zamzama GSA
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2001 Preliminary Results Presentation

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STRATEGIC FOCUS - 2002

  • Focus on early stage value creation

– exploration – leverage commercialisation skills – sell/farm-down projects early where possible – selectively operate development and production where adds value

  • Facilitate by restructuring with Amerada Hess/Petronas

– complex commercially/mechanically – balance interests of all shareholders – target deal in 2002

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2001 Preliminary Results Presentation

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EXPLORATION FOCUS – 2002 PROGRAMME

Q1 Q2 Q3 Q4

PAKISTAN Zarghun North well GUINEA BISSAU Sinapa-1 well - drilling PAKISTAN Benir + Dumbar wells MYANMAR MF1 well INDONESIA 1-2 Area IV wells

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2001 Preliminary Results Presentation

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  • MF1: Gas condensate play adjacent to

Yetagun infrastrucure.

  • Low risk Tertiary Delta (DHI supported)

prospect.

  • Large potential in the play, with 15-20 TCF in

untested leads and prospects.

  • MF1 will be a “ Playmaker Test”

MYANMAR EXPLORATION

Yetagun Field Yetagun North Discovery Thailand Myanmar

Wang Noi Rayong Surat Thani Khanom Ratchaburi

M13 M12

Yadana

M14

Mergui YANGON PHUKET

Andaman Sea

BANGKOK

Gulf of Thailand

Yetagun

MF-6 MF-5 MF-1

Yetagun Yetagun

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2001 Preliminary Results Presentation

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INDONESIA EXPLORATION

  • Premier’s exploration drive in the

Natuna Sea for 2002 is to test prospects in Area IV.

  • Working existing acreage hard is

central to Premiers exploration initiatives.

  • Several large, medium risk oil

prone exploration targets have been identified on seismic data acquired in 2001. 3Q Drilling.

Malaysia

Kerteh

Dumai

Singapore

Port Klang Duyong

Kuala Lumpur

Port Dickson

Kakap Kakap Natuna A Natuna A

Kelinci Sapi Kuda Nil Kus Kus

“ Area IV” “ Area IV”

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2001 Preliminary Results Presentation

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PAKISTAN EXPLORATION: 1

  • Targeting a gas play, this prospect is a large

structure adjacent to Premier’s Zarghun South gas discovery of 1998.

  • The Zarghun North-1 exploration well is currently

drilling ahead.

BOLAN EL Quetta Mach

Zarghun North Zarghun North Bolan Pakistan

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2001 Preliminary Results Presentation

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PAKISTAN EXPLORATION: 2

Dumbar Pakistan

DUMBAR SNPA SNPA SPA BPA

  • Two exploration wells will be drilled in 2002 in the

Dumbar block; Benir-2 and Dumbar-1

  • Large simple gas prone structures, proven

reservoir and trapping style to the north (Bhit and Zamzama).

  • These wells will test play, reducing risk on

adjacent, on-trend, prospects.

Badhra

Dumbar Dumbar Benir Benir

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2001 Preliminary Results Presentation

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GUINEA BISSAU EXPLORATION

  • The farm-in agreement to

Petrobank's Sinapa Permit (Block 2) signed 24/5/2001. Esperanca Permit (Blocks 4A & 5A) ratified 28/6/2001.

  • The Sinapa-1 prospect has

good reserve potential, and moderate exploration

  • risk. Additionally it is a

“ playmaker” test of the shelfal diapir play. Premier now holds 78.6% equity in the entire play in Guinea Bissau.

Esperança Esperança Sinapa Sinapa

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2001 Preliminary Results Presentation

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SUMMARY

  • 2001

– Finances - confirmation of a corner turned – Operations - continued performance delivery

  • 2002

– Restructuring - specific discussions in progress to achieve a result during 2002 – Strategic focus - creative front end - concentration on Premier’s traditional strength of exploration and creative dealmaking

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2001 2001 P PRELIMINARY

RELIMINARY R

RESULTS

ESULTS P

PRESENTATION

RESENTATION

13th March 2002

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2001 Preliminary Results Presentation

Make a Difference

APPENDIX

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2001 Preliminary Results Presentation

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COMMERCIALISATION OF UNBOOKED RESERVES

Pangkah - sold Zamzama - booked Total

Unbooked reserves - Block A, Chestnut

35 26 61 48 mmboe

  • 53% of unbooked reserves at start 2001 now commercialised