2003 Interim Results Presentation 18 September 2003 Presentation - - PowerPoint PPT Presentation

2003 Interim Results Presentation

18 September 2003

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2003 Interim Results Presentation

Introduction Results and Restructuring Operations Exploration and Business Development Summary and Outlook Sir David John John van der Welle Simon Lockett Robin Allan Charles Jamieson

Presentation

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2003 Interim Results Presentation

Results and Restructuring

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2003 Interim Results Presentation

• Record production and profits
• Producing assets performing well
• Strong operating cash generation
• Disposal of non-core assets
• Restructuring completed
• West African Fusion deal
• Exciting new exploration programme underway

Results Highlights

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2003 Interim Results Presentation

• Production 62.0 mboed (2002: 50.2 mboed)

up 24%

• Turnover £146.1m (2002: £115.2m)

up 27%

• Operating profit £81.1m (2002: £52.7m)

up 54%

• Net profit after tax £44.0m (2002: £15.3m)

up 188%

• Operating cashflow after interest, tax £97.1m (2002: £61.9m)

up 57%

• Net debt £173.4m (31 December 2002: £249.5m)

down 31%

• Gearing 49% (31 December 2002: 80%)

down 31%

Financial Highlights (pre-restructuring)

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2003 Interim Results Presentation

• Economic effective date 30 September 2002 - ignored
• Completion date 12 September 2003, i.e. post mid-year,

pre-interims announcement – key accounting date

• Results include profits etc. from assets sold to 30 June 2003 (for

interims) and 12 September 2003 (for full year)

• FRS 3 requires split of “ continuing/discontinued” operations
• But FRS 3 classes all Indonesian profits as “ continuing” despite

part sale

• Therefore additional “ ongoing operations” profits column

included to reflect retained Indonesia interest

Accounting for the Restructuring

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2003 Interim Results Presentation

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

Half year to 30 June 2002 Half year to 30 June 2003 Reported

50.2 23.38 3.19 £m 115 (28) 87 (23) (24)

• 40

(4) 36 17 53

• (16)

(1) 36 (21) 15 9.7

Working interest production Higher production, higher prices Unit opex (incl JVs) £2.16/boe - down 34% mainly due to higher low cost Far East production Unit DDA (incl JVs) £2.94/boe - down 11% due to lower charges in the UK and Indonesia JVs represent Pakistan and Myanmar (reported column), Pakistan only (ongoing column) Continuing reduction in debt Higher tax due to higher profits Using new consolidated shares

62.0 26.65 3.40 £m 146 (44) 102 (16) (26) (4) 56 (4) 52 29 81 1 (12) 1 71 (27) 44 27.2 35.3 26.36 2.98 £m 83 (11) 72 (14) (18) (4) 36 (4) 32 6 38 1 (8) 1 32 (19) 13

Half year to 30 June 2003 Ongoing

Profit & Loss Account (pre-restructuring)

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2003 Interim Results Presentation

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 91 (9) (16) 66 (35) 13 44 8 52

• (181)

(129)

Increase in line with higher net revenues Sale of AWE shares Capital expenditure - focus

• n exploration

Excl JV JV Total £m £m £m Exploration 12 4 16 Fields 8 8 16 Other 6

• 6

JV funding 9 (9)

• 35

3 38

Half year to 30 June 2003 (As reported) £m Half year to 30 June 2002 (Incl JVs) £m

127 (13) (17) 97 (38) 13 72 9 81 (4) (250) (173)

Half year to 30 June 2003 (Incl JVs) £m

• Operating cashflow covers exploration 6.1x (2002: 3.7x)
• Interest cover now 9.8x (2002: 7.2x)

80 (11) (7) 62 (37) 28 53 16 69 (5) (379) (315)

Cashflow (pre-restructuring)

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2003 Interim Results Presentation

• $670 million transfer of Myanmar and Indonesian assets
• Cancellation of Hess’ and Petronas’ shares
• Announced 16 September 2002
• Indonesia Government approval March 2003
• Myanmar Government approval June 2003
• US sanctions announced July 2003
• Completed 12 September 2003

Restructuring

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2003 Interim Results Presentation

45 (61) (16) 298 5 Cash (including JVs) Debt (including JVs) Net debt (including JVs) Shareholders’ funds Gearing ratio % (57) 214 157 (54) NA 102 (275) (173) 352 49 Proforma Balance sheet at 30 June 2003 £m Impact of restructuring £m Balance Sheet at 30 June 2003 £m %

Proforma Balance Sheet (post restructuring)

Transformed balance sheet

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2003 Interim Results Presentation

Post Restructuring Reserves & Production Strong future cash generation

Working Interest Production Premier 2P Reserves 204 mmboe (1)

Gas 82%

10,000 20,000 30,000 40,000 50,000 60,000 2003 2004 2005 2006 2007 Barrels of oil equivalent per day

Assets Sold in Restructuring Retained Assets

Notes

(1) Proforma total reserves at 30 June 2003

Oil 18%

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2003 Interim Results Presentation

OPERATIONS

Operations

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2003 Interim Results Presentation

Post Restructuring Reserves & Production

UK 15% Indonesia 41% Pakistan 31% Indonesia 2nd Gas Sale 10% Mauritania 3% Unbooked 13%

Assets Sold in Restructuring Indonesia 2nd Gas Sale Mauritania Indonesia Pakistan UK

10,000 20,000 30,000 40,000 50,000 60,000 2003 2004 2005 2006 2007 Barrels of oil equivalent per day

Working Interest Production Premier 2P Reserves 204 mmboe (1)

Notes

(1) Proforma total reserves at 30 June 2003

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2003 Interim Results Presentation

• 16,200 boepd, an expected 10% decline on the previous year
• Wytch Farm decline rate reduced through infill drilling of multilateral sidetracks

improving the gross field rate 6,000 bopd to around 50,000 bopd

• Kyle increased by a third to 6,000 boepd net to Premier due to uninterrupted

production

Production Operations - UK

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2003 Interim Results Presentation

Production Operations - Indonesia

• 22,800 boepd up from 17,500 boepd last time
• Higher than expected demand from the gas buyers in Singapore
• Two years continuous operations without an LTI
• Commercial discussions ongoing to sell excess gas to Singapore

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2003 Interim Results Presentation

Production Operations - Pakistan

• 6,900 boepd, an increase of 25% on last year
• Bhit fully commissioned ahead of schedule and on budget
• Zamzama development to deliver up to 320 mmscfd, onstream on time and budget
• Commissioning of the Qadirpur expansion plant ongoing
• Current production around 9,000 boepd

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2003 Interim Results Presentation

EXPLORATION & BUSINESS DEVELOPMENT

Exploration and Business Development

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2003 Interim Results Presentation

Business Development Update

UK

• UK licence P1048

farm in (Reach)

• 21st round licence

award

• Sale of minor assets

to Atlantic Petroleum for £5m +

UK

• UK licence P1048

farm in (Reach)

• 21st round licence

award

• Sale of minor assets

to Atlantic Petroleum for £5m +

Africa

• Guinea Bissau

– farm out near completion – 1 well in 1Q

• Gabon Iris & Themis Marin

– 3 well programme 1H (Dussafu, Iris & Themis Marin)

• Mauritania PSC A&B

– PSC B 1st of 3 well programme spudded

• SADR

– Favourable UN resolution

Africa

• Guinea Bissau

– farm out near completion – 1 well in 1Q

• Gabon Iris & Themis Marin

– 3 well programme 1H (Dussafu, Iris & Themis Marin)

• Mauritania PSC A&B

– PSC B 1st of 3 well programme spudded

• SADR

– Favourable UN resolution

Asia

• Pakistan

– preparing for Chung 1Q – new Tertiary delta licence offshore

• India

– completed Jaipur seismic, planning for well 1Q – planning seismic survey in Cachar

• Philippines

– new licence entry imminent

• Australia

– disposal of AWE shares for £13m

Asia

• Pakistan

– preparing for Chung 1Q – new Tertiary delta licence offshore

• India

– completed Jaipur seismic, planning for well 1Q – planning seismic survey in Cachar

• Philippines

– new licence entry imminent

• Australia

– disposal of AWE shares for £13m

Mauritania Mauritania Gabon Gabon SADR SADR Guinea Bissau Guinea Bissau Philippines Philippines Indonesia Indonesia UKCS UKCS Pakistan Pakistan India India Australia Australia

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2003 Interim Results Presentation

P1048 - 50%: Operator - Premier

(20/10b, 21/6a, 20/15a & 21/11b)

• Criollo-1 well
• 1st Q 2004
• Prospect 145m bbls
• Block potential 500m bbls

UK Portfolio Management

• Premier has sold equity in non-core assets to

Atlantic Oil and Gas for £5m + (3.75% of Rob Roy, Hamish and Ivanhoe, 15% of Chestnut, 3.75% of Perth and 8.27% of Ettrick).

39/2b, 39/7 - 30%: Operator - Tullow

• Blocks adjacent to our Fife Area interests
• 2003/4 seismic reprocessing and studies

work programme

• Potential to add value to Fife asset

UK

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2003 Interim Results Presentation

Volgian Fan Time Interval Map Volgian Fan Time Interval Map

UK – Criollo-1 Prospect

Dip Line showing stratigraphic pinchout Dip Line showing stratigraphic pinchout

Volgian Channel Volgian Channel Mustang Mustang Seismic indicates Mustang and Criollo combine here along pinch out edge Seismic indicates Mustang and Criollo combine here along pinch out edge Criollo Criollo

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2003 Interim Results Presentation

Africa – Mauritania

PSC B - 6%: Operator - Woodside

• Chinguetti-4 appraisal
• Currently drilling
• Targetting additional reserves
• Production test to support

submission of Chinguetti POD 4th Q 2003

PSC A - 3%: Operator - Woodside

• Banda appraisal
• 2004 likely appraisal of Banda discovery with
• il and gas potential

PSC B - 6%: Operator - Woodside

• Tiof-1 and Poune-1 wells
• 3Q and 4Q 2003
• Prospects of 146 and 153m bbls potential

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2003 Interim Results Presentation

Africa – Mauritania

Western Knob Diapir Province Western Knob Diapir Province Chinguetti Chinguetti Poune Poune Tiof Tiof

Banda

Pouné Pouné Banda Banda Chinguetti Chinguetti Tiof Tiof

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2003 Interim Results Presentation

Sinapa Block - 70%: Operator - Premier

• Sinapa-2 well
• 1st Q 2004
• Prospect 250m bbls
• Play potential > 2.5 billion bbls
• Advanced stages of farm-out

with a large international exploration company

Sinapa Block - 70%: Operator - Premier

• Post Sinapa-1, acquired new seismic data.
• R

e-imaged flanks of diapiric structures

• Developed strategy to explore challenging

seismic area.

Bissau Socio-Economic Programme

• Completed project to re-furbish paediatric

ward of Bissau Hospital

• Part of Premier’s on-going world-wide CSR

programme

Africa – Guinea Bissau

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2003 Interim Results Presentation

Africa – Guinea Bissau – Sinapa-2 Well

SALT

Block 5A Block 2 Block 4A

Top Reservoir 3D Regional Visualisation Map Top Reservoir 3D Regional Visualisation Map Sinapa-2 Well Sinapa-2 Well

Sinapa-2 Well

+ + + + + + + + + + + + + + + + + + + + + + + + + + + + +

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2003 Interim Results Presentation

Dussafu Licence - 25%: Operator - Sasol

• Dussafu-1 well
• 1st half 2004
• Prospect 40-50m bbls
• Block potential 200m bbls

Pre-Salt Plays

• Premier focusing on Pre-salt Gamba

Sandstone play

• Unlocking the potential of this area by

application of newly proven 3D imaging technology

Iris & ThemisMarin - 18%: Operator - Fusion

Iris and Themis wells

• 1st-2nd Q 2004
• Potential Reserve 40m bbls
• Block potential 200m bbls

Africa – Gabon

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2003 Interim Results Presentation

Africa – SADR

SADR - 35%: Operator - Fusion

• Premier have earned the option

to take 35% equity in up to three 20,000 sq km exploration licences offshore SADR

• Areas to be awarded following

recognition of the Polisario by the UN

Regional Studies

Regional studies undertaken by Premier and Fusion indicate that the area has exciting oil potential. With the exception of a recent regional seismic survey, the area is unexplored.

UN Resolution 1495 (2003)

Adopted by the Security Council at its 4801st meeting

• n 31 July 2003

‘…commitment to assist the parties to achieve a just, lasting and mutually acceptable solution, which will provide for the self-determination of the people of Western Sahara…’

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2003 Interim Results Presentation

Dumbar Licence - 37.5%: Operator - Premier

• Chung-1 Well
• 1st Q 2004
• Prospect 600 BCF
• Play potential 1300 BCF

Dumbar Licence - 37.5%: Operator - Premier

• Chung-1 Well
• 1st Q 2004
• Prospect 600 BCF
• Play potential 1300 BCF

Indus 2365 Offshore - 23.75%: Operator - Shell

• Attractive Tertiary delta system
• 2003 acquire 1500 sq km of 3D

seismic

• 3Q 2004 drill decision

Kadanwari - 15.8%: Operator - AGIP

• Kadanwari West K-14 well 3Q 2003
• Potential reserve 150 BCF

Zamzama - 9.38%: Operator - BHP

• Zamzama East-1 3Q 2003
• Potential reserve 400 BCF

Asia – Pakistan

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2003 Interim Results Presentation

Asia – Pakistan – Dumbar Block

Satellite Image of Dumbar Block and Kirthar Fold Belt Satellite Image of Dumbar Block and Kirthar Fold Belt

Badhra Badhra Zirkani-1 Zirkani-1 Bhit Bhit Chung-1 Chung-1

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2003 Interim Results Presentation

Asia – Pakistan – Zamzama East

2003 Interim Results Presentation

Footwall play to Zamzama Field Footwall play to Zamzama Field

Potential spill point to footwall ZZ-3 ZZ-5 ZZ-2 ZZ-4/ST3 ZZ-1/ST1 Proposed ZZ-East Producing zone of Zamzama Field Untested Footwall

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2003 Interim Results Presentation

Jaipur Block - 38%: Operator - Premier

• Jaipur-1 well
• 1st Q 2004
• Prospect 50m bbls
• Block potential 250m bbls

Cachar Block - 84%: Operator - Premier

• Government approval of equity assignment
• btained
• Seismic programme 4Q 2003 – 1st Q 2004

Jaipur Block - 38%: Operator - Premier

• 2003 seismic programme; acquired 118 km

2D under budget and with no LTI’s

• Significant improvement in sub-thrust

imaging achieved

Asia – India

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2003 Interim Results Presentation

Asia – India – Jaipur

Jaipur: 2003 Seismic Programme and Leads Jaipur: 2003 Seismic Programme and Leads

AAP-ON-94/1 Jaipur AAP-ON-94/1 Jaipur CR-ON -90/1 Cachar CR-ON -90/1 Cachar

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2003 Interim Results Presentation 2003 Interim Results Presentation 2003 Interim Results Presentation

Bangladesh N.E. India

AAP-ON-94/1 Jaipur AAP-ON-94/1 Jaipur Target: Rengi Fm. Target: Rengi Fm.

Asia – India – Cachar Block

A’ A A A’

CR-ON -90/1 Cachar CR-ON -90/1 Cachar

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2003 Interim Results Presentation

Asia – Indonesia

Natuna Sea Block A - 28.67%: Operator - Premier

• Bekantan-1 well
• 1st Q 2004
• Prospect 150 BCF, supporting

Gajah Baru gas sale

Gajah Baru - 28.67%: Operator - Premier

• Gajah Baru appraisal & deep exploration well
• Supporting gas sales
• Appraisal well to prove up additional 100BCF

Area IV - 28.67%: Operator - Premier

• 2003 wells Kuda Nil and Binturong both

encountered oil and gas

• Reviewing reservoir model to evaluate

remaining potential in Block

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2003 Interim Results Presentation

Ragay Gulf - 50%: Operator - Premier

• Premier have licenced a block

covering the offshore area of the Ragay Gulf in the Philippines.

• The three year first period work

programme will entail seismic reprocessing and studies

Regional Studies

• Regional studies undertaken by Premier indicate an

area with exciting oil potential.

• Little offshore exploration has been undertaken in the

past despite available data showing several interesting trap types and a working hydrocarbon system.

Regional strategy

• Premier is seeking attractive exploration
• pportunities in acreage that has been overlooked

and not explored with modern technology

• Of the many Philippine basins, the Ragay Gulf seems

to offer the best opportunity for low entry cost, high reward oil exploration.

Asia – Philippines

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2003 Interim Results Presentation

Planned Exploration and Appraisal Activity

Sept Oct Nov Dec Jan Feb

2003

Apr May

Pakistan Chung-1 Pakistan: Zamzama East-1 Pakistan: Kadanwari West India: Jaipur-1

2004

Jun Jul

UKCS Criollo-1 (Reach)

Mar

Contingent Mauritania: Chinguetti-4 Mauritania: Tiof-1 Mauritania: Pouné-1 Indonesia Bekantan-1 Indonesia Gajah Baru-2 Gabon: Dussafu-1 Gabon: Iris-1 Gabon: Themis-1 Guinea Bissau: Sinapa-2

Aug Sep Oct

ASIA AFRICA UK

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2003 Interim Results Presentation

SUMMARY AND OUTLOOK

Summary and Outlook

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2003 Interim Results Presentation

Premier Strategy

• High impact explorer and commercial dealmaker
• Base business - e.g. 35-50,000 boepd
• Cycle out/farm down assets when significant growth potential

has been exploited

• Realise early value for shareholders

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2003 Interim Results Presentation

Financially strong business

• Total 2P reserves of 200 mmboe
• Production of 35,000 boepd balanced
• ver three regions
• Average cashflow(1) ca £60m p.a.
• Low development capex £20m p.a.
• Exploration programme at £25m p.a.
• Negligible debt

New Premier

Indonesia 2nd Gas Sale Mauritania Indonesia Pakistan Albania UK Working Interest Production Forecast

10,000 20,000 30,000 40,000 2003 2004 2005 2006 2007 Barrels of oil equivalent per day

Production by Region

20% 40% 60% 80% 100%

Development Capex

5 10 15 20 25 £ million 2003 2004 2005 2006 2007 0% 2003 2004 2005 2006 2007

Notes

(1) Operating cashflow after interest and tax

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2003 Interim Results Presentation

12 Month Forward Plan

Guinea Bissau

• Sinapa-2

Guinea Bissau

• Sinapa-2

Mauritania

• Chinguetti-4
• Tiof-1
• Poune-1

Mauritania

• Chinguetti-4
• Tiof-1
• Poune-1

Gabon

• Iris-1
• Themis-1
• Dussafu-1

Gabon

• Iris-1
• Themis-1
• Dussafu-1

NE India

• Jaipur-1

NE India

• Jaipur-1

UKCS

• Criollo-1

UKCS

• Criollo-1

Indonesia

• Gajah Baru-2
• Bekantan-1

Indonesia

• Gajah Baru-2
• Bekantan-1

Pakistan

• Chung-1
• Kadanwari West K14
• Zamzama East

Pakistan

• Chung-1
• Kadanwari West K14
• Zamzama East

Well Seismic

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2003 Interim Results Presentation

New Premier

Independent Premier – well positioned to deliver

Strong cashflow Virtually debt free Real asset value Significant upside – 2003/2004 exploration programme

2003 Interim Results Presentation

18 September 2003

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2003 Interim Results Presentation

APPENDIX

Appendix

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2003 Interim Results Presentation

2001

(1)

(mboepd) 18.5 5.6 11.2 18.3 53.6 60% UK Pakistan Myanmar Indonesia Total % Gas

Notes

(1) Working interest production

2002

(1)

(mboepd) 18.4 5.7 6.6 10.2 40.9 47% Half year to 30 June 2003

(1)

(mboepd) 16.2 6.9 15.9 22.8 62.0 69%

Production Analysis

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2003 Interim Results Presentation

31 December 2002 (Incl JVs) £m 167 (417) (250) 312 80 Cash Debt Net debt Shareholders’ funds Gearing ratio % % 30 June 2003 (Incl JVs) £m 102 (275) (173) 352 49 30 June 2003 (As reported) £m 69 (198) (129) 352 NA

Balance Sheet (pre-restructuring)

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