2007 Interim Results Presentation 20th September 2007 Forward - - PowerPoint PPT Presentation

2007 Interim Results Presentation 20th September 2007

Page 3 | 2007 Interim 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.

Page 4 | 2007 Interim Results Presentation

Highlights

Page 5 | 2007 Interim Results Presentation

Highlights

• 42 mmboe of reserves and

resources added at ~$2.0/bbl

• Scott acquisition will have one

year payback

• Completion of

acquisitions in UK and Indonesia

• Steady progress in

defining development projects

• Zamzama Phase 2 startup
• Progress on Gas sales in Indonesia
• Engineering & project planning progressing

in Vietnam, Indonesia & Norway

• 1H production up 5% from 2H 2006

with current run rate of 37,000 boepd

• 50,000 boepd by end 2010 and rising
• Rising production

profile – on track to meet targets

• Continuing to build

high impact exploration pipeline

• Testing in India
• Anne well to spud in September 2007
• Norway, Congo and Vietnam wells planned

for 2008 and 2009

20000

Daily Production (boepd)

10000 40000 30000 50000 2008 70000 80000 All projects earlier All projects later Base producing fields 2009 2010 2011 60000

Page 6 | 2007 Interim Results Presentation

Asia

• Optimise Natuna

Sea position

• Build new core areas

in Vietnam and North Sumatra

• Fully exploit

exploration play in Vietnam

Regional strategies

Middle East / Pakistan

• Continuing growth in

Pakistan gas business

• Seeking new

exploration plays in Pakistan

• Progressing new JV in

the region West Africa

• Pursue high impact

exploration in Congo and elsewhere

• Exit Mauritanian

position North Sea

• Add to existing

producing fields

• Exploit Norwegian

development projects

• Pursue high impact

exploration

Page 7 | 2007 Interim Results Presentation

Exploration strategy

• Drill up programme of high impact new plays (Congo)
• Fully exploit plays as follow-ons to success (Vietnam)
• Maintain focus on new areas for future drilling (Eastern Indonesia,

Barents Sea)

• Through commercial activity, ensure operating cash flow more than

twice covers exploration spend

Page 8 | 2007 Interim Results Presentation

Financial results

Page 9 | 2007 Interim Results Presentation

Financial performance

• Balance sheet

Maintained balance sheet strength pre-funding investment programme

• Operating profit

Reduced by exploration write- down and non-cash charges

• Operating cashflow

before working capital Strong underlying cashflows driven by rising production and high prices

• Operating costs

Underlying costs stable at $6.90/bbl (including certain

• ne-off items)

108.8 69.7 82.8 147.6 155.2 143.3 5.0 6.5 6.9

• 26.2

43.8

• 24.1

Page 10 | 2007 Interim Results Presentation

North Sea Wytch Farm Scott Kyle Others Asia Anoa Kakap Pakistan Qadirpur Bhit Zamzama Kadanwari West Africa Chinguetti Total production kboepd (net) FY 2006 6.9 3.2 0.4 2.0 1.3 11.6 7.9 3.7 12.1 3.9 2.9 4.1 1.2 2.4 2.4 33.0 kboepd (net) 1H 2007 8.3 3.0 1.9 2.2 1.2 11.8 7.9 3.9 12.5 4.0 2.9 4.3 1.3 1.4 1.4 34.1

Production

Page 11 | 2007 Interim Results Presentation

Scott acquisition

Scott Economics

• Pre-emption purchase price

$60m

• Adjusted final price (including inventory of $26m) $53m
• After-tax cash flow (May 19th-August 31st)

$38m

5.16% 5.16% Maersk 10.47% 10.47% ExxonMobil 0.00% 20.95% Hess 20.64% 20.64% Petro-Canada 41.89% 40.99% Nexen 21.84% 1.79% Premier After Before Company Scott Field

• Anticipate cash pay-back within 12 months
• f acquisition
• Further in-fill drilling opportunities
• Expected field life 2020

Page 12 | 2007 Interim Results Presentation

Production and income statement

Working Interest Production (mboepd) 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 Profit/loss from discontinued operations Profit for the period 12 months to 31 Dec 2006 6 months to 30 June 2006 33.0 64.90 5.11 $m 358.8 (126.6) 232.2 (37.1) (16.6) 178.5 (5.7) 172.8 (86.7) 86.1

• (18.5)

32.5 66.50 5.26 $m 196.2 (65.6) 130.6 (13.8) (8.0) 108.8 (18.5) 90.3 (53.7) 36.6 (2.9) 33.7 Highlights Including Guinea Bissau writeoff of $25.7 million Non cash mark to market hedging loss

• f $9.9m

3% premium to Brent oil prices 6 months to 30 June 2007 34.1 65.00 5.03 $m 239.4 (114.4) 125.0 (34.4) (7.8) 82.8 (14.3) 68.5 (48.0) 20.5

• 20.5

50% effective rate on profits pre- exploration writeoff Mauritanian assets maintained at fair value estimate of $83.5m

Page 13 | 2007 Interim Results Presentation

143.3 (22.3) (34.3) 86.7 (188.5) (7.9) (109.7)

Cashflow

Operating cash flow Working capital movements Taxation paid Net cash from operating activities Capital expenditure Pre licence exploration costs Net cash flow before financing

6 months to 30 June 2006 $m 12 months to 31 Dec 2006 $m

302.8 58.2 (116.2) 244.8 (156.5) (19.2) 69.1 147.6 76.9 (50.0) 174.5 (95.9) (6.8) 71.8

2007 2006 Development 188.5 95.9 Exploration 39.9 39.0 Acquisitions 17.0 89.6 37.9 61.0 6 months to 30 June 2007 $m Before working capital movements Cargo proceeds of $42.0m received

• n 3 July

Expenditures ($m)

Page 14 | 2007 Interim Results Presentation

Balance sheet

Cash and equivalents Bank debt Convertible Bonds Net (debt)/cash Net assets Balance sheet gearing Undrawn facilities

As at 31 Dec 2006 $m As at 30 Jun 2007 $m

240.8 (68.0) (196.9) (24.1) 582.5 4.6% 207.0 40.9

• 40.9

449.1

• 275.0

Invested at an average 5.28% As at 30 Jun 2006 $m

43.8

• 43.8

412.4

• 275.0

$250 million issue in May at 2.875% coupon, $51.9 million attributed to equity reserve

Page 15 | 2007 Interim Results Presentation

Development update

Page 16 | 2007 Interim Results Presentation

Middle East – Pakistan – Producing fields

• Zamzama Phase-2 first production is imminent

– Incremental 150 mmscfd of production capacity – On time and on budget

• Badhra first production at year end

– Initial development of 30 mmscfd

• Qadirpur capacity expansion in April 2008

– Plant capacity increasing from 500 to 600 mmscfd

• Qadirpur Power Generation Project in 2009

– Further 70 mmscfd of gas to a new power station

• Further potential projects exist with Badhra

extension and Qadirpur Deep

20000

Pakistan Production Graph (boepd net)

18000 16000 14000 12000 10000 2006 2007 2008 2009 2010

Further potential Development projects Producing fields (including development drilling)

The historical picture of reliable production growth looks set to continue:

Page 17 | 2007 Interim Results Presentation

Other key producing fields

Scott

• In 2006/7 a successful infill drilling

campaign reinvigorated production

– Production increased from 18 to 35 kboepd gross – Added 11 mmbbls reserves at $10/barrel

• After further study work a new

campaign is being planned for late 2008/9

• Upgrades to power generation and

water injection will increase production Kyle

• Completion of the gas lift project has

significantly increased production

Page 18 | 2007 Interim Results Presentation

Asia – Vietnam – Blackbird / Dua

• First production targeted for 2010 but 2009 may be possible
• Market survey of FPSOs completed
• Development team in place in Ho Chi Minh
• Reservoir studies and development cost estimating are ongoing
• Gas options under review

Q1 2008 Q2 Q3 2009 2010 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 2007 RAR FDP PV Approvals FPSO Specify Tender Convert Install Wellhead Platforms Specify Tender EPCI - Blackbird Install - Blackbird EPCI – Dua Drilling Drill Blackbird Wells Tieback Blackbird Wells Drill Dua Wells First Production

Page 19 | 2007 Interim Results Presentation

Asia – Indonesia – West Natuna Block A GSA 2

• Confident of Indonesian ministerial

approval to export gas

• A further expansion of the Jurong

Petrochemical complex has been announced

• Evaluating the possibility of an offer

from Sembgas (GSA1 Buyer) as an additional buyer to ExxonMobil

• Development planning continues

– Pre-FEED work is ongoing

• First production target of Q4 2010

Page 20 | 2007 Interim Results Presentation

Asia – Indonesia – North Sumatra Block A

• Targeting POD approval at end of October

– Gas sales negotiations with PIM (fertilizer manufacturer) are progressing – POD has been submitted to BPMigas for review – Tendering process for FEED is underway

• First production targeted for Q4 2010
• Early production project of 15 mmscfd to an

IPP for late 2009

• Study work on re-development of the old oil

fields has commenced

Page 21 | 2007 Interim Results Presentation

North Sea – Norway – Frøy

• Development concept has been selected

– Jack-Up with Drilling, Production, Storage & Offtake – Either a converted rig or a purpose built jack-up – Installation in autumn 2010 or 2011 – First production will be three months later

• EPCIC contract has been tendered

– 5 potential bidders with responses due in October – Facility will be leased

• Expecting POD submission in Q1 2008

Page 22 | 2007 Interim Results Presentation

2007 2008 2009 2010

Pakistan Blackbird / Dua WNBA GSA-2 NSBA Frøy Ratna

Field developments schedule

NB: Projects are shown at “earlier” case start dates, for “later” case dates add one year

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

Page 23 | 2007 Interim Results Presentation

Production forecast

20000

Quarterly Production (boepd)

10000 40000 30000 50000 Q3 2009 70000 80000 All projects earlier All projects later Base producing fields 60000 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 15,000 10,000 6,000 8,000 Net rates (boepd) Frøy NSBA WNBA GSA2 Blackbird/Dua Field

Page 24 | 2007 Interim Results Presentation

Exploration update

Page 25 | 2007 Interim Results Presentation

North Sea

Page 26 | 2007 Interim Results Presentation

North Sea – Norway – PL407 – Bream

• Undeveloped Brent age oil field discovered 1971
• First well planned 2008
• Operator estimate of 80 mmbbls
• Premier 20% equity share

PL407 Bream Appraisal PL406 Bream Exploration Yme Field Re-development

10km

Gardrofa prospect

Page 27 | 2007 Interim Results Presentation

Lomond field

NW SE

North Sea – UK – 23/22b – Sparrow Prospect

Page 28 | 2007 Interim Results Presentation

West Africa

Page 29 | 2007 Interim Results Presentation

West Africa – Guinea Bissau

Page 30 | 2007 Interim Results Presentation

West Africa – Guinea Bissau – Espinafre Map

Page 31 | 2007 Interim Results Presentation

West Africa – Guinea Bissau – Espinafre interpretation

Pre-drill Post-drill

Page 32 | 2007 Interim Results Presentation

West Africa – Guinea Bissau – Eirozes map

Tied to Sinapa-2

Page 33 | 2007 Interim Results Presentation

Themis Marin PSC Premier 18%

• Rig contracted for 4Q 2007
• Admiral-1 planned for Dec 2007

West Africa – Gabon – Themis – Admiral-1

Page 34 | 2007 Interim Results Presentation

Tertiary (Turbidite Channel) Play

• ~ 14 BBO Reserves & Growing
• ~ 100 Expl. Wells since 1994

Cretaceous (Albian-Cenomanian Raft) Play

• ~ 5 BBO Reserves
• Significant Producer: Congo & Angola

Pre-Salt (Syn-rift Sand) Play

• ~ 2.6 BBO Reserves
• Under Explored - MPN Block (1 Well)
• Most of Wells: Pre-1980
• Recent Seismic Pre-Salt Imaging has

rejuvenated this play

(From third party analysis using IHS and in-house reserve estimates)

West Africa – Congo – Block Marine IX

Page 35 | 2007 Interim Results Presentation

Marine IX Block (Premier 58.5%)

• Significant reserve potential
• 3D reprocessing and interpretation in 2007
• Largest prospects – Frida and Ida
• Exploration well 2008/9

Frida Miocene Channel Frida Prospect Ida Prospect Moho 110 mmbbls N’Kossa 280 mmbbls Kitina & Kitina Sud 150 mmbbls

Frida Structure Ida Structure

West Africa – Congo – Block Marine IX

Page 36 | 2007 Interim Results Presentation

Middle East / Pakistan

Page 37 | 2007 Interim Results Presentation

Middle East / Pakistan – Offshore Indus – Anne-1

Anne-1

• Spudding September 2007
• Targeting 300 mmbbls
• First well in offshore Indus delta
• 1,300 metres water depth
• Premier 12.5%

SW NE S N

Page 38 | 2007 Interim Results Presentation

Asia

Page 39 | 2007 Interim Results Presentation

Asia – India – Cachar – Masimpur-3

Masimpur-3A Surface Location

Page 40 | 2007 Interim Results Presentation

SC43 – Ragay Gulf Premier 21%

• Monte Cristo-1 Well planned for Dec 2007
• Well costs carried, farmed out equity to Pearl Energy

Monte Cristo Reef Prospect Offshore target drilled from shoreline

Asia – Philippines – Ragay Gulf – Monte Cristo

Page 41 | 2007 Interim Results Presentation

Asia – Indonesia – Kakap – Pancing

Kakap, 18.75%

• Discovery announced

23rd August 2007

• Tested and flowed oil

to surface

• Opens up

prospectivity of Lama reservoir across the Natuna Sea

Page 42 | 2007 Interim Results Presentation

Asia – High impact pipeline – North Sumatra Block A

Page 43 | 2007 Interim Results Presentation

• Buton Island has a highly active oil generative

petroleum system. Oil seeps to the surface are abundant and prolific

• Carbonate reservoirs have been mapped as

closed structures in the subsurface

Asia – High impact pipeline – Indonesia – Buton

Page 44 | 2007 Interim Results Presentation

• Seismic shows excellent indications of
• il-prone source rocks
• Direct Hydrocarbon Indicators (DHIs)

confirm working petroleum generative system

Asia – High impact pipeline – Indonesia – Tuna

DHIs

Page 45 | 2007 Interim Results Presentation

Asia – Vietnam Block 12W

Page 46 | 2007 Interim Results Presentation

Block 12W Jay Prospect Premier 37.5%

• Exploration Candidate

for 2008

10 km

Mang Cau Mid Dua

2.5km

NE SW Dua sands

10km

Jay

Asia – Vietnam Block 12W – Jay

Page 47 | 2007 Interim Results Presentation

Block 12W Go Kien Prospect Premier 37.5%

• Exploration Candidate

for 2008

10km

WSW ENE Mang Cau Mid Dua Dua sands

2.5km Go Kien Dua

Asia – Vietnam Block 12W – Go Kien

Page 48 | 2007 Interim Results Presentation

Block 12W Falcon Prospect Premier 37.5%

• 3D seismic programme completed Q2 2007
• Exploration Candidate for 2008

10km

Asia – Vietnam Block 12W – Falcon

Page 49 | 2007 Interim Results Presentation Peacock Prospect

Block 12W Falcon Prospect Premier 37.5%

• 3D seismic

programme completed Q2 2007

• Exploration Candidate

for 2008

Peacock Prospect

Peacock Prospect

Asia – Vietnam Block 12W – Peacock

Page 50 | 2007 Interim Results Presentation

Late Middle Miocene Carbonate Top Upper Dua Top Cau Basement

Silver Sillago NW

10 km

Asia – High impact pipeline – Vietnam – Block 07/03

10 km Red Grouper Silver Sillago Blue Marlin

Mang Cau SE

Page 51 | 2007 Interim Results Presentation

Exploration drilling schedule

Contingent wells

M/East & Pakistan

Egypt : NW Gemsa Gemsa Well-1 Pakistan : Indus Anne-1

West Africa

Congo: Marine IX Frida Ida Gabon : Themis Admiral-1

Asia

Indonesia : Tuna Buton North Sumatra Block A Vietnam : Block 12 Falcon-1 Jay-1 Go-Kien-1 Peacock-1 Block 07/03 Philippines : Ragay Gulf Monte Cristo

North Sea

Norway : PL407 Bream Appraisal PL406 Gardrofa UK : 23/22b 2007 SEP OCT NOV DEC FEB High impact wells Firm wells 2008 JAN MAR APR JUN MAY JUL AUG SEP 2009 OCT DEC NOV

Page 52 | 2007 Interim Results Presentation

Summary

Page 53 | 2007 Interim Results Presentation

Impact of major projects on Premier group production

20000

Daily Production (boepd)

10000 40000 30000 50000 2008 70000 80000 All projects earlier All projects later Base producing fields 2009 2010 2011 60000

Page 54 | 2007 Interim Results Presentation

Forecast development expenditures

50

($millions)

150 100 200 2008 300 350 All projects earlier All projects later Base 2009 2010 2011 250

Page 55 | 2007 Interim Results Presentation

Summary

• Delivering a rising production profile
• Key developments are moving forward, which are

capable of an additional 30,000 boepd

• High impact exploration programme over the next

two years exposing shareholders to more than one billion barrels

• Low cost funding in place for our entire forward

investment programme

• Completed two successful value-adding acquisitions

during the period

Page 56 | 2007 Interim Results Presentation www.premier-oil.com

September 2007