2011 Annual Results Presentation 22 March 2012
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. 22 nd March 2012 | Page 1
Agenda Premier today Simon Lockett 2011 financial results Tony Durrant Operations update Neil Hawkings Exploration update Andrew Lodge Summary Simon Lockett 22 nd March 2012 | Page 2
Over the last 6 years … 338% 80% 40% 72% Over the period, NAV/share CAGR of 14.2% excluding oil price effects 22 nd March 2012 | Page 3
Premier today... ... is in the strongest position in its history • Clear path to 100,000 boepd from existing projects • >1.5 billion of prospective resources in the exploration portfolio • Fully funded programme with Evaluate Drill Appraise strong and rising cash flows LEADS MATURE PROSPECTS PROSPECTS Asia • Proven capability to deliver across the portfolio North Sea Pre- Development MEAP Project Appraisal Extension Approval Gate Gate Drill Decision Gate Acquire Licence Gate 22 nd March 2012 | Page 4
2011 highlights... • Increased production to 60,000 boepd at year end – Chim Sáo and Gajah Baru onstream – Next generation of development projects progressing • Increased reserves and resources to 527 mmboe – Exploration success at ~$5/bbl post-tax – Acquisitions at ~$8/bbl • Increased financial strength – Cash and undrawn facilities of ~$1.4 billion – Strongly rising cash flows – Record profitability – Continued access to bond and bank markets at favourable rates 22 nd March 2012 | Page 5
2011 financial results 22 nd March 2012 | Page 6
Record profitability 12 months to 12 months to Highlights 31 Dec 2011 31 Dec 2010 Operating costs ($/bbl) 42.8 Working Interest production (kboepd) 40.4 2011 2010 38.3 Entitlement production (kboepd) 37.7 UK $39.5 $28.7 79.7 Realised oil price ($/bbl) – pre hedge 111.9 Indonesia $11.1 $8.5 6.3 Realised gas price ($/mcf) – pre hedge 8.5 Pakistan $2.4 $2.0 Vietnam $16.6 – $15.9 $13.9 Group $m $m Hedging Sales and other operating revenues 827 764 • Net impact on 2011 of $23 million (531) Cost of sales (415) post-tax Gross profit 412 233 • 25% of 2012 production hedged at (87) Exploration/New Business (211) average of $100/bbl (18) General and administration costs (25) • Minimal hedging beyond 2012 Operating profit 176 128 Taxation (27) Financial items (34) • All b/fwd losses recognised as Profit before taxation 142 101 deferred tax asset 29 Taxation credit 29 • $1.36 billion allowances carried Profit after tax 171 130 forward into 2012 • No UK CT cash taxes until 2018 under existing model using $75/bbl 22 nd March 2012 | Page 7
Rising cash flows 12 months to 12 months to Estimated capex split ($m) 31 Dec 2011 31 Dec 2010 2011 2010 $m $m Development 433 349 Cash flow from operations 530 505 Exploration 228 165 661 514 Taxation (44) (69) 486 Operating cash flow 436 Regional split ($m) MEAP (661) Capital expenditure (514) $58m (90) (Acquisitions)/disposals, net 13 Finance and other charges, net (50) (70) Total $661m Pre-licence expenditure (23) (19) Net cash flow (338) (154) Asia North Sea $301m $302m Outlook • Operating cash flow increased by 11%; significant growth expected in 2012 22 nd March 2012 | Page 8
Strong liquidity position at 31 Dec 2011 at 31 Dec 2010 $m $m Cash 309 300 Bank debt (484) (488) Bonds (341) ( – ) Convertibles (228) (218) Net debt position (744) (406) Pro forma Gearing 30% 26% Cash and undrawn facilities 1,116 1,202 Outlook • Current debt funding costs average 5% (fixed) and 3% (floating) • Additional bank and bond debt raised post year-end of $585 million raising cash and undrawn facilities (after some debt repayment) to $1,400 million by mid-March 22 nd March 2012 | Page 9
Fully funded programme Investment Profile 2012 outlook (US$ million) •Forecast full-year 2012 spend of ~$740 1400 Exploration Expenditure million (development) and $220 million 1300 Development Capex (exploration) 1200 1100 •Total capex covered by cash flow for 2012 1000 at current spot prices 900 800 Forward funding 700 •Forward profile funded by cash flow and 600 facilities even at $60/bbl 500 400 •Significant capacity to increase spend on 300 exploration and new development projects 200 100 0 2012 2013 2014 2015 Note: assumes exploration expenditure of $250 mm pa from 2013 Outlook • Rising production generates $2 billion post-tax cash flow in 2015 at $100/bbl 22 nd March 2012 | Page 10
Operations update 22 nd March 2012 | Page 11
Operations highlights • Chim Sáo and Gajah Baru onstream in October – Deliverability exceeding expectations • Realising further value from producing assets • Continued progress on the development portfolio: – Huntington and Rochelle progressing – Solan project sanction expected soon – Development studies for Catcher well- advanced • On track to reach 75,000 boepd run rate by year end 2012, once Huntington and Rochelle onstream • Anticipate reaching 100,000 boepd when Catcher comes onstream in 2015 22 nd March 2012 | Page 12
Production update • Year-end target of 60,000 boepd achieved Production (working interest) (kboepd net) – Full year production 40,420 boepd 70 – Strong gas demand in Pakistan and Indonesia, combined with good facilities Asia performance 60 MEAP North Sea – Improved Balmoral production in H2, as 50 maintenance issues were progressed • Wytch Farm acquisition adds ~2,500 boepd net 40 • Production at Kyle (1,760 bopd) shut-in since December 2011 30 • 2012 full year production forecast 60,000- 20 65,000 boepd, with key variables being – Timing of Huntington first production 10 – Ability to capitalise on excess deliverability at Chim Sáo and Gajah Baru 0 2007 2008 2009 2010 2011 2012E 22 nd March 2012 | Page 13
Block A – strong production performance Anoa & GSA1 • Producing at current maximum capacity – 170-180 BBtud • Phase 4 expansion project underway – Raising capacity to 200 BBtud • Pelikan will add 70 BBtud of capacity Gajah Baru & GSA2/3/4 • Currently producing at 60-90 BBtud • DCQ increases from 50 to 90 BBtud at end Q1 – 200 BBtud well deliverability • Indonesia will shortly take an additional 40 BBtud when the domestic swap agreement is signed Outlook • Series of new field developments will maintain rates • Exploration is adding additional reserves Natuna ‘A’ 2015 22 nd March 2012 | Page 14
Singapore Gas Market – sales are increasing Singapore demand for gas will increase • Existing pipeline supplies are naturally declining • LNG supplies must commence and increase • But supply diversity will be maintained, and be underpinned by 90% Take or Pay contracts • GSA1 demand expected to remain between DCQ and Max Rate (341-392 BBtud) Premier’s GSA1 market share is increasing • Block A contractual market share of GSA1 is 37% – 2011 Block A actual share of deliveries was 42% – Block A share of remaining reserves dedicated to GSA1 has increased to 59% – Other GSA 1 suppliers are expected to drop to 150-100 BBtud in 2015-2016 • GSA 1 market available to Block A could increase to 200-250 BBtud in 2015-2016 22 nd March 2012 | Page 15
Chim Sáo – delivered and ramping up • First oil achieved, safely and on budget, in October 2011 • Currently producing 25,000-30,000 bopd – Gas exports add a further ~4,000 boepd – Rates limited due to water injection delays – 9 production wells could reach 40,000 bopd – Vessel capacity is 50,000 bopd • MDS5/6 reserves have increased by 10 mmbo 22 nd March 2012 | Page 16
Chim Sáo – uncovering upside potential Chim Sáo North West Far Closure • Chim Sáo North West discovered in August 2011 Near Closure • Additional gross resource estimate 13 to 20 mmbo Chim • Near vertical appraisal well scheduled for mid-2012 Sáo • Development will be via existing facilities West Closure Additional Reservoirs 3060mss • Further reserves potential is being 2000m found in reservoirs other than MDS5/6 Tie-in of Dua • Government of Vietnam approved ODP in December 2011 • Long lead items being purchased • Project sanction expected 1H 2012, first oil 2014 22 nd March 2012 | Page 17
Kadanwari – getting more from a mature field Kadanwari field • Came onstream in 1995 • Highest gas price in Pakistan • 2008-2012, five new gas compartments discovered: – K-27 tied-in to system at 45 mmscfd in 2012 – K-28 and K-30, which tested at 30 mmscfd and 50 mmscfd respectively, will be tied-in by mid-2012 • Production levels expected to be at 110 mmscfd during 2012-2014 • Further exploration well planned for 4Q 2012 Upside potential • 550 bcf of tight gas potential identified in 2011 • 3 well pilot project planned for 2012 22 nd March 2012 | Page 18
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