2011 Half Yearly Results 25 August 2011 Forward looking statements - - PowerPoint PPT Presentation

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2011 Half Yearly Results 25 August 2011 Forward looking statements - - PowerPoint PPT Presentation

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2011 Half Yearly Results 25 August 2011 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

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2011 Half Yearly Results

25 August 2011

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25 August 2011 | Page 1

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.

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25 August 2011 | Page 2

Agenda

Introduction and highlights Simon Lockett Chim Sáo and Gajah Baru update Robin Allan Future developments update Neil Hawkings Exploration update Andrew Lodge Financial results Tony Durrant Summary Simon Lockett

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25 August 2011 | Page 3

2011 Overall highlights

  • Chim Sao and Gajah Baru projects on stream imminently

– Production of 60,000 boepd by year end

  • 12 developments proceeding through development stages

– Building towards 100,000 boepd

  • Resource additions through exploration on track to deliver 200 mmboe of

2P reserves by 2015

  • Wytch Farm, Solan and Fyne acquisitions add 43 mmboe of reserves and

resources at a cost of around $5/bbl

  • Financial strength positions us well

– Profits after tax of $88.5 million – Growing operating cash flows exceed capital commitments – Cash and undrawn bank facilities of $1.3 billion

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25 August 2011 | Page 4

Chim Sáo and Gajah Baru update

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25 August 2011 | Page 5

Chim Sáo – WHP

WHP Jacket prior to Load Out WHP Topsides onto Jacket WHP Jacket Sail Away WHP Topsides onto Jacket WHP Topsides Lift Off Barge Ensco 107 Rig & WHP

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25 August 2011 | Page 6

Trading Tanker prior to Conversion Conversion of FPSO in Dry Dock Sail Away of Lewak Emas Arrival of Lewak Emas on Location

Chim Sáo – FPSO

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25 August 2011 | Page 7

  • FPSO is on location with mooring system,

risers and connections to the WHP installed and tested

  • Safe handover of the FPSO processing

equipment from commissioning to

  • perations is imminent
  • Production crew familiarisation is ongoing
  • First oil in tank expected 15 September
  • Total costs of project within original budget
  • f $800 million

Chim Sáo – production imminent

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25 August 2011 | Page 8

Chim Sáo – reserves increasing

Chim Sáo

  • Six production wells ready to produce
  • MDS5 reservoir is significantly better than prognosed
  • Additional potential in shallow MDS1 reservoir

Near field success

  • N2P well intersected a 20m oil column
  • Additional gross resource estimate 7 to 12 mmbo

Dua

  • Dua subsea development is nearing project sanction

2000m 3060mss

Chim Sáo

West Closure Far Closure Near Closure

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25 August 2011 | Page 9

Gajah Baru – Central Processing Platform (CPP)

CPP Jacket Load Out from NSB Yard (Batam) CPP Jacket Launch from Saipem S45 CPP Topsides Load Out from SM0E Yard (Batam) Up-ending of CPP Jacket by Castoro 8

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25 August 2011 | Page 10

Gajah Baru – CPP topsides float-over

Completed Gajah Baru Complex CPP Topsides Float-over Operation Export Pipeline Installation Bridge Installation

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25 August 2011 | Page 11

Gajah Baru – WHP, CPP

CPP from WHP Sea Aaryan Hook-up Accommodation Vessel CPP and WHP WHP from CPP CPP from Sea Aaryan

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25 August 2011 | Page 12

  • Project ahead of schedule

– Development drilling successfully completed in February 2011 – Jacket installed and piling completed in June 2011 – CPP topsides installed on jacket and bridge-linked to wellhead in July 2011 – Gas export pipeline installed and tested in July, dewatered and dried in August

  • Production for fuel gas ready
  • Gas export to start early September ahead of

contract date of 1 October

Gajah Baru – production imminent

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25 August 2011 | Page 13

Future developments update

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25 August 2011 | Page 14

Progress towards 100,000 boepd

Catcher Development planning underway Huntington Development drilling underway Gajah Baru Early first gas Rochelle Unitised development Chim Sáo First oil in next few weeks

2011 2012 2013-16

Fyne Operatorship acquired

East Fyne Central Fyne Appraisal target

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25 August 2011 | Page 15

Chim Sáo Bream

Project Initiation Project Sanction Ready for Production

Asia North Sea

Future development portfolio

Concept Selection

Gajah Baru Catcher Solan Caledonia Rochelle Huntington Dua Cá Rồng Đo Fyne Frøy Block A Aceh Pelikan & Naga

North Sea Asia

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25 August 2011 | Page 16

Huntington

  • Drilling template installed
  • First development well highly successful
  • Work continuing on the Sevan Voyageur

FPSO upgrade project and sub-contracted modules

  • Sevan’s plan is for FPSO sail-away in

April, implying June 2012 for first oil

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25 August 2011 | Page 17

Rochelle

  • Phase 1 field development plan approved (East area)
  • Single field development area determined by DECC
  • Unitised development – Premier 15% equity
  • Plans for West area being integrated

– West area pipeline route survey completed (May)

  • Scott tariff arrangements concluded

– Initial tie-in works completed during Scott shutdown (August)

  • Subsea long lead equipment ordered
  • Drilling rig contract being negotiated
  • First gas targeted for 4Q 2012

Rochelle

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25 August 2011 | Page 18

Natuna Sea Block A

  • 2010 was a record year for Block A gas sales

– From Singapore demand of 355 bbtud, Block A sold 160 bbtud vs a DCQ of 126 bbtud

  • 1H 2011, Singapore demand was 373 bbtud

with Block A supplying 154 bbtud

  • Gajah Baru builds up to 130 bbtud in 2012
  • In 2011 expect to approve:

– Anoa phase 4 compression expansion (2013) – Pelikan and Naga field developments (2013)

  • Total sales capacity will increase to

400 bbtud

  • Gajah Puteri planned for 2015

Natuna ‘A’ 2015

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25 August 2011 | Page 19

Catcher

  • Formal concept selection underway
  • Development options

– FPSO – Fixed Platform – FSO – Subsea wells – Platform wells – Gas export/injection

  • Premier’s objective is to

proceed with fast track development

Catcher Development Field Illustration

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25 August 2011 | Page 20

Fyne

  • In May, option exercised to become operator with a 39.9% equity stake

– Pre-development work progressed – Joint venture partners evaluating development options – Project sanction planned for early 2012 with first oil targeted for mid-2014

  • Development options

– Stand-alone – FPSO – Platform – Subsea-tieback to host – Eg Anasuria

  • Additional discoveries and exploration potential

provide upside opportunity – Appraisal well planned for Q4 2011 to de-risk East Fyne area – Erne exploration well planned for Q4 2011

East Fyne Central Fyne NW Fyne Appraisal target

Height above 4583ft N

1000m

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25 August 2011 | Page 21

Solan

  • SPA and Loan Agreement executed in May
  • Premier will become the operator with a 60% equity stake
  • Further engineering studies are underway
  • Project now targeting 2014 for first oil
  • 8
  • 8500
  • 8000
  • 8

5

  • 9000
  • 9
  • 9500
  • 8500
  • 8500
  • 8

5

  • 8500
  • 9
  • 8000
  • 7500
  • 8000
  • 7500
  • 8000

205_26a-7z 205_26a-7 205_26a-5z 205_26a-5 205_26a-3 205_26a-4 205_26a-8 205_26a-8z 205_26a-8z 205_26a-8z 205_26a-8z 205_26a-8z 205_26a-8z 205_26a-8z 205_26a-8y 205_26a-8y 205_26a-8y

0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

N/G

  • 9800
  • 9700
  • 9600
  • 9500
  • 9400
  • 9300
  • 9200
  • 9100
  • 9000
  • 8900
  • 8800
  • 8700
  • 8600
  • 8500
  • 8400
  • 8300
  • 8200
  • 8100
  • 8000
  • 7900
  • 7800
  • 7700
  • 7600
  • 7500
  • 7400
  • 7300

Depth Producer at reservoir level (Active 8 ½” Section) Injector at reservoir level (Active 8 ½” Section) Background Map = Top Solan Depth ft TVDSS with P50 Field Outline Well Penetrations shown at Top Solan

N

1km P1 P2 8 ½” (June 2013) W1 8 ½” (June 2012) W2 P3 in Upside Case (July 2014) Location of Wellhead Cluster at Sea Bed

Producer & Injector 12 ¼” Sections at reservoir level (Cased) Injector at reservoir level (Inactive 8 ½” Section)

W1 12 ¼” (May 2012) P2 12 ¼” August 2012 P1 12 ¼” (July 2012) P1 8 ½” (May 2013) W2 (June 2014)

Main decision points for well steering or completion

  • ptions

Current uncertainty in FWL across field

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25 August 2011 | Page 22

Progress on other developments

Bream (Norway) Dua (Vietnam) Block A Aceh (Indonesia) Frøy (Norway) Caledonia (UK) CRD (Vietnam)

CRD-1X CRD-2X

Anomalies associated with Gas Cau sequence

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25 August 2011 | Page 23

A path to 100,000 boepd

1000

Development capex (US$ million)

400 200 500 700 900 2011 2013 2012 2015 800 600 100 300 2014 120,000

Production outlook (bbls/day)

40,000 20,000 60,000 2011 2014 2012 2013 2016 100,000 80,000 2015

Future Norway Developments Future UK Developments Future Asia Developments End of Year Run Rate Huntington, Rochelle (UK) Chim Sáo, Gajah Baru (Asia) On Production

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25 August 2011 | Page 24

Exploration update

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25 August 2011 | Page 25

Progress towards 200 mmboe of discoveries

200 100 50 2010 2011 150 2012 2013 2014 250

Target cumulative risked additions Actual cumulative proved and probable discovered resources Actual cumulative plus possible resources

Global exploration: Forecast resource additions (mmboe)

2009

Exploration and appraisal drilling

  • At least 9 wells planned for the remainder of 2011
  • Discoveries at Burgman in the UK, K27 in

Pakistan and North West of Chim Sáo in Vietnam

  • Grosbeak and Cá Rồng Đo appraisal wells

successfully completed

  • Net estimated resource additions 20 to 30 mmboe

New ventures

  • PSCs signed for exploration blocks L10A and

L10B in Kenya

  • Exercised option to farm-in to the Greater Fyne

area in the UK – East Fyne appraisal well and Erne prospect to be drilled 2H 2011

  • Premier pre-qualified for the Iraq 4th Exploration

round in 2012

  • Actively pursing new venture opportunities in all

focus areas and themes

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25 August 2011 | Page 26 Unrisked Resource Portfolio Risked Resource Portfolio

Discovered resource under appraisal 80 mmboe Leads 1,500 mmboe Prospects 450 mmboe Total 1,950 mmboe Leads 180 mmboe Prospects 120 mmboe Total 380 mmboe

  • Unrisked prospective resource portfolio – 1,950 mmboe

– 450 mmboe in prospects – 1,500 mmboe in leads

  • Portfolio increased from 2010

– Increased lead inventory in MEAP (Kenya) – Prospect inventory adjusted post Tuna drilling

  • Risked pospective resource portfolio – 380 mmboe

– 120 mmboe in prospects – 180 mmboe in leads – Greater focus to lead maturation in 2012

  • Discovered resource under appraisal – 80 mmboe

Resource portfolio

On track to deliver 200 mmboe

  • f 2P reserves by 2015

Discovered resource under appraisal 80 mmboe

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25 August 2011 | Page 27

Samedi 15

Norway PL378: Grosbeak UK P077: East Fyne

P1784: Typhoon 14 PL406: Gardrofa P1466: Bluebell P1212: Stingray 12 Blk 104: Jackfruit 34 6 Natuna: Biawak Besar 4 Natuna: Anoa Deep 3.5 Buton: Benteng 23 3 Aceh: Matang 18 10 K-29 P1875: Erne Badhra-7 K-30 Badhra-6 Parh

Norway PL374S: Blabaer

P1430: Cougar P1420: New York 53 P1420: Manhattan P1420: Newark K-32 Badhra South Blk 07: Blue Marlin 72 6 Blk 07: Silver Sillago 60 15 1 2 1 4 2 P1430: Rapide P1430: Bonneville Blk 07: AD Deep Aceh: Peudawa Rayeu Tuna: Singa Laut Blk 07: CRT P1559: Cornet 3 1 1 2 4 4 PL359: Luno II 21 4 P1181: Lacewing 15 2 P1430: Carnaby 10 7 11 4 17 6 2 6 1 1 2 8 <1 1 2 4 <1 <1 <1 1

Vietnam Block 12W: CS NW Vietnam Block 07/03: CRD

Leads

Total Unrisked: 1500 Total Risked :180

Prospects

Total Unrisked: 270 Total Risked: 63

Mature Prospects

Total Unrisked: 180 Total Risked: 57

Appraisal

Total: 80

Appraise Drill Evaluate

Acquire Licence Drill Decision Appraisal Approval Gate Project Extension Gate

MEAP North Sea Asia

NB: Resource estimates identified for 2011-2012 prospective drilling candidates

<10 10-25 25-50 >50 Prospect potential resource mmboe (net unrisked): Risked

Progress towards 200 mmboe of discoveries

Pre- Development

Seismic

32 6 60 10

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25 August 2011 | Page 28

Exploration – Indonesia/Vietnam – Nam Con Son Basin Key prospects with Oligocene reservoirs at optimum depths

Gajah Laut Utara Belut Laut

Silver Sillago Fault Terrace CRD NE Blue Marlin AD Deep Mackerel Singa Laut Fault Terrace

Top Oligocene Structure Map

CRD

  • Unique integrated

database

  • New petroleum system

established

  • 600 mmbo and

>1 TCF of unrisked prospective resource potential

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25 August 2011 | Page 29 Silver Sillago Chim Sáo

SW NE NW SE

Top NCS Top Basement Top Cau MMU Dua

  • Similar proximal access to source package
  • Fault seal remains a key risk

Silver Sillago Line Chim Sáo Line

Exploration – Vietnam – Block 07/03 Chim Sáo vs Silver Sillago

CS-2X MMU Top Basement Top Cau MDS5

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25 August 2011 | Page 30

  • Oligocene prospectivity remains up dip from proven source kitchens
  • Singa Laut /Kuda Laut

– Oligocene sandstones at 3,000 mss – Fault seal risk mitigated by anticline to the west of bounding fault (Kuda Laut) – Unrisked resource estimate 100 mmboe

Gajah Laut Utara-1

TD 4687m

Belut Laut-1

TD 4977m

Kuda Laut Singa Laut MMU L.Terumbu Arang Gabus

Exploration – Indonesia – Tuna PSC

Depth of Top Oligocene in Gajah Laut Utara

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25 August 2011 | Page 31

  • Premier has the regional database to

pursue amplitude supported Tertiary prospects throughout the Central North Sea

  • The focus is towards basin margin

settings in structural/stratigraphic traps

  • Over the next 12 months Premier will

drill at least 5 exploration wells on this play

  • These wells will test a total gross

unrisked prospective resource of 100 mmbo (net 40 mmbo)

  • New venture options are being actively

pursued both in the UK and Norway

Exploration – North Sea Building on the Catcher success

Carnaby East Fyne / Erne Bluebell

Eocene Turbidite Sand Fairway

Typhoon

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25 August 2011 | Page 32

Appraisal – UK – Block 21/28a – Greater Fyne Area

East Fyne Appraisal

  • Premier 39.9% equity
  • Well planned for Q4 2011, targeting Eocene Tay Sands
  • Gross prospective resource estimate 9-12-16 mmbo

Erne

  • Premier equity 50%
  • Well planned for Q4 2011 – ‘Catcher’ Tay play type analogue
  • Gross prospective resource estimate 10-18-35 mmbo

Main Mid-Tay Chalk Upper Tay Horda

Central Fyne East Fyne

Appraisal well 21/28a-9 21/28a-9Y

East Fyne

Approx position of predicted OWC in TWT

  • W. Guillemot

Erne Prospect

Chalk Upper Tay BTM

Tay amplitudes Erne Prospect

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25 August 2011 | Page 33

Bluebell (P1466 ) (15/24c,15/25f)

  • Premier 60% equity
  • Palaeocene reservoir – Crevasse play
  • Gross prospective resource estimate 9-19-31 mmboe
  • Partial carry by farm-in partner
  • Well planned for Q4 2011
  • Valuable tieback opportunity

Exploration – UK – Bluebell

Top Forties Depth SS, CI=5 m Top Forties Lambda Rho Extraction Top Forties Lambda Rho Extraction Near Offset Lamda Rho, HC Indicator Bluebell Bluebell

Bluebell Well Location Bluebell Site Survey

Bluebell

Bluebell Well Location Bluebell

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25 August 2011 | Page 34

Block 21/7b

Typhoon (21/7b)

  • Premier 70% equity
  • Block awarded in 2010
  • Gross prospective resource estimate

– 20-27-36 mmbo (Tay reservoir)

  • Risk assessment

– Moderate risk – Seismic reprocessing ongoing

  • Well planned for Q2 2012

Exploration – UK – Typhoon

Typhoon

Scolty Oil discovery

Block 21/8

Typhoon Amplitude response

  • n inverted data

Typhoon Prospect

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25 August 2011 | Page 35

Carnaby

Exploration – UK – Carnaby

Carnaby (28/9)

  • Premier 35% equity
  • Gross prospective resource estimate

– 15-30-50 mmbo (Tay reservoir)

  • Expected phase oil

– Gas in shallower Eocene targets (Upper Tay)

  • Risk assessment

– Moderate risk at lower Tay level - oil quality – High risk at Cromarty level - reservoir presence and charge

  • Acquisition of new 3D seismic data ongoing
  • Well planned for Q2 2012

Varadero Carnaby Catcher N & E

Catcher Main Catcher E Carnaby Varadero

N S

Lower Tay Upper Tay

Burgman

Cromarty Depth Structure

Carnaby Prospect

Eocene ( Lower Tay) amplitude extraction

Carnaby

Burgman

Burgman

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25 August 2011 | Page 36

Exploration – Norway – Luno II

Luno II (PL 359)

  • Premier equity 30%
  • Greater Luno is a regional high

– Focus for oil migration – Regional top seal drapes the high – Jurassic/Triassic reservoirs flank the high and, where fractured, basement is also a reservoir – ~2,000 mmboe discovered to date

  • Key play risks

– Reservoir presence on the margins of the high – Lateral seal

  • Aldous Major South discovery

– Proves eastern margin of the basement high – Reserve estimate ~1,200 mmbo

  • Luno II

– Southwest margin prospect down dip from cemented basement- up dip from proven source kitchen – Mesozoic sand presence interpreted from seismic and local well data

  • Gross prospective resource estimate

– 45-148-286 mmbo (Operator estimate)

  • Well planned for Q2 2012

Aldous/ Avaldnes

PL 359

BCU Time Map

C.I. 100 ms

Luno/Apollo Ragnarrock

NE Luno II Prospect

BCU Jurassic Triassic

SW 10km

Luno II Prospect

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25 August 2011 | Page 37

Asia

2011 2012 Q3 Q4 Q1 Q2

Vietnam 104/109-05 Qua Mit Vang (Jackfruit) Buton Benteng-1 Natuna Sea Block A Anoa Deep Biawak Besar Block A Aceh Matang

North Sea

Norway PL406 Gardrofa PL359 Luno II UK P1466 Bluebell P077 East Fyne P1430 Carnaby P1212 / P1771 Stingray Block 21/29d Erne P1784 Typhoon P1557 West Orkney

Middle East & Pakistan

Pakistan Kadanwari K-29 K-30 Bhit-Badhra Badhra-6 Parh Kenya Blocks 10A & 10B 2D & 3D Seismic

Exploration drilling Q3 2011 to Q2 2012

  • ~ 300 mmboe

gross unrisked resource

  • 2011 full year

exploration expenditure ~ $250 million pre tax 12 to 15 exploration and appraisal wells planned in 2012

Contingent Wells Firm Wells: Rig Contracted Firm Wells: Rig TBC Seismic Programme All well timings are subject to revision for operational reasons Aqua Marine Driller W Callisto Antareja-8 W Callisto Bredford Dolphin Sedco 704 Sedco 704 WilPhoenix

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25 August 2011 | Page 38

Financial results

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25 August 2011 | Page 39

Production update

1H 2011

  • Steady performance in Pakistan
  • Anoa field in Indonesia continues to

respond well to Singapore demand

  • Reduced facility up-time in UK North Sea

Outlook

  • Recovery in UK performance
  • New fields in Asia drive 60 kboepd year-

end run rate

  • 2012 average of around 60 to 65 kboepd
  • 75 kboepd run rate post Huntington

80

Production (working interest) (kboepd net)

20 30 50 70 2010 A 2011 E 1H 2011 2H 2011 E 2012 E 60 40 10

Mid Point Estimate End of Period Run rate

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25 August 2011 | Page 40

Revenue and income statement

6 months to 30 June 2010 Average gas pricing ($/mcf) 2011 2010 Singapore $18.5 $13.8 Pakistan $3.7 $3.3 Average Brent oil price was $111.1/bbl (2010: $77.3/bbl) Operating costs per barrel ($/bbl) 2011 2010 UK $34.2 $24.7 Indonesia $9.6 $7.1 Pakistan $2.1 $1.6 Group $14.0 $12.9 Tax credit arises due to revaluation of UK tax allowance pool following UK government tax changes Highlights 6 months to 30 June 2011 Working Interest Production (kboepd) Entitlement Interest Production (kboepd) Realised oil price ($/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 credit/(charge) Profit after tax 46.6 42.6 78.1 5.8 $m 367 (189) 178 (46) (8) 124 (12) 112 (50) 62 36.9 33.8 109.7 8.3 $m 342 (200) 142 (91) (9) 42 (9) 33 56 89 2011 sales revenues include realised hedging loss on oil and gas production of $58.2 million (pre-tax)

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25 August 2011 | Page 41

Overseas UK PRT CT Prior period revisions UK deferred tax credits Tax credit for the period 6 months to 30 June 2010 $m

Group taxation position

27.8 17.7 nil (18.4) 27.1 22.5 49.6 Recognised previously as deferred tax asset Currently unrecognised Tax allowances at 1 Jan 2011 2011 estimated net additions Estimated end 2011 position UK Tax Allowance Position $m 972 140 1,112 238 1,350

  • Additional deferred tax credits mainly due to change in UK tax rate
  • UK allowances of $140 million not yet recorded
  • UK cash corporate taxes not anticipated until at least 2015

6 months to 30 June 2011 $m 46.0 30.4 nil (0.6) 75.8 (131.8) (56.0)

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25 August 2011 | Page 42

Cash flow

Cash flow from operations Taxation Operating cash flow Capital expenditure (Acquisitions)/disposals, net Finance and other charges, net Pre-licence expenditure Net cash flow 6 months to 30 June 2010 $m

1H 2011 Development Exploration

Estimated capex split ($m)

178 119 297 1H 2011 2010 Cash Net Debt

Balance sheet ($m)

300 406 902 483 582 804 Undrawn facilities

273 (51) 222 (212) 20 (27) (11) (8) 6 months to 30 June 2011 $m

1H 2010 142 70 212

246 (4) 242 (297) (87) (24) (10) (176)

Outlook

  • Forecast full-year 2011 spend – $500m (development) and $250m(exploration)
  • Net debt of around $600m (gearing of 32%)
  • Net debt peak of around $750m on forward curve

31 Dec

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25 August 2011 | Page 43

Summary

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25 August 2011 | Page 44

  • Asian development project success
  • Stronger North Sea production performance anticipated in 2H
  • Good progress on pipeline of development projects
  • Exploration on target to deliver 200 mmboe of discoveries
  • Acquisition track record at reasonable prices
  • Strong first half year financial results and balance sheet position

Delivering on strategy

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25 August 2011 | Page 45

www.premier-oil.com 25 August 2011