21 st September 2006 2006 Interim Results Presentation Forward - - PowerPoint PPT Presentation

2006 Interim Results Presentation 21st September 2006

Page 3 | 2006 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 | 2006 Interim Results Presentation

Interim Results Presentation

Highlights Simon Lockett Financial Results Tony Durrant Exploration & Appraisal Robin Allan Production & Development Neil Hawkings

Page 5 | 2006 Interim Results Presentation

Highlights

Page 6 | 2006 Interim Results Presentation

Operational highlights

2006 successes on Dua, Lembu Peteng, Macan Tutul, Lukah, and West Lobe, with more wells to follow

• Operated drilling

success in Indonesia & Vietnam

• Significant progress
• n new gas sales in

Pakistan & Indonesia Zamzama, Bhit, Badhra, Kadanwari, Zarghun, Qadirpur, North Sumatra Block A, Natuna Sea Block A Production up on 2005 full year average (33,235 boepd), tangible progress towards 50,000 boepd target

• Production of 33,521

boepd

Production Profile by Region (boepd)

Production Profile (boepd)

• Acquisition in North

Sumatra with significant upside 110 bcf net undeveloped certified reserves, with a ready gas buyer. Significant potential upside

Page 7 | 2006 Interim Results Presentation

Financial highlights

• Expenditures on track

$50m exploration $100m development Significant cash inflow in January 2006

• Profit after tax - up

64% to $33.7m Rising oil and gas prices, stable production

1H 2005 1H 2006

64%

• Healthy cashflow – up

218% to $172.3m Disciplined approach to expenditure

1H 2005 1H 2006

218%

• Improved balance

sheet Half year net cash position of $43.8m vs. year end net debt position of $26.2m

End 2005 1H 2006

• 26.2m

+43.8m

Page 8 | 2006 Interim Results Presentation

Asia Building on our Natuna Sea position

• Lembu trend appraisal

and Anoa oil finds

• Dua & Swan

development studies

• Blackbird exploration

well results in Q4

• North Sumatra

Development Planning

• Gas sales and Ratna

negotiations ongoing

Asia

Middle East / Pakistan Enhancing the Pakistan gas business

• Continuing production

growth

• New gas contracts

and field expansion

• New business focus in

the region

Middle East/Pakistan

Page 9 | 2006 Interim Results Presentation

North Sea Returning to growth

• Frøy development plan on track
• Applications in UK and Norway licensing rounds
• UK Peveril well in 4th Quarter

North Sea

West Africa Building a new core Business

• Seeking to optimise Chinguetti development
• Tiof development studies
• High impact exploration in Guinea Bissau

and Congo

West Africa

Page 10 | 2006 Interim Results Presentation

Financial Results

Page 11 | 2006 Interim Results Presentation

Production and Income Statement

Working Interest Production (mboepd) Entitlement Interest Production (mboepd) Realised oil price ($/bbl) Realised gas price ($/mcf) Sales and other operating revenues Cost of sales Exploration/New Business General and administration costs Operating profit Financial Items Profit before taxation Taxation Profit after tax

Prepared in accordance with IFRS

12 months to 31 Dec 2005 6 months to 30 June 2005 33.3 28.7 48.4 3.8 34.8 30.2 38.1 3.4 $m 149.3 (73.7) (5.7) (9.1) 60.8 1.2 62.0 (41.5) 20.5 Highlights Underlying operating costs per barrel flat at $5.2/bbl Includes $9.2m of exploration write-off principally in Egypt Effective tax rate of 43% of gross profit Includes $15.9m of mark-to-market hedging adjustments Strong gas prices in Singapore Average 1% premium to Brent crude Oil and gas split steady at around 30/70 6 months to 30 June 2006 33.5 31.0 66.5 5.3 $m 219.6 (85.5) (15.8) (8.2) 110.1 (18.6) 91.5 (57.8) 33.7

Page 12 | 2006 Interim Results Presentation

Cashflow

Net cash flow from operations Net interest Taxation Operating cash flow Capital expenditure Pre licence exploration costs Net cash flow before financing

6 months to 30 June 2005 $m 6 months to 30 June 2006 $m

223.6 (1.3) (50.0) 172.3 (95.9) (6.6) 69.8 93.9 (0.1) (39.6) 54.2 (62.0) (-) (7.8)

2006 2005 Development 95.9 62.0 Exploration 28.0 34.0 Acquisitions

• 17.0

39.0 39.9

Page 13 | 2006 Interim Results Presentation

Balance Sheet

Intangibles Producing and Development Assets Cash and Equivalents Net Working Capital Long-Term Debt Provisions Net Assets

As at 31 December 2005 $m As at 30 June 2006 $m

111.6 570.1 43.8 (54.8)

• (258.3)

412.4 63.9 568.9 38.5 5.5 (63.6) (250.5) 376.1

Unused facility of $275 million Favourable movement in working capital due to cargo delivery schedule Net cash resources of $43.8 million at period end Vietnam farm-out will complete after Blackbird well

Page 14 | 2006 Interim Results Presentation

Commodity pricing compared with hedges 2003-2012

Dated Brent Oil ($/bbl)

80.00 20.00 100.00 03 70.00 60.00 50.00 40.00 30.00 90.00 04 05 06 07 08 09 10 11 12 Year

HSFO Singapore 180 ($/metric tonne)

450.00 150.00 500.00 03 400.00 350.00 300.00 250.00 200.00 04 05 06 07 08 09 10 11 12 Year

Commodity Price and Forward Curve Average Cap Average Floor

Page 15 | 2006 Interim Results Presentation

Financial strategy

• Disciplined exploration spend of $50 million on a pre-tax basis – under

review for 2007 in light of E&A success

• Strong balance sheet and unused funding available for development

capital and acquisitions

• Fully capturing current oil and gas pricing
• Buyback programme available according to market conditions

Page 16 | 2006 Interim Results Presentation

Exploration Highlights

Page 17 | 2006 Interim Results Presentation

Blocks 12E & W Operator – Premier

• Dua (spudded 1st May 2006)
• Blackbird
• Swan commericalisation
• pportunities for 2007
• Falcon, Peacock and Quit:

follow-on prospects

Dua Structure

12E-CS-1X

Blackbird Structure

Quit Peacock Falcon Swan Dua Blackbird

Vietnam

Canary

Page 18 | 2006 Interim Results Presentation

Dua-1X

12-A-1X Dua-1X Discovery Dua-2X Premier Dua-4X

5km

Vietnam - Dua

Premier Dua-5X

Page 19 | 2006 Interim Results Presentation

• Dua-4x and -4xst

intersected gas- bearing reservoirs

• Dua-5x intersected

gas and oil-bearing reservoirs

Premier Dua-4X & -4Xst Premier Dua-5X

Additional oil and gas discoveries in shallower reservoirs

Vietnam – new Dua

NCS sandstones NCS carbonates

Page 20 | 2006 Interim Results Presentation

Indonesia drilling update – Natuna A PSC

Natuna Sea Block A PSC

• 2006 Success in:
• Macan Tutul-1
• Lembu Petang-1
• Lukah-1
• Planned Ibu Lembu

follow-up drilling Q4 2006

Lembu Peteng-1 Lukah-1 Macan Tutul-1

Page 21 | 2006 Interim Results Presentation Ibu Lembu-1

Lembu Peteng follow-up potential

• A new oil and gas trend within tie-back

distance to existing infrastructure

Lembu Peteng-1 Lembu Peteng

Page 22 | 2006 Interim Results Presentation

Exploration – the next 12 months

West Africa

Guinea Bissau: Eirozes-1 Espinafre-1 Mauritania : Kibaro-1 Gabon : Themis-1

M/East & Pakistan

Pakistan : Anne-1

Asia

Indonesia : Ibu Lembu-1 : 3-4 further wells (commencing September) : Kakap Vietnam : Blackbird-1 : Dua-5x India : Masimpur-3 : Hailakandi-1 : Kanchanpur-1

North Sea

UK : Peveril 2007 JAN FEB MAR APR OCT NOV DEC MAY JUN JUL AUG SEP 2006 SEP Appraisal wells Exploration wells Contingent Wells High impact wells

Page 23 | 2006 Interim Results Presentation

Vietnam – opportunity set

Flamingo Major high, 3D repro being interpreted Swan Possible well to test gas volumes in SW of closure Quit Risky but big potential Blackbird In success case, 3D April 2007, appraisal well April 2008 Falcon & Others On trend, follow-up to Blackbird Jay Near field exploration to Dua Chim Dau Near field exploration to Dua Dua Field Further appraisal

Page 24 | 2006 Interim Results Presentation Existing Well 12E-LX-1X Drilled outside structure Premier 12E-CS-1X Planned at crest 12E-LX-1X Thick sands with residual oil; drilled close to mapped contact Anticipated Oil Water Contact at spill-point

Blackbird Prospect – estimated 80 million barrels reserves potential

Vietnam - Blackbird

Page 25 | 2006 Interim Results Presentation

Indonesia drilling programme - 2007

Lembu Peteng-2

Natuna Sea Block A PSC

• 3-4 wells are planned

for 2007. Contenders are shown

Ibu Lembu Kakap Lembu Tenggiling Ganesha Tupai

Page 26 | 2006 Interim Results Presentation

India high-impact wells

Cachar Block

• 2 Tcf gas prospect
• Masimpur-1 mobilising for December 2006 spud
• Hailakandi-1 & Kanchanpur-1 follow-up wells,

each with high potential

Masimpur Anticline

NW Primary Target: Oligocene Renji Formation Seismic line POC-03-12 SE

Page 27 | 2006 Interim Results Presentation

Pakistan – Anne high impact exploration

Anne-1 E W

• Key well for Indus

Delta

• 300 million barrels

potential

• Now scheduled for

July 2007

Page 28 | 2006 Interim Results Presentation

Gabon and Congo

Page 29 | 2006 Interim Results Presentation

Block Marine IX Highly prospective block, with significant reserve potential. Premier 58.5% – Operator

Congo high impact exploration

Kitina 150 m bbls Moho 110 m bbls N’Kossa 280 m bbls

Frida Prospect

Page 30 | 2006 Interim Results Presentation

Congo Block IX : Frida Prospect

• Decree authorising award of PSC issued May 19th
• Presidential approval expected in August 2006
• JOA signed by all parties
• Possible drilling end 2007–early 2008
• Estimated reserves >200MMBO

Top Lower Albian depth map with Miocene channel depth overlay

Page 31 | 2006 Interim Results Presentation

South Gabon Exploration Portfolio

Gabon : Dussafu and Themis PSC’s

Moubenga-1 discovery Walt Whitman-1 discovery GMC-1 discovery

Themis Marin PSC

• 2005 3D
• Rig contracted for 3Q

2007 well Dussafu Marin PSC

• Large oil-prone block
• Reassessing existing

discoveries previously regarded as ‘sub- commercial’ at lower

• il prices
• Finalising prospects for

2007-8 drilling (subject to rig availability)

Page 32 | 2006 Interim Results Presentation

• At $50/bbl oil price economics

generates $7 NPV/bbl

• Firm drilling programme

commencing January 2007

Guinea Bissau high-impact wells

135 mbbls 100 mbbls 180 mbbls 80 mbbls 151 mbbls 230 mbbls 110 mmbbls Eirozes 190m bbls 300 mmbbls Espinafre 70 mbbls

Sinapa-1 Sinapa-2,2z

175 mbbls 190 mbbls 30 mbbls

Page 33 | 2006 Interim Results Presentation North

Eirozes-1 Proposed Well (WD= 120 metres)

Eirozes Prospect: mean reserves 190 million barrels

Top Albian Sand Salt South

Guinea Bissau high-impact wells

Page 34 | 2006 Interim Results Presentation

Espinafre Prospect: mean reserves 70 million barrels

North Top Albian Sand Salt South

Espinafre-1 Proposed Well (WD= 34 metres)

Guinea Bissau high-impact wells

Page 35 | 2006 Interim Results Presentation

UK exploration - Peveril

Blocks 39/2, 39/7

• Premier share 30%
• Carried interest
• 40m bbl prospect
• Close to Fife

infrastructure

• Drilling December 2006

Peveril Prospect

Page 36 | 2006 Interim Results Presentation

UK exploration - Peveril

Page 37 | 2006 Interim Results Presentation

Building for the future

• Licensing Rounds – outstanding applications
• Indonesia
• Egypt
• Norway
• UK
• Out-of-round applications
• Farm-ins
• Acquisitions

Page 38 | 2006 Interim Results Presentation

Operational Highlights

Page 39 | 2006 Interim Results Presentation

Vietnam – moving Block 12 into development

Page 40 | 2006 Interim Results Presentation

Indonesia - North Sumatra Block A

• Certified 110 bcf (~18mmboe) net

discovered gas reserves with a ready gas buyer at a good price.

• 20+ exploration prospects, 1.5 tcf+ gross
• Partnership with ConocoPhillips, Medco and

Japex (Premier Interest 16.67%)

• Low initial entry cost of $17 million

Page 41 | 2006 Interim Results Presentation

Indonesia – Natuna Sea Block A

Anoa Development – GSA 1

• Existing oil and gas process

and export Wet Gas Area

• Potential for Liquids

Development

• Further Appraisal

required Gajah Baru

• Focus of GSA2 Plans
• 500 Bcf of Certified

Reserves

• First Gas 2010

Page 42 | 2006 Interim Results Presentation

Indonesia – ongoing Anoa development

West Lobe Central Lobe East Lobe Anoa Field 3D Reservoir View

• West Lobe development drilling proceeding well
• 67 ft oil column confirmed in Central Lobe area -

Potential to significantly increase Anoa oil production

• 100 ft hydrocarbon bearing interval encountered above

the main Anoa reservoir

• Tie-in Opportuinity - Macan Tutul
• Further 2007 Exploration Opportunities

Page 43 | 2006 Interim Results Presentation

Indonesia – Block A drilling plans

JUL 2006 SEP NOV SEP NOV JUL MAY MAR JAN 2007 2006 Drilling Programme West Lobe Wells – Batch Drilled West Lobe Well Completions Ibu Lembu SA-21 WO Rig on contract to Serica 2007 Drilling Programme Central Lobe Development and Comp E&A Well 1 E&A Well 2 West Lobe-5 E&A Well 3 E&A Well 4 (Option)

Indonesia

Page 44 | 2006 Interim Results Presentation

Kadanwari

• Further development drilling to proceed

in 2006 and 2007 Qadirpur

• Further plant expansion to proceed
• Term sheet agreed for further 100

mmscfd from 2008

• Deeper reservoir being drilled

Zamzama

• Phase 2 project progressing to plan
• 150 mmscfd - first gas in 2007

Bhit/Badhra

• GSA awaiting formal signature
• First gas in 2008

Zarghun South

• Agreement reached on GSA

Pakistan - a continually growing gas business

K18 K17 K16

Page 45 | 2006 Interim Results Presentation

Mauritania – optimising the Chinguetti development

• Production commenced at ~70,000 bopd, 5,700 bopd net Premier
• Current production 30,000 to 35,000 bopd - complex reservoir architecture
• Reserves under review by Operator
• Further development drilling in Q4 2006 (Phase 2A)
• Additional development wells also being considered for 2007-8 (Phase 2B and 3)

Page 46 | 2006 Interim Results Presentation

• New seismic acquired and processed
• Geological model constructed
• Reservoir model being built
• Development concept selection under way
• 20-50 mmbbl of reserves
• Development Plan submission mid-2007
• First oil 2010

Norway - progressing the Frøy development

FPSO Jack-up with Processsing

Page 47 | 2006 Interim Results Presentation

Building for the future

• Premier is continually seeking new opportunities to add

production growth opportunities to our portfolio via:

• Acquisitions
• License Rounds
• Farm-ins
• During the first half of the year we have been actively

pursuing new production growth opportunities

Page 48 | 2006 Interim Results Presentation

Summary

Page 49 | 2006 Interim Results Presentation

Strategy

Progress

• Drilling a high quality

exploration programme, already yielding results

• Gained Sumatra entry

via acquisition

• Norway organic growth

starting to deliver

• Delivering growth in

existing assets in Pakistan & Indonesia Strategy

• Targeting

production growth to 50,000 bopd

• Minimum of 4 high

impact wells per annum within disciplined spend

• Acquisitions focus
• n core areas
• Operating in 4

regional Businesses

Page 50 | 2006 Interim Results Presentation

5 Year production potential

Production Profile by Region (boepd)

2006 60000 80000 2007 2008 2009 2010 50000 40000 30000 20000 10000 70000

Production Profile (boepd)

2006 60000 80000 2007 2008 2009 2010 50000 40000 30000 20000 10000

(NB: Only includes discovered hydrocarbons (no exploration success assumed or acquisitions))

Potential new projects Booked reserves 70000 Asia M/East & Pakistan West Africa North Sea

Page 51 | 2006 Interim Results Presentation

Exploration – the next 12 months

West Africa

Guinea Bissau: Eirozes-1 Espinafre-1 Mauritania : Kibaro-1 Gabon : Themis-1

M/East & Pakistan

Pakistan : Anne-1

Asia

Indonesia : Ibu Lembu-1 : 3-4 further wells (commencing September) : Kakap Vietnam : Blackbird-1 : Dua-5x India : Masimpur-3 : Hailakandi-1 : Kanchanpur-1

North Sea

UK : Peveril 2007 JAN FEB MAR APR OCT NOV DEC MAY JUN JUL AUG SEP 2006 SEP Appraisal wells Exploration wells Contingent Wells High impact wells

Page 52 | 2006 Interim Results Presentation

Look Ahead

• Close out gas sales contracts in Indonesia/Pakistan
• Commercialise Frøy, Dua & North Sumatra
• High impact exploration in Guinea Bissau, Vietnam,

India, UK and Pakistan

• Actively target acquisitions in core areas

Page 53 | 2006 Interim Results Presentation www.premier-oil.com

September 2006