22 nd March 2007 2006 Preliminary Results Presentation Forward - - PowerPoint PPT Presentation

2006 Preliminary Results Presentation 22nd March 2007

Page 2 | 22nd March 2007

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 3 | 22nd March 2007

Agenda

Results Highlights Simon Lockett Financial Results Tony Durrant Regional Update Robin Allan & Neil Hawkings Look Ahead Simon Lockett

Page 4 | 22nd March 2007

Results Highlights

Page 5 | 22nd March 2007

Highlights

• Dua and Blackbird in Vietnam; Lembu

Peteng, Macan Tutul and Lukah in Indonesia

• Current drilling in India & Guinea Bissau
• Operated drilling

successes in Indonesia & Vietnam

• Signed MOU for gas sales in North

Sumatra

• Significant progress on West Natuna gas
• Resolution of partner issues on Ratna
• Initiated sale process for Mauritania
• 25% increase in reserves and

resources

• Tangible progress towards our

medium term target of 50,000 boepd

• Further definition on

development projects across all regions

• 3 acquisitions adding

low cost barrels

• 270 bcf net certified gas in North

Sumatra Block A

• Adding 5,000 bopd UK Scott production
• New opportunities with Middle East JV
• Real progress in

commercial discussions

Page 6 | 22nd March 2007

Financial highlights

• Profit after tax
• Operating cashflow
• Operating costs
• Balance sheet

Up 75% to $67.6 million (2005 - $38.6 million) Up 102% to $244.8 million (2005 - $121.2 million) Net cash of $40.9 million (2005 – net debt of $26.2 million) Stable at $6.0 per barrel (2005 - $5.9 per barrel)

Page 7 | 22nd March 2007

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 Loss for the period from assets held for sale Profit for the period

Prepared in accordance with IFRS

12 months to 31 Dec 2005 33.3 28.7 48.38 3.82 $m 359 (176) (38) (20) 126 (1) 125 (86) 39

• 39

Highlights 12 months to 31 Dec 2006 33.0 28.9 64.90 5.11 $m 359 (127) (37) (17) 179 (6) 173 (87) 86 (18) 68 Chinguetti revenues excluded Favourable resolution of prior provisions Mauritania defined as asset for sale Underlying field operating costs stable at $6.0/bbl Close to Brent average of $65.40/bbl Strong Singapore gas prices

• Maintained policy of hedging after tax barrels

with average floor around $40

• Net movement in mark to market valuation over

the year of $1.9 million

100.00

Dated Brent Oil ($/bbl)

80.00 60.00 20.00 03 04 08 10 12 40.00 05 06 07 09 11

Commodity Price and Forward Curve Average Cap Average Floor

Page 8 | 22nd March 2007

Cashflow

Net cash flow from operations Net interest Taxation Operating cash flow Capital expenditure Pre licence exploration costs Net share issues/(purchases) Other movements Movement in net cash Opening net cash/(debt) Closing net cash/(debt)

12 months to 31 Dec 2005 $m 12 months to 31 Dec 2006 $m

361

• (116)

245 (154) (22) 1 (3) 67 (26) 41 208

• (87)

121 (133) (17) (20) 4 (45) 19 (26)

2006 2005 Development Exploration 51 82 Acquisitions

• 17

154 90 47 133

Undrawn facility of $275 million

Operating Cashflow Capex Pakistan North Sea 43 26 West Africa 25 22 245 45 91 154 Asia 60 87 Estimated regional split

Page 9 | 22nd March 2007

Financial outlook

• Production expected to be 36,000-40,000 boepd for 2007
• Exploration spend will increase in 2007

– Current estimate around $100m – After-tax cost will be around $70m

• Planned development spending currently estimated at $110 million

120

Exploration cash expenditure before and after tax US Dollars (millions)

100 80 60 20 2004 2006

Gross expenditure Expenditure after tax and recoveries

2005 2007 40

Page 10 | 22nd March 2007

North Sea Strategy

• Deliver material reserve additions through
• rganic growth in Norway
• Maximise returns from current UK production

assets with a focus on incremental projects

• Pursue acquisitions of additional equity in core

areas

North Sea – returning to growth

25000

North Sea Production Profile (boepd)

20000 15000 10000 5000 2004 2006 2008 2009 2011

2004 Interim Results Forecast 2004-6 Actuals and Current Forecast

2005 2007 2010

Page 11 | 22nd March 2007

Scott acquisition

• Pre-emption notice issued on Hess’ sale of part of

Scott interest

• Premier share to increase from 1.79% to 21.83%
• Additional 12.7 mmboe net to Premier for $60m
• Increased 2007 production of 5,000 boepd

Page 12 | 22nd March 2007

• Premier 50% share

(operator Pertra)

• Brent equivalent field abandoned

by Total in 2001, awarded to Premier in 2005

• Operator’s reserves estimate is

62 mmbbl (35 to 70 mmbbls)

• Two development concepts

being carried forward – Jack-up drilling and production unit (leased) – Subsea tie-back to Jotun

• Final concept selection decision

planned for September

• POD submission targeting

year end

Frøy

Page 13 | 22nd March 2007

Bream

Bream

• “Most sought after” blocks in the APA 2006 round
• Undeveloped Brent equivalent oil field discovered in

1971, awarded to Premier in 2007

• Awarded 40% and Operatorship of Bream Exploration

– 1 Firm well

• Awarded 20% of Bream Appraisal (BG Operator)

– 1 Firm and 1 contingent well – POD submission in 2 years

• Could be developed as a tieback to the Yme field

– POD was submitted in January 2007

PL407 Bream Appraisal PL406 Bream Exploration

Yme Field Re-development Bream

Page 14 | 22nd March 2007

2006 APA Round Awards

• Five blocks awarded
• First Operatorship for Premier Norway
• Bream discovery to be appraised

UKCS 24th Round Awards

• 1524a & 15/25f

2005 APA Round Awards

• 4 non-operated exploration licences

awarded

• Working-up prospects for drilling
• Rig consortia discussions

North Sea exploration update

Page 15 | 22nd March 2007

PL359 – Merckx lead

• Paleocene sandstones lap
• nto the edge of the Utsira High.
• Oil shows in down-dip

16/4-1 well

• Risk analysis is being

undertaken before deciding whether to commit to a well.

North Sea exploration update

Paleocene sandstone pinchout

Page 16 | 22nd March 2007

UK exploration - Peveril

Blocks 39/2, 39/7

• Premier share 30%
• Premier carried for well
• 40mmbbl prospect in Fife (Upper Jurassic)

sandstones

• Close to Fife infrastructure
• Drilling April 2007

Peveril Prospect

Fife Field Fergus Field Outline of Peveril Prospect

Sealing Fault-locally developed sands not charged on eastern side 4 Way Dip closure at Base Cretaceous Subcrop/Erosion/Pinchout

• f Fife Sandstones defined

by subcrop of sealing Triassic Smith Bank Formation shales against Lower Cretaceous shales

Page 17 | 22nd March 2007

Middle East & Pakistan Strategy

• Grow high return Pakistan business through

development and acquisition

• Replenish Pakistan exploration portfolio, focusing
• n High Impact acreage
• Develop relationships to access new opportunities

– (EIIC Joint Venture)

Middle East & Pakistan Enhancing the Pakistan gas business

20000

Pakistan Production Graph (boepd)

18000 16000 14000 12000 10000 2007 2008 2009 2010 2011

Page 18 | 22nd March 2007

Pakistan - Qadirpur Deep

Qadirpur

• Discovered gas in a Lower

Cretaceous structure at ~4500m, with potential stratigraphic upside.

• The well has been

suspended for testing later in 2007

Page 19 | 22nd March 2007

Qadirpur (4.75%)

• Further plant expansion proceeding
• Qadirpur Deep drilled awaiting testing

Zamzama (9.37%)

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

2007

• Potential Upside Reserves identified

Bhit/Badhra (6.0%)

• GSA signed for additional sales
• Additional gas targeted December 2007
• Enlarging Badhra licence area

Kadanwari (15.79%)

• Development drilling proceeding

Pakistan – field updates

Page 20 | 22nd March 2007

Pakistan – Anne-1

Anne-1 E W

• Targeting 300 mmbbl in

Oligocene-Miocene sandstones

• Deep water: 1300m
• Drilling June/July 2007

Page 21 | 22nd March 2007

West Africa Strategy

• High Impact Exploration-led growth
• Maximise value from existing discoveries
• Generate a portfolio of new exploration
• pportunities

West Africa – high impact exploration

Congo Congo Guinea Bissau Guinea Bissau Country April 2007 190 Eirozes 285 260 70 Gross Unrisked Mean Potential (mmboe) 2008/9 2008 Drilling Anticipated Spud Frida Ida Espinafre Prospect

Page 22 | 22nd March 2007

Mauritania update

• New well (Chinguetti-18) is now

flowing

• Chinguetti-14 has been worked over
• Plans progressing for Phase 2B

production wells in Q4 this year

• Tiof continues to make progress
• High resolution seismic acquisition

in Q2

• Operator has started work on Banda

gas commercialisation

• At 8.12% equity, unlikely to generate

high impact exploration opportunities going forward

Page 23 | 22nd March 2007

Guinea Bissau

Esperanca (Block 4A and 5A) – 30.5%

• Targeting cretaceous sandstones
• Espinafre-1 currently drilling (70 MMBO)
• Eirozes-1 to follow:190 MMBO mean, 360

MMBO upside

• Block farmed-out to Delek Feb ’07 (subject to

Government ratification)

Page 24 | 22nd March 2007 North

Eirozes Prospect: mean reserves 190 million barrels

Top Albian Sand Salt South

Guinea Bissau high impact wells

Espinafre Prospect: mean reserves 70 million barrels

North Salt South Top Albian Sand

Page 25 | 22nd March 2007

Marine IX Block (Premier 58.5%)

• Significant reserve potential
• 3D reprocessing and interpretation in

2007

• Two large prospects – Frida and Ida
• Exploration well 2008/9

Congo – Block Marine IX

Kitina 150 mmbbls Moho 110 mmbbls N’Kossa 280 mmbbls

Frida Prospect Ida Prospect Frida Miocene Channel

Page 26 | 22nd March 2007

Frida Prospect 150 mmbo Kitina Field (Total)

Congo – Block Marine IX – Frida prospect

Page 27 | 22nd March 2007

Congo – Block Marine IX – Frida and Ida prospects

Frida Structure Ida Structure

Page 28 | 22nd March 2007

Asia Strategy

• Fully exploit the West Natuna potential
• Build a new core area in North Sumatra
• Develop the Nam Con Son Basin
• Access further high impact exploration
• Build on selected E&P projects in India

Asia – Building on our Natuna Sea position

Page 29 | 22nd March 2007

Asia success

Vietnam Block 12 37.5% - Dua and Blackbird discoveries Tuna licence award - 65% Vietnam Block 7&8/97 – option exercised for 45% interest Kakap 18.75% - Lukah discovery Natuna Sea Block A 28.67% - Macan Tutul-1, Lembu Peteng-1, discoveries North Sumatra Block A – acquisition

• f 41.67% interest

Significant progress on West Natuna gas sales Buton licence award - 30%

Page 30 | 22nd March 2007

India – Ratna

• All partners are now in agreement and ready to sign the

PSC and the associated documentation

• Being progressed through the ministries concerned
• Premier’s reserves estimate is around 80 mmstb but

further upside exists

• Premier is Operator with a 10% carried interest

Page 31 | 22nd March 2007

India – Cachar Block

Cachar, 14.5% (Operator)

• Masimpur-3 (2 Tcf), spudded 21 Jan 2007
• Hailakandi-1 & Kanchanpur-1 follow-up

wells, each with high potential

Hailakandi Prospect Kanchanpur Prospect Masimpur Prospect

Page 32 | 22nd March 2007

Masimpur-3 drilling curve

Seismic line POC-03-12

Masimpur Anticline

• The Masimpur structure has defeated

previous attempts to drill the Renji formation target

• The rig is located off the crest, and the

well is being drilled directionally to avoid high pressures seen in earlier wells

Page 33 | 22nd March 2007

North Sumatra Block A

• Acquired 41.67% in two

acquisitions from ExxonMobil and ConocoPhillips at a cost of $53m

• Medco have now assumed

Operatorship

• Initial focus will be the

development of the Alur Siwah gas field

• Followed by exploration activities

and re-development studies on old

• il fields

Page 34 | 22nd March 2007

Alur Siwah Development

• Initial gas development of three fields to an

already built local fertiliser plant. – D& M 2P certified gas reserves – Alur Siwah – 556 bcf – Alur Rambong – 76 bcf – Julu Rayeu – 34 bcf

• Outline Development

– 120 mmscf/d offtake rate (including 20% CO2) – New gas processing facility – First production in 2010

• Gas sales MOU recently signed

Alur Siwah – 9 Well

Page 35 | 22nd March 2007

• Gas from Alur Siwah to be sold to

fertiliser plants

• The Bata Raya Field could be

developed either into the Arun LNG Plant or the Fertiliser plant

• Further gas to be discovered through

exploration and quickly developed

• The old oil fields to be redeveloped

with horizontal drilling technology

• The giant Kuala Langsa Field Gas

to be developed and gas sold to the Arun LNG plant

• The reject CO2 stream could be

used for EOR in the old oil fields

North Sumatra Block A – long term vision

Page 36 | 22nd March 2007

West Natuna Block A – Gas Sales Update

• Gas sales planned under two

contracts – Singapore petrochemical complex

• ExxonMobil and other end users
• HSFO indexed price

– Domestic power generation

• Sale to PLN for Batam
• Domestic pricing
• First gas in 2010

– Possibility of some supplies in 2009

Page 37 | 22nd March 2007

West Natuna – long term vision

Page 38 | 22nd March 2007

West Natuna drilling programme – 2007

Lembu Peteng-2 (Appraisal) Ibu Lembu Pancing Kakak Lembu Gajah Sumatera 2 development wells Tenggiling Tupai

Contingent Wells Firm Wells

Page 39 | 22nd March 2007 Ibu Lembu-1

Lembu Trend

• A new oil and gas trend within tie-

back distance to existing infrastructure

Lembu Peteng-1 Lembu Peteng discovery

West Natuna – Lembu trend

Page 40 | 22nd March 2007 Gajah Puteri-2 Gajah Sumatera-1 plus ST Gajah Puteri-1

West Natuna - Gajah Sumatera Prospect

Gajah Sumatera

Gajah Sumatera

• Potential extension to the Gajah

Puteri Field

Page 41 | 22nd March 2007

Buton 30%

• Awarded 28 February 2007
• Operator Japex
• 2007 WP:

– Environmental Impact Assessment – Geological Field Survey – 265km 2D seismic (late ‘07) – Exploration well 2009

Buton Block

Indonesia licence award – Buton (Sulawesi)

Page 42 | 22nd March 2007

Large anticlines are seen at surface; there are likely to be structural traps at depth

U D Oil seeps

Buton: Lead C Satellite Interpretation

Lead C Anticline Tp-Q Tp-Q Sampolakosa-1S

Page 43 | 22nd March 2007

Natuna Sea – Tuna Block

Seismic Line showing Direct Hydrocarbon Indicators Tuna Block Leads

Tuna 65%, Operator

• Awarded 2 March 2007 (3 yrs)
• Adjacent to Vietnam Block 7 & 8/97
• On trend with Dua and Blackbird

discoveries

• Potential 40-100 MMBO prospects

Page 44 | 22nd March 2007

Vietnam Block 12 – discoveries and prospects

Blackbird Successful exploration, 3D April 2007 Falcon Follow-up to Blackbird Dua Field Successfully appraised Jay Near field exploration to Dua Quit Big structure

Page 45 | 22nd March 2007

Vietnam Block 12 - Discoveries and Prospects

10 km

Falcon Blackbird Quit Dua Peacock

Base Tertiary Depth Map

Page 46 | 22nd March 2007

Dua / Blackbird update

• Reservoir and Facilities Development studies are underway
• 3D seismic on Blackbird in 2Q 2007 to reduce volumetric uncertainty
• Concept selection scheduled for Q3 - Project sanction in Q2 2008
• Likely to be an FPSO
• Two wellhead platforms
• Jack-up drilling rig
• First production in 2010
• 80 mmbbl of oil reserves
• Gas options under review

Page 47 | 22nd March 2007

Block 12 – Falcon prospect

Falcon – Top Middle Dua Sands Depth Structure

Top Thong Top Intra Middle Dua Top MD1 Near Top MD5 Top MD6 Top Cau

A A’ A’

Falcon

Falcon

A

Falcon Prospect – max closing Contour 2990mSS

Falcon Prospect

• 2007: 3D seismic programme
• Exploration well in 2007/8

Page 48 | 22nd March 2007 Peacock Prospect Top Middle Dua Sands Depth Map

Peacock Prospect

• 2007: 3D seismic programme
• Exploration well in 2008

Peacock

Peacock Prospect Peacock Prospect

Vietnam Block 12 – Peacock prospect

Page 49 | 22nd March 2007

Vietnam – Blocks 7 & 8/97

Block 7 & 8/97 Premier 45%

• Force Majeure lifted in November

2006

• Adjacent to Block 12 (success in

2006) and newly awarded Tuna Block in Indonesia

• Numerous prospects and leads

identified on seismic

• First well to be drilled in 2008/9

Page 50 | 22nd March 2007

Vietnam – Blocks 7 & 8/97

E W

Blue Marlin Prospect

Page 51 | 22nd March 2007

Red Grouper Prospect

Block 7 & 8/97 – Red Grouper Prospect

Page 52 | 22nd March 2007

Vietnam Block 12 – long term vision

• Repeat the successful model

from West Natuna Block A

• Start with an FPSO based oil

development

• Follow up with gas offtake

through a shared pipeline to power generation

• Continue to integrate

exploration successes

• Potential synergies with

Block 7 & 8/97 and Tuna Block in Indonesia

Page 53 | 22nd March 2007

Corporate Strategy

• Deliver value through a growth focused

independent upstream E&P business

• Production growth through

development projects

• Focused high impact exploration
• Pursuit of acquisitions which are

complementary to existing assets and knowledge base Medium Term Targets

• Targeting production growth to

50,000 bopd

• 4 high impact wells per annum within

disciplined spend

Corporate strategy

Page 54 | 22nd March 2007

Reserve additions

• West Natuna
• North Sumatra

Block A

• Blackbird/Dua
• Frøy
• Pakistan

100

Reserves/Resources (mmboe)

Opening Production Resource additions Proforma

50 200 150 250

Closing

300 350

Resources movement Booked reserves movement Resources Booked reserves

232 302

Scott

165 164 152 289

Page 55 | 22nd March 2007

Development schedule

WNBA GSA-2 Ratna Blackbird / Dua NSBA–Alur Siwah Frøy Pakistan

2007 2008 2009 2010

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

Page 56 | 22nd March 2007

5 Year production

Production Profile (boepd)

2006 60000 80000 2007 2008 2009 2011 50000 40000 30000 20000 10000

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

New projects Booked reserves 70000 2010

Production Profile by Region (boepd)

2006 60000 80000 2007 2008 2009 2011 50000 40000 30000 20000 10000 70000 West Africa Asia M/East & Pakistan North Sea 2010

Page 57 | 22nd March 2007

Development capex

Future Field Capex by Region ($ million)

300 250 200 150 100 50

West Africa Asia

• M. East & Pakistan

North Sea

Future Field Capex ($ million)

300 250 200 150 100 50 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

New projects Booked reserves

Page 58 | 22nd March 2007

Exploration – the next 12 months

Contingent wells

North Sea

UK : 39/7 Peveril

M/East & Pakistan

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

West Africa

Guinea Bissau : Esperanca Espinafre-1 Eirozes-1 Gabon : Themis Themis-1

Asia

Indonesia : Natuna A PSC Ibu Lembu-1 Gajah Sumatera-2 Lembu Peteng-2 Tenggiling Kakak Lembu-1 Kakap Pancing-1 Vietnam : 12E & 12W Falcon-1 Philippines : Ragay Gulf Monte Cristo India : Cachar Masimpur-3 Hailakandi-1 Kanchanpur-1 JUN JUL AUG SEP APR MAY OCT NOV DEC FEB 2007 MAR High impact wells Firm wells 2008 JAN

Timing depends on rig availability

Page 59 | 22nd March 2007

12 months ahead

• Progress development sanctions
• High impact exploration in Guinea Bissau, India, UK,

Pakistan

• Focus exploration efforts on 2008/9; Vietnam, Congo

and follow-ups

• Complementary acquisitions to existing Businesses

Page 60 | 22nd March 2007 www.premier-oil.com

22nd March 2007