a 2003 Preliminary Results Presentation 2003 Preliminary Results - - PowerPoint PPT Presentation

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18 March 2004

2003 Preliminary Results Presentation

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2003 Preliminary Results Presentation

18 March 2004

Photo: Woodside

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Presentation

Introduction Sir David John Finance and Operations John van der Welle Business Development Robin Allan Summary and Outlook Charles Jamieson

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Finance and Operations

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Results highlights – secure base for future growth

• Record results – financially/operationally
• Restructuring complete
• Exploration success in West Africa and Pakistan
• Non-core assets disposals
• Exciting 2004 exploration programme underway

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Financial highlights

• Production 53,600 boepd (2002: 53,600 boepd)

NC

• Turnover £257.7m (2002: £263.1m)
• 2%
• Operating profit £121.6m (2002: £104.1m)

+17%

• Net profit after tax £40.8m (2002: £22.6m)

+80%

• Pre-exceptional net profit after tax £63.6m (2002: £35.7m)

+78%

• Operating cash flow after interest, tax £135.7m (2002: £136.1m)

NC

• Net cash £7.1m (2002: net debt £249.5m)

NA

• Gearing Nil (2002: 80%)
• 80%

NC = No change

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Profit and loss – record profitability

2002 Restated 2003 Reported 53.6 24.3 3.44 £m 263 (64) 199 (54) (53) (13) (5) 74 (8) 66 38 104

• (31)
• 73

(50) 23 14.2 53.6 27.2 3.74 £m 258 (75) 183 (42) (45)

• (12)

84 (12) 72 50 122 1 (19) (23) 81 (40) 41 30.0 35.1 27.0 3.18 £m 166 (25) 141 (37) (38)

• (12)

54 (12) 42 16 58

• (13)
• 45

(28) 17 NA 2003 Ongoing

Working interest production Impact of weak dollar and change in production mix (more gas) Unit opex (incl JVs) £3.0/boe – same as last year Unit DDA (incl JVs) £2.60/boe - down 17% due to higher proportion of low cost production outside UK JVs represent Pakistan and Myanmar (reported column), Pakistan only (ongoing column) Continuing reduction in debt Early repayment of fixed rate debt on restructuring Reduction in deferred tax Using weighted average number of new consolidated shares (136m)

Production (mboepd) Realised oil price ($/bbl) Realised gas price ($/mcf) Turnover less: share of JVs turnover Group turnover Operating costs Amortisation Exceptional provision for oil and gas assets Exploration expenditure written off Gross profit Administration costs Operating profit Operating profit in JVs Total operating profit Profit on sale of investment Net interest/exchange Exceptional make-whole payment Profit before tax Taxation Profit after tax Earnings per share - basic (pence)

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Strong cashflow

Net cash flow from operations Net interest Taxation Operating cash flow (after interest and tax) Capital expenditure Acquisitions Disposals Restructuring Net cashflow Exchange/other Movement in net debt Yetagun interest accrued Opening net debt Closing net cash/(debt) 138 (19) (27) 92 (32) (6) 18 101 173 12 185

• (181)

4

In line with unchanged turnover Capital expenditure – focus on exploration

Excl JV JV Total £m £m £m Exploration 25 6 31 Fields 6 5 11 Other 1

• 1

32 11 43

2003 (As reported) £m 2002 (Incl JVs) £m

187 (22) (29) 136 (43) (6) 18 150 255 2 257

• (250)

7

2003 (Incl JVs) £m

• Operating cash flow covers exploration 4.4x (2002: 3.9x)
• Interest cover now 8.5x (2002: 7.1x)

184 (26) (22) 136 (73)

• 30
• 93

38 131 (2) (379) (250)

Fusion deal Sale of AWE shares and non-core UK assets

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Balance sheet transformed – no net debt

64 (57) 7 Cash (incl JVs) Debt (incl JVs) Net (debt)/cash (incl JVs) Gearing ratio %

Balance sheet at 31 Dec 2003 £m

101 49 150 NA

Impact of restructuring £m

167 (417) (250) 80

Balance Sheet at 31 Dec 2002 £m

% (204) 311 107 NA

Movement

• ver year

£m

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Reserves and production

UK Indonesia Pakistan Mauritania (2) Unbooked (3)

Total 2P reserves ~200+ mmboe (1)

• Booked reserves 175 mmboe:

83% gas; 17% oil 10,000 20,000 30,000 40,000 2004 2005 2006 2007 2008

Working interest production (barrels of oil equivalent per day)

Indonesia 2nd gas sale Mauritania – Chinguetti only Indonesia Pakistan UK

(1) Total reserves defined as booked and unbooked 2P WI reserves (2) 29.9% of Premier share of Chinguetti reserves pending

completion of Fusion deal and before Agip pre-emption

(3) Unbooked reserves relate to Indonesia and Mauritania

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Good spread of production across countries and assets

0% 5% 10% 15% 20%

WI production by field (5 year total) (Percentage of total WI production)

W y t c h F a r m F i f e G r

• u

p S c

• t

t / T e l f

• r

d K y l e G a l a h a d Q a d i r p u r K a d a n w a r i B h i t Z a m z a m a A n

• a

K a k a p I n d

• n

e s i a 2

n d

s a l e C h i n g u e t t i

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Future field capex programme

20 25 30 35 40

Development CAPEX (£ million)

Averaging £20-25 million pa

2004 2005 2006 2007 2008 15 10 5 Indonesia 2nd gas sale Mauritania Indonesia Pakistan UK

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Secure financial outlook

• Solid, developed and diverse reserve base
• Manageable development costs
• Ungeared balance sheet

Sustainable growth programme

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Reserves and production

UK Indonesia Pakistan Mauritania (2) Unbooked (3)

Total 2P reserves ~200+ mmboe (1)

• Booked reserves 175 mmboe:

83% gas; 17% oil 10,000 20,000 30,000 40,000 2004 2005 2006 2007 2008

Working interest production (barrels of oil equivalent per day)

Indonesia 2nd gas sale Mauritania – Chinguetti only Indonesia Pakistan UK (1) Total reserves defined as booked and unbooked 2P WI reserves (2) 29.9% of Premier share of Chinguetti reserves pending completion of Fusion deal and before Agip pre-emption (3) Unbooked reserves relate to Indonesia and Mauritania 2003 Preliminary Results Presentation Page 17

Reserves and production

UK Indonesia Pakistan Mauritania (2) Unbooked (3)

Total 2P reserves ~200+ mmboe (1)

• Booked reserves 175 mmboe:

83% gas; 17% oil 10,000 20,000 30,000 40,000 2004 2005 2006 2007 2008

Working interest production (barrels of oil equivalent per day)

Indonesia 2nd gas sale Mauritania – Chinguetti only Indonesia Pakistan UK (1) Total reserves defined as booked and unbooked 2P WI reserves (2) 29.9% of Premier share of Chinguetti reserves pending completion of Fusion deal and before Agip pre-emption (3) Unbooked reserves relate to Indonesia and Mauritania 2003 Preliminary Results Presentation Page 11

Good spread of production across countries and assets

0% 5% 10% 15% 20%

WI production by field (5 year total) (Percentage of total WI production)

W y t c h F a r m F i f e G r

• u

p S c

• t

t / T e l f

• r

d K y l e G a l a h a d Q a d i r p u r K a d a n w a r i B h i t Z a m z a m a A n

• a

K a k a p I n d

• n

e s i a 2

n d

s a l e C h i n g u e t t i

2003 Preliminary Results Presentation Page 11

Good spread of production across countries and assets

0% 5% 10% 15% 20%

WI production by field (5 year total) (Percentage of total WI production)

W y t c h F a r m F i f e G r

• u

p S c

• t

t / T e l f

• r

d K y l e G a l a h a d Q a d i r p u r K a d a n w a r i B h i t Z a m z a m a A n

• a

K a k a p I n d

• n

e s i a 2

n d

s a l e C h i n g u e t t i

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Future field capex programme

20 25 30 35 40

Development CAPEX (£ million)

Averaging £20-25 million pa

2004 2005 2006 2007 2008 15 10 5 Indonesia 2nd gas sale Mauritania Indonesia Pakistan UK

2003 Preliminary Results Presentation Page 12

Future field capex programme

20 25 30 35 40

Development CAPEX (£ million)

Averaging £20-25 million pa

2004 2005 2006 2007 2008 15 10 5 Indonesia 2nd gas sale Mauritania Indonesia Pakistan UK

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Business Development

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Business development

• 2003 Review
• Strategy
• 2004 Plans
• Summary

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Business development

Make a Difference

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• Delivery of exploration success

– “Play-makers” – Quality

• Commercial deal-making:

– Value adding through smart acquisitions – Optimising the portfolio:

• Lower R/P ratio
• Managing portfolio risk
• Realising value

STRATEGY IMPLEMENTATION

Make a Difference

2002 Preliminary Results Presentation

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• Delivery of exploration success

– “Play-makers” – Quality

• Commercial deal-making:

– Value adding through smart acquisitions – Optimising the portfolio:

• Lower R/P ratio
• Managing portfolio risk
• Realising value

STRATEGY IMPLEMENTATION

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Business development

Make a Difference

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GEOGRAPHIC FOCUS

Premier’s strategy will remain principally focused on our 3 core areas:

• UK: Growing and

extending the business to retain a significant UK base

• South and South East Asia:

Leveraging on experience

• West Africa: Building a

material business

Existing Business Unit Geographic Focus Area

UK UK South and South East Asia South and South East Asia West Africa West Africa Make a Difference

2002 Preliminary Results Presentation

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GEOGRAPHIC FOCUS

Premier’s strategy will remain principally focused on our 3 core areas:

• UK: Growing and

extending the business to retain a significant UK base

• South and South East Asia:

Leveraging on experience

• West Africa: Building a

material business

Existing Business Unit Geographic Focus Area

UK UK South and South East Asia South and South East Asia West Africa West Africa

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2003 Review

UKCS

• Divested non-core assets
• Renewed exploration portfolio

Africa

• Mauritania PSC A&B

– New country entry – Testing of Chinguetti at 15,600 bopd – Significant Tiof-1 & Tiof West-1 discovery

• Guinea Bissau

– Sinapa Farmout to Oxy concluded – New deep-water protection acreage signed

• Gabon

– New permits – Iris and Themis

• SADR

– New country entry

Asia

• Pakistan

– New offshore licence – Kadanwari West success – Zamzama East success

• Philippines

– New country entry - Ragay Gulf Mauritania SADR Guinea Bissau Gabon Indonesia UKCS Philippines India Pakistan

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2003 UKCS

P1048 - 50% : Operator – Premier (20/10b, 21/6a, 20/15a & 21/11b)

• New licence entry
• Block potential 300m bbls

39/2b, 39/7 - 30% : Operator – Tullow

• New licence entry
• Blocks adjacent to Fife Area interests

UK Portfolio Management

• Sold equity in non-core assets to

Atlantic Oil and Gas for £8m including contingent payments

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2003 Africa – Mauritania

New country entry PSC A – 4.62%*: Operator – Woodside PSC B – 9.23%*: Operator – Woodside Entry cost $10m for 6% PSC B and 3% PSC A BG entry at $132m for 11.6% PSC B and 13.1% PSC A PSC B

• Chinguetti test flowed 15,600 bopd
• Tiof-1 successful wildcat discovery
• Poune-1 (Cretaceous test) P&A Dry
• Tiof West-1 appraisal (8 kms west of Tiof-1) successful

* Subject to completion of legal documentation Mauritania

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2003 Africa – Mauritania

Tiof: Discovered Nov 2003 Banda: Discovered Sept 2002 Chinguetti: Discovered May 2001

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• Miocene channel systems have proven highly successful
• Three structures drilled to date, all have encountered significant

hydrocarbons - Chinguetti (2001), Banda (2002), Tiof (2003)

• Key to success is seismic-based prediction of reservoir and HC content

2003 Africa – Mauritania

Tiof-1

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2003 Africa – Mauritania: Tiof

Sketch of Miocene channel system containing Tiof sands

N

Tiof-1 Tiof West 48m Gas and 38m Oil 4m Gas and 122m Oil

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2003 Africa – Guinea Bissau

Sinapa Block 2 – 42%: Operator – Premier

• Post Sinapa-1, acquired new

seismic data

• Prospect 250m bbls
• Play potential > 2.5 billion bbls
• Farmout concluded with Oxy

Blocks 7B, 7C – 25%: Operator – Premier

• 2D seismic acquisition work

commitment

• Potential for large prospects

Guinea Bissau

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2003 Africa – Gabon

Dussafu Licence – 25%: Operator – Sasol Iris & Themis Marin – 18%: Operator – Fusion/Sterling

• New licences

Targeting Pre-Salt Plays

• Focus on Pre-salt Gamba Sandstone
• Unlocking the potential of this area by

application of new 3D seismic imaging technology

Gabon

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2003 Africa – SADR

SADR

New country entry SADR – 35%: Operator – Fusion

• Premier have earned the option to

take 35% equity in up to three 20,000 km² exploration licences offshore SADR

• Areas to be awarded following

recognition of the Polisario by the UN

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2003 Asia – Pakistan

Indus 2365 Offshore – 23.75%: Operator – Shell

• New licence
• Attractive Tertiary delta system
• Potential for large oil & gas reserves
• 2003 acquired 1500 sq km of 3D seismic
• 3Q 2004 drill decision

Kadanwari – 15.8%: Operator – ENI

• Successful Kadanwari West K-14 well
• Gas to be sold under existing contract

Zamzama – 9.38%: Operator – BHP

• Successful Zamzama East-1 well

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2003 Asia – Pakistan: Kadanwari West (K14)

K13 K14

The K14 well successfully tested a seismic amplitude supported prospect.

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2003 Asia – Pakistan: Zamzama East

Spill point into footwall

ZZ-3 ZZ-5 ZZ-2 ZZ-4/ST3 ZZ-1/ST1

ZZ-East Thrust Fault

N

Producing zone of Zamzama Field ZZ-East Fault Block

Zamzama East drilled the previously untested eastern side

• f the Zamzama anticline, below

the thrust fault

E W ZZ-East

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2004 Business Development Strategy

Exploration led, commercially driven

• £25m p.a. exploration expenditure
• 12 to 18 well programme p.a.
• 1/3 of wells offer step change growth opportunity
• Focus on Africa and Asia

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12 Month forward plan

Philippines Indonesia

• Gajah Baru -2
• Macan Tutul -1

Pakistan

• Chung -1

NE India

• Jaipur-1
• 2D seismic

in Cachar Mauritania

• ~6 expl’n wells
• Tiof app’l wells
• 3D seismic

Guinea Bissau

• Sinapa-2
• 2D seismic

in 7B & 7C Gabon

• Dussafu -1
• Iris -1
• Themis -1

UKCS

• Criollo - 1

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2004 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

UKCS

2005 1st H 2nd H

2004 Planned exploration and appraisal activity

UKCS: Criollo-1

Contingent wells

Mauritania Gabon: Dussafu-1 Gabon: Iris-1 Gabon: Themis-1 Guinea Bissau: Sinapa-2 2004 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2005 1st H 2nd H Up to 9 E & A wells

AFRICA

2004 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

ASIA

2005 1st H 2nd H Pakistan: Chung-1 Pakistan: Indus Offshore India: Jaipur-1 India: Cachar-1 Indonesia: Macan Tutul-1 Indonesia: Gajah Baru-2

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2004 UKCS

P1048 - 50%: Operator – Premier (20/10b, 21/6a, 20/15a & 21/11b)

• Criollo -1 well
• 2nd Q 2004
• Prospect 145m bbls, high risk
• Block potential 300m bbls

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2004 UKCS – Criollo-1 prospect

Criollo Buzzard field 25 km

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2004 UKCS – Criollo-1 prospect

Volgian fan time interval map

E W Criollo-1

Seismic line showing stratigraphic pinchout

Stratigraphic pinchout

• f the potential reservoir

Stratigraphic pinchout

• f the potential reservoir

Criollo-1 5km

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2004 UKCS – prospect map Volgian fan pinchout on top Triassic

20/10b-4 20/10-2 20/15-2 Potential sand infill

• f the Volgian Fan

2010b Criollo

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2004 Africa – Mauritania: Chinguetti

Planned Development

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2004 Africa – Guinea Bissau

2D seismic currently being acquired Sinapa-2 currently drilling

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2004 Africa – Guinea Bissau: Sinapa-2 well

Salt

NE SW Sinapa-2 Sinapa-1

Sinapa-2 is being drilled as a vertical well to tie down the precise depth of the Albian reservoir sequence. It is anticipated that a sidetrack will then be drilled towards the salt to target the best trap location.

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2004 Africa – Guinea Bissau: Sinapa & Esperanca

Sinapa-2

Salt diapirs

Map showing location of salt diapirs in the Sinapa and Esperanca permits. All of these have potential for flanking prospects located in shallow water (30-200 metres). If Sinapa-2 is successful then there is potential for material follow-on reserves addition.

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2004 Africa – Guinea Bissau: Blocks 7B & 7C

Seismic data by courtesy of Veritas DGC

New 2D is currently being acquired; several tilted fault traps have been recognised (Baobab field analogue)

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2004 Africa – Gabon

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2004 Africa – Gabon: Dussafu

Proposed Dussafu Well Location Mytilus-1 Projected

Dussafu Prospect

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2004 Asia – Pakistan: Dumbar – Chung prospect

Badhra field Zirkani-1 Bhit field Chung-1

Chung-1 well is expected to spud in May. This prospect is adjacent to the Bhit and Badhra gasfields.

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2004 Asia – Pakistan: Indus offshore

Block 2365-1 – 23.75% : Operator – Shell

• 3D Seismic processing &

interpretation

• Drilling decision September 04

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2004 Asia – Pakistan: Indus offshore

New 3D seismic has just been acquired; high amplitude horizons are recognised indicating a variety of structural and stratigraphic traps

Example of bright channel fill 10 km

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2004 Asia – India

Jaipur Block – 38% : Operator – Premier

• Jaipur-1 well, 4th Q 2004
• Prospect 50-100m bbls
• Block potential 250m bbls

Cachar Block – 84% : Operator – Premier

• 2D seismic programme underway:

completion by end 1st Q 2004

• Farming out, close to a deal that will

leave us with 49%

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Legend

Premier Block Prospect Oil Field

2004 Asia – India: Jaipur

Jorajan Field 242 MMbbl Reserves Digboi Field 100 MMbbl Reserves Nahorkatiya Field 260 MMbbl Reserves

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2004 Asia – India: Cachar

Target: Rengi Fm.

A’ A

BANGLADESH

N.E. INDIA A A’

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2004 Asia – Indonesia

Natuna Sea Block A – 28.67% : Operator – Premier

• Macan Tutul-1 well
• Targetting oil & gas
• Gajah Baru appraisal & deep

exploration well

• Supporting gas sales

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2004 Asia – Indonesia: Macan Tutul

Macan Tutul in flank of Anoa Field All gas producing zones in Anoa field have significant oil legs (target for early field production) Anoa

A A’ A A’

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2004 Asia – Philippines

New Country Entry Ragay Gulf – 37.5%: Operator – Premier

• Signed 14th January 2004

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2004 Asia – Philippines: Ragay Gulf

SC Area (10,865 km²)

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2004 Asia – Philippines: Ragay Gulf

Initial studies are evaluating Miocene age pinnacle reefs

Monte Cristo Sacramento

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2004 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

UKCS

2005 1st H 2nd H

Planned exploration and appraisal activity

UKCS: Criollo-1

Contingent wells

Mauritania Gabon: Dussafu-1 Gabon: Iris-1 Gabon: Themis-1 Guinea Bissau: Sinapa-2 2004 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 2005 1st H 2nd H Up to 9 E & A wells

AFRICA

2004 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

ASIA

2005 1st H 2nd H Pakistan: Chung-1 Pakistan: Indus Offshore India: Jaipur-1 India: Cachar-1 Indonesia: Macan Tutul-1 Indonesia: Gajah Baru-2

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Business development summary

18 wells in 2004 New acreage will be signed New commercial deals An exciting 2005 drilling programme

Photo: Woodside

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Summary and Outlook

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Delivering the strategy

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Appendix

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Areas of operation and strategy

• High impact explorer and

commercial dealmaker

• Base business –

e.g. 30-50,000 boepd

• Cycle out/farm down assets

when significant growth potential has been exploited

• Realise early value

for shareholders

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Production operations – UK

• Mature production, mainly oil
• Wytch Farm (picture), BP operated
• Kyle and Fife area fields
• UK production ~13,000 boepd, reserves 26 mmboe

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Production operations - Indonesia

• West Natuna Gas (WNG) project – Premier operated
• 650km pipeline to Singapore
• Production commenced 2001 – 27 year gas contract
• Indonesia production ~10,000 boepd, reserves 82mmboe

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Production operations - Pakistan

• Onshore gas – all in production, offshore exploration block (Shell)
• Bhit (picture) and Zamzama on-stream 2003
• Long-term gas contracts, in dollars
• Successful drilling late 2003
• Pakistan production ~10,000 boepd, reserves 65mmboe

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