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

a 2003 Preliminary Results Presentation 2003 Preliminary Results Presentation 18 March 2004 18 March 2004 Photo: Woodside

Presentation Introduction Sir David John Finance and Operations John van der Welle Business Development Robin Allan Summary and Outlook Charles Jamieson a 2003 Preliminary Results Presentation Page 2

Finance and Operations a 2003 Preliminary Results Presentation Page 3

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 a 2003 Preliminary Results Presentation Page 4

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 a 2003 Preliminary Results Presentation Page 5

Profit and loss – record profitability 2003 2003 2002 Ongoing Reported Restated Production (mboepd) 35.1 53.6 53.6 Working interest production Realised oil price ($/bbl) 27.0 27.2 24.3 Impact of weak dollar and Realised gas price ($/mcf) 3.18 3.74 3.44 change in production mix £m £m £m (more gas) Turnover 166 258 263 Unit opex (incl JVs) £3.0/boe less: share of JVs turnover (25) (75) (64) – same as last year Group turnover 141 183 199 Unit DDA (incl JVs) Operating costs (37) (42) (54) £2.60/boe - down 17% due to Amortisation (38) (45) (53) higher proportion of low cost Exceptional provision for oil and gas assets - - (13) production outside UK Exploration expenditure written off (12) (12) (5) JVs represent Pakistan and Gross profit 54 84 74 Myanmar (reported column), Administration costs (12) (12) (8) Pakistan only (ongoing Operating profit 42 72 66 column) Operating profit in JVs 16 50 38 Continuing reduction in debt Total operating profit 58 122 104 Profit on sale of investment - 1 - Early repayment of fixed rate debt on restructuring Net interest/exchange (13) (19) (31) Exceptional make-whole payment - (23) - Reduction in deferred tax Profit before tax 45 81 73 Using weighted average Taxation (28) (40) (50) number of new consolidated Profit after tax 17 41 23 shares (136m) Earnings per share - basic (pence) NA 30.0 14.2 a 2003 Preliminary Results Presentation Page 6

Strong cashflow 2003 2003 2002 (As reported) (Incl JVs) (Incl JVs) £m £m £m Net cash flow from operations 138 187 184 In line with unchanged turnover Net interest (19) (22) (26) Taxation (27) (29) (22) Capital expenditure – focus on exploration Operating cash flow (after interest and tax) 92 136 136 Excl JV JV Total Capital expenditure (32) (43) (73) £m £m £m Exploration 25 6 31 Acquisitions (6) (6) - Fields 6 5 11 Disposals 18 18 30 Other 1 - 1 32 11 43 Restructuring 101 150 - Net cashflow 173 255 93 Fusion deal Exchange/other 12 2 38 Sale of AWE shares and Movement in net debt 185 257 131 non-core UK assets Yetagun interest accrued - - (2) Opening net debt (181) (250) (379) Closing net cash/(debt) 4 7 (250) • Operating cash flow covers exploration 4.4x (2002: 3.9x) • Interest cover now 8.5x (2002: 7.1x) a 2003 Preliminary Results Presentation Page 7

Balance sheet transformed – no net debt Balance Movement Impact of Balance Sheet at over year restructuring sheet at 31 Dec 2002 31 Dec 2003 £m £m £m £m Cash (incl JVs) 167 (204) 101 64 Debt (incl JVs) (417) 311 49 (57) Net (debt)/cash (incl JVs) (250) 107 150 7 Gearing ratio 80 % NA NA 0 % a 2003 Preliminary Results Presentation Page 8

Reserves and production Total 2P reserves ~200+ mmboe (1) Working interest production (barrels of oil equivalent Indonesia 2 nd gas sale per day) Mauritania (2) Unbooked (3) Mauritania – Chinguetti only Indonesia Pakistan Indonesia UK 40,000 UK 30,000 20,000 Pakistan • Booked reserves 175 mmboe: 10,000 83% gas; 17% oil (1) Total reserves defined as booked and unbooked 2P WI reserves (2) 29.9% of Premier share of Chinguetti reserves pending 0 completion of Fusion deal and before Agip pre-emption 2004 2005 2006 2007 2008 (3) Unbooked reserves relate to Indonesia and Mauritania a 2003 Preliminary Results Presentation Page 9

Good spread of production across countries and assets WI production by field (5 year total) (Percentage of total WI production) 20% 15% 10% 5% 0% a m p d e d r i t a a p i r i t u i h a t u r l a a m o s r y p e e o o h w B n k e a K l u f r a a a r a A n F l i n e z g G d K o s l a T a m n h a d d G d i e Q c n h a n / a t f 2 Z C i I y t K F t W o c S a 2003 Preliminary Results Presentation Page 10

Future field capex programme Development CAPEX (£ million) Indonesia 2 nd gas sale 40 Mauritania Indonesia 35 Pakistan 30 UK 25 20 15 10 5 0 2004 2005 2006 2007 2008 Averaging £20-25 million pa a 2003 Preliminary Results Presentation Page 11

Secure financial outlook Good spread of production Good spread of production Reserves and production across countries and assets Future field capex programme Reserves and production across countries and assets Future field capex programme Total 2P reserves ~200+ mmboe (1) Working interest production WI production by field (5 year total) Development CAPEX Total 2P reserves ~200+ mmboe (1) Working interest production WI production by field (5 year total) Development CAPEX (barrels of oil equivalent (Percentage of total WI production) (£ million) (barrels of oil equivalent Indonesia 2 nd gas sale (Percentage of total WI production) (£ million) per day) Mauritania (2) Unbooked (3) Indonesia 2 nd gas sale Mauritania – Chinguetti only per day) Indonesia 2 nd gas sale Mauritania (2) Unbooked (3) Indonesia Mauritania – Chinguetti only 40 Indonesia 2 nd gas sale Pakistan Indonesia 40 Mauritania Indonesia UK Pakistan 20% Mauritania Indonesia 35 Indonesia UK 20% 40,000 35 Indonesia Pakistan 40,000 UK Pakistan 30 UK UK 15% 30 UK 15% 25 30,000 25 30,000 10% 20 10% 20 15 20,000 15 20,000 5% Pakistan 5% 10 Pakistan 10 • Booked reserves 175 mmboe: 5 • Booked reserves 175 mmboe: 10,000 83% gas; 17% oil 0% 5 10,000 83% gas; 17% oil 0% m p d e d r i t a a p a i u r l a u a r h i m o a s i t t r o y p B e e e a m o p f d K e h d r r w i t a a n a k p l a u i 0 (1) Total reserves defined as booked and unbooked 2P WI reserves F r u l r l a a i u n a r h i z m A o a a n a s i g t t r G e o y l d p a B K o s e e e h a o T f K a h a r w m a n k d n l u 0 (1) Total reserves defined as booked and unbooked 2P WI reserves c F e r l G a Q i d n z A a n d n h a i g 2004 2005 2006 2007 2008 (2) 29.9% of Premier share of Chinguetti reserves pending t f G / e l d a a a K n 2 o s y h F i t T a a K Z m I d C n W c e o t G Q d n d h i 2004 2005 2006 2007 2008 completion of Fusion deal and before Agip pre-emption (2) 29.9% of Premier share of Chinguetti reserves pending 0 t f / a a n 2 y F i c t K Z I C W S o t completion of Fusion deal and before Agip pre-emption 0 2004 2005 2006 2007 2008 (3) Unbooked reserves relate to Indonesia and Mauritania c Averaging £20-25 million pa S 2004 2005 2006 2007 2008 (3) Unbooked reserves relate to Indonesia and Mauritania Averaging £20-25 million pa 2003 Preliminary Results Presentation Page 17 2003 Preliminary Results Presentation Page 11 2003 Preliminary Results Presentation Page 12 2003 Preliminary Results Presentation Page 17 2003 Preliminary Results Presentation Page 11 2003 Preliminary Results Presentation Page 12 • Solid, developed and diverse reserve base • Manageable development costs • Ungeared balance sheet Sustainable growth programme a 2003 Preliminary Results Presentation Page 12

Business Development a 2003 Preliminary Results Presentation Page 13

Business development • 2003 Review • Strategy • 2004 Plans • Summary a 2003 Preliminary Results Presentation Page 14

Business development 2002 Preliminary Results Presentation 2002 Preliminary Results Presentation STRATEGY IMPLEMENTATION STRATEGY IMPLEMENTATION • Delivery of exploration success • Delivery of exploration success – “Play-makers” – “Play-makers” – Quality – Quality • Commercial deal-making: • Commercial deal-making: – Value adding through smart acquisitions – Value adding through smart acquisitions – Optimising the portfolio: – Optimising the portfolio: - Lower R/P ratio - Lower R/P ratio - Managing portfolio risk - Managing portfolio risk - Realising value - Realising value Make a Difference Make a Difference 22 22 a 2003 Preliminary Results Presentation Page 15