2013 ANNUAL RESULTS PRESENTATION // 27 February 2014
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. 27 February 2014 // Page 1
Agenda Introduction, Highlights, Production Simon Lockett Business Units review Robin Allan Exploration update Andrew Lodge 2013 financial results Tony Durrant Summary / Outlook Simon Lockett 27 February 2014 // Page 2
Introduction “...our strategy is to invest in high -quality developments whilst maintaining balance sheet strength...” Premier today Going forward • Robust cash flow and profitability The Board will: • 800 mmboe reserves and resources • Give priority to balance sheet strength • Key exploration campaigns in • Focus investments on our highest Indonesia, Norway and Falklands return projects • NAV >£5 per share (broker • Reduce capital exposure to the Sea consensus) Lion project • Production increased to 68 kboepd year to date • Cash dividend and buyback programme 27 February 2014 // Page 3
Highlights • Strong and rising cash flows of • Production currently 4 kboepd ahead $833m ($808m*) of budget • Cash of $449m ($187m*) • Dua, Pelikan and Naga expected in 2014 • Facilities increased to $1.2bn ($900m*) – extended maturities at • Solan – progressing towards sail-away attractive rates • Catcher – final sanction imminent • Recommended dividend of 5p/sh • Up to £75m buyback • Sea Lion – TLP and phased development concept selected • Successful asset sales in 2013 – • 6 discoveries from 7 exploration wells further disposals planned in 2014 • Focusing on emergent exploration plays *2012 27 February 2014 // Page 4
Production Delivery capacity is the lower of field well capacity, facilities capacity or the expected market demand for output Operating efficiency is the actual production rate divided by the delivery capacity 27 February 2014 // Page 5
Business Units review
North Sea Production • 14.9 kboepd (2012: 12.1 kboepd) • Strong production from Wytch Farm and Scott/Telford • Huntington production reached 35 kboepd Development • Solan, Catcher and Bream • Kyle redevelopment due on-stream in Q3 2014 – $55m insurance claim settled Exploration • Discoveries at Luno and Bonneville • Farmed into Bagpuss/Blofeld • Increased position on Mandal High • 23 licences divested 27 February 2014 // Page 7
North Sea – Solan Development drilling • Reservoir reached on prognosis • Pressure data indicates good reservoir connectivity • 2 nd phase of drilling to start in April 2014 Jacket in Methil, Scotland Platform and subsea • Tank, topsides and jacket over 80% complete Topsides in Methil, Scotland Key milestones • Installation planned July & August 2014 • First oil Q4 2014 Project metrics • 24 kbopd gross post ramp up Subsea tank in Dubai, UAE • Capex $26/bbl; Opex $18/bbl • 60% equity – rapid project payback from 75% of cash flows 27 February 2014 // Page 8
North Sea – Catcher • First oil 2017 • Capex ~$24/bbl • 2P reserves of 92 mmboe – Upside of 140 mmboe • Development drilling starts 2015 • Rig and well systems contracts awarded Update • Field Development Plan submitted to DECC, project budget to partners • Negotiations with FPSO provider concluding Catcher area development scheme 27 February 2014 // Page 9
North Sea – Bream Area Development concept Bream • 2C resource estimate: 70 mmboe Mackerel • Mackerel – 17km tie-back to Herring Bream FPSO • Herring prospect – upside potential Key milestone • Year-end partner sanction decision 27 February 2014 // Page 10
North Sea – looking forward • Optimise levels of operating efficiency • Rising cash flow from new developments returning >20% IRR • Maximize the benefit of our UK CT losses and allowances of $2.3bn • Exploration reduced to a smaller number of key wells • Current disposal programme of non-core assets – Includes Luno and Scott area 27 February 2014 // Page 11
Pakistan Production Kadanwari • 14.9 kboepd (2012: 15.6 kboepd) • Gas demand and cash flows remain strong • Improving recovery – Infill wells established new zones in Badhra, Bhit and Kadanwari – Adding compression at Badhra, Bhit and Qadirpur Exploration • Success at K-32 and Badhra B North-2 – 8 consecutive E&A successes • 5 E&A wells planned in 2014 Bhit 27 February 2014 // Page 12
Vietnam West Telesto on Dua Production and development • 2 year payback • 14.1 kboepd (2012: 15.2 kboepd) – Reduced due to gas export pipeline damaged by 3rd party • Year to date production of 18 kboepd (net) • ~$6/bbl premium to Brent oil price • Dua on-stream mid-2014 – Subsea development tied back to FPSO – Development drilling underway Dua template installation Exploration • Block 121 – 2D seismic planned for 2014 Portfolio management • Sale of Block 07/03 for $45m cash – $55m contingent upside 27 February 2014 // Page 13
Indonesia Production • Singapore demand remains above minimum contract volumes • 13.7 kboepd (2012: 14.2 kboepd) • Average price of $17/mcf achieved (GSA1) – Contractual share increased to 39.4% – Year to date actual ~47% Development Exploration • Anoa Phase 4 successfully completed • Matang gas discovery in 2013 • Pelikan and Naga onstream 2014 2H • Kuda/Singa Laut results 2014 1H – Platforms loaded out and installed • Follow-up drilling to Lama play discovery at Anoa Deep – Development drilling to commence shortly 27 February 2014 // Page 14
Falkland Islands – Sea Lion Concept selection highlights • Tension leg platform with permanent drilling rig selected – Minimal subsea infrastructure – Better economics than a new build FPSO scheme • Phased development – Phase 1 recovers 293 mmstb over 25 years from 32 wells – Phase 2 development plan will incorporate results from exploration Schedule • Award of FEED Contracts in Q2 2014 • Farm down process prior to sanction 27 February 2014 // Page 15
Exploration
2013 exploration results • 6 discoveries from 7 exploration wells – Luno II and Matang – 40 mmboe of resources added – Finding costs $5.3/boe (pre-tax) • >800 mmboe unrisked prospective resources added – Brazil and onshore Kenya – North Falklands Basin – Bagpuss/Blofeld, UK – Mandal High, Norway • Portfolio management – 25 licences divested 2013 drilling success rate of >80% 27 February 2014 // Page 17
2014 indicative exploration drilling programme 5 high impact wells planned 27 February 2014 // Page 18
Indonesia – Kuda/Singa Laut • 2 wells planned to drill the Kuda/Singa Laut prospect Kuda Laut • Kuda Laut is a four way dip closure targeting Miocene sands • Singa Laut is the adjoining Singa Laut three-way structure with reservoirs in the lower Miocene and Oligocene NW SE Belut Laut-1 • Low risk for gas, high risk for TD 4977m commercial oil • Gross prospective resource: MMU 10-37-99 mmbbls L.Terumbu Arang Gabus Chim Sáo analogue 27 February 2014 // Page 19
Indonesia – Lama play • Proven by Premier’s Anoa Deep in 2012 – 17mmscfd • Identified look-a-like opportunities from shows in existing wells • 5 prospects and leads – Ratu Gajah Q1 2014 – Anoa Deep appraisal Q4 2014 • Gross prospective resource on block ~2 TCF Anoa North Anoa West Ratu Gajah prospect Ratu Gajah East Kuskus lead prospect High impact potential from the “missed” gas pay zones 27 February 2014 // Page 20
Indonesia – Ratu Gajah well • Originally drilled in 1984 – not flow tested Ratu Gajah-1 proposed location – Gas readings, high resistivity and mud losses, Babar-1 same as Anoa Deep Ratu Gajah East prospect – Similar in Babar-1 and Koko-1 wells Raja Gajah-1 Koko-1 Ratu Gajah Top Sand A (Top Lama) depth map • Gross prospective resource: 60-225-700 bcf • Follow up potential at Ratu Gajah East Re-drilling an existing gas discovery 27 February 2014 // Page 21
Norway – Luno II Luno II North Luno II Central Luno II S. (Prospect) 16/4-6 Luno II 16/5-5 appraisal • First oil discovery on south west margin of Utsira High • Luno II Central segment to be appraised in Q2 2014 Balder BCU Top Chalk • Further exploration potential remains on PL 359 – including Luno II North Basement Ragnarrock North 1 Central 1 Luno/Apollo Johan Sverdrup Discovery PL 359 North 2 Luno II discovery BCU Time Map 10km C.I. 100ms Appraising a material discovery 27 February 2014 // Page 22
Norway – Mandal High • Built on acreage position around Mandal High – 20% equity in PL663 – 2013 – 70% and 50% in PL725 and PL726 – 2014 – Drill or drop options • >500 mmboe of gross unrisked prospective resources • Myrhauk – Rig contracted; spud Q4 2014 Myrhauk Prospect – Gross prospective resource: SW NE 10-50-135 mmboe – Critical risk: reservoir presence MANDAL HIGH 3 way dip closure with up-dip pinch-out trap Play opening test 27 February 2014 // Page 23
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