Exploration Analysts Afternoon 8 December 2011
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. December 2011
Exploration strategy • Focus on geologies we know well • Target best plays in basins of choice North Sea Asia – Play master approach MEAP & Exploration New • Invest ~30% of annual cash flows in Business exploration RIFT setting - below present day RIFT setting FOLD-BELT/FORELAND setting deep water passive margins SE Asia & North Sea Pakistan & new Areas Longer term aspiration East & North Africa & New areas December 2011
Progress towards 200 mmboe of discoveries Global exploration: Exploration and appraisal drilling-2011 Forecast resource additions (mmboe) • Discoveries at Burgman & Erne in the UK, K27 in Pakistan North West of Chim Sáo and Chim Sao deep in Vietnam 250 • Grosbeak and Cá R ồ ng Đ o appraisal wells successfully Target cumulative risked additions completed Actual cumulative proved and probable discovered resources • Net estimated resource additions 22 to 34 mmboe Actual cumulative plus possible resources 200 • Overall exploration success rate 54% New ventures • PSCs signed for exploration blocks L10A and L10B in Kenya 150 • New acreage secured in the North Sea – Farm-ins to Fyne area – Nexen acreage in Norway 100 • Actively pursing new venture opportunities in focus areas and themes – Norway: bids submitted for 3 new licenses 50 – UK: 27 th Round preparation (2012) – Egypt: EGPC bid round evaluation (2012) – Iraq: Qualified for Exploration Round 0 – East Med: Preparation for 2012 bid round(s) 2009 2010 2011 2012 2013 2014 – Asia: Joint Study agreements in Indonesia December 2011
Exploration organisation Chief Geoscientist (Asia) Exploration S. Carney Director A. Lodge Geophysical Chief Geophysicist Advisor N. Oates Chief Co-ordinator Geoscientist B. Anderson C. Johns Chief Development Geologist R. Alexander Operations Manager Consultant Expl. Manager Senior Expl. New Expl. Manager Expl. Manager Exploration North Sea Advisor Business Mgr. MEA Pakistan Asia T. Davies Vacant S. Bottomley Vacant S. Zahidi 2 Geoscientists 1 Geoscientist Team Leader Team Leader Team Leader Expl. Manager Expl. Manager NV Manager Team Leader Team Leader UK Norway New Ventures Vietnam Indonesia Asia A. Belopolsky Vacant A. Robson V. Friestad D. Mellere A. Van-Lennep B. Boslaugh W. Spencer 3 Geoscientists 3 Geoscientists 3 Geoscientists 2 Geoscientists 2 Geoscientists 4 Geoscientists 2 Geoscientists Excluding Technical and Administrative Assistants: Operated Non-Operated/ Ventures New Ventures Exploration Headcount = 44 Exploration Management = 9 3 Geoscientists 3 Geoscientists December 2011
Exploration organisation – building for the future Premier Oil recruitment since 2009 • 25% increase in Premier geoscientists Origin of recruits Consultancy, 4 Major, 6 • Longer term consultants replaced by 25% 37% Premier personnel • Recruitment primarily from majors and large independents – Play fairway knowledge – 10 to 20 years experience • Basin specific or technology experts sourced from consultancies or smaller independents • Continuing to build • In house training schemes introduced Small Large Independent, 3 Independent, 3 19% 19% December 2011
Premier Oil: Explorer network • Community linking experienced explorers in offices around the globe • Knowledge capture and transfer within and between business units • Mentoring and coaching by the experienced staff • Network leader: Andrei Belopolsky December 2011
Prospective resource portfolio • Unrisked prospective resource portfolio 2000 mmboe Unrisked Resource Portfolio – 500 mmboe in prospects Discovered resource under appraisal 38 mmboe – 1,500 mmboe in leads • Portfolio increased from 2010 Prospects – Increased lead inventory in Kenya and Norway Total 500 mmboe Leads 2,038 – Prospect inventory adjusted post 2011 drilling 1,500 mmboe mmboe • Risked prospective resource portfolio – 290 mmboe – 140 mmboe in prospects – 150 mmboe in leads – Greater focus to lead maturation in 2012 Risked Resource Portfolio Discovered resource • Discovered resource under appraisal – 38 mmboe under appraisal 38 mmboe – Ca Rong Do transferred to Pre-Developments • Encore portfolio not included Total Prospects Leads 358 140 mmboe 180 mmboe mmboe On track to deliver 200 mmboe of 2P reserves by 2015 December 2011
Prospective resource portfolio – RISC’s view • RISC evaluated prospects & leads in Premier’s portfolio planned to be drilled in the next 3 years – Evaluation excluded Kenya, South Darag in Egypt, West of Orkney acreage the UK and dependent leads in Asia • On a like for like basis RISC estimated the total net un-risked inventory at 915 mmboe – Premier estimate: 900 mmboe • On a risked basis RISC’s total is 215 mmboe versus Premier’s estimate of 249 mmboe • In Asia, RISC assess the Nam Con Son Basin prospect inventory as higher potential • In the North Sea RISC assess the portfolio as lower potential at slightly higher risk (2% to 5% per prospect/lead) December 2011
Progress towards 200 mmboe of discoveries Evaluate Drill Appraise Leads Prospects Mature Prospects Appraisal Total Unrisked: 1500 Total Unrisked: 370 Total Unrisked: 130 Total: 38 Total Risked :180 Total Risked: 90 Total Risked: 50 Asia . Vietnam Block 12W: CS NW North Sea Norway PL378: Grosbeak Pre- Norway PL374S: Blabaer Development UK P077: East Fyne MEAP Project Appraisal Extension Approval Gate Gate Drill Decision Gate Prospect potential resource mmboe (net unrisked): Value ranges to be provided in 2012 Risked Acquire Licence Gate December 2011 <10 10-25 25-50 >50
Encore acquisition adds to the overall porfolio Evaluate Drill Appraise Leads Prospects Mature Prospects Appraisal Total Unrisked: 1345 Total Unrisked: 420 Total Unrisked: 160 Total: 38 Total Risked :153 Total Risked: 90 Total Risked: 50 Asia . Vietnam Block 12W: CS NW North Sea Coaster Buffalo Norway PL378: Grosbeak Pre- Norway P1430: Carnaby P1430: PL374S: Blabaer Development Rapide Tudor Rose UK P1430: P077: East Fyne Bonneville Spaniards P1430: Cougar MEAP Project Appraisal Extension Approval Gate Gate Drill Decision gate Prospect potential resource mmboe (net unrisked): Encore portfolio adds (near term drilling targets only): Acquire Licence • ~ 150 mmboe of net un-risked prospective resource gate December 2011 • ~ 25 mmboe on a risked basis
Nexen Norge acquisition impacts Premier’s lead portfolio Evaluate Drill Appraise Leads Prospects Mature Prospects Appraisal Total Unrisked: >1500 Total Unrisked: 420 Total Unrisked: 160 Total: 38 Total Risked :>180 Total Risked: 90 Total Risked: 50 Asia . Vietnam Block 12W: CS NW Vandretost North Sea Tarnfalk Norway PL378: Grosbeak Pre- Norway PL374S: Blabaer Development UK P077: East Fyne Myrhauk MEAP Project Appraisal Extension Approval Gate Gate Drill Decision gate Prospect potential resource mmboe (net unrisked): Nexen portfolio adds: Acquire Licence • ~ 165 mmboe of net unrisked prospective resource gate December 2011 • ~ 33 mmboe on a risked basis
Exploration drilling Q4 2011 to Q2 2012 • > 250 mmboe net 2011 2012 Asia Q4 Q1 Q2 Q3 Q4 unrisked resource Block 07/03 Silver Sillago Vietnam CRD NE Appraisal • 2012 full year Block 12W Chim Sao NW Appraisal ENSCO 107 Buton Benteng-1 PRA 01 Indonesia exploration forecast Natuna Sea Block A Anoa Deep West Callisto ~ $210 million pre tax Biawak Besar West Callisto Antareja-8 Block A Aceh Matang North Sea PL359 Luno II Norway P1463 Tudor Rose* Sedco 704 UK 12 to 16 exploration P077 East Fyne Appraisal Sedco 704 and appraisal wells P1466 Bluebell Sedco 704 P1430 Carnaby Sedco 711 planned over next P1812 Coaster * six months P1430 Bonneville Deep P1212/P1771 Stingray P1784 Cyclone WilPhoenix P1875 Erne P1804 Ronan, Cringletie, Glengorm P1181 Lacewing Firm Wells: Rig Contracted P1655 Spaniards * Firm Wells: Rig TBC Middle East - Africa - Pakistan Kadanwari K-28 Weatherford 812 Pakistan Contingent Wells Weatherford 812 K-30 K-32 Weatherford 812 Seismic Programme Bhit-Badhra Badhra-6 Parh Badhra-7 * Encore well PSC A&B 3D Seismic Mauritania Commitment Well All well timings are subject to Block 10A & 10B 2D & 3D Seismic Kenya revision for operational reasons December 2011
Internal Processes and Risk Management
Internal processes and risk management Functional management: aiming for technical excellence and consistency in our prospect evaluations • Uncertainty and Risk • Play Fairway Analysis and Risking • Prospect Analysis and Risking • Volumetric Uncertainties • Premier’s Gateway Process December 2011
Uncertainty and risk management December 2011
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