Indonesia - North Sumatra Block A update 23 June 2010
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. June 2010 | Page 1
North Sumatra Block A (NSBA) • Established hydrocarbon province • Existing undeveloped discoveries • Under-explored • Rehabilitation opportunities Medco 41.67% (op.) Premier 41.67% Japex 16.66% June 2010 | Page 2
Summary PSC Extension • Significant progress made in securing Aceh local government approval, expect Central Government approval in Q3 Gas Development – Alur Siwah / Alur Rambong / Julu Rayeu • Facilities – EPCI documents prepared for tender, award expected Q1 2011 • Drilling – rig secured, detailed well planning underway • Gas Transportation – pursuing Right of Way sharing with ExxonMobil • The Operator (Medco) plans First Gas at the end of 2012. Alur Rambong is planned to have a full year of production in 2013 with Alur Siwah following 6 months into the year Contingent Resources • Work-overs on old oil fields successfully executed in 2009 • Currently evaluating results and forward programme • Internal evaluation (screening studies) undertaken for Kuala Langsa • Exploratory discussions with Operator and 3rd parties Exploration Programme • Matang-1 proposed for 2011 • 2nd Exploration well likely in 2012 June 2010 | Page 3
PSC extension – MOA with Aceh • Under the Autonomy agreement between Central Government and Aceh, the Regional Government needs to approve any PSC award or extension in Aceh • MOA between Aceh Governor and Medco – signed 5th April • 1% of total revenue from production each year to be used for Community Development – as per law 2006/11 • Local Government Company to participate in 3rd Party pipeline project • Aceh to support Extension of the PSC to the JV, with the above terms to be incorporated in to the PSC • Aceh Parliament (DPR) verbally endorsed terms of the MOA on 17th May, as announced by Aceh DPR Head, Pak Hasbi Abdullah. Waiting on formal approval • With formal approval from Aceh, Medco expects Central Government approval to be forthcoming in Q3 June 2010 | Page 4
Gas development – gas sales • Pupuk Iskandar Muda (PIM) – Fertilizer production • 2 x Fertilizer plants each requiring c 55 BBtu/d of gas • GSA signed in December 2007 • 223 Tbtu reserves at 110 BBtu/d (PIM obliged to take excess TCQ) • $6.50 mmbtu, profit share when Urea above $425/tonne • PLN – Electricity • New Power generation plant to be built close to Alur Rambong field • GSA signed in April 2008 • 85 Tbtu at 15 BBtu/d • $5.30 mmbtu, 3% annual escalation • Initial delivery expected to be at 5 bbtu/d, ramping up to 15 bbtu/d June 2010 | Page 5
Gas development – overview Field Development • Alur Siwah 10-12 wells • Alur Rambong 2 wells • Julu Rayeu 6 wells (fuel gas) • Central Process Facility (CPF) with condensate separation, plus H 2 S and CO 2 removal • 140 MMscf/d export to: • PIM – 110 bbtu/d • PLN – 5-15 bbtu/d • 2000-3000 bcpd • Gas Export Pipeline to SLS-A and Power plant • Gas transportation cost from SLS-A to PIM, paid by PIM • Separate condensate line from CPP to PT Arun June 2010 | Page 6
Gas development – status Land Acquisition • Good progress made - acquisition survey complete, land largely in plantation areas simplifying purchase process • Options for CPP location. • Permits requested – Expect to be granted when Aceh formally endorses PSC Facilities • Tender documents prepared for facilities EPCI • Two Development options carried in the tender: 1. Alur Rambong FG at 55bbtu/d followed by Alur Siwah at 110bbu/d after 6 months 2. Alur Rambong FG at 55bbtu/d followed by Alur Siwah at 55 bbtu/d after 6 months, then ramping up to 110 bbtu/d after a further 18 months (Essentially option 2 defers installation of one of the acid gas removal plants. Decision to be made once commercial bids received). Drilling • Detailed well planning underway for first phase of development drilling • Medco secured PT Antareja Resources Rig-8 • Long Lead drilling tangibles contacts ready to award • Preparing tender documents for drilling services – to be tendered in Q3 June 2010 | Page 7
Contingent resources – oil fields • Work-over of 6 wells (5 producers & 1 water injector) successfully completed • Wire-line logs run in two wells – movable oil interpreted, Tu-33 tested at 25 bopd • Demonstrated: • Wells can be worked over and produced • Strong and positive relationship with the local community, extremely important as a precursor to the gas development • Going Forward: • Focus continues to be on gas project but meanwhile the Operator is evaluating results to-date and formulating further work programmes – including gathering additional data in current wells, considering additional work-overs and some infill drilling June 2010 | Page 8
Contingent resource – Kuala Langsa gas field • Giant Gas Field Discovered in 1992 Top Peutu Fm. Depth • c.10 Tcf of Gas in Place – the one well C.I.=50 metres drilled to date recovered around 80% CO2 2500m in the gas test. • Screening studies undertaken to develop and sequestrate CO2 • Exploratory development discussions with operator and approaches from third parties E W S N Kuala Langsa -1 TD 3756 m Lwr. Baong Interval GWC -3511m Peutu Carbonate over basement Bend in Line June 2010 | Page 9
Exploration • Under-explored area – last exploration well in 1978 • Deep Gas Potential – backfill PIM Gas Sale from Alur Siwah • Matang-1 - proposed for 2011 • Potential 2012 wells • Peudawa Rayeu • Terumbu Peutouw • Kuala Langsa • All the above appraise existing discoveries • Operator now working on shallower oil- prone intervals to develop further exploration opportunities June 2010 | Page 10
Exploration – Matang prospect Matang-1 - Proposed for 2011 NSBA PSC: Top N4 Carbonate Depth • Reservoir Peutu Carbonates (Alur Siwah, Blue areas interpreted as reef build-ups Arun) – target reefs 818 • Gas proven by Pergidatit-1 • Main risk is reservoir quality • Area 15,731 acres • Depth to crest 2370 mss • Column height 145 m • Reserves range 113 – 240 – 440 bcf 2.5 Km • Operators number 400 – 715 – 1330 bcf W Matang E • Development Concept is for minimal surface facilities tied back to Alur Siwah for processing and export to PIM 818 2.5 Km June 2010 | Page 11
North Sumatra Block A (NSBA) • Established hydrocarbon province • Existing undeveloped discoveries • Under-explored • Rehabilitation opportunities Medco 41.67% (op.) Premier 41.67% Japex 16.66% June 2010 | Page 12
June 2010 June 2010 | Page 13 www.premier-oil.com
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