Interim Results Presentation 16 September 2004 Presentation Sir - PowerPoint PPT Presentation

Interim Results Presentation 16 September 2004

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

Finance and operations Interim Results Presentation | Page 3

Financial highlights • Steady production 35.2 mboed Strong gas demand in performance (2003: 35.3 mboed*) Pakistan and Indonesia • Turnover, operating All down on a comparative basis due to a weak profit and operating US$ and more gas in the production mix cashflow • Net profit after tax £14.5m (2003: £12.8m**) Lower interest charges • Healthy cashflow: Cashflow sufficient to – Operating cashflow £38.6m cover all operating and – Net cashflow £5.4m capital expenditure • Strong balance sheet Net cash £15.5m In line with strategy * comparatives for 2003 are with ongoing operations i.e. assets retained post restructuring ** restated in line with 2003 results Interim Results Presentation | Page 4

Operational highlights UK Working interest production Indonesia (barrels of oil equivalent per day) • Production 12,000 boepd Pakistan 40,000 UK • Successful infill drilling at Wytch Farm • Kyle well tie back (October production) 30,000 • Negotiating to extend life of Kyle and Fife Area fields 20,000 Indonesia 10,000 • Production 13,100 boepd • Offtake greater than DCQ 0 1H 2003 (ongoing) 1H 2004 • Gas sale negotiations continue Pakistan • Production 10,100 boepd • Qadirpur facilities upgrade to 500 mmscfd throughput completed • Zamzama phase 2 progressing to gas sales negotiations • Kadanwari K14 well to be tied back for production start in November Mauritania • Chinguetti field development approved – first oil Q1 2006 Interim Results Presentation | Page 5

Profit & loss Half year to Half year to 30 June 2004 30 June 2003 (Ongoing) Production (mboepd) 35.2 35.3 Working interest production Realised oil price ($/bbl) 31.45 26.36 Turnover down – more gas Realised oil price (£/bbl) 17.28 16.55 production, weaker dollar Realised gas price ($/mcf) 3.33 2.98 Unit opex (incl JV) Realised gas price (£/mcf) 1.83 1.85 £2.67/boe - up 10% vs £m £m ongoing operations mainly Turnover 75 83 due to fixed costs with reduced production in UK less: share of JV turnover (14) (11) fields 61 72 Group turnover Operating costs (16) (14) Unit DDA (incl JV) 2.96/boe Amortisation (15) (18) JV represents Pakistan only Exploration expenditure written off (3) (4) Gross profit 27 36 Reduction in net debt Administration costs (4) (4) Tax restated for change in Operating profit 23 32 method of calculation of Operating profit in JV 10 6 overseas tax (per 2003 33 38 annual report) Total operating profit Net interest (1) (8) Using new consolidated Exchange gain 1 1 shares Profit before tax 33 31 Taxation (18) (18) 15 13 Profit after tax Earnings per share - diluted (pence) 17.2 NA Interim Results Presentation | Page 6

Cashflow Half year to Half year to Half year to 30 June 2004 30 June 2003 30 June 2004 (Incl JV) (Ongoing, (As reported) Incl JV) £m £m £m Net cash flow from operations 41 52 68 Lower turnover and operating cashflow, partly Net interest - - (9) offset by reduction in Taxation (13) (13) (12) interest 28 39 47 Operating cash flow (after interest and tax) Capital expenditure – increased spend on Capital expenditure (24) (33) (34) exploration Disposals - - 13 2004 2003 Excl JV JV Total Total Net cashflow 4 6 26 £m £m £m £m Exchange/other 3 3 6 Exploration 17 1 18 14 Fields 9 - 9 10 Movement in net debt 7 9 32 Other 6 - 6 6 Yetagun interest accrued - - JV funding * (8) 8 - 4 24 9 33 34 Opening net cash/(debt) 4 7 NA 11 16 NA * Pakistan net payment to Closing net cash/(debt) Premier by JV in 2004 • Operating cash flow covers exploration 2.2x Interim Results Presentation | Page 7

Future field capex programme Development CAPEX (£ million) Indonesia 2 nd Sale (contingent) 50 Tiof (contingent) 45 Chinguetti Indonesia 40 Pakistan 35 UK 30 25 20 15 10 5 0 2004 2005 2006 2007 2008 Averaging £18 million to £32 million pa depending on Tiof /2 nd sale Interim Results Presentation | Page 8

Reserves and production Total 2P reserves ~200+ mmboe (1) Working interest production (barrels of oil equivalent Indonesia 2 nd Sale (contingent) Mauritania per day) Tiof (contingent) Chinguetti Unbooked (2) Indonesia Pakistan Indonesia UK 40,000 UK 30,000 20,000 Pakistan • Booked reserves 175 mmboe: 10,000 80% gas; 20% oil (1) Total reserves defined as booked and unbooked 2P WI reserves (2) Unbooked reserves relate to Indonesia and Mauritania 0 2004 2005 2006 2007 2008 2009 2010 Interim Results Presentation | Page 9

Business development Interim Results Presentation | Page 10

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 Interim Results Presentation | Page 11

18 month plan AFRICA 2004 2005 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Mauritania : Tevét A : Capitaine A Contingent wells : Tiof A : Merou A : Tiof B : Tiof C : Exp. Well : Tiof: D : Exp./App. Wells Gabon : Dussafu-1 : Iris-1 : Themis-1 Egypt : Al Amir-1 Guinea Bissau ASIA 2004 2005 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Pakistan : Dumbar : Indus Offshore India : Jaipur-1 : Cachar-1 Indonesia : Gajah Baru-2 : Macan Tutul-1 Vietnam : 12E & 12W Exp. Well : 12E & 12W Exp. Well : 7,8/97 Exp. Well UKCS 2004 2005 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC UKCS : Palomino-1 Interim Results Presentation | Page 12

Africa – Gabon Dussafu-1 Gabon Interim Results Presentation | Page 13

Africa – Gabon: Dussafu Mytilus-1 Projected Dussafu-1 Well Location Dussafu Prospect Interim Results Presentation | Page 14

Africa – Mauritania Mauritania Interim Results Presentation | Page 15

Africa – Mauritania: drilling programme RIG 2004 2005 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN Exploration Chinguetti-J Appraisal SEDC Prods SE WI Chinguetti SWDC Development STENA TAY RIG NDC Well Completions Banda-D Tevét Non-interest Operations Capitaine Tiof A Merou Tiof C Exp./App. Wells Top Holes Tevét, Capitaine Tiof A Tiof-B WEST NAVIGATOR RIG Exp. Well Tiof D Exp./App. Wells DP Rig – All Top Holes DP Rig - SEDC DP Rig – SE WI DP Rig – SWDC DP Rig – NDC Banda-D Interim Results Presentation | Page 16

Africa – Mauritania: exploration prospects Tevét Banda Tiof Sotto Chinguetti Bogue Lead 60 Lead 100 Capitaine Merou N’Dor Fantar Tenit 3D Area MIS20 TWT surface North Interim Results Presentation | Page 17

Africa – Mauritania: Tiof Tiof West-1 Tiof-1 • Brighter colours indicate presence of hydrocarbons and sands. Their location varies throughout the seismic volume due to the braiding of the channel system 3D visualisation of Miocene • Up to 4 appraisals sands draped over structure Interim Results Presentation | Page 18

Africa – Mauritania: Tevét Banda Tevét, if successful, would be tied Tevét back to the Chinguetti development. Amplitudes at the prospect are similar to those seen at Chinguetti, suggesting the presence of similar reservoir and hydrocarbons. Chinguetti 3D visulisation of Miocene sands draped over structure Interim Results Presentation | Page 19

Africa – Mauritania: Capitaine S N Top Reservoir Depth 2km Top Reservoir Amplitude 10km Interim Results Presentation | Page 20

Africa – Mauritania: Merou Bright amplitudes in the Miocene section over the Merou structure W E Merou Salt 2.5 km Interim Results Presentation | Page 21

Africa – Egypt NW Gemsa Block, Gulf of Suez Basin Premier equity: 37.5% Operator: Kriti (Vegas) • 3D seismic programme acquired • Al Amir-1 to spud in December 2004. • onshore flat desert terrain • well cost under $3m gross • targeting prospects of up to 100m bbls • block potential > 200m bbls Egypt Interim Results Presentation | Page 22

Africa – Egypt: NW Gemsa Block SAKARA DISCOVERY (June 2003) REC : 80 m bbls GAS PIPELINE OIL PIPELINE EAST ZEIT DISCOVERY (Oct 2001) REC : 70 m bbls Al Amir-1 Interim Results Presentation | Page 23

Africa – Egypt: NW Gemsa Block Proposed Al Amir-1 Zeit Bay-1 Al Amir-1 will drill a shallow trap and investigate the deeper stratigraphy. A subsequent contingent well may be drilled to test the deep pre-rift. Top S Gharib Top Belayim Top Kareem Top Rudeis Top Lwr. Rudeis Top Pre-rift Interim Results Presentation | Page 24

Africa – Guinea Bissau Interim Results Presentation | Page 25

Africa – Guinea Bissau: Sinapa & Esperanca The results of the Sinapa-2,2z well have significantly reduced the risks of the salt diapir flank play in Guinea Bissau. Sinapa-2,2z 2005 programme will include new 3D seismic acquisition followed by exploration and appraisal drilling. Interim Results Presentation | Page 26