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Investor Presentation July 2017 Forward-looking statements This - - PowerPoint PPT Presentation

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Investor Presentation July 2017 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

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Investor Presentation

July 2017

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SLIDE 2

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.

July 2017 | P1

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SLIDE 3

Executive Summary

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SLIDE 4

Negotiating funding packages Engagement with FIG around regulatory & commercial approvals

Progress against 2017 targets

YTD production >80 kboepd; all BUs tracking ahead of 2017 budget Scope to increase production guidance once summer maintenance completed

Meet FY production guidance of 75 kboepd Further cost reductions Catcher on-stream Progress Tolmount to sanction decision Identify & drill best prospects

Opex 11% below 1H 2016 at $14.7/boe; expect FY opex of <$16/boe Full year capex guidance reduced from $390m to $325m On schedule for 2017 first oil; total capex 29% below sanctioned estimate Improved production profiles now anticipated All FEED contracts now awarded Project sanction targeted for 1H 2018 World class oil discovery at Zama -1 well in Mexico

Realise >$100m in disposal proceeds

Sale of Pakistan announced; other sales processes progressing

Progress Sea Lion to next phase Net debt reduction

Expect to be cash flow positive (after capex and planned disposals) at oil prices above $50/boe; free cash flow positive in 1H

July 2017 | P3

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SLIDE 5

Production overview

Largest 5 fields account for c. 70% of production

July 2017 | P4

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SLIDE 6

Portfolio potential

Catcher Tolmount Tuna Sea Lion

Cash flows prioritised towards debt reduction and selective investment

Zama >800 mmboe

  • f discovered

but undeveloped reserves and resources

July 2017 | P5

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SLIDE 7
  • De-leveraging from free cash flow
  • Covenant and liquidity headroom
  • Stable and low cost base

19.7 18.5 15.5 15.8 15.9 2013 2014 2015 2016 2017F Opex $/boe

  • Optimise quality producing assets in UK, Vietnam,

Indonesia

  • Falklands, Mexico, Brazil offer transforming upside
  • Continuing programme of disposals

Looking forward

Strategy Financial flexibility

  • Tolmount – high quality project
  • Optimising Sea Lion
  • Appraise Zama oil discovery in Mexico
  • Exploration upside in SNS & Brazil
  • Potential UK acquisitions

Selective growth

  • pportunities
  • 80-90 kboepd; $15-20/bbl opex long-life asset base
  • Balance sheet debt reduction
  • Highly leveraged to further oil and gas price recovery

Forward Position

500 1000

Operating Cash Flow Capex & Abex Operating Cash Flow Capex & Abex

$m

$55/bbl $65/bbl $75/bbl On production 2P reserves Discovered but undeveloped 2P reserves and 2C resources ~140 mmboe ~700 mmboe

2018 2019

July 2017 | P6

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SLIDE 8

Producing portfolio

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SLIDE 9

Chim Sáo, Vietnam (53.125%, operator)

July 2017 | P8

20P 5IPST1

2017 1H highlights

  • 15.5 kboepd, above budget
  • High operating efficiency
  • Strong reservoir performance
  • $9/boe operating cost

Outlook

  • 2 infill wells planned for August 2017
  • Field life extended to 2028

5 10 15 20 25 30 35 2016 2017 2018 2019 2020 Current Previous Improved Production Profile kboepd (gross)

59 mmboe reserves remaining

55 mmboe at sanction 57 mmboe produced to date

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SLIDE 10

July 2017 | P9

Natuna Sea Block A, Indonesia (28.67%, operator)

2017 1H highlights

  • 13.0 kboepd, above budget
  • Singapore demand above take or pay
  • 49% of GSA vs 47% contractual share
  • High operating efficiency
  • Opex of c.$6/boe

Outlook

  • Singapore demand stable
  • GSA1 market share increasing
  • Lama well tied into production (Q3 2017)
  • Gajah Baru infill drilling opportunities
  • BIGP first gas 2019

20 40 60 80 100 5 10 15 20 2016 2017 2018 2019 2020 NSBA Production net to PMO (kboepd) Market Share GSA1 (%)

BIGP

30% IRR

93 Bcf $340m gross capex

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SLIDE 11

Huntington, Central North Sea (100%, operator)

July 2017 | P10

2017 1H highlights

  • 15.6 kboepd, 35% above budget

− High operating efficiency − Strong reservoir performance Outlook

  • FPSO lease extension discussions

underway

Currently producing ~15 kboepd

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SLIDE 12

July 2017 | P11

Solan, West of Shetlands (100%, operator)

2017 1H highlights

  • 7.3 kboepd
  • Operational concept working well
  • Central reservoir on prognosis; Eastern

area of field under-performing Outlook

  • P1 outperforming on free flow
  • P1 workover deferred

P1 W2 P2 W1 500m

Top Solan Sand Depth Map

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SLIDE 13

July 2017 | P12

Elgin-Franklin, Central North Sea (5.2%)

2016 production (gross)

2017 1H highlights

  • 6.5 kboepd, above budget
  • Low opex of c.$8/boe

Outlook

  • Long field life; production forecast to

continue until 2037

  • 350 mmboe remaining reserves
  • Ongoing infill drilling, well intervention

programme & exploration upside

20 40 60 80 100 120 140 Jan Feb Mar April kboepd 2017 production (gross)

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SLIDE 14

Portfolio potential

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SLIDE 15

Portfolio potential

July 2017 | P14

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Catcher – under budget, start up 2017 2H

  • 11 wells completed to date with excellent
  • perational performance
  • Improved production profiles anticipated and

review of FPSO capacity underway

  • FPSO mechanically complete and final

commissioning well advanced

  • Sailaway to North Sea during August
  • On schedule for 2017 first oil
  • Capex reduced by 29% to $1.6bn

Varadero Catcher Burgman

2000 4000 6000 8000 10000 12000

CCP3 CTP1 BP3 BP5 VP2 VP3 VP4

Net pay length (ft)

Net pay length - Producers

Predicted cumulative NPL Actual cumulative NPL

Net pay encountered above prognosis

July 2017 | P15

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Completions at Burgman

  • 1 wells

Drilling at Varadero

  • 4 wells

Yard-based pre-commissioning and commissioning of FPSO Drilling at Burgman

  • 3 wells

Catcher outlook

FPSO hook up & final commissioning Improved production profile anticipated Drilling at Catcher

  • 4 wells

FPSO sailaway and transit to North Sea

2017 2018

Today First oil

12 wells

  • n-stream

at first oil Well count reduced to 20

July 2017 | P16

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Indicative metrics

  • ~ 1 Tcf potential (GTA)
  • Capex ~$550m
  • Designed for daily peak

production of 300 mmcfd

  • First gas 2020

Tolmount – next phase of growth

  • Most significant discovery in SNS since 1997
  • Concept selected Q1

– Standalone, normally unmanned – 4 platform wells – 48km x 20” gas export to onshore

  • FEED contracts awarded;

engineering commenced

  • Potential 3rd party infrastructure funding
  • FID targeted for 2018 1H

High return project robust down to low gas prices

Drillex 25% Owners 14% Platform 16% SURF 19% Onshore terminal 27%

Capex Split

July 2017 | P17

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Tolmount – future phases planned

Tolmount East

  • Subsea tie-back or small platform

Tolmount Far East

  • Subsea tie-back or small platform

to Tolmount or Tolmount East Mongour

  • Subsea tie-back or extended reach

well from Tolmount East 3rd party business potential

  • A new hub with 20+ year life

Tolmount Mongour Tolmount East Tolmount Far East

Tolmount area ~ 1 Tcf

Indicative production profile

42/28d-12 NE SW Tolmount Tolmount East

Tolmount Far-East Gas water contact

July 2017 | P18

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SLIDE 20

Southern Gas Basin: portfolio of opportunities

Portfolio of

  • pportunities

which are economic at low gas prices

Tolmount Main (50% op)

  • On path to sanction

Ravenspurn North Deep (5% carried interest)

  • Play-opening carboniferous well

currently drilling Babbage (47% op)

  • Infill opportunities

Cobra (50% op)

  • Appraisal planning underway

Tolmount Area (50% op)

  • Future phases in planning

July 2017 | P19

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SLIDE 21

Sea Lion, Falkland Islands (60%, operator)

Highlights

  • FEED substantially completed
  • Breakeven reduced to $45/bbl

– Capex to first oil reduced to $1.5bn – Field opex reduced to $15/bbl – Indicative FPSO cost of $10/bbl (LOF)

Outlook

  • Positive commercial and fiscal

engagement with FIG

  • Positive engagement with contractor

market and export credit government funding sources

  • Licence extension to May 2020

20 40 60 80 100 120 140 160 5 10 15 20

Annual average oil rate (mbopd) Years from first production

Phase 2 Phase 1

July 2017 | P20

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SLIDE 22

2km Flat spot

Zama Main

3D view of Zama showing top structure and seismic amplitudes of the main target Good conformance of seismic amplitude with structure

salt salt

salt salt

– 1 km – 2 km – 3 km – 4 km – 5 km

seismic section (left) runs E-W through well

ST drilled ahead to 13 5/8” casing point. Well was side-tracked to west and contingency 16” liner set above fault. Current hole depth 3381 m MD

  • 80-90 days (mid Aug) to drill

and evaluate the well to TD of 4400 mTVD (no well test planned).

  • Forecast cost $61.5m gross,

$15.4m net to Premier’s 25%.

  • Forward Plan: Case current

hole section then drill ahead and evaluate the remainder

  • f Zama Main and Zama

Deep secondary target.

Mexico - Zama-1 oil discovery

July 2017 | P21 PTD 4426 m MD

E W Zama-1 Well Zama Deep

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SLIDE 23

Global significance of the Zama Discovery

July 2017 | P22

100 200 300 400 500 600 700 800 900 1000

Liza-Payara Iara Entorno Tulimaniq Carcara Owowo Anchor North Platte SNE Orca Itapu Itapu (Surplus) Snoek Bay du Nord

1500 2000 Zama pre-drill volume range

Sits in top 10 largest offshore commercial oil discoveries of the last 5 years

(Data courtesy of WoodMac)

Offshore Oil Discoveries >300 mmboe since 2012

Reserves (mmboe)

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SLIDE 24

July 2017 | P23

Mexican fabrication capability

  • Development conceptual engineering will

commence shortly

  • Given the scale of the Zama discovery an

illustrative fixed installation development could be much as shown here: – Single jacket and significant topsides, with capabilities of producing well in excess of 100,000 bopd – Single drill centre with wells drilled from the platform – A pipeline to the Dos Bocas terminal

  • The development could leverage the

significant Mexican country infrastructure and manufacturing plants

  • In terms of timetable we would expect to

appraise in 2018 and to target first oil well within 5 years

Zama – Illustrative Development Scenario

Illustrative development schematic

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Tuna, Indonesia (65%, operator)

  • Discovered in 2014 by the Singa

Laut-1 and Kuda Laut-1 wells

  • >90 mmboe
  • Evaluation of potential

development scenarios ongoing – Gas offtake via WNTS to Singapore & Indonesia – Gas offtake through existing infrastructure in Vietnam

  • Granted 3 year extension to

exploration period of licence

July 2017 | P24

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Ceara Basin, Brazil – exploration

  • Largest acreage holder in the Ceara basin
  • 4,000 km2 of fast-track seismic data across all 3

blocks received in 2016

  • Final depth migrated broadband seismic data

received in April 2017

  • Well locations to be selected during 2017
  • Licence extensions received for all 3 blocks
  • Drilling operations planned for 2019 1H

CE-M-661 CE-M-665 CE-M-717 Excellent imaging on new broadband seismic

  • f Upper Cretaceous

turbidite channel sands

Maraca K40 Ganza K40 Pecem K40 Berimbau Up-dip pinch out and fault offset Berimbau Pecem K50 discovery 1-CES-158 1-CES-112 SW NE

CE-M-717

Data Proprietary to PGS Investigacoa Petrolifera Limitada

8km

July 2017 | P25

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SLIDE 27

Refinancing terms

Drawn Debt Total Facilities (incl cash)

Cash & Undrawn

$4.0 bn

Facilities confirmed 1

$3.4 bn 1,000 2,000 3,000 4,000 2017 2018 2019 2020 2021 2022

Existing Proposed

Maturities extended 1

1 FX as at when facilities entered into

Summary of amended terms

  • Total facilities confirmed
  • Maturity dates extended to 2021/2
  • Covenant profile re-set with headroom
  • Enhanced economics (~1.5%) to lenders
  • A warrant package to lenders
  • Convertible bond re-priced
  • Corporate governance controls

Outlook

  • $585m cash and undrawn facilities (30 April 2017)
  • Cash flow positive at forward curve; debt reduction

accelerating once Catcher on-stream

  • Targeting Net Debt/EBITDA <3x by end 2018

May June

15/05: Scottish Court Schemes of Arrangement commenced 30/05: Court scheme convening meeting Posting of documentation incl. shareholder circular & retail bond prospectus 26/06: Scheme Creditors Vote 15/06: Shareholder meeting Requisite majority

  • f Scheme creditors,

Convertible bondholders & Schuldschein holders locked up

July

18/07: Court hearing to sanction the Schemes

July 2017 | P26

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SLIDE 28

Premier Oil Plc 23 Lower Belgrave Street London SW1W 0NR Tel: +44 (0)20 7730 1111 Fax: +44 (0)20 7730 4696 Email: premier@premier-oil.com www.premier-oil.com July 2017