Investor Presentation 01 October 2018 Highlights 2020 1H - - PowerPoint PPT Presentation

July 2020

01 October 2018

Investor Presentation

Highlights

July 2020

2020 1H highlights

• Production of 67.3 kboepd; safe and responsible
• perations maintained
• $240m of savings and deferrals (capex and opex)
• Solan P3 first oil by end Q3, adds c. 10 kbopd
• Tolmount: final topsides commissioning underway

ahead of August sailaway; first gas Q2 21, adding 20-25 kboepd post ramp-up

• Operated growth projects preserved; highly

prospective exploration acreage retained

• Zama unitisation & sales process ongoing: SENER

instruction received (July); 120 days to agree

• Amended BP acquisitions approved by creditors,

subject to SPA finalisation, equity funding and agreed refi terms; adds c. 17 kboepd

• Discussions underway with subset of creditors; aim

to agree terms to a long term extension to our credit facilities by end July

• Net debt reduced to $1.97 bn, financial covenants

waived through to end Sept 2020; forecast free cash flow positive for 2020 at forward curve

P1 Crew change at Catcher Transocean Leader drilling Solan P3 Castoro Sei laying pipe at Tolmount

Highlights

July 2020

BP acquisitions & lender discussions

Strong strategic rationale behind UK acquisitions

• Strengthens UK business and diversifies portfolio
• Accelerates balance sheet deleveraging
• Accelerates use of Premier’s UK tax losses
• Track record of capturing value through acquisitions

Status of UK acquisitions

• Integration and transition work well advanced
• Terms adjusted to reflect market conditions
• Lender consent received
• Remain subject to SPA finalisation, agreed refinancing

terms and equity funding

• Targeting 30 September for completion

Status of refinancing

• Stable Platform Agreement approved; financial

covenants waived through to 30 September

• Discussions with a subset of creditors regarding long

term extension to Group’s credit facilities progressing

• Targeting end July for agreed refi terms which can then

be recommended to full lender group for approval

P2

BP acquisitions to add c. 17 kboepd (net) in Q4 2020

Production

July 2020

Production assets overview

2020 1H

• Production averaged 67.3 kboepd
• FY guidance 65-70 kboepd

– Solan P3, Varadero infill drilled – Catcher outage (now restored) – Huntington, Kyle COP

• No recordable injuries on any

Premier operated sites

• Proposed UK acquisitions announced

P3

Outlook

• Rising production profile

– Increased contribution from tax advantaged UK assets – Stable Asia production

• High value infrastructure led
• pportunities
• Continuous review of operated

assets to minimise emissions

Net debt

$m

SE Asia

23 kboepd

UK

47 kboepd

Operating efficiency1

% 20 40 60 80 100 2017 2018 2019 2020 1H Premier (Group) UKCS avg

1 Company estimates, Oil and Gas Authority data

1500 2000 2500 3000 2016 2017 2018 2019 2020 1H

Production

July 2020

UK North Sea

2020 1H performance

• 45.0 kboepd, underpinned by Catcher which

averaged 28.4 kboepd (net)

• Elgin Franklin: 7.3 kboepd (high OE and

completion of FIC infill well)

• Huntington COP in April with FPSO sailaway

planned for mid-year

• Solan P3 horizontal well successfully drilled

P4

>$2/bbl prm to Brent (Catcher 1H cargos) UK field opex of $13.5/boe (2020 1H)

Catcher plateau rates

kboepd (gross)

Outlook

• Varadero infill to be brought on-stream end Q3
• Solan P3 horizontal, expected to boost field

production by >10 kbopd in Q4

• Catcher North and Laverda drilling deferred

20 40 60

Sanctioned First Oil 2019 2020F

Production

July 2020

South East Asia

P5

NSBA, Indonesia (28.7% op)

• 2020 1H: 13.2 kboepd (net)
• Low opex of $6/boe
• Infill wells identified to

maintain profile

• 48% of 2020 production

hedged at c.$9/mscf Chim Sáo, Vietnam (53.1% op)

• 2020 ytd: 9.1 kboepd
• Low opex of $9/boe
• Ongoing well interventions
• 2021 infill wells deferred

>$5/bbl

• av. premium to Brent

(Chim Sáo 2020 1H cargoes)

57%

GSA1 market share Q1 2020

Cash generative: c.$50 million of free cash flow generated from NSBA & Chim Sao during 2020 1H NSBA production

kboepd (net) 5 10 15 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20

Development

July 2020

Tolmount Area

P6

Tolmount indicative production profile1

kboepd (net, Premier 50 per cent)

• 500 Bcf gross resource
• 50 kboepd gross peak rates
• Modest capex; low opex
• Partnership with Kellas who

are partially funding the capex

• Revised schedule with first

gas now Q2 2021

• Significant upside within the

Greater Tolmount Area

– Tolmount East, Mongour discoveries – Tolmount Far East, Tolmount South – Initial results from 4D seismic survey very encouraging

1 Company estimates

Tolmount topsides final commissioning Tolmount jacket roll up achieved in Dec 19 5 10 15 20 25 30 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Tolmount Tolmount East

<2 years

Tolmount Main payback

Development

• 160-300 BCF gross

resource (P50-P10) including Mongour

• Subsea development

concept; FEED underway

• Designed for electric

power

• Project sanction

decision by year-end 2020

• Extends Tolmount

plateau production

• 250 mmbbls gross
• Conventional FPSO and

subsea development

• FEED completed
• Technical work now

paused with work done to date fully documented

• Reduced team to

progress regulatory and financial matters

• Transaction

documentation with Navitas being progressed

• 100 mmboe gross

resource

• Farm out agreed with

Zarubezhneft, subject to government approvals

• Premier carried for two

appraisal well campaign planned for 2021

• MoU signed for sale of

Tuna gas to Vietnam

• Preparation of net zero

development plan underway

July 2020

Development asset review

P7

Tolmount East Area Sea Lion Phase 1 Tuna discoveries Block 7 Zama oil field1

• 810-970 mmbbls gross

resource (P50-P10)

• Simple, conventional

development plan

• Long life plateau of

120 kbopd (gross) to 2040+

• Robust economics: PSC

regime

• Unitisation and sales

process ongoing Premier, 50% op Premier2, 40% op Premier2, 50% op Premier, 25% non-op

1 Extends into neighbouring block which is 100% owned by Pemex 2 Working interest, assuming proposed farm outs

Development

July 2020

Development asset review – a Net Zero Commitment

Low Carbon by Design

• Measuring, managing and

minimising Premier’s emissions

• Emissions Hopper approach
• Best Available Technology

Carbon Neutral by Commitment

• Nature-based offsetting in Premier’s

geographies

• All operated developments will be

Carbon Neutral (Scopes 1 and 2)

• Premier’s activities will be:

– >65% net zero by 2025 – 100% net zero by 2030

P8

Reducing Scope 1 emissions

• Use of normally unattended facilities
• Removal of CO2 from the gas stream for re-injection
• Minimisation of all venting and flaring
• Electrification of platforms, vehicles etc where possible
• Minimisation of offshore support vessels

Reducing Scope 2 emissions

• Efficiently generate our own power

Advocacy and supported initiatives

GHG intensity

kgCO2e/boe

10 15 20 25 2017 2018 2019

Exploration

July 2020

High value exploration portfolio

Area A, Alaska North Slope

• Charlie-1 well drilled in Q1
• Extended Brookian play south but

encountered gas condensate Block 717, Brazil

• Berimbau/Maraca targeting 100-600

mmbbls (gross, P90-P10)

• Well deferred to 2021

Mexico

• Block 30: Wahoo flat spot similar to

Zama; drilling deferred to 2022

• Burgos Blocks 11 & 13: 3D seismic

reprocessing Andaman Sea, Indonesia

• 3D survey completed with highly

encouraging initial results

• Timpan (Andaman II, PMO 40% op)

now planned for 2022; targeting 1.5 TCF of gross unrisked resource

P9

Timpan DHI

Timpan-1

Multi-TCF

gross potential

Wahoo prospect, Block 30, Mexico Expanded position in South Andaman Sea, Indonesia

>300 mmbbls

On block gross resource potential

Flat Spot Targeting under explored plays in proven hydrocarbon basins

Summary

July 2020

Forward production profile

P10

Indicative production profile

kboepd

• Rising, highly cash generative production base
• Near to medium term growth from UK assets; South East Asia stable
• Longer term growth from new international projects
• Excludes contribution from proposed UK North Sea acquisitions

Base profile Awaiting approval Growth projects

Summary

July 2020

7 year balanced capital allocation (2020 to 2026)

P11

10% 10% 100% 25% 45%

At $65/bbl, 40p/therm the business will deliver

• Positive free cash flow in all years
• Production averages >100 kboepd by period end
• Covenant level of <1x by period end

2018-2019 allocation

• Debt reduction 40%
• Producing assets / abex 20%
• New projects 25%

Discretionary Non-discretionary

10% Reinvestment in new projects will be measured against shareholder returns

Summary

100 200 300 400 500 2020 budget 2020F (July) Abex P&D E&A July 2020

2020 Priorities and outlook

Maintain safe and responsible operations

• Focus on health and safety of our people
• Deliver FY20 production guidance of 65-70 kboepd

(before contribution from BP assets)

• Complete Tolmount platform installation and pipelay;

commence development drilling

Deliver $240m of savings and deferrals

• Non safety critical maintenance deferred
• Production stopped from low rate fields not generating

positive cash flows

• Sea Lion suspended, exploration drilling deferred

Preserve optionality of growth projects

• Sea Lion farm-in documentation agreed
• Tuna appraisal to be fully funded
• Highly prospective exploration acreage retained

Complete proposed transactions

• Agree amendments to Group’s existing credit facilities
• Complete equity-funded BP acquisitions

P12

2020F capex reduction

• c. $130 million

Capital expenditure

$m Final onshore commissioning of Tolmount topsides

Premier Oil Plc 23 Lower Belgrave Street London SW1W 0NR T: +44 (0)20 7730 1111 E: premier@premier-oil.com www.premier-oil.com

July 2020