Investor Presentation 01 October 2018 Highlights 2020 year to date - - PowerPoint PPT Presentation

June 2020

01 October 2018

Investor Presentation

Highlights

June 2020

2020 year to date highlights

• Safe and responsible operations maintained

– Focus on health and safety of our people – Production averaged 70.1 kboepd to end April

• Forecast broadly free cash flow neutral for

2020 at forward curve

– c. 30% of 2020 volumes hedged at $60/boe – $240m capex & opex savings & deferrals secured

• Tolmount schedule impacted by COVID-19,

first gas Q2 2021

• Optionality of operated growth projects

preserved with new partnerships agreed

• Highly prospective exploration acreage

retained

• Zama unitisation and sales process ongoing
• $490m of liquidity; addressing covenant and

drawing profiles with creditors

• Court approved schemes, re-engaging with

stakeholders around proposed UK acquisitions and extension of credit maturities

P1

Transcocean Leader on tow to Solan field

Highlights

June 2020

Status of UK acquisitions & lender discussions

Strategic rationale behind acquiring UK assets still stands

• Strengthens UK business through addition of operated

assets

• Equity financed acquisition of cash generative assets

consistent with deleveraging

• Accelerates use of Premier’s UK tax losses
• Continues track record of capturing long term value

through acquisition at low points in the cycle (Oilexco, E.ON)

Current status of UK acquisitions

• Focus on BP assets given immediately cash flow generative
• Integration and transition work well advanced
• Seeking to adjust terms given current market conditions
• Remain subject to shareholder and lender consent

Lender discussions ongoing

• Adequate liquidity: c. $490m of cash & undrawn facilities
• Manage covenant profile; secure any necessary waivers
• Address May 2021 maturity: blueprint for an extension

linked to the acquisitions already exists

• Court approved the creditor schemes in April (subject to

appeal)

P2

Production

June 2020

Production assets overview

2020 ytd

• Production averaged 70.1 kboepd
• FY guidance now 65-70 kboepd

– Catcher outage (now restored) – Huntington 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 ytd Premier (Group) UKCS avg

1 Company estimates, Oil and Gas Authority data

1500 2000 2500 3000 2016 2017 2018 2019 Apr-20

Production

June 2020

UK North Sea

2020 ytd performance

• 47.1 kboepd, underpinned by Catcher which

averaged 28.7 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 vertical pilot well completed

P4

$3/bbl prm to Brent (Catcher Q1 cargos) UK field opex of $11/boe (to 31 Apr)

Catcher plateau rates

kboepd (gross)

Outlook

• Varadero infill well spudded 11 May
• Solan P3 horizontal, expected to boost field

production to >10 kbopd in Q4

• Catcher North and Laverda drilling deferred

20 40 60

Sanctioned First Oil 2019 2020F

Production

June 2020

South East Asia

P5

NSBA, Indonesia (28.7% op)

• 2020 ytd: 13.8 kboepd (net)
• Low opex of $5/boe
• Infill wells identified to

maintain profile

• 48% of 2020 production

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

• 2020 ytd: 9.2 kboepd
• Low opex of $9/boe
• Ongoing well interventions
• 2021 infill wells deferred

>$5/bbl

• av. premium to Brent

(Chim Sáo 2020 1H cargoes)

60%

GSA1 market share Q1 2020

Cash generative: c.$50 million of free cash flow generated from SE Asian assets to end April 2020 NSBA production

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

Development

June 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

• Potential acquisition of

additional 25 per cent interest from Dana

1 Company estimates

Tolmount topsides pre-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

Development

• 160-300 BCF gross

resource (P50-P10) including Mongour

• FEED studies underway

for subsea and platform concepts

• Designed for electric

power

• Project sanction

decision targeted 2020 2H

• Extends Tolmount

plateau production

• 250 mmbbls gross
• Conventional FPSO and

subsea development

• FEED completed
• Technical work now

paused with work done to date being fully documented

• Reduced team to

progress regulatory and financial matters

• Transaction

documentation with Navitas being progressed

• 100 mmboe gross

resource

• HoT agreed with

Zarubezhneft

• 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

June 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

June 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

June 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

June 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

June 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

25 50 2020 budget 2020F (May) 100 200 300 400 500 2020 budget 2020F (May) Abex P&D E&A June 2020

Priorities in today’s environment

Maintain safe and responsible operations

• Focus on health and safety of our people

Maximise operating cash flow

• 30% of 2020 production hedged at $60/boe
• Non safety critical maintenance deferred
• Opex reduced by c. $100m

Minimise expenditure

• Ability to flex and control capex as operator
• Production capex with quick pay back prioritised
• Sea Lion put on hold, exploration deferred

Preserve liquidity

• $490 million of cash & undrawn facilities
• Manage covenant profile

Re-engage with stakeholders

• Proposed UK acquisitions
• 2021 credit maturities extension

P12

Broadly FCF breakeven at current forward curve 2020F capex reduction

• c. $140 million

Capital expenditure

$m

2020 FCF breakeven price

$/bbl

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

June 2020