Investor Presentation February 2013 Forward looking statements - - PowerPoint PPT Presentation

Investor Presentation

February 2013

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.

February 2013 | Page 1

j A number of factors could cause actual results, performance or events to differ materially from those expressed or implied by these forward-looking statements.

Introduction to Premier Oil

• Leading FTSE 250 independent E&P

company, founded in 1934

• 6 key business units: UK, Norway,

Pakistan, Indonesia, Vietnam and Falkland Islands

• Exploration assets in Middle East

and Africa

• Current production of ~60 000 boepd

February 2013 | Page 2

• Current production of 60,000 boepd

rising to >100,000 boepd

• Over 700 mmboe of 2P reserves

and 2C resources

• Invest in high quality projects

– Value-enhancing acquisitions – Exploration

• Market cap of ~$3.2 billion (Feb 2013)
• Record levels of profit-after-tax and
• perating cashflow in 2012

Historic NAV/share CAGR of 14.2% at constant oil prices

Operations update

February 2013 | Page 3

North sea and Asia assets

February 2013 | Page 4

Chim Sáo

• Chim Sáo production averaged ~29,000 boepd

in 2012

• Higher level of facility uptime achieved in 2H
• Water injection rates are now at 30,000 bpd,

providing effective reservoir pressure support

• Two well supplementary drilling programme into

additional reservoirs completed in June and wells i d i i Q

Chim Sáo and Dua

February 2013 | Page 5

tied-in in Q3 2012

• Total well capacity in excess of 40,000 bopd

Dua

• Dua will develop ~10 mmbbls
• Prime Minister approval of FDP received in August
• Long lead items being procured and contracted
• Development drilling to commence in April 2013
• Subsea installation and tie-in in Summer 2013
• First oil 2014

• Gas sales from NSBA averaged 144 BBtud

in 2012 – NSBA’s share of GSA1 at 44.4% against a contractual market share of 36.9% – Block A’s share of remaining reserves dedicated to GSA1 is estimated to be ~64%

• Gajah Baru, which is dedicated to GSA2, is

performing well with deliverability in excess of 200

Natuna Sea Block A

February 2013 | Page 6

BBtud

• Next phase of development projects (Pelikan, Naga

and Anoa Phase 4) progressing to schedule

• Total sales capacity will increase to 400 BBtud over

time

• Discussions to sell an additional 40 BBtud into the

Indonesian domestic market continue

Rochelle

Huntington and Rochelle

Huntington

February 2013 | Page 7

• Development drilling completed in August

– To schedule and on budget – Better than expected well results – Debottlenecking study underway

• FPSO arrived on location on 3 October

– All of the five risers have been installed – System testing and commissioning underway

• First oil anticipated before end of 1Q 2013 with the field

expected to produce 25 kbopd after a ramp-up period

• Subsea pipeline work is complete
• Rig is on location to conclude the horizontal section of

the first of the two development wells ahead of final tie-ins

• Operator expecting first gas in 1Q 2013

Solan

• Premier is Operator with 60% equity
• All significant contracts have been awarded

– Procurement and fabrication of platform (Burntisland Fabrications) – Heavy lift installation (Heerema) – Subsea tank fabrication (Dry Docks World Dubai) – Drilling rig (Awilco)

• Construction of topsides has commenced
• Phase 1 development drilling to commence in April 2013
• First oil targeted for Q4 2014 with an initial production rate of

February 2013 | Page 8

• First oil targeted for Q4 2014 with an initial production rate of

24,000 bopd

• 2012

2013 2014 Platform T ank Drilling Installation, Hook-up and Commissioning

FEED Design and Procurement Construction

• Premier is operator with 50% equity
• Development concept agreed among partners

in December 2012

• Tender processes with FPSO providers and for

the subsea facilities FEED are underway

• Reservoir modelling being updated to optimise

subsurface development requirements

Catcher update

February 2013 | Page 9

subsurface development requirements

• Design phase expected to be completed in

mid-2013 with submission of the FDP to thereafter

• First oil modelled for early 2016, subject to

FPSO contractor discussions

FPSO and Subsea Wells

Sea Lion

Transaction details

• Farm-in for 60% of Rockhopper’s interests in the

Falklands completed in October 2012

• Initial payment of $231 million plus an exploration and

development carry of up to $48 million and $722 million, respectively

• Fully funded from existing cash, facilities and cash

flow; commitment to fund dividend unchanged

February 2013 | Page 10

Development plan

• FPSO in 450m water depth; tanker offloading
• Associated gas used as fuel or re-injected
• 22 producers, 13 water injectors and a gas

injector, drilled from 3 subsea centres

• Insulated flowlines and risers
• HSPs for artificial lift and flow assurance
• Gross plateau rate of 80-85 kbopd
• Capex to first oil of ~$3 billion (purchased FPSO)
• Subsequent development of satellite fields

Targeted schedule

• Concept Selection in Q2 2013
• Project Sanction in mid 2014
• First Oil in Q3 2017

Fully funded programme

Development Funding

• Dividend, exploration

and all existing projects are fully funded at $85/bbl

• Capacity to increase

spend on exploration

1800

Development capex

(US$ million)

1200 1000 1400 * * 1800

Investment Profile

(US$ million)

1200 1000 1400 1600

Acquisitions / disposals Exploration expenditure Development Capex Sea Lion Existing Assets

1600 February 2013 | Page 11

spend on exploration and new development projects at higher oil prices

• Forward profile funded

by cash flow and facilities even at $65/bbl

400 200 800 600 1000

*Assumes standby funding is taken up by Rockhopper. Purchased FPSO case.

2013 2012 2015 2014 2016 2017

400 200 800 600 1000

2013 2012 2015 2014 2016 2017

Note: Assumes exploration expenditure of $250 mm pa from 2014.

Exploration update

February 2013 | Page 12

Exploration 2012 and vision

2012

• Success at Carnaby in the Catcher area, Anoa Deep on Natuna

Sea Block A and K-30 and Badhra B North-1 in Pakistan

• Unrisked prospective resource portfolio increased to 2,524 mmboe

(484 mmboe risked)* – Increased lead and prospect inventory in the Falklands, Iraq, Vietnam and the North Sea Vision T i k l i (Rif F l f ld b l ) i i i

February 2013 | Page 13

* Excludes PL23 and PL24 in the Falkland Islands ** DeGoyler & MacNaughton estimate

• Targeting known geologies (Rift or Frontal fold belts) in existing
• r new areas

– Focus on play opening opportunities with significant follow

• n potential

– Drill out high impact prospects

• Building on $2.7 billion of NPV from Premier discoveries

(since 2005)** Portfolio increased by ~ 1 billion boe to 2,524 billion boe (net, unrisked) during 2012

Transforming the exploration portfolio

February 2013 | Page 14

Asia

12W 07/03 Block A Aceh Block 121 Phu Khanh Basin

Plays to be accelerated

• Anoa Deep success in 2012

– Play opener – More than 4 wells planned 2014/15

• Block 121

– Play opener, high risk Ca Voi t t b d ill d i 1H 2013

• February 2013 | Page 15

Tuna

• NSBA

prospect to be drilled in 1H 2013

High impact prospect inventory

• Matang currently drilling
• Kuda Laut and Singa Laut to be

drilled in 2H 2013

• Ca Duc to be drilled in 1H 2013

Anoa Deep (Natuna Sea Block A)

• Premier 28.67% equity and Operator
• Drilled as an exploration tail to the WL-5

development well

• Encountered ~300 feet of fractured Lama

Sandstones

• Lama formation tested and flowed gas

17 f/d h h 48/64 i h h k

Anoa Deep success

Top Lama Depth WL

Anoa Deep Discovery Anoa North

February 2013 | Page 16

– 17 mmscf/d through a 48/64 inch choke – Estimated total gas in place of 70-100-150 bcf

• The well will be tied-in to the Anoa facility
• Significant follow-on potential

– Gross accessible prospective resource ~2TCF – Exploration drilling in 2014/2015

• 3km

C.I.=100 feet 1 Km

Vietnam Block 121 – play opening well

Ca Voi (Whale) prospect (Vietnam Block 121*)

• The Ca Voi prospect is the first test of the Oligocene play in the

Phu Khanh Basin

• High risk well (a true frontier wildcat) with multiple follow-up

potential

• Risk assessment: high (a true frontier wildcat)
• Gross prospective resource assessment: 40-100-200 mmbo

February 2013 | Page 17

p p

• Well planned for 1H 2013
• Significant follow on potential

* Block 121 - Premier 40% equity (Government approval pending)

Kuda Laut and Singa Laut

Combined Depth Structure Map

• Premier 65% equity and Operator
• Faulted dip closed structure up dip from a

proven source kitchen to the east

• Risk assessment:

– Low risk for gas (amplitude supported) – Moderate to high risk for commercial oil

• Gross prospective resource estimate:

60-100-140 mmboe

Kuda Laut Singa Laut

February 2013 | Page 18

4 km

60 100 140 mmboe

• Well planned for 2H 2013

Kuda Segment

NW SE

Gajah Laut Utara-1

TD 4687m

Belut Laut-1

TD 4977m

Kuda Laut Singa Laut MMU L.Terumbu Arang Gabus

Depth of Top Oligocene in Gajah Laut Utara

Pushing the Plays Wider

• Premier drilled five exploration wells targeting the Tertiary sands

in the UK Central North Sea – Success at Carnaby, within the Greater Catcher Area

• Tertiary prospect drilling now focussed on the Greater Catcher

Area with Bonneville planned to spud in March 2013 Pushing the Plays Deeper

• Higher impact exploration programme focuses on deeper

Mesozoic plays – HPHT Triassic test at Lacewing (1H 2013); Learnings will be

Pushing the plays wider and deeper in North Sea

February 2013 | Page 19 g ( ); g applied to UK and Norway – Luno II, high impact prospect (1H 2013) Accelerating high impact play opening prospects and leads

• Ongoing maturation of the Inner Moray Firth and Mandal High

prospects

PL 359

BCU Time Map

C.I. 100 ms

10km Johan Sverdrup Luno/Apollo Ragnarrock Luno II Prospect

Luno II Inner Moray Firth Carnaby

Lacewing

Lacewing Mandal High

L10A & L10B

• 3 distinct play areas on block
• Half of the acreage covered by 3D

– Enable the right prospect on the right play to be accelerated

• 2,535 km2 of 3D and 1030 km 2D acquired
• New 2 280 km2 3D is being acquired

Kenya

February 2013 | Page 20

New 2,280 km 3D is being acquired

• Potential well in 2H 2013

Outboard Turbidite Plays Inboard Reef Play

SW NE W E

Iraq Exploration

Approximate position of Block 12 SW NE

February 2013 | Page 21

Block 12

• Premier 30% equity
• 8,000 km2 block in the foreland of the Zagros fold belt up dip

from producing fields

• Multiple stacked reservoirs targeted
• Gross prospective resource potential in excess of 1 billion bbls
• Plan to acquire seismic over the block in 2013 and 2014 and

drill in 2015

Gravity Map

• Accelerating maturation of prospects in two

distinct plays – Extension of play proven by Sea Lion – Under explored deeper fairway

• Working with Rockhopper to drill a minimum
• f three wells in 2014

Exploration in the Falkland Islands

February 2013 | Page 22

Sea Lion 14/10-9

SOUTHERN AREA NORTHERN AREA Syn-Rift Early Post-rift lacustrine basin Late Post-rift (marine)

S N

Q1 Q2 Q3 Q4 Block 121 Ca Voi 120 High Block 07/03 Ca Duc 45 High Block A Aceh Matang 40 Moderate Tuna Block Kuda Laut & Singa Laut 100 Moderate Norway PL359 Luno II 120 Moderate P1181 Lacewing 58 High P1430 Bonneville 10 Low North Sea

• Rest of World

Asia 2013 P50 gross unrisked resource (mmboe) Risk Vietnam Indonesia

Bredford Dolphin Maersk Resiliant Century Rig 28 Ocean General Ocean General Ocean General WilPhoenix

2013 exploration drilling programme

February 2013 | Page 23

K-32 7 Low K-36 5 Low Badhra South Deepening-1 38 High Badhra BN-1 8 Low Badhra-6 Parh 58 Moderate Inboard 3D seismic Contingent well TBC TBC Mauritania Tapendar TBC TBC Kenya L10A & L10B Pakistan Kadanwari

• Weatherford 812

SLB Rig-23 Weatherford 812 SLB Rig-23 SLB Rig-23 Contingent Wells Firm Wells: Rig Contracted Firm Wells: Rig TBC All well timings are subject to revision for operational reasons Wells to watch

The three key upcoming wells are Luno II, Lacewing and Ca Voi, targeting at least ~100 mmboe of net unrisked prospective resources

Seismic acquisition

Outlook

February 2013 | Page 24

• Strong growth in cash flow generation

– $2.6 billion per annum once Catcher

• n-stream
• Higher impact exploration

– Luno II, Lacewing and Ca Voi – 2013/14 programmes in Kenya, Norway and Falklands

What can you expect from Premier?

Rapidly rising production and cash flow (kboepd)

75 100+ 100

February 2013 | Page 25

• Continuing acquisition activity

– Financial strength and access to capital

• ffers continuing opportunities
• Dividend commitment
• Portfolio focussed on value creation

2011 Huntington 2012 Sea Lion Catcher 40 75 60

Historic NAV/share CAGR of 14.2% at constant oil prices

February 2013 | Page 26

www.premier-oil.com February 2013