Zama Discovery Interim Update 13th July 2017 Mexico: 111 years of - - PowerPoint PPT Presentation

Zama Discovery Interim Update

13th July 2017

Mexico: 111 years of E&P history, 78 years under state monopoly

Sureste

Veracruz Tampico- Misantla Campeche Mexican Ridges

61 Bboe Sureste

14 Bboe 2.0 Bboe 0.9 0.3 0.4 0.5 Salina del Bravo & Perdido

• il

gas

Area proportional to discovered resource

Burgos

Burgos

• Onshore, Mature
• Gas, minor Oil
• Main Play: Paleogene Deltaics

Tampico - Misantla

• Onshore, Mature
• Oil + Assoc Gas
• Main Plays: Jurassic /

Cretaceous carbonates Veracruz

• Onshore, Mature
• Gas, minor Oil
• Main Plays: Cretaceous

carbonates; Tertiary deep water sandstones Sureste (offshore)

• Shallow to Deep-Water,

Emerging

• Oil + Assoc Gas
• Main Play: Cretaceous / Jurassic

carbonates; Neogene clastics

• Salt plays

Mexican Ridges

• Slope & Deep-Water, Frontier
• Possible Gas (Tertiary SR), but

unknown

• Main Play: Paleogene &

Neogene DW Clastics Campeche

• Slope & Deep-Water, Frontier
• Probably Mixed Oil and Gas
• Main Play: Neogene DW

Clastics

• Salt plays

Perdido

• Deep-Water, Emerging
• Oil + Assoc Gas
• Main Play: Neogene and

Paleogene clastics

• Salt plays

July 2017 | P1

• Premier screening high-graded

Sureste Basin as best fit for entry

• Opening of a high potential energy sector to foreign investors after 78 years
• f state monopoly.
• Establishment of a clean and transparent process with an independent

regulatory body, CNH.

• Extensive modern datasets made available for a reasonable cost across most

basins.

• CNH and SENER (Ministry) continuing to mature both the licencing process

and terms.

• Bid conditions comprise government take and defined work programme.
• Mexico offers large tracts of acreage in proven basins with access via a

regular tender process.

July 2017 | P2

Mexico: recent Energy Sector Reform

July 2017 | P3

• Successful entry (10% carried) into Blocks 2 & 7 in Q3 2015
• Increased equity to 25% (paying) in May 2017 in Block 7, ahead of Zama well

Block 2

Mexico: Premier Sureste Basin Licence Position

Block 7 Premier 25% Talos (op) 35% Sierra 40%

ENSCO 8503 Flat Spot

• Talos (op.) spudded the well in 166m of water on

21 May using the Ensco 8503 rig.

• Premier’s pre-drill assessment of Zama was of it

being a low risk prospect, with a P50 of 300 MM barrels EURR within a range of 100-500 MM barrel

full stack reprocessed seismic data in depth E W Zama-1 Well

July 2017 | P4

Good conformance of seismic amplitude with structural contours salt salt 3D view of the Zama Prospect showing top structure map and seismic amplitudes of the target interval Zama-1 Well

Mexico: Block 7 Zama Prospect (Premier 25%)

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 of Zama Main and Zama Deep secondary target.

Mexico - Zama-1

July 2017 | P5 PTD 4426 m MD

E W Zama-1 Well Zama Deep

Global significance of the Zama Discovery

July 2017 | P6

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)

July 2017 | P7

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

Mexico - Block 7 - Fiscal Terms

July 2017 | P8

Gross Revenues Cost Recovery Profit Oil

Exploration Capex Opex Contractor Profit Oil Government Profit Oil (68.99%)

Royalties

Contractor Gross Revenues 60% limit

• f Gross

Revenue (per month)

Corporation Tax 30% Representative barrel of oil at $65/bbl Royalty Sensitivity to Oil Price

Oil Price $/bbl Royalty

100%

125%

Exploration benefits from a 25% uplift

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