2001 I I NTERIM NTERIM R R ESULTS ESULTS P P RESENTATION 2001 RESENTATION 17th September 2001
2001 Interim Results Presentation PRESENTATION • Key Issues Charles Jamieson • Results John van der Welle • Operations Richard Liddell • Summary Charles Jamieson Make a Difference
2001 Interim Results Presentation RESULTS OVERVIEW • Production 35.3 mboed (2000 : 25.9 mboed) up 36% • Operating profit £44.6 million (2000 : £17.8 million) up 151% • Profit before tax £24.8 million (2000 : £12.6 million) up 97% • Net profit £12.4 million (2000 : restated £7.9 million) up 57% • Gearing 149% (2000 : 153%) down 4% Make a Difference
2001 Interim Results Presentation PORTFOLIO MANAGEMENT - SUMMARY • Restructuring of Pakistan business – New joint venture with Kufpec – Increased production, reduced capex • Disposal of non-core Indonesian interest (Pangkah) – Raises cash – Reduced future capex • Proceeds of $135 million realised • Pro forma gearing reduced by 42% to 107% • Reduction in future capex of $85 million • Exceptional accounting gain of £35 million Make a Difference
2001 Interim Results Presentation KEY ISSUES FOR INVESTORS • Shareholder structure • Production • Portfolio management / cash flow / gearing • Commercialisation of gas reserves • Exploration and replenishment of portfolio Make a Difference
2001 Interim Results Presentation SHAREHOLDER STRUCTURE “ It is widely acknowledged by analysts and other commentators that Premier’s share price does not adequately reflect the value of our oil and gas reserves or the potential of the business. I said in my interim statement to you in September that the Board and alliance shareholders Amerada Hess and Petronas were aware of the perceived depressive effect of the 50% alliance shareholding on the share price and were working together to find a way forward for the best interests of all shareholders. I remain confident that we can find a suitable way.” Sir David John Annual Report 2000 Make a Difference
2001 Interim Results Presentation PRODUCTION IN 2001 60000 • Forecast physical production for 2001 revised to 40,000 boepd from 50,000 boepd: 50000 – 3,500 boepd covered by Yetagun and WNG take or pay 40000 Net Boepd – 1,700 boepd re: delayed Kyle production 30000 – 1,700 boepd re: changed Chestnut arrangements (Brovig - Amerada Hess) 20000 – 1,700 boepd re: Fife, Fergus and Flora fields partially covered by business interruption insurance 10000 – 1,400 boepd other production losses in UK and slower 0 ramp up of WNG 2001 Forecast Physical Production Delay Kyle Production Fife, Fergus, Flora ToP due 2002 Chestnut Shortfall in Production Make a Difference
2001 Interim Results Presentation PORTFOLIO MANAGEMENT - DETAILS INDONESIA • Pangkah – Sale to Amerada Hess for $30m PAKISTAN • Shell – Termination of joint venture – Acquisition of 49.9% of PSP shares – Reduction in interest in Bhit to 12% (from 20%) • Kufpec – New 50/50 joint venture with Kufpec – Consideration $105m + 15.8% Kadanwari Make a Difference
2001 Interim Results Presentation PREMIER INTEREST IN PAKISTAN Before Movement After Qadirpur 4.75% - 4.75% Kadanwari 7.89% +7.89% 15.79% Zamzama – pre commerciality 11.88% - 11.88% Zamzama – post commerciality 9.38% - 9.38% Bhit 20% -14% 6% Cash - +$105m $105m Make a Difference
2001 Interim Results Presentation COMMERCIALISATION OF GAS RESERVES • Pakistan – Zamzama - allocation of 350 mmscfd (gross) - negotiations concluded by end of year • Indonesia – WNG - negotiations in progress for sales to Malaysia - signature targeted first quarter 2002 • Indonesia – Pangkah - sold for $30 million Indonesian and Pakistan reserves at or near commercialisation represent ~100 million boe, 95% of unbooked reserves Make a Difference
2001 Interim Results Presentation EXPLORATION AND REPLENISHMENT OF PORTFOLIO • 2001 programme – Indonesia - Pangkah programme - Q1 – Pakistan - Kadanwari West - Q3 - Zarghun North - Q4 – Significant seismic programmes in Area IV in Indonesia and Dumbar in Pakistan • Planned 2002 exploration programme – Pakistan - 2 Dumbar wells – Indonesia - Natuna Block A Area IV oil well – Myanmar - MF1 well – Guinea Bissau - well – Kirthar (near Bhit) - well Make a Difference
2001 Interim Results Presentation GUINEA-BISSAU This is an under explored area - only 10 wells have been drilled offshore Guinea Bissau None of these wells has tested the play type being evaluated by Premier Most wells recorded live oil shows, one tested oil If successful a number of additional prospects are present on the acreage Exploration success would provide the opportunity to establish a new core area Make a Difference Figure 00
2001 Interim Results Presentation R ESULTS Make a Difference
2001 Interim Results Presentation RESULTS OVERVIEW AND PORTFOLIO MANAGEMENT • Production 35.3 mboed (2000 : 25.9 mboed) up 36% • Operating profit £44.6 million (2000 : £17.8 million) up 150% • Profit before tax £24.8 million (2000 : £12.6 million) up 97% • Net profit £12.4 million (2000 : restated £7.9 million) up 57% • Gearing 149% (2000 : 153%) down 4% • Impact of take or pay accounting - SORP • Financial impact of portfolio management Make a Difference
2001 Interim Results Presentation PROFIT & LOSS ACCOUNT 2001 2000 (restated)* Production (mboepd) 35.3 25.9 Excludes Yetagun ToP (SORP) Realised oil price ($/bbl) 26.71 21.38 Realised gas price ($/mcf) 2.19 2.16 1999 hedging - no impact in 2001 £m £m Turnover 94 54 Higher production and higher prices less: share of JVs turnover (19) (5) Group turnover 75 49 Unit opex (incl JV’s) £3.96/boe - up 4% Operating costs (17) (12) Amortisation (19) (17) Unit DDA (incl JV’s) Gross profit 39 20 £3.30/boe - down 9% due to lower cost gas Administration costs (4) (4) production Operating profit / (loss) 35 16 Increased contributions Operating profit in JVs 10 2 from Myanmar and Total operating profit / (loss) 45 18 Pakistan Net interest (21) (8) Higher debt and cessation Exchange gain 1 3 of capitalisation on Profit / (loss) before tax 25 13 Yetagun and WNG Taxation (13) (5) Higher UKCT due to Profit / (loss) after tax 12 8 higher revenues, plus onset of Yetagun Earnings per share - basic and diluted (pence) 0.8 0.5 production * restatement is for FRS19 (Deferred tax) adopted in 2000 Make a Difference
2001 Interim Results Presentation CASHFLOW 2001 2001 2000 (Incl. JVs) (As reported) (As reported) £m £m £m Net cashflow from operations 62 36 25 Increase in line with higher net revenues Net interest (14) (14) (11) Taxation (11) (11) (10) Much reduced capital expenditure - Operating cashflow (after interest and tax) 37 11 4 completion of major developments Capital expenditure (37) (29) (64) Group JV Total Disposals (net) - - - £m £m £m Exploration 5 3 8 Net cashflow - (18) (60) Fields 20 5 25 Exchange/other (20) (17) (15) Other 4 - 4 29 8 37 Movement in net debt (20) (35) (75) Yetagun interest accrued (7) - - Mainly exchange losses Opening net debt (445) (323) (171) on $ debt Closing net debt (472) (358) (246) Make a Difference
2001 Interim Results Presentation BALANCE SHEET 2001 2001 2000 (incl. JVs) (As reported) (As restated) £m £m £m Cash 61 36 100 Debt 533 391 346 Net debt 472 355 246 Shareholders’ funds 317 NA NA Gearing ratio 149 NA NA % Gearing well within debt covenants Make a Difference
2001 Interim Results Presentation IMPACT OF SORP ON TAKE OR PAY - YETAGUN 2001 2000 HY FY £m £m Deferred turnover 8.4 11.8 Reported net profit 12.4 6.1 Deferred profit 5.3 8.9 Profit including deferred profit 17.7 15.0 Cumulative deferred profit of £14.2 million equivalent to 77% of reported net profit Make a Difference
2001 Interim Results Presentation FINANCIAL IMPACT OF PORTFOLIO MANAGEMENT 30/6 Pangkah Sale Pakistan Restructure Proforma 30/6 £m £m £m £m Fixed assets 696 (21) (39) 636 Net current assets 47 21 73 141 Long term creditors (426) - 1 (425) & provisions Net assets 317 - 35 352 Cash 36 131 Net debt 472 377 Gearing 149% 107% Make a Difference
2001 Interim Results Presentation O PERATIONS Make a Difference
2001 Interim Results Presentation OPERATIONS HIGHLIGHTS • West Natuna Gas project delivery • Rapid response to operations challenges • Premier delivering operations performance Make a Difference
2001 Interim Results Presentation WEST NATUNA GAS PROJECT • AGX Platform installed May 2001 • On time and under budget • Development cost $265m (gross) • Production operations established The AGX main deck being lifted from the transportation barge onto the AGX Jacket. Make a Difference
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