2001 P P RELIMINARY RELIMINARY R R ESULTS ESULTS P P RESENTATION 2001 RESENTATION 13th March 2002
2001 Preliminary Results Presentation PRESENTATION Sir David John • Introduction John van der Welle • Results Richard Liddell • Operations Charles Jamieson • Summary and Outlook Make a Difference
R ESULTS 2001 Preliminary Results Presentation Make a Difference
2001 Preliminary Results Presentation RESULTS OVERVIEW • Production 40.9 mboed (2000: 27.3 mboed) up 50% • Turnover £213.8m (2000: £115.7m) up 85% • Operating profit (1) £88.6m (2000: £35.2m) up 152% • Proforma (2) profit after tax £34.5m (2000: £14.2m) up 143% • Gearing 122% (2000: 153%) down 31% • Gearing including sales proceeds 113% down 40% (1) Before exceptional items (2) Proforma for Take or Pay Make a Difference
2001 Preliminary Results Presentation PROFIT & LOSS ACCOUNT 2001 2000 Production (mboepd) 40.9 27.3 Working interest volume Realised oil price ($/bbl) 25.2 21.6 1999 hedging - no impact Realised gas price ($/mcf) 2.97 2.64 in 2001 £m £m Higher production and Turnover 214 115 higher realised prices less: share of JVs turnover (47) (16) Unit opex (incl JV’s) Group turnover 167 99 £3.65/boe - down 11% Operating costs and royalties (53) (33) Unit DDA (incl JV’s) Amortisation (44) (32) £3.18/boe - down 7% due Gross profit 70 34 to lower cost gas production Other income - 2 Administration costs (7) (7) Increased contributions from Myanmar and Operating profit 63 29 Pakistan Operating profit in JVs 26 6 Higher debt and cessation Total operating profit 89 35 of capitalisation on Net interest and exchange gains (40) (18) Yetagun and WNG Profit / (loss) before tax 49 17 Higher taxes due to higher Taxation (29) (11) profits, including higher Profit / (loss) after tax 20 6 overseas deferred tax Earnings per share - basic and diluted (pence) 1.3 0.4 Make a Difference
2001 Preliminary Results Presentation PROFORMA NET PROFIT - TAKE OR PAY 2001 2000 £m £m Reported profit after tax 20.3 6.1 Deferred net profits on TOP 14.2 8.1 Proforma net profit 34.5 14.2 • Cumulative deferred profits are 85% of reported profits (2000-01) • Proforma profits are a better measure of underlying profitability Make a Difference
2001 Preliminary Results Presentation EXCEPTIONAL ITEMS 2001 £m Gain on Pakistan joint venture restructuring 42 Exceptional provisions: • Write-off Albania (18) • Mark AWE shares to market value (8) • FRS11 write-downs (16) Net exceptional items – • Realised gain on Pakistan (cash received) cf book provisions in balance sheet (no impact on asset economic value) Make a Difference
2001 Preliminary Results Presentation CASHFLOW 2001 2000 2001 (As reported) (Incl JVs) (Incl. JVs) £m £m £m Net cashflow from operations 111 152 52 Increase in line with higher net revenues Net interest (30) (34) (17) Taxation (23) (23) (17) Much reduced capital expenditure - Operating cashflow (after interest and tax) 58 95 18 completion of major developments Capital expenditure (73) (80) (160) Excl JV JV Total Disposals 73 73 - £m £m £m Net cashflow 58 88 (142) Exploration 14 6 20 Exchange/other (7) (27) (13) Fields 48 3 51 AWE 2 - 2 Movement in net debt 51 75 (169) Other 7 - 7 JV funding 2 (2) - Yetagun interest accrued - (9) (8) 73 7 80 Opening net debt (323) (445) (268) Closing net debt (272) (379) (445) Mainly exchange losses on $ debt • Operating cashflow covers exploration 4.75x (2000: 0.8x) • Interest cover now 4.4x (2000: 3.1x) Make a Difference
2001 Preliminary Results Presentation BALANCE SHEET 2001 2001 2000 (As reported) (Incl JVs) (Incl JVs) Cash 84 97 30 Debt 356 476 475 Net debt 272 379 445 Shareholder’s funds 312 312 290 Gearing ratio NA 122 153 % % • Gearing 113% after including 2001 sales proceeds of £28 million now received Make a Difference
O PERATIONS 2001 Preliminary Results Presentation Make a Difference
2001 Preliminary Results Presentation OPERATIONS • 2001 Performance Delivery • Operations Highlights • Production • Reserves Make a Difference
2001 Preliminary Results Presentation 2001 PERFORMANCE DELIVERY Commercialising discoveries • Zamzama development plan & GSA • Qadirpur upgrade and GSA • WNG 2nd sale development plan Creating new assets Developing assets • Dumbar EIA and seismic • WNG platform/pipeline on time/budget • Yetagun upgrade advanced • Zarghun North well • Guinea Bissau acreage • Kyle onstream Improving operations performance Cash • Reducing cost base generated • HSE excellence • Business improvement Premier achieving in all phases of the business cycle Make a Difference
2001 Preliminary Results Presentation DEVELOPING ASSETS INDONESIA • New West Natuna gas platform installed May 2001 • Commissioned ready for contract gas deliveries July • All nominations to date successfully delivered MYANMAR • First full operational year for Yetagun • All nominations to date successfully delivered • Work on Phase 2 on schedule World class, on time and budget, operationally fit for purpose Make a Difference
2001 Preliminary Results Presentation COMMERCIALISING DISCOVERIES PAKISTAN - ZAMZAMA • EWT commenced March 2001 • Production expectations exceeded - 90 mmscfd • Full field gas sales agreement signed • Full field development commenced PAKISTAN - QADIRPUR • Qadirpur expansion to 400 mmscfd • Further increase to 500 mmscfd in prospect INDONESIA • Block A reserves commercialisation/development Duyong Duyong Kerteh Kerteh • Sale to Malaysia in negotiation Malaysia Malaysia – all significant outstanding points agreed Port Klang Port Klang Kuala Lumpur Kuala Lumpur – target to have GSA signed this year Port Dickson Port Dickson • Development plans advanced Make a Difference
2001 Preliminary Results Presentation CREATING NEW ASSETS PAKISTAN - DUMBAR EXPLORATION LICENSE • National Park EIA approved • Seismic operations completed • Drilling programme on target PAKISTAN - BOLAN EXPLORATION LICENSE • Zarghun North drilling in progress WEST AFRICA - GUINEA BISSAU • Secured exploration acreage • Drilling in progress Make a Difference
2001 Preliminary Results Presentation PRODUCTION OUTLOOK • Achieved 40,000 boepd target as indicated in interim announcements • Production in early 2002 over 49,000 boepd • 100% availability of production facilities • Production set to grow over the next 3 years Working Interest Production 70,000 Indonesia 60,000 Myanmar 50,000 Pakistan boepd 40,000 UK 30,000 20,000 10,000 0 2001 2002 2003 2004 Make a Difference
2001 Preliminary Results Presentation RESERVES MOVEMENTS End 2000 End 2001 Unbooked Myanmar 114 mmboe A k h 177 mmboe c a o k l B g n a Zamzama P Myanmar Chestnut Unbooked 177 mmboe 48 mmboe Pakistan 602 mmboe 517 mmboe 61 mmboe Pakistan UK 66 mmboe 45 mmboe Other Indonesia Indonesia UK 17 mmboe 188 mmboe 186 mmboe 40 mmboe • Reserves movement due to: Divestments (Pangkah, Bhit) 58 Production in 2001 15 Revisions (Albania) 12 85 • Production replaced with booked discoveries by 340% Make a Difference
S UMMARY AND O UTLOOK 2001 Preliminary Results Presentation Make a Difference
2001 Preliminary Results Presentation PERFORMANCE REVIEW 2001 2001 OBJECTIVE DELIVERY 1. Improved financial returns - profits up 128% - cashflow up £76m 2. Strengthened finances - net debt down £95m - gearing down 40% - interest cover up to 4.4x 3. Operational success - production up 50% - reserve replacement 340 % - WNG onstream 4. Portfolio management - Pakistan restructuring - Pangkah sale - sales proceeds received £101m 5. Commercialisation of - booked/sold 53% b/f unbooked reserves unbooked reserves - Zamzama GSA Make a Difference
2001 Preliminary Results Presentation STRATEGIC FOCUS - 2002 • Focus on early stage value creation – exploration – leverage commercialisation skills – sell/farm-down projects early where possible – selectively operate development and production where adds value • Facilitate by restructuring with Amerada Hess/Petronas – complex commercially/mechanically – balance interests of all shareholders – target deal in 2002 Make a Difference
2001 Preliminary Results Presentation EXPLORATION FOCUS – 2002 PROGRAMME Q1 Q2 Q3 Q4 PAKISTAN Zarghun North well GUINEA BISSAU Sinapa-1 well - drilling PAKISTAN Benir + Dumbar wells MYANMAR MF1 well INDONESIA 1-2 Area IV wells Make a Difference
2001 Preliminary Results Presentation MYANMAR EXPLORATION Myanmar Yetagun North Discovery Thailand MF-5 YANGON MF-1 MF-6 Yadana Yetagun Yetagun Wang Noi M12 M13 Yetagun BANGKOK Yetagun Ratchaburi Field M14 Rayong Mergui Andaman Sea • MF1: Gas condensate play adjacent to Yetagun infrastrucure. Gulf of Thailand • Low risk Tertiary Delta (DHI supported) Khanom Surat Thani prospect. • Large potential in the play, with 15-20 TCF in PHUKET untested leads and prospects. • MF1 will be a “ Playmaker Test” Make a Difference
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