22 nd March 2007 2006 Preliminary Results Presentation
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. A number of factors could cause actual results, performance or events to differ materially from those expressed or implied by these forward-looking statements. Page 2 | 22 nd March 2007
Agenda Results Highlights Simon Lockett Financial Results Tony Durrant Regional Update Robin Allan & Neil Hawkings Look Ahead Simon Lockett Page 3 | 22 nd March 2007
Results Highlights Page 4 | 22 nd March 2007
Highlights • Operated drilling • Dua and Blackbird in Vietnam; Lembu successes in Peteng, Macan Tutul and Lukah in Indonesia & Vietnam Indonesia • Current drilling in India & Guinea Bissau • 3 acquisitions adding • 270 bcf net certified gas in North low cost barrels Sumatra Block A • Adding 5,000 bopd UK Scott production • New opportunities with Middle East JV • Signed MOU for gas sales in North • Real progress in Sumatra commercial • Significant progress on West Natuna gas discussions • Resolution of partner issues on Ratna • Initiated sale process for Mauritania • Further definition on • 25% increase in reserves and development projects resources across all regions • Tangible progress towards our medium term target of 50,000 boepd Page 5 | 22 nd March 2007
Financial highlights • Profit after tax Up 75% to $67.6 million (2005 - $38.6 million) • Operating cashflow Up 102% to $244.8 million (2005 - $121.2 million) Stable at $6.0 per barrel • Operating costs (2005 - $5.9 per barrel) • Balance sheet Net cash of $40.9 million (2005 – net debt of $26.2 million) Page 6 | 22 nd March 2007
Production and income statement 12 months to 12 months to 31 Dec 2006 31 Dec 2005 Highlights Close to Brent average of $65.40/bbl Working Interest Production (mboepd) 33.0 33.3 Strong Singapore gas prices Entitlement Interest Production (mboepd) 28.9 28.7 Realised oil price ($/bbl) 64.90 48.38 Chinguetti revenues excluded Realised gas price ($/mcf) 5.11 3.82 Underlying field operating costs stable at $6.0/bbl Favourable resolution of prior provisions Mauritania defined as asset for sale $m $m Sales and other operating revenues 359 359 Dated Brent Oil Cost of sales (127) (176) ($/bbl) Exploration/New Business (37) (38) 100.00 Commodity Price General and administration costs (17) (20) and Forward Curve Operating profit 179 126 Average Cap 80.00 Average Floor Financial Items (6) (1) Profit before taxation 173 125 60.00 Taxation (87) (86) Profit after tax 86 39 40.00 Loss for the period from assets held for sale (18) - Profit for the period 68 39 20.00 03 04 05 06 07 08 09 10 11 12 • Maintained policy of hedging after tax barrels with average floor around $40 Prepared in accordance with IFRS • Net movement in mark to market valuation over the year of $1.9 million Page 7 | 22 nd March 2007
Cashflow 12 months to 12 months to 31 Dec 2006 31 Dec 2005 Estimated regional split $m $m Operating Cashflow Capex 361 208 Net cash flow from operations North Sea 91 43 - - Net interest Asia 87 60 (116) (87) Pakistan 45 26 Taxation West Africa 22 25 245 121 Operating cash flow 245 154 (154) (133) Capital expenditure (22) (17) Pre licence exploration costs 2006 2005 1 (20) Net share issues/(purchases) Exploration 47 51 (3) 4 Development 90 82 Other movements Acquisitions 17 - 67 (45) Movement in net cash 154 133 (26) 19 Opening net cash/(debt) 41 (26) Closing net cash/(debt) Undrawn facility of $275 million Page 8 | 22 nd March 2007
Financial outlook • Production expected to be 36,000-40,000 boepd for 2007 • Exploration spend will increase in 2007 – Current estimate around $100m – After-tax cost will be around $70m Exploration cash expenditure before and after tax US Dollars (millions) Gross expenditure 120 Expenditure after tax and recoveries 100 80 60 40 20 0 2004 2005 2006 2007 • Planned development spending currently estimated at $110 million Page 9 | 22 nd March 2007
North Sea – returning to growth North Sea Strategy • Deliver material reserve additions through organic growth in Norway • Maximise returns from current UK production assets with a focus on incremental projects • Pursue acquisitions of additional equity in core areas North Sea Production Profile (boepd) 2004 Interim Results Forecast 25000 2004-6 Actuals and Current Forecast 20000 15000 10000 5000 0 2004 2005 2006 2007 2008 2009 2010 2011 Page 10 | 22 nd March 2007
Scott acquisition • Pre-emption notice issued on Hess’ sale of part of Scott interest • Premier share to increase from 1.79% to 21.83% • Additional 12.7 mmboe net to Premier for $60m • Increased 2007 production of 5,000 boepd Page 11 | 22 nd March 2007
Frøy • Premier 50% share (operator Pertra) • Brent equivalent field abandoned by Total in 2001, awarded to Premier in 2005 • Operator’s reserves estimate is 62 mmbbl (35 to 70 mmbbls) • Two development concepts being carried forward – Jack-up drilling and production unit (leased) – Subsea tie-back to Jotun • Final concept selection decision planned for September • POD submission targeting year end Page 12 | 22 nd March 2007
Bream • “Most sought after” blocks in the APA 2006 round • Undeveloped Brent equivalent oil field discovered in 1971, awarded to Premier in 2007 PL407 Bream Appraisal • Awarded 40% and Operatorship of Bream Exploration – 1 Firm well PL406 Bream Exploration • Awarded 20% of Bream Appraisal (BG Operator) – 1 Firm and 1 contingent well – POD submission in 2 years • Could be developed as a tieback to the Yme field – POD was submitted in January 2007 Yme Field Re-development Bream Bream Page 13 | 22 nd March 2007
North Sea exploration update 2006 APA Round Awards • Five blocks awarded • First Operatorship for Premier Norway • Bream discovery to be appraised UKCS 24 th Round Awards • 1524a & 15/25f 2005 APA Round Awards • 4 non-operated exploration licences awarded • Working-up prospects for drilling • Rig consortia discussions Page 14 | 22 nd March 2007
North Sea exploration update PL359 – Merckx lead • Paleocene sandstones lap onto the edge of the Utsira High. • Oil shows in down-dip 16/4-1 well Paleocene sandstone pinchout • Risk analysis is being undertaken before deciding whether to commit to a well. Page 15 | 22 nd March 2007
UK exploration - Peveril Fife Field Fergus Field Sealing Fault-locally Outline of developed sands not Peveril charged on eastern side Peveril Prospect Prospect Blocks 39/2, 39/7 4 Way Dip closure at Base Cretaceous • Premier share 30% Subcrop/Erosion/Pinchout • Premier carried for well of Fife Sandstones defined by subcrop of sealing Triassic Smith Bank • 40mmbbl prospect in Fife (Upper Jurassic) Formation shales against Lower Cretaceous shales sandstones • Close to Fife infrastructure • Drilling April 2007 Page 16 | 22 nd March 2007
Middle East & Pakistan Enhancing the Pakistan gas business Middle East & Pakistan Strategy • Grow high return Pakistan business through development and acquisition • Replenish Pakistan exploration portfolio, focusing on High Impact acreage • Develop relationships to access new opportunities – (EIIC Joint Venture) Pakistan Production Graph (boepd) 20000 18000 16000 14000 12000 10000 2007 2008 2009 2010 2011 Page 17 | 22 nd March 2007
Pakistan - Qadirpur Deep Qadirpur • Discovered gas in a Lower Cretaceous structure at ~4500m, with potential stratigraphic upside. • The well has been suspended for testing later in 2007 Page 18 | 22 nd March 2007
Pakistan – field updates Qadirpur (4.75%) • Further plant expansion proceeding • Qadirpur Deep drilled awaiting testing Zamzama (9.37%) • Phase 2 project progressing to plan • Additional 150 mmscfd - first gas in 2H 2007 • Potential Upside Reserves identified Bhit/Badhra (6.0%) • GSA signed for additional sales • Additional gas targeted December 2007 • Enlarging Badhra licence area Kadanwari (15.79%) • Development drilling proceeding Page 19 | 22 nd March 2007
Pakistan – Anne-1 • Targeting 300 mmbbl in Anne-1 W E Oligocene-Miocene sandstones • Deep water: 1300m • Drilling June/July 2007 Page 20 | 22 nd March 2007
West Africa – high impact exploration West Africa Strategy • High Impact Exploration-led growth • Maximise value from existing discoveries • Generate a portfolio of new exploration opportunities Gross Unrisked Mean Prospect Country Anticipated Spud Potential (mmboe) Espinafre Guinea Bissau 70 Drilling Eirozes Guinea Bissau 190 April 2007 Frida Congo 260 2008 Ida Congo 285 2008/9 Page 21 | 22 nd March 2007
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