24 March 2005 2004 Preliminary Results Presentation
Presentation Introduction Charles Jamieson Finance and Operational Highlights John van der Welle Business Review Robin Allan Strategy and Outlook Simon Lockett Page 2 | 2004 Preliminary Results Presentation
Finance and operational highlights Page 3 | 2004 Preliminary Results Presentation
Finance highlights • Total operating profit $93.0m (2003: $94.5m*) Lower turnover offset by lower costs • Net profit after tax up $43.8m (2003: $27.9m*) Lower interest charges 57% • Healthy cashflow Net inflow $4.9m Cashflow sufficient to cover all operating and capital expenditure • Strong balance sheet Net cash $19.6m Maintained financial flexibility • Share buy back initiated £10 million programme Future purchases in appropriate market conditions * comparatives for 2003 are with ongoing operations i.e. assets retained post restructuring Page 4 | 2004 Preliminary Results Presentation
Operational highlights • Production ahead of Strong gas demand in Pakistan, Indonesia offsets UK budget decline • Developments on track West Natuna (West Lobe) Chinguetti • Further gas sales Bhit phase 2, Zamzama phase 2 and progressed West Natuna • Successful exploration 6 successes from 11 wells and appraisal • World class HSE 3 years continuous operation without LTI in Indonesia performance • Increasing resource base Independent review confirms booked reserves Page 5 | 2004 Preliminary Results Presentation
Profit and loss Year to Year to 31 December 2004 31 December 2003 (Ongoing) Production (mboepd) 31.5 33.2 Entitlement interest production Realised oil price ($/bbl) 29.9 27.2 Gas price flat due to mix change Realised gas price ($/mcf) 3.24 3.28 and Indonesia linkage to HSFO $m $m Turnover down – more gas Turnover 252 270 production, hedging impact ($23m) less: share of JV turnover (56) (41) Unit opex (incl JV) $5.8/boe - up Group turnover 196 229 5% mainly due to fixed sterling Operating costs (51) (60) costs and reduced production in Amortisation (57) (61) UK fields Exploration expenditure written off (14) (20) Gross profit 74 88 Unit DDA (incl JV) $4.9/boe – no Administration costs (16) (19) change on 2003 Operating profit 58 69 JV represents Pakistan only Operating profit in JV 35 26 Total operating profit 93 95 Interest charge comprises Net interest (3) (20) abandonment provision and loan issue costs Exchange losses (3) (2) Profit before tax 87 73 Effective tax rate broadly flat Taxation (43) (45) Profit after tax 44 28 EPS up 8% versus reported Earnings per share - diluted (cents) 52 N/A amount for 2003 Page 6 | 2004 Preliminary Results Presentation
Cashflow Year to Year to Year to 31 Dec 2004 31 Dec 2004 31 Dec 2003 (Incl JV) (Ongoing, (As reported) Incl JV) $m $m $m Net cash flow from operations 124 165 203 Lower turnover and operating cashflow, partly Net interest - - (29) offset by reduction in Taxation (54) (55) (38) interest Operating cash flow (after interest and tax) 70 110 136 Capital expenditure – increased spend on Capital expenditure (63) (105) (65) exploration and Chinguetti Investment/disposals - - 19 field development capex Net cashflow 7 5 90 2004 2003 Exchange/other 2 2 N/A Excl JV JV Total Total $m $m $m $m Movement in net debt 9 7 N/A Exploration 53 5 58 48 Opening net cash 8 12 N/A Fields 30 4 34 16 Other 13 - 13 1 Closing net cash 17 19 N/A JV funding * (33) 33 - - 63 42 105 65 * Net payment to Premier by Pakistan JV in 2004 • Operating cash flow covers exploration 1.9x Page 7 | 2004 Preliminary Results Presentation
Reserve movements Reserves/Resources Unbooked resources movement (mmboe) Movement Unbooked resources 220 Booked reserves 210 200 190 180 170 160 150 Opening Production Revisions Acquisition Discoveries Closing reserves reserves • Increased total booked reserves & unbooked resources • Booked reserves reviewed by D&M • Strong foundation for future Cashflows Page 8 | 2004 Preliminary Results Presentation
Business review Page 9 | 2004 Preliminary Results Presentation
Production – UK • Wytch Farm continuing to perform well • Kyle extended by a new commercial deal with Banff • Fife field life extension under negotiation • Current production ~12,000 boepd, reserves 24 mmboe Page 10 | 2004 Preliminary Results Presentation
Africa Page 11 | 2004 Preliminary Results Presentation
Egypt: NW Gemsa Block NW Gemsa Block, Gulf of Suez Basin Premier equity: 37.5% • Al Amir-1 currently drilling • Relatively high risk prospect due to seismic imaging challenges • 3D seismic programme acquired • Onshore flat desert terrain, low well cost, low development cost if successful • Operator: Vegas (Kriti) Page 12 | 2004 Preliminary Results Presentation
Egypt: NW Gemsa Block GAS PIPELINE OIL PIPELINE Al Amir-1 Page 13 | 2004 Preliminary Results Presentation
Egypt: NW Gemsa Block Proposed Al Amir-1 Zeit Bay-1 Top S Gharib Top Belayim Top Kareem Top Rudeis Top Lwr. Rudeis Top Pre-rift Page 14 | 2004 Preliminary Results Presentation
Africa – Mauritania Page 15 | 2004 Preliminary Results Presentation
Africa – Mauritania: Chinguetti Development • Development approved May 2004 • Reserves of 120 mmbbls (Premier share 9.7 mmbbls) • Development cost $630 million (Premier share $51 million) • First oil Q1 2006 building to 75,000 bopd (Premier share 6,000 bopd) Page 16 | 2004 Preliminary Results Presentation
Africa – Mauritania: Tevét Banda Tevét, drilled October 2004, was Tevét successful and found target reservoirs of oil and gas on prognosis. Likely to be developed through Chinguetti field. Chinguetti 3D visulisation of Miocene sands draped over structure Page 17 | 2004 Preliminary Results Presentation
Mauritania: 2004 Exploration - Capitaine & Merou wells Regional view of Base Miocene surface from west Chinguetti – Banda channel Tiof channel Merou-1 Capitaine-1 The Capitaine and Merou prospects are in the outboard trend of salt diapirs Page 18 | 2004 Preliminary Results Presentation
Mauritania: 2004 exploration – Capitaine-1 Regional base reservoir TWT map showing deepening to west Page 19 | 2004 Preliminary Results Presentation
Mauritania: 2004 exploration – Merou-1 Merou Tiof Page 20 | 2004 Preliminary Results Presentation
Mauritania: 2005 drilling candidates New Tenit 3D Baudroie Espadon Tenit fast-track 3D Older 3D being reprocessed merged Tapandar Fantar SW Kibaro Assetat Sotto Fantar SW New Kiffa 3D Kiffa fast-track volume over Fantar prospect Page 21 | 2004 Preliminary Results Presentation
Guinea Bissau Blocks 2, 4A, 5A Premier equity – 38.5% to 42% Operator – Premier • Prospect sizes 50m to 300m bbls • 2004 Sinapa-2 oil discovery Blocks 7B, 7C Premier equity – 25% Operator – Premier • 2D seismic acquisition work commitment • Potential for large prospects in ultra-deep water Page 22 | 2004 Preliminary Results Presentation
Guinea Bissau: Sinapa & Esperanca SW Sinapa-1 Sinapa-2 NE Top of salt penetrated in Sinapa-2z Sinapa-1 and Sinapa-2z Top Turonian Top Cenomanian Top Albian Top Aptian Page 23 | 2004 Preliminary Results Presentation
Africa – Guinea Bissau: 2005 The results of the Sinapa-2,2z well have significantly reduced the risks Sabayon Sinapa-1 Sinapa-2,2z of the salt diapir flank play in Guinea Bissau. Sardinha 2005 programme will include new Espinafre Solha 3D seismic acquisition followed by Espargos exploration and appraisal drilling. Encharcada Eirozes Espadarte El Linguada Ervas Espetada Empada Page 24 | 2004 Preliminary Results Presentation
Egomor and Peixe Boy Permits Veritas VFGB00-16 Premier PGB04-25 Higher frequencies and better amplitudes Clearer fault plane Page 25 | 2004 Preliminary Results Presentation
Gabon Dussafu Licence Premier equity – 25% Operator – Sasol Iris & Themis Marin Premier equity – 18% Operator – Fusion/Sterling Pre-Salt Plays • Premier focusing on Pre-salt Gamba Sandstone play • Unlocking the potential of this area by application of newly proven 3D imaging technology Page 26 | 2004 Preliminary Results Presentation
Gabon: Dussafu Mytilus-1 Projected Dussafu-1 Well Location Dussafu Prospect Page 27 | 2004 Preliminary Results Presentation
Gabon: Iris Marin & Themis Marin Page 28 | 2004 Preliminary Results Presentation
Gabon: Iris Marin – 3D Perspective PLM-1 DKM-1 NGTSM-1 N Page 29 | 2004 Preliminary Results Presentation
Gabon: Themis Marin – 3D Perspective ARM-1 NEM-1A FABM-1 N Page 30 | 2004 Preliminary Results Presentation
Asia Page 31 | 2004 Preliminary Results Presentation
Production – Pakistan • Growing onshore gas production • Onshore and offshore exploration planned 12,000 Pakistan Gas production • Bhit and Zamzama Phase 2 scheduled for 2006/7 • Long-term gas contracts, in dollars 8,000 BOEPD • Kadanwari step-out now onstream 4,000 • Current Pakistan production ~12,000 boepd, reserves 64 mmboe 0 2001 2002 2003 2004 Page 32 | 2004 Preliminary Results Presentation
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