25 th March 2010 2009 Annual 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. 25 th March 2010 | Page 1
Agenda Progress against strategy Simon Lockett 2009 financial results Tony Durrant Operations update Neil Hawkings Exploration update Andrew Lodge Summary Simon Lockett 25 th March 2010 | Page 2
2009 highlights • 21% increase in production and 23% increase in reserves and resources • Continuing good progress on development projects – Chim Sao, Gajah Baru on track for 2011 • Acquisitions in UK and Vietnam successfully integrated • Five successes out of nine exploration and appraisal wells • Strong cash flow, despite lower average commodity prices • Record profits after tax of US$113 million 25 th March 2010 | Page 3
Delivering against strategy Production 2P Reserves Target 2005-2009 (kboepd) 2005-2009 (mmboe) • Build three quality businesses which deliver 100 kboepd from 400 mmbbls of reserves Strategy Progress • Attain 75 kboepd from • Chim Sao and Gajah Baru on existing projects schedule for 2011 • Commercialise contingent • Froy, Bream, Bugle progress resource base towards development sanction in 2010 Operating Cashflow Acquisitions 2005-2009 • Add 200 mmboe of • Added 29 mmboe. Up to 11 2005-2009 ($million) Oil price ($/bbl) 2P reserves from the exploration and appraisal wells exploration portfolio over next nine months targeting 330 mmboe • Make value-adding • Oilexco and Block 12 (Vietnam) acquisitions in three successfully integrated; non- core areas core asset sales underway • Maintain a conservative • Investment programme fully balance sheet funded; acquisition capacity 25 th March 2010 | Page 4
2009 financial results 25 th March 2010 | Page 5
Production and income statement 12 months to 12 months to Highlights 31 Dec 2009 31 Dec 2008 Working Interest Production (kboepd) 36.5 Average Brent oil price was $61.7/bbl 44.2 (2008: $97.3/bbl) Entitlement Interest Production (kboepd) 40.2 31.8 Realised oil price ($/bbl) 94.5 66.3 Realised gas price ($/mcf) 6.6 5.2 Average gas pricing ($/mcf) 2009 2008 Singapore $11.0 $15.2 Pakistan $3.2 $3.5 $m $m Sales and other operating revenues 655 621 Cost of sales (318) (361) Operating costs per barrel ($/bbl) 2009 2008 Gross profit 260 337 UK $23.2 $20.6 Excess of fair value over purchase consideration - 6 Indonesia $10.0 $8.6 Exploration/New Business (59) (77) Pakistan $1.9 $1.5 General and administration costs (18) (17) Group $12.2 $9.5 Operating profit 262 170 Financial Items (90) 16 Includes non-cash mark to market adjustment on hedging of $61.1 million (pre-tax) Profit before taxation 278 80 Taxation (179) Tax credit arises due to UK tax allowances 33 acquired with Oilexco Profit after tax 113 98 25 th March 2010 | Page 6
Hedging • Policy unchanged: secure cashflows via floors or forwards to fund investment programme even at low oil prices • 2009 Impact No cash payments under collars $ Cash premia paid (Oilexco-related) 12.5 Mark-to-market movement 48.6 Charge to income statement 61.1 Outlook • 41% liquids 2010 - 2012 has collar of $49 - $84/bbl • 22% Indonesian gas 2010 - 1H 2013 has collar of $47 - $94/bbl • 1.3 mmbbls 2010 production sold forward at average $76/bbl 25 th March 2010 | Page 7
Group taxation position 12 months to 12 months to UK Tax Allowance Position 31 Dec 2009 31 Dec 2008 at 31 Dec 2009 $m $m $m Allowances acquired Overseas 73.0 111.6 1199 UK Carried back to 2008 (47) PRT 23.2 34.0 Utilised in 2009 (59) CT (23.4) 47.5 Premier allowances brought forward 37 Prior period revisions (24.6) (0.2) 1130 Current charge 48.2 192.9 Recognised as deferred tax asset 875 Deferred tax credits (81.3) (13.6) Currently unrecognised 275 Tax charge for the year (33.1) 179.3 Tax allowances carried forward 1130 Outlook • Significant UK carry forward of allowances • UK cash taxes not anticipated until at least 2014 25 th March 2010 | Page 8
Cash flow 12 months to 12 months to Estimated Capex split ($m) 31 Dec 2009 31 Dec 2008 2009 2008 $m $m Development 195 127 Cash flow from operations 419 555 Exploration 108 90 Taxation 303 217 (71) (203) Operating cash flow 348 352 Estimated 2009 Regional Capex split ($m) Capital expenditure (303) (217) Operating cashflow Capex (Acquisitions)/disposals (643) 3 Asia 47 143 Finance charges, net (55) - MEP 97 26 North Sea Pre-licence expenditure 204 134 (20) (16) 348 303 Net cash flow (673) 122 Outlook • Forecast full-year 2010 spend of $400m (development) and $150m (exploration) 25 th March 2010 | Page 9
Net debt and financial strength Movement in net debt Current balance sheet $m $m 251 Opening net cash 117 Cash and equivalents* (353) Net cash out flow (673) Bank borrowings 213 Equity issued 240 Convertible loan (316) Closing net debt* (316) Current net debt* * Excludes $70m of cash in escrow for abandonment obligations Outlook • Cash on hand, in escrow and undrawn facilities of US$649 million • Bank facilities extended to 2012; credit approval received for new five year facility of $150m • At $60/bbl, peak net debt of around $650 million in 2011 with rapid payback 25 th March 2010 | Page 10
Operations update 25 th March 2010 | Page 11
Operations highlights • Oilexco integration complete • GSA2 project sanction • Chim Sáo acquisition • Chim Sáo project sanction 25 th March 2010 | Page 12
Production update Production (working interest) (boepd) • Full year production 44,200 boepd North Sea / W. Africa Middle East-Pakistan Asia 50,000 • Continuing increases in gas demand from Singapore and Pakistan 45,000 • Gas compression and infill drilling 40,000 projects ongoing in Pakistan 35,000 • Balmoral facilities projects completed 30,000 • Shelley performed at the lower end 25,000 of expectations 20,000 • Good performance from Wytch Farm 15,000 and Kyle but mixed results from Scott infill drilling 10,000 5,000 0 2006 2007 2008 2009 Forecast 2010 25 th March 2010 | Page 13
Reserves and resources Reserves and contingent resources (mmboe) 500 2C contingent resources 450 213 2P reserves 400 350 300 250 255 200 150 100 50 0 2005 2006 2007 2008 Production Additions & Oilexco End 2009 Revisions 25 th March 2010 | Page 14
Chim Sáo – on schedule for first oil in July 2011 • WHP jacket being installed in April • ENSCO 107 drilling rig contracted and mobilising in June • Platform topsides to be installed in July • FPSO conversion underway – vessel in Keppel shipyard • Project overall 65.8% complete at end March • Premier equity 53.125% 25 th March 2010 | Page 15 25 th March 2010 |
Gajah Baru – on schedule for October 2011 • Wellhead platform jacket progressing well • Rig tender complete and drilling starts in September • Wellhead platform to be installed in September • Central Processing Platform construction underway • Overall project 43% complete • Premier equity 28.67% 25 th March 2010 | Page 16
Huntington and North Sumatra Block A Huntington • Focus has moved to FPV/FPSO development • Negotiations with providers well underway • Earliest possible first oil is late 2011 North Sumatra Block A • PSC extension approval process remains ongoing • Optimisation of development plan has continued • First gas: Alur Rambong - 2012, Alur Siwah - 2013 25 th March 2010 | Page 17
Appraised development portfolio targeting 2013 Frøy Bugle • Alternative development • Waiting on drilling results from Bugle North solutions being studied • Integrate with other Scott subsea tie-backs • Preliminary tenders expected in April • Synergies with nearby fields being explored Bream • Successfully appraised in 2009 • Targeting development approval this year; Gardrofa could impact positively 25 th March 2010 | Page 18
Production and development forecast Production forecast* 2P reserves development capex forecast (kboepd net) ($m) Risked appraised developments Huntington Huntington Asian developments Asian developments 90 500 On production On production 450 80 400 70 350 60 300 50 Excludes new 250 project capex 40 200 30 150 20 100 10 50 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 *Assumes early Huntington case 25 th March 2010 | Page 19
Exploration update 25 th March 2010 | Page 20
2009 Exploration highlights • 29 mmboe added; finding cost <$4/boe • Nine exploration and appraisal wells drilled, 55% success rate – Success on key exploration wells Grosbeak, Cá R ồ ng Đ ỏ – Successful Bream appraisal • New acreage captured in UK and Egypt • Central North Sea database from Oilexco integrated • Exploration strategy redefined 25 th March 2010 | Page 21
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