27 th August 2009 2009 Half-Yearly 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. 27 th August 2009 | Page 2
Agenda 2009 highlights Simon Lockett Finance Tony Durrant Operations update Neil Hawkings Exploration update Andrew Lodge Summary Simon Lockett 27 th August 2009 | Page 3
2009 highlights – a transformational first half • OGP survey results: Premier best performing company for TRIF* in Drilling HSE • Production TRIF* performance in top quartile • Premier TRIF* <1 per million man hours, 350% improvement over 5 years • Production up 4% at 39,700 boepd Production • Step up following Oilexco acquisition, Shelley now on-stream • Record Pakistan production and strong performance from Anoa • Asian developments progressing well Development • Lower cost estimates as result of re-tendering/re-designing • Huntington – concept selection targeted by end 2009 • Success in Vietnam on Block 07/03 Exploration • Premier’s first well in Norway also a success • Focus in 2010 returns to South-East Asia • Oilexco: a favourable price and a step change in North Sea Acquisitions • Additional equity in Block 12W; material interest in key project • Reserves and resources increased by 17% • Extended debt facilities and successful rights issue Finance • Fully funded forward development plan • Flexibility to take advantage of further opportunities * Total Recordable Injury Frequency 27 th August 2009 | Page 4
Strategy Strategy Progress Production forecast (kboepd net) • Targeting production • Projecting 60,000- 90 growth to 75,000 bopd 65,000 boepd at end by end 2013 2011 post start up of North Sea developments 80 Asian developments Gajah Baru and Chim Existing production Sao 70 • Exploration • Up to 15 exploration 60 programme within and appraisal wells disciplined spend over next 15 months 50 • Acquisitions focus on • Oilexco and Block 12 40 our three core areas (Vietnam) completed; non-core divestitures 30 underway 20 • Conservative financing • Demonstrated ability plan to access debt and 10 equity markets 0 2009 2010 2011 2012 2013 2014 2015 27 th August 2009 | Page 5
Half-yearly financial results 27 th August 2009 | Page 6
Production and income statement 6 months to 6 months to 30 Jun 2009 30 Jun 2008 Average Brent oil price was $52 (1H 2008: Working Interest Production (kboepd) 39.7 38.0 $110/bbl) Entitlement Interest Production (kboepd) 37.0 33.1 Average gas pricing ($/mcf) Realised oil price ($/bbl) 53.0 110.0 1H 2009 1H 2008 Realised gas price ($/mcf) 5.0 6.6 Singapore $8.94 $16.16 Pakistan $3.86 $3.28 Operating costs per barrel ($/bbl) $m $m 2009 2008 Sales and other operating revenues 214 386 UK $16.1 $21.7 Cost of sales (117) (139) Indonesia $ 7.6 $ 6.5 Gross profit 97 247 Pakistan $ 1.6 $ 1.3 Excess of fair value over purchase consideration 60 - Average $ 8.2 $ 9.6 Exploration/New Business (25) (32) General and administration costs (7) (11) Includes $22.7m of additional depreciation in respect of Chinguetti downgrade Operating profit 125 204 Financial Items (52) (13) Profit before taxation 73 191 Includes write-off of $17.9m for PSC B, Taxation (46) (119) Mauritania Profit after tax 27 71 Includes mark to market adjustment on hedging of $44.2 million (pre-tax) 27 th August 2009 | Page 7
Oilexco acquisition accounting (at completion) $million Purchase consideration 501 Acquisition expenses (external) 10 Cost of Acquisition 511 Allocation: Exploration and evaluation assets Nil Oil and gas properties 569 Deferred tax assets 144 Net current assets (10) Decommissioning obligations (126) Fair value 577 Excess of fair value over purchase consideration 66 Less acquisition expenses (internal) (6) Net effect on the income statement 60 27 th August 2009 | Page 8
Hedging • Policy remains to underwrite value of projects by putting in low cost floors • 2009 Hedging Transactions: – Existing $40/$100 floor/cap revised to $50/$80 for 2010 and 2011 for half existing oil production – New hedging in place for Oilexco acquisition; 50% production at floor of ~$53/bbl for 2H 2009-2011 • Hedging impact $m Cash premia paid 12.5 Mark-to-market movement (non-cash) 31.7 Charge to income statement 44.2 • Group-wide ~25% of 2009-2011 oil and gas production has an average floor of $52/bbl (oil) and $45/boe (gas) production – Pakistan gas is unhedged 27 th August 2009 | Page 9
Cash flow 6 months to 6 months to 30 Jun 2009 30 Jun 2008 $m $m Estimated Capex split ($m) Cash flow from operations 142 260 H1 2009 H1 2008 Taxation (29) (69) Development 70 51 Operating cash flow 113 191 Exploration 41 23 Capital expenditure (111) (74) 111 74 ONSL acquisition cost (511) - Estimated 2009 Regional Capex split ($m) Finance charges, net (18) - Development Exploration Pre-licence expenditure (7) (7) Asia 19 32 MEP 15 0 Net cash flow (534) 110 North Sea 36 9 70 41 Forecast full-year 2009 spend of $230m (development) and $140m (exploration) 27 th August 2009 | Page 10
Net debt and funding programme Current balance sheet Development capex forecast (2P reserves) ($m) $m 600 Opening net cash 117 North Sea developments Asian developments Net cash out flow (534) Existing production 500 Equity issued 237 Non cash movements (3) 400 Closing net debt* (183) * Includes $71m of restricted cash 300 Forward plans • ONSL bridge facility ($175m) being extended in 200 size and maturity to match main facility • On completion of financing, expected cash and 100 undrawn facilities of around $500million • Available funding and covenant headroom to 0 meet capex requirements at $45/bbl 2009 2010 2011 2012 2013 2014 2015 27 th August 2009 | Page 11
Operations update 27 th August 2009 | Page 12
Production update • Deliveries from expanded plants meeting Production (Working Interest) (boepd) strong Pakistan gas demand North Sea Asia • Good production performance from Anoa Middle East-Pakistan 50000 meeting strong Singapore gas demand 45000 – Kakap production impacted by gas compression issues 40000 • Balmoral area production currently 35000 impacted by acceleration of shutdowns 30000 and system bottlenecks 25000 • Shelley now on-stream • Good performance on Wytch Farm and 20000 Kyle but Scott impacted by plant issues 15000 • Average full year production projected to 10000 be around 46kboepd 5000 0 2006 2007 2008 Forecast full year 2009 27 th August 2009 | Page 13
MEP – Pakistan – producing fields Pakistan Production • Capitalising on completed plant expansions to Kadanwari (boepd) take advantage of strong local gas demand Bhit Zamzama • Ongoing infill development drilling and Qadirpur 16000 compression projects to maintain rates • Qadirpur (27.2 mmscfd, net) 14000 – Plant capacity enhancement (end 2008) 12000 – Compression project and tie-in to local power plant planned for 2010 10000 • Kadanwari (7.6 mmscfd, net) – K-14 successful and tied in 8000 • Zamzama (41.5 mmscfd, net) 6000 – Infill wells 6 and 7 onstream and tie-in of Zamzama North 4000 • Bhit/Badhra (20.3 mmscfd, net) – Improved production from phase 2 plant 2000 • Kadanwari gas price capped at $8.50/mmbtu; 0 licence extended to 2022 from 2017 2006 2007 2008 1H 2009 27 th August 2009 | Page 14
Asia – Indonesia – West Natuna Block A • Continued strong demand from Singapore market • Consistent overperformance on Anoa allowing 3 well development programme to be postponed to 2010 • FEED work underway on Anoa compression project • Conceptual studies commenced on future GSA1 field developments 27 th August 2009 | Page 15
Asia – Indonesia – West Natuna Block A Gajah Baru • Delivering significant cost reductions: – Latest capital expenditure estimate $196mm net to Premier – Positioned to capture lower rig rates and development drilling costs • First gas 2011 meets contractual obligations with gas buyer in Singapore • Overall project progress around 20% • Transportation agreements supporting Batam GSAs targeted for H2 2009 27 th August 2009 | Page 16
Asia – Indonesia – North Sumatra Block A • FEED completed in February, further optimisation studies ongoing • Latest cost estimate $210mm net to Premier • EPCI and rig tenders being prepared with bids targeted for year end • PSC signature for North Sumatra Block A delayed awaiting Indonesian government • First gas expected from Alur Rambong in 2011 and from Alur Siwah in 2012 27 th August 2009 | Page 17
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