28 th August 2008 2008 Interim 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. 28 th August 2008 | Page 2
Highlights 28 th August 2008 | Page 3
Summary highlights Strong UK oil production across our 1. Production up 11% major fields and gas from Zamzama at 38,000 boepd Phase 2 in Pakistan. Increased profits, strong cashflow 2. Record financial and further strengthening of our performance balance sheet position. Fully-termed Gas Sales agreements for 3. Significant progress on Singapore and Batam signed. Board approvals all development projects for Gajah Baru and Chim Sáo completed. 2008 successes on Chim Sáo and 4. Appraisal successes in Banda, discoveries on Chim Ung Vietnam and Mauritania and Chim Công. Frøy and Chim Sáo reserves progressed 5. A growing 2P to 2P booking stage. Reserve upgrade on reserve base Natuna Sea Block A anticipated. 28 th August 2008 | Page 4
Operations update 28 th August 2008 | Page 5
Field development schedule Existing producing fields 2008 2009 2010 Scott Wytch Farm Pakistan Operated Non-operated Anoa Study Design Execute Other Natuna Sea Block A Project Concept Project First Initiation Selection Sanction Production Major projects 2008 2009 2010 2011 2012 Gajah Baru Alur Siwah Chim Sáo / Dua Frøy 28 th August 2008 | Page 6
Asia – Indonesia – West Natuna Block A Gajah Baru • Gas transportation negotiations are nearing completion and govern timing of project sanction • EPCI tendering process is underway – bids expected in October • Order has been placed for wellhead platform steel • Rig tendering is about to commence Anoa • Multi-well drilling programme planned for 2009 – New oil development well – Ongoing gas development wells – Deeper exploration target • Production programme is indicating potential for a significant reserves increase Block A Development • Block-wide plan has been optimised to eliminate the need for further compression at Anoa 28 th August 2008 | Page 7
Asia – Indonesia – Alur Siwah • GSA signed with PIM for the sale of 110 Bbtud in December 2007 • GSA signed with PLN for sale of 15 Bbtud to their IPP in April 2008 • FEED commenced in July and tendering of drilling rig will commence shortly • Negotiations continue with ExxonMobil and PT Arun for gas transportation and condensate export • Operator working towards first gas to PIM in Q42010 and early gas to PLN from end 2009 • Oil reactivation project underway; conceptual studies for Kuala Langsa continuing 28 th August 2008 | Page 8
Asia – Vietnam – Chim Sáo / Dua Chim Sao • Bid exercises for the FPSO and the surface facilities completed • Work has commenced under interim agreements with the successful bidders • Going through the final stages of partner and government approval processes • Appraisal success has confirmed previous reserve ranges • First production from Chim Sáo targeted for mid-2010 Dua • A subsea tieback planned for 2011 28 th August 2008 | Page 9
North Sea – Norway – Frøy • Latest operator reserves estimate is 56 mmbbls • First production is targeted for H2 2012 • An FPSO/wellhead platform alternative still exists • Reservoir modeling and development planning has progressed • Operator is ready to submit PDO and sign JUDPSO contracts • Complex commercial negotiations are ongoing between the field owners and the preferred contractor (e.g. payment guarantees) • Premier is planning to be a 49% participant in the JUDPSO SPC 28 th August 2008 | Page 10
Exploration update 28 th August 2008 | Page 11
Exploration look ahead Asia 2009 2010 J F M A M J J A S O N D J F M A M J J A S O N D Indonesia : Tuna Gajah Laut Timur Singa Laut Natuna Anoa Deep Tenggiling N. Sumatra A 2 wells Buton 1 well Vietnam : 07/03 2 wells 104-109/05 2D seismic and well West Africa Congo: Marine IX Frida Ida North Sea UK : P1177 (21/7b) Typhoon P1181 (23/22b) Corrie Norway : PL359 (16/1,4) Greater Luno PL374S (34/2,5) Blaabaer PL378 (35/12,36/10) Waxbill PL406 (8/3) Gardrofa PL407 (17/8,9,11,12) Bream Appraisal Firm Wells: Rig Contracted Firm Wells: Rig TBC Contingent Wells Seismic Programme 28 th August 2008 | Page 12
Asia – exploration and appraisal update Country Block Prospect Equity Prospect size Vietnam Block 07/03 2 wells 45.00% TBA Indonesia Natuna Block A Anoa Deep 28.67% 30 mmboe Tuna Block Gajah Laut Timur 65.00% 280 mmbbls Tuna Block Singa Laut 65.00% 90 mmbbls 28 th August 2008 | Page 13
West Africa – exploration and appraisal update Country Block Prospect Equity Prospect size Congo Marine IX Frida 31.50% 170 mmbbls Marine IX Ida 31.50% 320 mmbbls 28 th August 2008 | Page 14
North Sea – exploration and appraisal update Country Block Prospect Equity Prospect size Norway 17/12 Bream 20.00% 50 mmbbls 8/3 Gardrofa 40.00% 90 mmbbls 16/4 Greater Luno 30.00% 150 mmbbls 35/12 Waxbill 40.00% 100 mmbbls 34/2,5 Blaabaer 15.00% 300 mmbbls UK 21/7b Typhoon 30.00% 30 mmbbls 23/22b Corrie 25.00% 65 mmbbls • Discoveries in adjacent acreage have increased the prospectivity of our North Sea position 28 th August 2008 | Page 15
North Sea – exploration and appraisal update 1 Typhoon (21/7b) 3 Bream (17/12) Moth 3 4 1 2 Moth Ext/Corrie 2 Moth (23/22b) 4 Gardrofa (8/3) 28 th August 2008 | Page 16
Interim financial results 28 th August 2008 | Page 17
Financial highlights • Operating profit of • Rising production (up 11%) $203.6m up 146% on prior year • Strong commodity pricing • Healthy gas demand in Singapore and Pakistan • Post tax profit of • Maintained cost control $71.2m up 247% on prior year • Operating cash flow of $191.1m up 104% • Cash flow continuing to rise on prior year • Well positioned for development spending phase • Balance sheet strength • Net cash of $176.9m increasingly valuable (prior year end $79.0m) 28 th August 2008 | Page 18
Production and income statement 6 months to 6 months to 30 June 2008 30 June 2007 Premium to Brent average oil price Working Interest Production (kboepd) 38.0 34.1 Entitlement Interest Production (kboepd) 33.1 29.2 Realised oil price ($/bbl) 110.0 64.6 Average gas pricing ($/mcf) Realised gas price ($/mcf) 6.61 5.03 1H 2008 1H 2007 Singapore $16.16 $9.60 Pakistan $3.28 $3.07 $m $m Sales and other operating revenues 386 256 Operating costs per barrel Cost of sales (139) (130) Gross profit 247 126 1H 2008 1H 2007 Exploration/New Business (32) (35) UK $21.7 $14.6 General and administration costs (11) (8) Indonesia $6.5 $6.9 Operating profit 204 83 Pakistan $1.3 $1.7 Financial Items (13) (14) Includes hedging provision of $7m (pre-tax) Profit before taxation 191 69 Taxation (119) (48) Effective tax rate of 58% of operating profit (2007 – 58%) Profit after tax 71 21 Earnings per share (cents) 86 25 28 th August 2008 | Page 19
Cashflow 6 months to 6 months to 30 June 2008 30 June 2007 $m $m Cash flow from operations 260 128 Taxation (69) (34) Operating cash flow 191 94 Capital Expenditure ($m) Capital expenditure (74) (196) Pre licence expenditures (7) (7) 1H 2008 1H 2007 Net cashflow 110 (109) Exploration 51 61 Development 23 46 Opening net cash/(debt) 79 41 Acquisitions – 89 Net cash from financing (12) 44 Closing net cash/(debt) 177 74 196 (24) 28 th August 2008 | Page 20
Premier’s financial strength • Strong balance sheet position Development capex forecast ($ Millions) ($433m cash at 30 June 2008) 450 • Undrawn bank facilities of $222m 400 and additional debt capacity 350 300 • Forecast exploration expenditure 250 of $90m in 2008, increased programme for 2009 200 150 • Development capex funded by 100 cash resources and early cashflow 50 0 2008 2009 2010 2011 2012 2013 Frøy (leased case) Gajah Baru, Chim Sáo/Dua (leased case), Alur Siwah Existing producing fields 28 th August 2008 | Page 21
Outlook 28 th August 2008 | Page 22
Outlook • Execution phase of development Production forecast (kboepd) projects to first production in 2010 80 • Extensive exploration campaign 70 planned of up to 19 wells over the 60 next 18 months 50 • Filling the exploration hopper with 40 new projects 30 • Leverage strong balance sheet 20 position to deliver acquisitions 10 • People and funding are in place 0 2008 2009 2010 2011 2012 2013 Frøy (leased case) Gajah Baru, Chim Sáo/Dua (leased case), Alur Siwah Existing producing fields 28 th August 2008 | Page 23
28 th August 2008 28 th August 2008 | Page 24 www.premier-oil.com
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