Investor Presentation May 2018
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. May 2018 | P1
2018 year to date highlights and outlook Production Cost Base Disposals Catcher 2018 YTD 2018 YTD 2018 YTD 2018 YTD Q1 production of Q1 opex of $18.8/boe Kakap sale Levels of >60 kbopd 74 kboepd; current (constrained Catcher completed; Babbage reached; excellent rates reached production) sale announced delivery capacity of >90 kboepd available wells 2018 Outlook 2018 Outlook 2018 Outlook 2018 Outlook FY Guidance of FY guidance of opex Complete Pakistan, Gas export to start 80-85kboepd $17-18/boe and capex Babbage and ETS shortly; complete of $380m sales drilling programme Tolmount Sea Lion Exploration Net Debt 2018 YTD 2018 YTD 2018 YTD 2018 YTD Significant progress; Negotiating funding Significant licence Q1 cash flow neutral; contract awards packages; LOI signed awards in Mexico, net debt down post ongoing with contractors Indonesia; exited final CB exchange E.ON commitments 2018 Outlook 2018 Outlook 2018 Outlook 2018 Outlook Project sanction Secure funding for the Zama appraisal drilling Significant cash flow scheduled for second project ahead of FID to start in H2 generation, debt half (including on adjacent reduction and improving Pemex block) covenant leverage ratio May 2018 | P2
The asset portfolio Largest 5 fields accounted for c. 70% of production in 2017 May 2018 | P3
Strategic framework, NAV focused • Priority in 2018/2019 Debt reduction • Targeting 2.5x EBITDAX by end Q1 2019 • Core operations in UKCS and Natuna Sea Producing – Maintain cost base of <$20/boe assets – Discretionary spend of $100m per annum • Continue to leverage FPSO expertise Develop- – Targeting >20% IRR at $65/bbl ment – Utilise leasing and other off balance sheet structures • Focus on proven but underexplored basins – Avoid high cost, deep-water areas Exploration – Minimise upfront commitments May 2018 | P4
Balanced capital allocation, returns driven 7 year capital allocation 2018-2024 Net operating Debt cash flow reduction 100% 30% Producing assets 20% New projects 40% Exploration 10% A sustainable position At $65/bbl • Positive free cash flow in all years to 2024 the business • Production > 100 kboepd at period end will deliver • Covenant level of <1x at period end May 2018 | P5
Portfolio overview
Asia production portfolio Chim Sáo (op, 53.125%) Natuna Sea Block A (op, 28.67%) Producing >30 kboepd • Active well intervention programme • GSA1 market share increasing • Net production > 17 kboepd currently • Improving gas price • Ongoing reservoir optimisation • BIGP first gas 2019 • Crude sold at premium to Brent • Optimise exploitation of Lama gas Long life, low opex assets May 2018 | P7
UK production portfolio • Reserves • One of the Huntington (op, 100%) Elgin-Franklin (5.2%) upgrade UK’s largest • FPSO lease producing fields • Long field life extended and rate reduced (COP 2035+) • Looking at well • Active well optimisation intervention • Current programme • Exploration production UK c. 8 kboepd upside production >50 kboepd • High uptime; 2019-22 • Targeting Solan (op, 100%) B Block (op, various) steady 5 kbopd deferral of COP • Infill drilling to 2021 • Continuing 2020 • Potential 3rd positive cash party business flow Tax advantaged cash flows May 2018 | P8
Catcher – the journey to first oil What we achieved in 2017 • FPSO hull and topsides completed and integrated • Sailaway of FPSO from Keppel yard • HSE Acceptance of Safety Case • Drilling and completion of 6 wells • Successful tie-in of wells and deployment of subsea control pods • Hook up of STP buoy to FPSO • Successful pull in of all risers, umbilicals and installation of swivel stack First Oil achieved 23 Dec 17 May 2018 | P9
2017 successful full cycle delivery of Catcher • Experienced project management team in delivery of FPSO projects On schedule • World class contractors Forecast total capex 30% below budget • Early operations involvement in project Plateau production • Collaborative and strong increased by 20% relationship with key contractors Industry leading • Deployment of industry leading outcome on HSE technology e.g. Geosteering • Experienced well delivery team • Subsurface design optimisation • Favourable market conditions May 2018 | P10
Catcher Area commissioning status Oil Booster Gas Gas lift 60 kbopd Dec Jan Feb Mar May treatment gas treatment and export 2018 2017 2018 2018 2018 production plant compression plant compression Operations • Good uptime; oil plant up and stable • Water injection commissioned • Production levels reached >60 kbopd • Gas export to start imminently • All 3 fields on-stream and excellent deliverability May 2018 | P11
Catcher Area upside Catcher North: • 16 of 18 wells now completed Laverda: Joint development Tie-back via Varadero – Latest Catcher well (CCP8) with Laverda higher net pay than prognosed • Potential for reserves upside – Conservative initial recovery factor assumed – Positive production test results – Well-connected sands with good pressure support – Reservoir quality and sand quantity above predictions Varadero Infill made at sanction • Infill drilling opportunities FPSO – 4D seismic acquisition targeted for 2019 Catcher Infill: • Tie-back of near field discoveries Multiple future Cromarty and Tay targets identified – Laverda, Catcher North Burgman Infill: Burgman Far East target Supported by seismic and well results March 2018 | P12
Tolmount – high value project Adds significant resource – 540 bcf Indicative production profile boe equivalent (100 mmboe) (kboepd) 60 Provides next phase of UK 50 growth – 50 kboepd peak production 40 30 Low capex requirement – $100m 20 (Premier’s share) 10 Low life of field total project cost – 0 $20/boe Tolmount Generates significant tax advantaged cash flows; >$1bn of net 48 km to terminal cash flow Holderness Potential Area Recovery of c. 1Tcf Inshore MCZ Holderness Offshore MCZ Onshore Terminal May 2018 | P13
Tolmount Main project update 2017 highlights • Key terms agreed for funding of Tolmount facilities • Draft Field Development Plan submitted to OGA • Final documentation with selected contractors for platform construction, pipeline and terminal modifications being completed • Regulatory, environmental and planning statements submitted for public consultation • Project sanctioned scheduled for 2018 2H Infrastructure joint venture Tolmount • Dana and CML will jointly own Owners the platform and export pipeline Onshore Drillex terminal 25% • Tolmount gas will use the 26% facilities in return for production CAPEX Sources based tariff Owners 14% • Premier’s share of total capex SURF 19% Platform reduced to $100m 16% Infrastructure Owners May 2018 | P14
Tolmount Area Development Tolmount East • Subsea well tie-back • Sanction Tolmount Main • 220 Bcf • New 3D seismic over 2018 • Extends Tolmount Main plateau Greater Tolmount Area SW 42/28d-12 NE • Construction of platform, pipeline, onshore mods 2019 starts Gas water contact • Appraise Tolmount East Tolmount Tolmount East • 1 st development well on 2020 Tolmount Main • Exploration well on TFE Mongour • 3 development wells on 2021 Tolmount Main • Sanction Tolmount East Tolmount Far East (TFE) • 150 Bcf Tolmount Main • Subsea well tie-back • 1 st gas from Tolmount • NUI and 4 wells 2022 East development • 540 Bcf 3rd party opportunities • $100m (net) capex • Platypus May 2018 | P15
Sea Lion – substantial progress 1 2 World scale resource Proven development concept 160 • 1 bn bbls in new Annual average oil rate • Technically straightforward FPSO Phase 2 140 province Phase 1 development (similar to Catcher) 120 • Well understood • Extensive project development and (kbopd) 100 reservoir 80 engineering complete • Highly marketable 60 • Supply chain and logistics proven after 40 crude drilling campaign 20 0 0 5 10 15 20 Years from first production 3 World class contractor team • Experienced in comparable projects • Leveraging on past relationships and delivery of Catcher • Opportunity to lock in supply chain at competitive rates • Contractor interest aligned via provision of vendor financing 4 Key metrics Sea Lion Ph1 Catcher Regulatory interface well-advanced Development Plan FPSO+SPS FPSO+SPS • Environmental Impact FPSO oil capacity 85 60 Statement public consultation FPSO liquid capacity 120 125 process nearing completion Drill Centres 1-2 3 • FDP substantially agreed; final Total wells 23 19 update at sanction Producers 16 15 • Alignment with FIG on key Injectors 6 4 fiscal, commercial and Pre-first oil capex $1.5bn $1.3bn regulatory items Reserves/resource 220 96 May 2018 | P16
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