Investor Presentation July 2017
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. July 2017 | P1
Executive Summary
Progress against 2017 targets Meet FY production YTD production >80 kboepd; all BUs tracking ahead of 2017 budget guidance of 75 kboepd Scope to increase production guidance once summer maintenance completed Opex 11% below 1H 2016 at $14.7/boe; expect FY opex of <$16/boe Further cost reductions Full year capex guidance reduced from $390m to $325m On schedule for 2017 first oil; total capex 29% below sanctioned estimate Catcher on-stream Improved production profiles now anticipated Progress Tolmount to All FEED contracts now awarded sanction decision Project sanction targeted for 1H 2018 Progress Sea Lion to Negotiating funding packages next phase Engagement with FIG around regulatory & commercial approvals Identify & drill best World class oil discovery at Zama -1 well in Mexico prospects Realise >$100m in Sale of Pakistan announced; other sales processes progressing disposal proceeds Expect to be cash flow positive (after capex and planned disposals) at oil prices Net debt reduction above $50/boe; free cash flow positive in 1H July 2017 | P3
Production overview Largest 5 fields account for c. 70% of production July 2017 | P4
Portfolio potential Sea Lion Catcher Tolmount >800 mmboe of discovered Cash flows prioritised towards debt reduction and selective investment but undeveloped reserves and resources Tuna Zama July 2017 | P5
Looking forward • Optimise quality producing assets in UK, Vietnam, Indonesia Strategy • Falklands, Mexico, Brazil offer transforming upside • Continuing programme of disposals 19.7 Opex $/boe 18.5 • De-leveraging from free cash flow 15.9 15.8 15.5 Financial • Covenant and liquidity headroom flexibility • Stable and low cost base 2013 2014 2015 2016 2017F • Tolmount – high quality project ~140 On production mmboe • Optimising Sea Lion 2P reserves Selective Discovered but • Appraise Zama oil discovery in Mexico growth undeveloped 2P ~700 • Exploration upside in SNS & Brazil reserves and 2C opportunities mmboe resources • Potential UK acquisitions $m $55/bbl 1000 $65/bbl • 80-90 kboepd; $15-20/bbl opex long-life asset base $75/bbl Forward 500 • Balance sheet debt reduction Position • Highly leveraged to further oil and gas price recovery 0 Operating Capex Operating Capex Cash Flow & Abex Cash Flow & Abex 2018 2019 July 2017 | P6
Producing portfolio
Chim Sáo, Vietnam (53.125%, operator) 2017 1H highlights • 15.5 kboepd, above budget • High operating efficiency • Strong reservoir performance • $9/boe operating cost Outlook • 2 infill wells planned for August 2017 • Field life extended to 2028 55 mmboe Improved Production Profile Current at sanction kboepd (gross) Previous 57 mmboe 35 produced 30 to date 20P 25 5IPST1 20 15 59 mmboe 10 reserves 5 remaining 0 2016 2017 2018 2019 2020 July 2017 | P8
Natuna Sea Block A, Indonesia (28.67%, operator) BIGP 2017 1H highlights • 13.0 kboepd, above budget • Singapore demand above take or pay • 49% of GSA vs 47% contractual share • High operating efficiency • Opex of c.$6/boe 93 Bcf Outlook $340m gross • Singapore demand stable capex • GSA1 market share increasing • Lama well tied into production (Q3 2017) • Gajah Baru infill drilling opportunities 30% IRR • BIGP first gas 2019 Market Share GSA1 NSBA Production net to PMO (%) (kboepd) 20 100 80 15 60 10 40 5 20 0 0 2016 2017 2018 2019 2020 July 2017 | P9
Huntington, Central North Sea (100%, operator) 2017 1H highlights • 15.6 kboepd, 35% above budget − High operating efficiency − Strong reservoir performance Outlook • FPSO lease extension discussions underway Currently producing ~15 kboepd July 2017 | P10
Solan, West of Shetlands (100%, operator) 2017 1H highlights • 7.3 kboepd • Operational concept working well • Central reservoir on prognosis; Eastern area of field under-performing Outlook • P1 outperforming on free flow • P1 workover deferred Top Solan Sand Depth Map W1 500m P2 P1 W2 July 2017 | P11
Elgin-Franklin, Central North Sea (5.2%) 2017 1H highlights • 6.5 kboepd, above budget • Low opex of c.$8/boe Outlook • Long field life; production forecast to continue until 2037 • 350 mmboe remaining reserves • Ongoing infill drilling, well intervention programme & exploration upside kboepd 2017 production (gross) 140 120 100 2016 production (gross) 80 60 40 20 0 Jan Feb Mar April July 2017 | P12
Portfolio potential
Portfolio potential July 2017 | P14
Catcher – under budget, start up 2017 2H • 11 wells completed to date with excellent operational performance • Improved production profiles anticipated and review of FPSO capacity underway • FPSO mechanically complete and final commissioning well advanced • Sailaway to North Sea during August • On schedule for 2017 first oil • Capex reduced by 29% to $1.6bn Varadero Net pay Net pay length - Producers length (ft) 12000 Predicted cumulative NPL 10000 Actual cumulative NPL 8000 6000 Net pay Catcher encountered 4000 above prognosis 2000 Burgman 0 CCP3 CTP1 BP3 BP5 VP2 VP3 VP4 July 2017 | P15
Catcher outlook Yard-based pre-commissioning FPSO sailaway and FPSO hook up & Improved production profile and commissioning of FPSO transit to North Sea final commissioning anticipated 2017 2018 Today First oil Drilling at Varadero Drilling at Burgman Drilling at Catcher Completions at Burgman • 4 wells • 3 wells • 4 wells • 1 wells 12 wells on-stream at first oil Well count reduced to 20 July 2017 | P16
Tolmount – next phase of growth • Most significant discovery in SNS since 1997 • Concept selected Q1 – Standalone, normally unmanned – 4 platform wells – 48km x 20” gas export to onshore • FEED contracts awarded; engineering commenced • Potential 3 rd party infrastructure funding • FID targeted for 2018 1H Indicative metrics • ~ 1 Tcf potential (GTA) High return Onshore Drillex • Capex ~$550m terminal 25% project robust 27% Capex • Designed for daily peak down to low Split gas prices Owners production of 300 mmcfd 14% SURF 19% • First gas 2020 Platform 16% July 2017 | P17
Tolmount – future phases planned Tolmount East • Subsea tie-back or small platform Tolmount Tolmount Far East area Tolmount Mongour • Subsea tie-back or small platform Far East ~ 1 Tcf to Tolmount or Tolmount East Mongour Tolmount East • Subsea tie-back or extended reach well from Tolmount East 3rd party business potential • A new hub with 20+ year life Tolmount Indicative production profile SW NE 42/28d-12 Tolmount Far-East Gas water contact Tolmount Tolmount East July 2017 | P18
Southern Gas Basin: portfolio of opportunities Tolmount Main (50% op) Tolmount Area (50% op) Ravenspurn North Deep • On path to sanction • Future phases in planning (5% carried interest) • Play-opening carboniferous well currently drilling Babbage (47% op) • Infill opportunities Portfolio of opportunities which are economic at low gas prices Cobra (50% op) • Appraisal planning underway July 2017 | P19
Sea Lion, Falkland Islands (60%, operator) Highlights • FEED substantially completed • Breakeven reduced to $45/bbl – Capex to first oil reduced to $1.5bn – Field opex reduced to $15/bbl – Indicative FPSO cost of $10/bbl (LOF) Outlook • Positive commercial and fiscal engagement with FIG • Positive engagement with contractor 160 Phase 2 Annual average oil rate (mbopd) market and export credit government 140 Phase 1 120 funding sources 100 • Licence extension to May 2020 80 60 40 20 0 0 5 10 15 20 Years from first production July 2017 | P20
Mexico - Zama-1 oil discovery • 80-90 days (mid Aug) to drill W E and evaluate the well to TD of Zama-1 Well 4400 mTVD (no well test planned). – 1 km • Forecast cost $61.5m gross, Well was side-tracked to west and contingency $15.4m net to Premier’s 25%. 16” liner set above fault. • Forward Plan: Case current salt ST drilled ahead to hole section then drill ahead – 2 km 13 5/8” casing point. and evaluate the remainder of Zama Main and Zama Deep secondary target. Current hole depth – 3 km Zama Main 3381 m MD 3D view of Zama showing top structure and seismic amplitudes of the main target Flat spot salt Zama Deep seismic section (left) runs E-W through well – 4 km salt PTD 4426 m MD salt – 5 km 2km Good conformance of seismic amplitude with structure July 2017 | P21
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