2002 P RELIMINARY RELIMINARY R R ESULTS P RESENTATION 2002 P ESULTS P RESENTATION 25 MARCH 2003
2002 Preliminary Results Presentation PRESENTATION Introduction Sir David John Results and Restructuring John van der Welle Exploration Update Neil Hodgson Business Development Robin Allan Summary and Outlook Charles Jamieson Make a Difference 2
2002 Preliminary Results Presentation R ESULTS Make a Difference 3
2002 Preliminary Results Presentation FINANCIAL HIGHLIGHTS • Production 53.6 mboed (2001: 40.9 mboed) up 31% • Turnover £263.1m (2001: £ 213.8m) up 23% • Operating profit (1) £117.2m (2001: £88.6m) up 32% • Net profit after tax £25.0m (2001: £20.3m) up 23% • Pre-exceptional net profit after tax £38.1m (2001: £20.1m) up 90% • Operating cashflow after interest, tax £136.1m (2001: £94.6m) up 44% • Net debt £249.5m (2001: £379.3m) down 34% • Gearing 80% (2001: 122%) down 42% (1) Before exceptional items Make a Difference 4
2002 Preliminary Results Presentation 4 YEAR RECORD Working Interest Production Reported Profit After Tax 60 30 55 20 50 10 45 mboepd 0 £m 40 -10 35 -20 30 -30 25 20 -40 1999 2000 2001 2002 1999 2000 2001 2002 Unit Operating Costs Net Debt (Including JV’s) 4.5 500 450 4 400 3.5 £/boe £m 350 3 300 2.5 250 2 200 1999 2000 2001 2002 1999 2000 2001 2002 Make a Difference 5
2002 Preliminary Results Presentation OPERATIONAL HIGHLIGHTS • Production up 31% on 2001 – 7% above target range of 45-50 mboepd – Record levels of over 60 mboepd in Nov/Dec – Higher volumes in Myanmar and Indonesia • Cost reduction drive continues – Unit opex down 18% at £3 per boe • Development projects on target/budget – Yetagun capacity upgrade – Bhit/Zamzama • Top quartile HSE performance on operated assets Make a Difference 6
2002 Preliminary Results Presentation PROFIT & LOSS ACCOUNT 2002 2001 Production (working interest) (mboepd) 53.6 40.9 Realised oil price ($/bbl) 24.3 25.2 Higher production and Realised gas price ($/mcf) 3.44 2.97 strong gas prices £m £m Unit opex (incl. JVs) Turnover 263 214 £3.0/boe - down 18% less: share of JVs turnover (64) (47) Unit DDA (incl. JVs) Group turnover 199 167 £3.14/boe - in line with Operating costs and royalties (54) (53) 2001 Amortisation (53) (44) Increased contributions Exceptional ceiling test write down (13) (42) from Myanmar and Pakistan Exploration expenditure written off (5) - Gross profit 74 28 Reduced interest rates and repayment of debt in Administrative costs (8) (7) Myanmar Operating profit 66 21 Operating profit in JVs 38 26 Higher taxes due to higher profits and impact of Total operating profit 104 47 Budget 2002 Exceptional profit on disposal - 42 Net interest and exchange movements (31) (40) Profit before tax 73 49 Taxation (48) (29) Profit after tax 25 20 Profit after tax (before exceptional items) 38 20 Earnings per share - basic and diluted (pence) 1.6 1.3 Make a Difference 7
2002 Preliminary Results Presentation CASHFLOW 2002 2002 2001 (As reported) (Incl. JVs) (Incl. JVs) £m £m £m Net cash flow from operations 124 184 152 Increase in line with higher net revenues Net interest (17) (26) (34) Taxation (21) (22) (23) Reduced capital expenditure, and Operating cash flow (after interest and tax) 86 136 95 greater focus on exploration Capital expenditure (54) (73) (80) Excl JV JV Total Disposals 30 30 73 £m £m £m Net cash flow 62 93 88 Exploration 22 13 35 Exchange 29 38 (13) Fields 17 18 35 Other 3 - 3 Movement in net debt 91 131 75 JV funding 12 (12) - 54 19 73 Yetagun interest accrued - (2) (9) Opening net debt (272) (379) (445) Exchange gains on $ debt due to $ Closing net debt (181) (250) (379) weakening against £ • Operating cash flow funds exploration costs 3.9x cover (2001: 4.8x ) • Interest cover now 7.1x (2001: 4.5x) Make a Difference 8
2002 Preliminary Results Presentation R ESTRUCTURING Make a Difference 9
2002 Preliminary Results Presentation RESTRUCTURING DEAL • Transformation into a fully independent E&P company • Transfer of Myanmar and just over half of Indonesian West Natuna block A to Petronas and Hess • Cancellation of Hess' and Petronas' shares in Premier • Effective date 30 September 2002 • Subject to various approvals/consents prior to completion • Independently verified core NAV up to 43p per share (31 December 2002 proforma) • Debt and gearing reduced to £47m and 17% (31 December 2002 proforma) Make a Difference 10
2002 Preliminary Results Presentation COMPLETION Completion imminent: • Achieved – Signature of framework agreement and 16 September 2002 $210m bridge facility – EGM – shareholder approval 5 November 2002 – Yetagun partners’ participation agreed February 2003 – Indonesia Government approval March 2003 • Pending – Written Myanmar Authorities approval – Court sanction and completion expected early second quarter 2003 Make a Difference 11
2002 Preliminary Results Presentation PROFORMA BALANCE SHEET Balance Proforma Balance Sheet at Impact of Sheet at 31 December 2002 Restructuring 31 December 2002 £m £m £m Cash (including JVs) 167 (139) 28 Debt (including JVs) (417) 342 (75) Net debt (including JVs) (250) 203 (47) Shareholders’ funds 312 (41) 271 Gearing ratio 80 N/A 17 % % Transformed finances Make a Difference 12
2002 Preliminary Results Presentation VALUATION ROLL FORWARD Core Net Asset Value of Proven and Probable reserves (excluding exploration and appraisal, technical reserves and other upsides) 31 December 2002 (3) 30 September 2002 (2) 10% discount factor 10% discount factor Before After Before After Restructuring Restructuring Restructuring Restructuring $ million $ million $ million $ million Assets sold at consideration (1) 670.0 670.0 Value of assets remaining (5) 580.6 580.6 593.7 (1) 593.7 (1) Total assets 1250.6 580.6 1263.7 593.7 Other investments 16.4 16.4 16.4 16.4 Net debt (401.7) (75.8) (444.5) (120.7) Net asset value 865.3 521.2 835.6 489.4 Total number of shares (in millions) 778.7 777.5 1588.5 1587.3 Net asset value per share (in pence) (4) 43.2 40.6 35.1 34.0 Accretion in net asset value per share 23% 20% (1) Assets valued at D&M valuation except for assets sold where restructuring value applied as per Circular (2) 30 September 2002 valuation as per Circular (3) 31 December 2002 valuation - year-end reference date (4) NAV per share converted at $1.55=£1, close Friday 13 September, as per Circular (5) Oil price of $20 in 2003 escalating at 3% pa Make a Difference 13
2002 Preliminary Results Presentation POST RESTRUCTURING RESERVES AND PRODUCTION Premier 2P Reserves 203 mmboe Working Interest Production Annualised (2) Assets sold UK Indonesia 40,000 Retained assets 16% 52% 35,000 30,000 25,000 boepd 20,000 15,000 Pakistan 10,000 32% Indonesia Pakistan 5,000 UK Notes 0 (1) Proforma total reserves at 31 December 2002 2003 2004 2005 (2) Proforma 2003 production assumes completion 31 March for illustration Make a Difference 14
2002 Preliminary Results Presentation E XPLORATION Make a Difference 15
2002 Preliminary Results Presentation EXPLORATION DRILLING UPDATE • Playmaker 204/16-1 204/16-1 • High Impact – UK – 204/16-1 – Indonesia – Area IV Kuda Nil-1 Kuda Nil-1 – Pakistan Binturong-1 Binturong-1 – Dumbar – Kirthar Benir-2 Benir-2 Hallel-1 Hallel-1 Zirkani-1 Zirkani-1 Make a Difference 16
2002 Preliminary Results Presentation PAKISTAN EXPLORATION 2003 UPDATE: DUMBAR Zamzama Field: 2.4 TCF P2 Reserves Zamzama Field: 2.4 TCF P2 Reserves (Premier Discovery 1998) (Premier Discovery 1998) Bhit Field Bhit Field Badhra Field Badhra Field Zirkani-1 Zirkani-1 Bhandak-A Bhandak-A • Benir-2 encountered gas in the Cretaceous Pab Formation Benir-2 Benir-2 • Zirkani-1: A large (1.8 TCF unrisked) simple gas prone structure, proven reservoir and trapping style to the north (Bhit Gas fields and Zamzama Fields) Prospects/Leads Make a Difference 17
2002 Preliminary Results Presentation GUINEA BISSAU EXPLORATION 2003: SINAPA Sinapa-2 Sinapa-2 Location Location Dome Flore 800m BOIP Discovery Dome Flore 800m BOIP Discovery Senegal Guinea-Bissau Bissau Sinapa Sinapa Block 2 Premier Block 5a e n Premier i L Block 4a m o d Premier n a R D Area of prospective Area of prospective 3 shelfal salt diapir play shelfal salt diapir play Atlantic Esperança Esperança Ocean Guinea Make a Difference 18
2002 Preliminary Results Presentation GABON EXPLORATION 2003 PHENIX • Currently finalising negotiations converting Phenix TEA into a PSC • Expect to spud Dusafu well 4 th quarter 2003 Oil fields Mayumba Prospects/Leads Phenix TEA Phenix TEA Atlantic Ocean Most likely first drilling candidate:- Dusafu Dusafu Dusafu prospect. A Medium Risk Pre-salt “ Playmaker” . Gabon Congo Make a Difference 19
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