Zama Discovery Interim Update 13th July 2017
Mexico: 111 years of E&P history, 78 years under state monopoly • Premier screening high-graded gas Sureste Basin as best fit for entry Perdido oil • Deep-Water, Emerging • Oil + Assoc Gas Area proportional to • Main Play: Neogene and Burgos discovered resource • Onshore, Mature Paleogene clastics Burgos • Salt plays • Gas, minor Oil • Main Play: Paleogene Deltaics Salina del Bravo Mexican Ridges • Slope & Deep-Water, Frontier Tampico - Misantla & Perdido • Onshore, Mature • Possible Gas (Tertiary SR), but 0.5 2.0 Bboe • Oil + Assoc Gas unknown • Main Plays: Jurassic / • Main Play: Paleogene & Cretaceous carbonates Neogene DW Clastics Mexican Ridges 0.4 Campeche • Slope & Deep-Water, Frontier 14 Bboe • Probably Mixed Oil and Gas • Main Play: Neogene DW Tampico- Clastics Misantla • Salt plays Campeche Sureste (offshore) Veracruz 0.3 • Shallow to Deep-Water, • Onshore, Mature Emerging • Gas, minor Oil Veracruz • Oil + Assoc Gas Sureste • Main Plays: Cretaceous • Main Play: Cretaceous / Jurassic carbonates; Tertiary deep carbonates; Neogene clastics water sandstones 0.9 • Salt plays 61 Bboe Sureste July 2017 | P1
Mexico: recent Energy Sector Reform • Opening of a high potential energy sector to foreign investors after 78 years of state monopoly. • Establishment of a clean and transparent process with an independent regulatory body, CNH. • Extensive modern datasets made available for a reasonable cost across most basins. • CNH and SENER (Ministry) continuing to mature both the licencing process and terms. • Bid conditions comprise government take and defined work programme. • Mexico offers large tracts of acreage in proven basins with access via a regular tender process. July 2017 | P2
Mexico: Premier Sureste Basin Licence Position • Successful entry (10% carried) into Blocks 2 & 7 in Q3 2015 • Increased equity to 25% (paying) in May 2017 in Block 7, ahead of Zama well Block 7 Premier 25% Talos (op) 35% Sierra 40% Block 2 July 2017 | P3
Mexico: Block 7 Zama Prospect (Premier 25%) • Talos (op.) spudded the well in 166m of water on W Zama-1 Well E 21 May using the Ensco 8503 rig. • Premier’s pre -drill assessment of Zama was of it full stack reprocessed being a low risk prospect, with a P50 of 300 MM seismic data in depth barrels EURR within a range of 100-500 MM barrel Flat Spot 3D view of the Zama Prospect showing top structure map and Zama-1 Well seismic amplitudes of ENSCO 8503 the target interval salt salt Good conformance of seismic amplitude with structural contours July 2017 | P4
Mexico - Zama-1 • 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 | P5
Global significance of the Zama Discovery Sits in top 10 largest offshore commercial oil discoveries of the last 5 years Offshore Oil Discoveries >300 mmboe since 2012 (Data courtesy of WoodMac) 2000 1500 1000 900 Reserves (mmboe) 800 Zama pre-drill volume range 700 600 500 400 300 200 100 0 Liza-Payara Iara Tulimaniq Carcara Owowo Anchor North SNE Orca Itapu Itapu Snoek Bay du Entorno Platte (Surplus) Nord July 2017 | P6
Zama – Illustrative Development Scenario Illustrative development schematic • Development conceptual engineering will commence shortly. • Given the scale of the Zama discovery an illustrative fixed installation development could be much as shown here: – Single jacket and significant topsides, with capabilities of producing well in excess of 100,000 bopd – Single drill centre with wells drilled from the platform Mexican fabrication capability – A pipeline to the Dos Bocas terminal • The development could leverage the significant Mexican country infrastructure and manufacturing plants. • In terms of timetable we would expect to appraise in 2018 and to target first oil well within 5 years. July 2017 | P7
Mexico - Block 7 - Fiscal Terms Royalty Royalty Sensitivity Royalties to Oil Price Government Oil Price $/bbl Profit Oil Profit Oil (68.99%) Gross Revenues Corporation Representative barrel of oil at $65/bbl Contractor Tax 30% Profit Oil Opex Cost Recovery 100% Contractor Gross Revenues Capex 125% Exploration 60% limit Exploration of Gross benefits from a Revenue 25% uplift (per month) July 2017 | P8
July 2017 www.premier-oil.com Premier Oil Plc 23 Lower Belgrave Street London SW1W 0NR Tel: +44 (0)20 7730 1111 Fax: +44 (0)20 7730 4696 Email: premier@premier-oil.com
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