2007 preliminary results presentation 13th march...
TRANSCRIPT
2007 Preliminary Results Presentation 13th March 2008
13th March 2008
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.
13th March 2008
Agenda
Strategy and highlights Simon Lockett
2007 Financial results Tony Durrant
Production and development update Neil Hawkings
Exploration update Robin Allan
Summary Simon Lockett
13th March 2008
Strategy and highlights
13th March 2008
2007 highlights
• Delivered value through acquisitions
• Signed gas sales agreements
• Advanced development projects
• Added significant reserves and resources
13th March 2008
Strategy
Strategy
• Targetingproduction growthto 50,000 bopd by end 2010
• High impact exploration programme within disciplined spend
• Acquisition focuson core areas
• Addressing post 2010 growth
Progress
• On target to deliver 50,000 boepd by end 2010 with potential to achieve 80,000 boepd in 2012
• 13 exploration and appraisal wells planned for 2008, focused on Vietnam and Congo
• People, funding and capability in place to execute planned projects
13th March 2008
2007 regional highlights
North Sea• Completion of Scott acquisition and infill well programme
• Kyle gas lift project completed
• Bream licences awarded
• Frøy development planning progressed
• Qualified as an operator to work in the Norwegian sector
West Africa• Progressed Congo prospects to drill ready status
• Mauritania sale terminated
• Working with new operator on progressing Banda and Tiof developments
• Exited Gabon and Guinea Bissau
13th March 2008
2007 regional highlights
Middle East/Pakistan• Record production from Pakistan (12,700 boepd)
• Project to increase Qadirpur capacity to 600 mmscfdprogressed
• Qadirpur Deep well drilled, now awaiting testing
• Kadanwari K-18 successfully drilled and tested
• Zamzama Phase 2 development onstream
• Bhit phase 2 completed increasing capacity to 315 mmscfd
• Execution of shareholder agreements for EIIC JV
Asia• Significant progress on gas sales to Singapore, Batam and
North Sumatra Block A
• 2 discoveries in Indonesia
• Acquisition of additional 25% interest in North Sumatra Block A
• Subsurface facilities and planning for Vietnam progressed
• Block 12W 3D seismic completed
• Block 12W well planning progressed
13th March 2008
2007 financial results
13th March 2008
2007 financial highlights
• Operating profit
• Operating cashflow
• Production
• Reserves
Up 35% to $219 million (2006 - $163 million)
Up 10% to $270 million (2006 - $245 million)
Up 39% to 212 mmboe (2006 – 152 mmboe)
Up 8% to 35.8 kboepd(2006 - 33.0 kboepd)
13th March 2008
Production and income statement
Average gas pricing ($/mcf)2007 2006
Singapore $11.3 $9.4Pakistan $3.0 $3.1
Working Interest Production (kboepd)Entitlement Interest Production (kboepd)Realised oil price ($/bbl)Realised gas price ($/mcf)
Sales and other operating revenuesCost of salesGross profitExploration/New BusinessGeneral and administration costsOperating profit Financial ItemsProfit before taxationTaxationProfit after tax
Prepared in accordance with IFRS
12 months to31 Dec 2006
33.028.964.95.11
$m402
(179)223(44)(17)163(6)
157(89)
68
Highlights12 months to31 Dec 2007
35.831.572.35.60
$m578
(268)310(74)(18)219(72)147
(108)39
Effective tax rate of 35% of gross profit (2006 – 40%)
In line with Brent average oil price
Operating costs per barrel2007 2006
UK $18.5 $13.6Indonesia $7.1 $6.0Pakistan $1.8 $1.8
Includes hedging provision of $65m (pre-tax)
13th March 2008
Hedging
Accounting• No revaluation on oil hedges required post
1st July 2008 due to embedding hedges within physical offtake contracts
• Cumulative oil provision of $39.5m will be written back to income statement over 5 years
• No changes in underlying hedge position• Minimal cash impact during 2007
45
24
21
2007 Post-Tax
65Total
24Gas
41Oil
2007 Pre-Tax
600
HSFO (1 month average) 2007($/tonne)
400
300
0 J F D
100
200
500
J JM MA A S O N
Cap $5001 month averageFloor $245 120
Oil (6 month average) 2007(Brent $)
80
60
0J F D
20
40
100
J JM MA A S O N
Cap $1006 month averageFloor $39.90
2007 mark to market revaluation impact ($m)
13th March 2008
Cashflow
361(116)245
(176)69
(26)(2)41
Cash flow from operationsTaxationOperating cash flowCapital expenditureNet cashflow
Opening net cash/(debt)Net cash from financingClosing net cash/(debt)
12 months to31 Dec 2007
$m
360(90)270
(269)1
413779
Operating Cashflow Capex
MEP
North Sea 104
24West Africa 3213
270
59
97
269
Asia 109101
Regional split ($m)12 months to31 Dec 2006
$m
2007 2006
Development
Pre-licence 22
90Acquisitions 1789
269
67
8
176
Exploration 47105
13th March 2008
Premier’s financial strength
• Strong balance sheet position ($332m cash at 31 Dec 2007)
• Pre-funded $1bn capital programme, even at much lower oil prices:
– 7-year $250m convertible issued on favourable terms in May 2007
– Undrawn bank facilities of $224m at year-end
– $300m post tax annual operating cashflow at forward curve
• 2008 outlook:
– Target exploration spend of $100m (pre-tax)
– Planned Development spend of $150-$175m
13th March 2008
Production and development update
13th March 2008
40000
Production (Working Interest)(boepd)
30000
25000
10000
5000
02005 2006 2007
15000
20000
35000
AsiaPakistanWest AfricaNorth Sea
Producing fields update
North Sea• Production run rates are touching 12,000 boepd• Strong production from Scott and Kyle• Scott infill programme expected Q4 2008• 2008 full year infill drilling campaign on Wytch Farm• Suspension of production on Fife
West Africa• Two new wells and three workovers on Chinguetti planned
for 2008
Pakistan• Production run rates are touching 15,000 boepd• Badhra field came on stream in January • Increased production from Zamzama, Kadanwari and
Qadirpur• An appraisal well on Badhra is currently being drilled, and
testing of the Qadirpur Deep Well is expected in June
Asia• Production run rates are touching 12,000 boepd• Singapore gas demand remained strong• Extensive drilling campaign planned for 2009/10 on Anoa
13th March 2008
Field development schedule
2008 2009 2010 2011
Gajah BaruAlur SiwahChim Sáo / DuaFrøy
ProjectInitiation
ConceptSelection
ProjectSanction
FirstProduction
Study Design ExecuteOperated
Non-operated
13th March 2008
Asia – Indonesia - Gajah Baru
Gas contract update• HoA for a DCQ of 90 bbtud to Sembgas was
signed in November 2007• HoA’s for up to 40 bbtud to Batam for power
generation were signed in December 2007• Fully termed GSA was initialled with Sembgas
at the end of February 2008• Gas transportation agreements (GTAs) under
negotiation with the West Natuna Transportation System
Gajah Baru development update• A draft POD has been submitted to BPMigas
for approval• The tendering process for the EPCI contract is
about to commence• Formal project sanction now expected in mid
2008 after GTA completion• First gas targeted for Q4 2010
13th March 2008
Asia – Indonesia - North Sumatra Block A
• GSA signed with PIM for the sale of 110 Bbtud in December 2007• Plan of Development has been approved by BPMigas• Engineering/subsurface work underway to optimise development• Negotiations ongoing with:
• ExxonMobil for Gas Transportation Arrangements• PLN for an additional gas sale to their IPP• BP Migas for PSC extension expected imminently
• Project sanction is anticipated mid year, first gas Q4 2010• Re-activation of wells and production at Tualang and Lee Tabue planned for 2008• Conceptual studies are underway re Kuala Langsa development
13th March 2008
Asia – Vietnam - Block 12W
• RAR has been approved. Outline Development Plan has been submitted. Final Development Plan approval expected mid year
• First production from Phase 1 Development is targeted for mid 2010 from Chim Sáo
• Chim Sáo North appraisal well expected to spud imminently
• Tie-back possibilities of field extensions and adjacent exploration prospects are being evaluated
• 59 mmbbls of oil and 16 mmboe of gas over Chim Sáo and Dua
• Project team in place in Ho Chi Minh• Design FEED competitions for floating FPSO
and fixed facilities ongoing• FPSO supplier candidates are Modec, EOCP,
Viking and SBM
• Discussions ongoing with PV Gas
13th March 2008
North Sea – Norway - Frøy
• EPCIC contract has been tendered
• Availability of a suitable JUDPSO is limited, installation planned for autumn 2011
• Project costs have risen in line with industry cost environment
• Preferred supplier identified and negotiations are proceeding
• Seeking cost reductions/optimisation prior to PDO submission later in the year
• Break even at ~$60/bbl, 20% return at $90/bbl oil price
13th March 2008
Illustrative project metrics
30
8
4
7
Opex/boe
$
50.0
31.875*
41.667
28.67
Premier Equity
Interest
%
90
340
210
180
Net Capex 2008-11
$m
15Norway:Frøy (Lease case)
14Vietnam:Chim Sáo/Dua (Lease case)
11Indonesia:North Sumatra Block A
7Indonesia:GSA2
Net Peak Working Interest
Production kboepd
*Equity level assumes Petrovietnam exercise their right to back in to the project
Illustrative project metrics will be refined as tender processes are completed and partner/Government approvals are received
13th March 2008
Production forecast
20
(kboepd Net)
0
10
40
30
50
2008
70
90FrøyGajah Baru, Chim Sáo/Dua, Alur SiwahExisting producing fields
60
80
2009 2010 2011 2012
13th March 2008
100
($ Millions Net)
0
50
200
150
250
2008
450FrøyGajah Baru, Chim Sáo/Dua, Alur SiwahExisting producing fields
300
2009 2010 2011 2012
350
Development capex forecast
400
13th March 2008
4.0
($ per boe)
0.0
2.0
8.0
6.0
10.0
2008
12.0
2009 2010 2011 2012
Opex forecast per boe
13th March 2008
North Sea• Bream• Further Scott Infill• Wytch Farm Beacon• Wytch Farm EOR• Kyle K16• Fife Redevelopment
West Africa• Chinguetti Phase 3• Banda• Tiof
Middle East/Pakistan• Qadirpur Deep
Asia• NSBA Oil• Kuala Langsa• Swan Gas
Other contingent resource projects
13th March 2008
End 2007 2P reserves and contingent resources
369.420.462.7205.580.8Total Reserves & Contingent Resources
2C Contingent Resources
2P Reserves
44.52.318.423.8Development pending
61.217.13.711.928.5Un-clarified oron hold
52.250.91.3Development not currently viable
157.917.16.081.253.6Total Contingent Resources
56.7
2.1
5.9
48.7
MEP
124.3
62.9
24.9
36.5
Asia
211.53.327.2Total Reserves
68.91.32.7Justified for development
34.71.02.8Approved for development
107.91.021.7On production
TotalWest AfricaNorth Sea
These figures include no provision for prospective resources
13th March 2008
Year end 2006 vs 2007 reserves and resources
100
2P Reserves and Contingent Resources(mmboe)
0
50
200
150
250
2006
350
400Contingent ResourcesAcquisitionsAdditions and RevisionsProductionReserves
Production 2007
300
Additions and Revisions
Acquisitions
13th March 2008
Exploration update
13th March 2008
North Sea• Bream appraisal – Norway - 20%• Sparrow – UK - 25%
West Africa• Banda appraisal – Mauritania - 4.62%• Frida – Congo - 58.5%
Middle East/Pakistan• Al Amir 2 – Egypt - 10%• Al Amir 3 – Egypt - 10%• Badhra deep – Pakistan - 6%• Qadirpur deep 2 – Pakistan - 4.75%
Asia• Chim Sáo appraisal – Vietnam - 37.5%• Chim Ung – Vietnam - 37.5%• Chim Công – Vietnam - 37.5%• Follow on prospect – Vietnam - 37.5%• Monte Cristo – Philippines - 21%
2008 exploration and appraisal drilling
13th March 2008
Bream
18/10-1
Brisling
Letfetti
Alsvid
Gardrofa
18/10-1 extPL407
PL406
North Sea – Norway - Bream appraisal
Bream update• Undeveloped Brent age oil field discovered 1971• Appraisal well and contingent test planned June 2008• Operator estimate of 80 mmbbls• Premier 20% equity share
13th March 2008
West Africa – Congo - Marine Block IX - Frida
Block Marine IX – Frida update• Farmout nearing completion – current interest 58.5%• Well planned Q4 2008/Q1 2009• 260 mmbbls gross prospect size• Cretaceous target (1 in 7 commercial success rate)• Water depth 580m
2 km
Frida
13th March 2008
Asia – Vietnam – initial 2008 programme
Block 12W• 37.5% operated equity• Jackup Wilboss on location 11th March• Chim Sáo Appraisal• Chim Ung North• Chim Công• Up to 2 year programme
13th March 2008
Chim Sáo
Chim Ung
Chim Công
Block 12W • 37.5% operated equity• Block 12W program targeting 200 mmbbls
Asia – Vietnam – Chim Sáo
13th March 2008
Asia – Vietnam – Chim Ung
Chim Sáo
Chim Ung
Chim Công
Block 12W • 37.5% operated equity• Block 12W program targeting 200 mmbbls
Top Dua
M Dua
MDS 5
12W-CU-1X Proposed well location
Chim Ung (Falcon)Area Depth Map
Chim Boi
Chim Se
Chim Ung
13th March 2008
Chim Sáo
Chim Ung
Chim Công
12W-CC-1X Proposed well location
Chim CôngChim En
Asia – Vietnam – Chim Công
Block 12W • 37.5% operated equity• Block 12W program targeting 200 mmbbls
12W-CC-1X
ChimCông
ChimEn
Chim Công / Chim EnTop MDS-5 Depth Map
13th March 2008
2009 exploration drilling
North Sea• Gardrofa(Norway)
West Africa• Ida(Congo)
Asia• Block 07/03 drilling(Vietnam)
• Tuna drilling(Indonesia)
• Buton drilling(Indonesia)
• North Sumatra Block A drilling (Indonesia)
13th March 2008
West Africa – Congo - Marine Block IX - Ida
Block Marine IX – Ida update• Farmout nearing completion – current interest 58.5%• Operated well planned Q4 2008/Q1 2009• 320 mmbbls gross prospect size• Cretaceous target (1 in 7 commercial success rate)• Water depth 580m
2 km
Ida
13th March 2008
Sidewinder
North Sidewinder
Block Marine IX – Sidewinder• Joint study over Tertiary prospects completed with
SNPC in 2007• Tertiary targets (1 in 3 commercial success rate)
West Africa – Congo - Sidewinder
13th March 2008
Matangprospect
Alur Siwah field
20 km
Structure Map showing the main carbonate build-ups on structural
highs in the block
North SumatraBlock ‘A’ Exploration• 41.67% equity interest• 2 wells planned 2009• 9 leads identified• Unrisked potential of 1.9 tcf gross
Asia – Indonesia - North Sumatra Block A
13th March 2008
Asia – Indonesia - Tuna
Tuna• 65% operated interest• Farm out planned• First wells expected in 2009• Unrisked potential of ~1.5bn barrels gross• Possible logistical synergies with planned 2009 Vietnam
campaign
NW SEGajah Laut
10km
13th March 2008
Asia – Vietnam - 2009 programme
Block 07/03• 45% operated interest• 2 wells planned 2009• 21 leads identified• Unrisked potential of >3bn barrels gross• Rig identified and negotiations at an advanced stage• Planning to farm down interest
13th March 2008
5 km
NW
Asia – Vietnam - 2009 programme - Silver Sillago
Silver Sillago• 45% operated interest• Well candidate for 2009• Potential of 300 mmbbls
Silver Sillago SE
13th March 2008
Asia – Vietnam - 2009 programme - Blue Marlin
W Blue Marlin E
Blue Marlin• 45% operated interest• Well candidate for 2009• Potential of 500 mmboe
13th March 2008
Asia – Vietnam - Block 104-109/05
• Licence awarded February 2008• 50% operated interest• 9,087 square kilometres• 2006 Technical Cooperation agreement with Petrovietnam identified 21
leads• Water depths of 20-60 metres• Firm commitment of seismic acquisition and one exploration well• Carried through first exploration well by MOECO (50% interest)
13th March 2008
Exploration drilling schedule
2008MAR
Contingent wells High impact wellsFirm wells
M/East & PakistanEgypt : NW Gemsa Al Amir SE-1X
Gemsa Well-2
West AfricaCongo: Marine IX Frida
IdaMauritania : PSC-A Banda Appraisal
AsiaIndonesia : Natuna Sea Block A
TunaButonNorth Sumatra Block A
Vietnam : Block 12W Chim Sáo North (Blackbird)Chim Ung North (Falcon)Chim Công (Peacock)Block 12W ProspectBlock 07/03
Philippines : Ragay Gulf Monte Cristo
North SeaUK : P1181 Sparrow (23/22b)Norway : PL407 Bream Appraisal
PL406 Gardrofa
APR JUNMAY JUL AUG SEP20091HOCT DECNOV
20092H
13th March 2008
Summary
• Major progress in 2007:– Delivered value through acquisitions– Signed gas sales agreements – Advanced development projects – Added significant reserves and resources
• On target to deliver 50,000 boepd by end 2010– Potential to achieve 80,000 boepd in 2012
• High quality forward exploration programme within disciplined spend
– Focused on Vietnam and Congo
• Seeking further core area acquisitions– Including via JV with EIIC
• Funding and people in place
13th March 2008www.premier-oil.com 13th March 2008