march 2010 results presentation 100325 final - premier oil · 2017-01-25 · 2009 annual results...
TRANSCRIPT
25th March 2010 | Page 1
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.
25th March 2010 | Page 2
Agenda
Progress against strategy Simon Lockett
2009 financial results Tony Durrant
Operations update Neil Hawkings
Exploration update Andrew Lodge
Summary Simon Lockett
25th March 2010 | Page 3
2009 highlights
• 21% increase in production and 23% increase in reserves and resources
• Continuing good progress on development projects
– Chim Sao, Gajah Baru on track for 2011
• Acquisitions in UK and Vietnam successfully integrated
• Five successes out of nine exploration and appraisal wells
• Strong cash flow, despite lower average commodity prices
• Record profits after tax of US$113 million
25th March 2010 | Page 4
Delivering against strategy
Progress
• Chim Sao and Gajah Baru on schedule for 2011
• Froy, Bream, Bugle progress towards development sanction in 2010
• Added 29 mmboe. Up to 11 exploration and appraisal wells over next nine months targeting 330 mmboe
• Oilexco and Block 12 (Vietnam) successfully integrated; non-core asset sales underway
• Investment programme fully funded; acquisition capacity
Strategy
• Attain 75 kboepd from existing projects
• Commercialise contingent resource base
• Add 200 mmboe of2P reserves from the exploration portfolio
• Make value-adding acquisitions in threecore areas
• Maintain a conservative balance sheet
Production2005-2009 (kboepd)
Target
• Build three quality businesses which deliver 100 kboepdfrom 400 mmbbls of reserves
Operating Cashflow2005-2009 ($million)
2P Reserves2005-2009 (mmboe)
Acquisitions 2005-2009Oil price ($/bbl)
25th March 2010 | Page 6
Production and income statement
Working Interest Production (kboepd)Entitlement Interest Production (kboepd)Realised oil price ($/bbl)Realised gas price ($/mcf)
Sales and other operating revenuesCost of salesGross profitExcess of fair value over purchase considerationExploration/New BusinessGeneral and administration costsOperating profit Financial ItemsProfit before taxationTaxationProfit after tax
12 months to31 Dec 2008
12 months to31 Dec 2009
36.531.894.5
6.6
$m655
(318)337
-(59)(17)262
16278
(179)98
44.240.266.3
5.2
$m621
(361)260
6(77)(18)170(90)
8033
113
Average gas pricing ($/mcf)2009 2008
Singapore $11.0 $15.2Pakistan $3.2 $3.5
Average Brent oil price was $61.7/bbl(2008: $97.3/bbl)
Operating costs per barrel ($/bbl)2009 2008
UK $23.2 $20.6Indonesia $10.0 $8.6Pakistan $1.9 $1.5Group $12.2 $9.5
Includes non-cash mark to market adjustment on hedging of $61.1 million (pre-tax)
Tax credit arises due to UK tax allowances acquired with Oilexco
Highlights
25th March 2010 | Page 7
Hedging
• Policy unchanged: secure cashflows via floors or forwards to fund investment programme even at low oil prices
• 2009 ImpactNo cash payments under collars
$Cash premia paid (Oilexco-related) 12.5Mark-to-market movement 48.6Charge to income statement 61.1
Outlook
• 41% liquids 2010 - 2012 has collar of $49 - $84/bbl
• 22% Indonesian gas 2010 - 1H 2013 has collarof $47 - $94/bbl
• 1.3 mmbbls 2010 production sold forward at average $76/bbl
25th March 2010 | Page 8
Overseas
UK
PRT
CT
Prior period revisions
Current charge
Deferred tax credits
Tax charge for the year
12 months to31 Dec 2008
$m
12 months to31 Dec 2009
$m
111.6
34.0
47.5
(0.2)
192.9
(13.6)
179.3
Group taxation position
73.0
23.2
(23.4)
(24.6)
48.2
(81.3)
(33.1)
Allowances acquired
Carried back to 2008
Utilised in 2009
Premier allowances brought forward
Recognised as deferred tax asset
Currently unrecognised
Tax allowances carried forward
UK Tax Allowance Position at 31 Dec 2009
$m
1199
(47)
(59)
37
1130
875
275
1130
Outlook• Significant UK carry forward of allowances• UK cash taxes not anticipated until at least 2014
25th March 2010 | Page 9
Cash flow
Cash flow from operations
Taxation
Operating cash flow
Capital expenditure
(Acquisitions)/disposals
Finance charges, net
Pre-licence expenditure
Net cash flow
12 months to31 Dec 2009
$m2009 2008
Development
Exploration
Estimated Capex split ($m)12 months to31 Dec 2008
$m127
90
217
195
108
303
Operating cashflow Capex
Asia
MEP
Estimated 2009 Regional Capex split ($m)
143
26
134
47
97
204North Sea
303348
555
(203)
352
(217)
3
-
(16)
122
419
(71)
348
(303)
(643)
(55)
(20)
(673)
Outlook• Forecast full-year 2010 spend of $400m (development) and $150m (exploration)
25th March 2010 | Page 10
Net debt and financial strength
$m
117
(673)
240
(316)
Movement in net debt
Opening net cash
Net cash out flow
Equity issued
Closing net debt*
Outlook• Cash on hand, in escrow and undrawn facilities of US$649 million• Bank facilities extended to 2012; credit approval received for new five year
facility of $150m• At $60/bbl, peak net debt of around $650 million in 2011 with rapid payback
* Excludes $70m of cash in escrow for abandonment obligations
$m
251
(353)
213
(316)
Current balance sheet
Cash and equivalents*
Bank borrowings
Convertible loan
Current net debt*
25th March 2010 | Page 12
Operations highlights
• Oilexco integration complete
• GSA2 project sanction
• Chim Sáo acquisition
• Chim Sáo project sanction
25th March 2010 | Page 13
Production update
50,000
Production (working interest)(boepd)
30,000
25,000
10,000
5,000
02006 2007 2008
15,000
20,000
35,000
North Sea / W. AfricaMiddle East-PakistanAsia
2009
40,000
45,000
Forecast2010
• Full year production 44,200 boepd
• Continuing increases in gas demand from Singapore and Pakistan
• Gas compression and infill drilling projects ongoing in Pakistan
• Balmoral facilities projects completed
• Shelley performed at the lower endof expectations
• Good performance from Wytch Farm and Kyle but mixed results from Scott infill drilling
25th March 2010 | Page 14
Reserves and resources
500
2005
450
400
350
0
150
200
250
300
2006 2007
100
50
Reserves and contingent resources (mmboe)
Production Additions &Revisions
Oilexco End 20092008
2C contingent resources2P reserves 213
255
25th March 2010 | Page 1525th March 2010 |
• WHP jacket being installed in April
• ENSCO 107 drilling rig contracted and mobilising in June
• Platform topsides to be installed in July
• FPSO conversion underway – vessel in Keppel shipyard
• Project overall 65.8% complete at end March
• Premier equity 53.125%
Chim Sáo – on schedule for first oil in July 2011
25th March 2010 | Page 16
• Wellhead platform jacket progressing well
• Rig tender complete and drilling starts in September
• Wellhead platform to be installed in September
• Central Processing Platform construction underway
• Overall project 43% complete
• Premier equity 28.67%
Gajah Baru – on schedule for October 2011
25th March 2010 | Page 17
North Sumatra Block A• PSC extension approval process remains ongoing• Optimisation of development plan has continued• First gas: Alur Rambong - 2012, Alur Siwah - 2013
Huntington and North Sumatra Block A
Huntington• Focus has moved to FPV/FPSO development• Negotiations with providers well underway• Earliest possible first oil is late 2011
25th March 2010 | Page 18
Appraised development portfolio targeting 2013
Frøy• Alternative development
solutions being studied• Preliminary tenders
expected in April• Synergies with nearby
fields being explored
Bugle• Waiting on drilling results from Bugle North• Integrate with other Scott subsea tie-backs
Bream• Successfully appraised in 2009• Targeting development approval this year;
Gardrofa could impact positively
25th March 2010 | Page 19
Production and development forecast
90
Production forecast*(kboepd net)
50
40
20
10
02010 2011
30
60
20142012 2013
70
80
Risked appraised developmentsHuntingtonAsian developmentsOn production
2P reserves development capex forecast($m)
500
300
250
150
50
02010 2011
200
350
20142012 2013
400
450
HuntingtonAsian developmentsOn production
100
*Assumes early Huntington case
Excludes new project capex
25th March 2010 | Page 21
2009 Exploration highlights
• 29 mmboe added; finding cost <$4/boe
• Nine exploration and appraisal wells drilled, 55% success rate
– Success on key exploration wells Grosbeak, Cá Rồng Đỏ
– Successful Bream appraisal
• New acreage captured in UKand Egypt
• Central North Sea databasefrom Oilexco integrated
• Exploration strategy redefined
25th March 2010 | Page 22
• Premier began exploring in 1986, initially via entry into SE Asia
• To date Premier has discovered net 800 mmboe at an overall commercial success rate of 22%
• The commercial discoveries have been made in two basin types:1) Rifts: Southeast Asia and Norway2) Frontal Fold-belts: Pakistan
• The success rate in these basin types is ~40%
• Since 2000 the exploration success has been dominated by Rift Basin exploration in Asia and latterly in Norway
• 200 mmboe net reserves additions are targettedover the next five years
Exploration – Historic performance and future target
1000
Premier Discoveries 1986-2009 (net mmboe)
500
400
200
100
01985 1990
300
600
700
1995 2000 2005 2010
Cumulative annual discoveriesHistoric performance
800
900
2015
Cumulative annual discoveriesHistoric performanceFuture target
25th March 2010 | Page 23
Add 200 mmboe bookable net reserves by 2015 from unrisked portfolio of >1bnboe
Exploration – Targets
2010-2012• Unrisked prospect resource: 780 mmboe• Risked resource target: 144 mmboe• 12 Exploration and appraisal wells planned
in 2010• Material prospects targeted• Drilling candidates from existing portfolio
2012 to 2014• Resource additions must come from the lead
inventory maturation and success case follow up • Unrisked lead resource: 786 mmboe• Risked resource target: 78 mmboe• New ventures are required to secure the
2013/14 delivery and ensure longer term growth
250
200
100
50
02010 2011
150
300
2012 2013 2014
350
500Lead inventory - unriskedLead inventory - riskedProspect inventory - unriskedProspect inventory - riskedCum risked additions
Global exploration:Forecast resource additions (mmboe)
400
450
25th March 2010 | Page 24
Exploration strategy
Longer-term programme• Rift Basins: new acreage in the North Sea,
Asia and Middle East
• Frontal Fold-belt plays: new acreage in the Middle East region
The goal is to deliver 200mmboe bookable 2P reserves through the drill bitfocusing on areas where we have demonstrated skills and expertise
North Sea / West AfricaAsiaMiddle East-Pakistan
Geography Geology
RiftsFrontal Fold Belts
Near-term programme• Asia: Nam Con Son Basin (Vietnam
and Indonesia)
• North Sea: UK Central North Sea and Norwegian North Sea
$ spend
25th March 2010 | Page 25
Exploration outlook 2010
Contingent WellsFirm Wells: Rig Contracted Firm Wells: Rig TBC Seismic Programme
All well timings are subject to revision for operational reasons
Unrisked net potential of 330 mmboe; $150mm expenditure pre-tax
BlåbaerPL374S (34/2,5)Norway
OatesP1620
CatcherP1430
Bugle AppraisalP815UK
Grosbeak AppraisalPL378
GnatcatcherPL378
GardrofaPL406 (8/3)
North SeaLead BButon
Prospect B
Prospect ATunaIndonesia
Seismic104/109-05
Seismic (contingent)07/03Vietnam
Q4Q3Q2Q12010Asia
Transocean GSF Arctic IV
Galaxy II (STC)
Maersk Guardian
Bredford Dolphin
25th March 2010 | Page 26
• Active 2010 programme targeting40-150 mmboe net to Premier:
Gnatcatcher
Moth/Lacewing
Gardrofa
Blåbaer
Bugle Appraisal
Bream
Oates
Catcher
Premier’s rift basin expertise is being applied to the North Sea
Exploration – North Sea
Exploration Drilling
10-25 mmboeGrosbeak
7-39 mmboeBugle
Appraisal Drilling18-33 mmboeCatcher
25-107 mmboeOates
15-115 mmboeGardrofa
31-60 mmboeGnatcatcher
15-75 mmboeBlåbaer
Gross PotentialProspect
• Prospect maturation and new venture activity in preparation for 2011 drilling
25th March 2010 | Page 27
Exploration – Norway – Greater Luno
Greater Luno (Pl 359)• Premier 30% equity• Operated by Lundin• Well status: plugged and abandoned with minor shows• Pre-drill risk: reservoir presence and effectiveness• Post Drill analysis
– No Jurassic Reservoir present– No effective reservoir in Basement– Demonstrates lateral seal to Hinault lead– Hinault under evaluation for future drilling
16/4-5 Well Location
Greater Luno
Hinault
25th March 2010 | Page 28
Blåbaer
Blåbaer (PL374)• Premier 15% equity• Operated by BG• Reserves estimate 15-30-75 mmboe• Well status: oil discovered in primary target,
being appraised via sidetrack drilling• Jordbaer project moving forward, also
operated by BG
Exploration – Norway – Blåbaer
C.I. 10m
Sidetrack
2 Km2 Km
25th March 2010 | Page 29
Exploration – UK – Bugle Appraisal
Bugle North (P815)• Premier 50%• Operated by Nexen• Well costs equally shared between 15/23d and 15/23c partnerships• High value near field exploration opportunity• Gross reserves estimate 7-17-39 mmboe• Adjacent Bugle discovery flowed 7,398 bopd and 9.06 mmscfd gas• Well Status: drilling
Galley
Dirk
S
BCU
15/23d Bugle North15/23d-13,13Z
N
Base Galley
Inline-2273 ThinMan Impedance Volume 1 Km
Bugle North
25th March 2010 | Page 30
Exploration – UK – Oates
Oates (P1620)• Premier 50% equity and operator• Reserve estimate 25-65-107 mmboe• Amplitude supported stratigraphic trap• Low to moderate risk for oil and gas• Drilling planned June 2010• Follow up potential exists at Bowers
(10-65 mmboe unrisked reserves)
Oates
Bowers
Forties Isopach Map
OatesNW SE
Amplitude Bloom on Far Stacks
25th March 2010 | Page 31
Exploration – Norway – Bream, Gardrofa
Bream (PL 406)• Brent age oil discovered 1971, close to Yme Field• In 2009,17/12-4 and its sidetracks wells appraised
this discovery, testing 2,516 boepd• Operated by BG, Premier equity 20%• Estimated reserves 39-50-63 mmboe• Plan of development under review
Gardrofa (PL407)• Premier’s first operated licence in Norway• Premier equity 40%• Untested trap flanking a Salt dome feature• Estimated reserves 15-70-115 mmboe• Moderate risk for oil• Well planned for August 2010
9/1-1 Gardrofa Prospect Well Location
Success at Gardrofa will lead to a new core area for Premier in Norway
25th March 2010 | Page 32
Exploration – Norway – Grosbeak, Gnatcatcher
Gnatcatcher/Grosbeak (PL 378)• Premier 20% equity (non-operated)• Successful Grosbeak well completed in July 2009
– Close to nearby infrastructure– Oil in Middle Jurassic sandstones– Estimated reserves 30-90-170 mmboe
• Gnatcatcher resource estimate 31-40-60 mmboe• Moderate to high risk for oil• Q3 2010 Gnatcatcher exploration well and Q4 2010
Grosbeak appraisalGnatcatcher
SW NE
25th March 2010 | Page 33
Exploration – Indonesia – Tuna
Singa / Kuda Laut Cacing Laut Gajah Laut Utara
Tuna PSC• Premier 65% equity• Target equity pre-drill 40%• Numerous drillable prospects being defined on 3D• Reserves estimate 30-100-200 mmboe, per
prospect• Moderate risk for oil and gas• 2 wells planned for Q3 / Q4 2010
25th March 2010 | Page 34
South Darag• Premier 100%, subject to government approvals• Located in the Gulf of Suez rift basin, close to
existing production facilities• Three year initial term• Planned exploration drilling in 2013• Block wide resource potential: 50-250 mmboe• Three leads identified with 30-100 mmbo potential• Moderate risk for oil
SW
New Business/Exploration – Egypt – South Darag
NE
25th March 2010 | Page 35
North Sea• UK: Four exploration wells planned including
appraisal of Moth and testing of the deeperTriassic Lacewing prospect
• Norway: Drilling dependent on 2010 results
SE Asia• Vietnam: Block 07/03 - CRD Appraisal and an
additional exploration well• Vietnam: 104-109/5 - Commitment well• Indonesia: Near field exploration wells in
Natuna A and NSBA, further drilling on Tuna
Middle East Pakistan• Pakistan: One near field exploration well
West Africa• Congo: Contingent well on the Ida prospect
New ventures• Actively pursuing new opportunities for 2011 drilling
Exploration – 2011 Outlook
12 Exploration & appraisal wells are planned,targeting net 250 mmboe of unrisked resource potential
Firm wellsContingent wells
25th March 2010 | Page 37
Delivering against strategy
Progress
• Chim Sao and Gajah Baru on schedule for 2011
• Froy, Bream, Bugle progress towards development sanction in 2010
• Added 29 mmboe. Up to 11 exploration and appraisal wells over next nine months targeting 330 mmboe
• Oilexco and Block 12 (Vietnam) successfully integrated; non-core asset sales underway
• Investment programme fully funded; acquisition capacity
Strategy
• Attain 75 kboepd from existing projects
• Commercialise contingent resource base
• Add 200 mmboe of2P reserves from the exploration portfolio
• Make value-adding acquisitions in threecore areas
• Maintain a conservative balance sheet
Production2005-2009 (kboepd)
Target
• Build three quality businesses which deliver 100 kboepdfrom 400 mmbbls of reserves
Operating Cashflow2005-2009 ($million)
2P Reserves2005-2009 (mmboe)
Acquisitions 2005-2009Oil price ($/bbl)
25th March 2010 | Page 38
Road map
End 2012
• Run-rate production of 75 kboepd with related cash flow expansion
• Follow-on portfolio of development projects to add 10-15 kboepd
• Significantly increased reserve base
• Fully evaluated Nam Con Son basin opportunity
• Replenished exploration portfolio in new areas of existing geological knowledge
• Three quality growing businesses
End 2010
• Stable production from established assets
• Development drilling commenced on key projects in Indonesia and Vietnam
• New project approvals
• Twelve well exploration programme completed
• 10-20 prospects brought to drillable status for 2011 / 2012 programme
We expect to make further acquisitions in our core areas
25th March 2010 | Page 40
End 2009 2P reserves and contingent resources
468.152.4252.6163.1Total Reserves & Contingent Resources
2C Contingent Resources
2P Reserves
48.35.30.043.0Development pending
74.10.035.338.7Un-clarified oron hold
90.60.061.029.6Development not currently viable
213.05.396.3111.3Total Contingent Resources
47.1
0.0
25.3
21.8
MEP
156.3
42.3
80.6
33.4
Asia
255.251.8Total Reserves
54.912.7Justified for development
105.80.0Approved for development
94.439.1On production
TotalNorth Sea/W Africa
These figures do not include prospective resources
25th March 2010 | Page 41
Exploration – Indonesia – Buton
meters
‘B’
Buton PSC• Premier equity 30%• Japex operator• Lead B reserve estimates 35-100-300 mmboe• High risk for oil, in fold belt theme• Prospect maturation ongoing• Drilling planned Q4 2010 / Q1 2011
Lead BNW SE
0 5000
25th March 2010 | Page 42
Exploration – UK – Catcher
2 Km
Catcher (P1430)• Premier equity 50%, target equity 35% pre-drill• Encore operator• Reserves estimates 18-25-33 mmboe• High risk for oil• Drilling planned April 2010
CatcherWTop Cromarty depth Map E
Balder
Chalk
Top Cromarty
Phase Change
2 Km
Blocks28/9 & 10c