August 2010 Interims Presentation 260810 final · This presentation may contain forward-looking...

2010 Half Yearly Results Presentation 26 August 2010

26 August 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.


Agenda

Progress against strategy Simon Lockett

Financial results Tony Durrant

Exploration update Andrew Lodge

Operations update Neil Hawkings

Summary Simon Lockett


Gajah BaruWellhead platform jacketbuilt and in place

Progress towards 75,000 boepd

Chim SáoDevelopment drilling under way

HuntingtonField developmentplan submitted


Delivering Asian projects to meet growing demand


Progress on the portfolio of development projects

BreamEvaluatingtenderresponses

DuaConcept selectioncompleted

FrøyTender process under way

SolanProject sanction by end 2010

Pelikan,NagaConceptselectioncompleted

NorthSumatraBlock AProgresstowardsPSCextension


Progress towards 200mmboe of discoveries

Catcher Main andCatcher East60-100mmboe (gross)

Blåbaer15-75mmbo (gross)

Catcher Exploration>150 mmboe (gross) potential remaining


Progress on acquisition / new ventures

West Orkney Basin, Solan & 15/26c South Darag


Half yearly financial results


Production and pricing

Working Interest Production (kboepd)

Entitlement Interest Production (kboepd)

Realised oil price ($/bbl)

Realised gas price ($/mcf)

6 months to30 Jun 2009


39.7

37.0

53.0

5.0

46.6

42.6

78.1

5.8 Average gas pricing ($/mcf)H1 2010 H1 2009

Singapore 13.8 8.9Pakistan 3.3 3.7

Average Brent oil price was $77.3/bbl (H1 2009: $52.0/bbl)

Highlights

30

0

5

10

20

25

Jan 05

15

Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10 Jul 10

Commodity price comparison$/mmbtu

Henry HubWest Natuna

Full-year 2010 guidance unchanged at around44,000 boepd


Income statement

Sales and other operating revenuesCost of salesGross profitExcess of fair value over purchase considerationExploration/New BusinessGeneral and administration costsOperating profit Financial ItemsProfit before taxationTaxationProfit/(loss) after tax



$m213

(116)97

6(25)

(7)71

(52)19

(46)(27)

$m367

(189)178

-(46)

(8)124(12)112(50)

62

Operating costs per barrel ($/bbl)H1 2010 FY 2009

UK $24.7 $23.2Indonesia $7.1 $10.0Pakistan $1.6 $1.9Group $12.9 $12.2

Includes $20.5 million credit from mark to market revaluation of hedges

Estimated UK tax allowances/losses of $1.05billion outstanding at 30 June 2010

Prior year comparatives are restated for acquisition fair value adjustments made in the 2009 year-end accounts


Cash flow

Cash flow from operations

Taxation

Operating cash flow

Capital expenditure

(Acquisitions)/disposals

Finance charges

Pre-licence expenditure

Net cash flow


$m

H1 2010 H1 2009

Development

Exploration

Estimated Capex split ($m)


$m

69

42

111

142

70

212

Operatingcash flow Capex

Asia

MEP

Estimated H1 2010Regional split ($m)

118

14

80

49

29

144North Sea

212222

142

(29)

113

(111)

(511)

(18)

(7)

(534)

273

(51)

222

(212)

20

(27)

(11)

(8)


Net debt and financial strength

6 months toJune 2010

$m

(316)

(8)

(12)

(336)

Movement in net debt

Opening net debt

Net cash out flow

Purchase of shares

Closing net debt*

Current outlook• Cash $449 million, undrawn facilities $404 million• Forecast 2010 full year spend of $430 million (development) and $170 million (exploration)• At current prices net debt is expected to peak at around $700 million in mid-2011

* Excludes $65m of cash in escrow for abandonment obligations

At 30 Jun 2010

$m

449

(569)

(216)

(336)

Balance sheet

Cash and cash equivalents*

Bank borrowings

Convertible loan

Net debt*


Exploration update


Year to date exploration highlights

Exploration and appraisal drilling• Nine wells drilled, four successful• Discoveries at Catcher, Catcher East

and Blåbaer• Net estimated resource additions

>30mmbo

New ventures• New acreage awarded in West Orkney,

UK and South Darag, Egypt• 11 applications in the UK 26th

Licensing Round• Farmed into UK Block 15/26c (West

Rochelle)

200

100

50

02010 2011

150

2012 2013 2014

250Target cumulative risked additionsActual cumulative risked additions

Global exploration:Forecast resource additions (mmboe)

2009


Exploration – UK – Oates

Oates (P1620)• Premier 50% equity and operator• Well plugged and abandoned • Pre-drill risk was trap integrity• Post-drill analysis ongoing

– Focus on cause of amplitude response– Lessons learned will be captured and applied– Post drill analysis will be completed within 60 days of P&A

Oates

Bowers

Forties Isopach Map

OatesNW SE

Amplitude Bloom on Far Stacks

Oates


Exploration – UK – Catcher

Catcher (P1430)• Premier equity 35%• 30° API oil discovery in high quality sands• Catcher Main and Catcher East discoveries• Catcher Main appraised by Catcher SW• Gross reserve estimate: 60-85-100 mmbo

WCatcher Main Catcher East

VaraderoProspect

W E

2 KmDepth Map on Top Reservoir

Catcher Main

Catcher NorthProspect

Catcher East

1 Km

Catcher

26 August 2010 | Page 1726 August 2010 | Page 17

UK 28/9 (P1430)• Premier equity 35%• Overall block potential >300 mmbo recoverable• Low risk, seismic amplitude support• Three exploration wells are planned Q4 2010

Exploration – UK – 28/9 exploration potential

CatcherEast

Rapide

Cougar

Carnaby65mmbo

Bonneville

Burgman45 mmbo

Catcher - Main

CatcherNorth

Varadero40 mmbo

Eocene – Tay Amplitudes

Catcher - MainDiscovery

Carnaby

Catcher North

Varadero

Burgman

CatcherEast


Exploration outlook

Firm Wells:Rig Contracted

Firm Wells:Rig TBC

Contingent Wells

SeismicProgramme

All well timings aresubject to revision for operational reasons

Unrisked net potential new barrels over next 12 months of 300 mmboe

Anoa DeepNatuna Sea Block A

Exploration well

AppraisalBhit/Badhra

Q2

K25, K18ST, K28KadanwariPakistan

Middle East - Pakistan

BentengButon

Exploration well

West RochelleP1298

2010

BluebellP1466

Q1

CRD Appraisal

Q42011

CatcherP1430UKGrosbeak AppraisalPL378

GnatcatcherPL378

GardrofaPL406 (8/3)Norway

North SeaBiaawak Besar

Belut Laut

Gajah Laut UtaraTunaIndonesia

Seismic104/109-05

Seismic07/03VietnamQ3Q3Asia

Ocean General

Ocean General

Songa Delta

Songa Delta

2010 full year expenditure $170million pre-tax

Geowave Voyager

Viking II

West Callisto

West Callisto

Weatherford 812

Transocean Prospect


Exploration – UK – West Rochelle

West Rochelle (P1298 & P1615)• Premier equity 50% P1298 (15/26b), 25% P1615 (15/26c)• Farmed into 15/26c to test western extension of the Rochelle

discovery along the Kopervik pinchout margin• Potential gross reserves: 15-25-30 mmboe• Well spudding – end August 2010

RochelleP1298 (15/26b)

P1615 (15/26c)

West Rochelle well

West Rochelle

West RochelleS N

Plenus Marl

Top KopervikBase Kopervik

Top Chalk

Andrew Sst

Lista

BCU

Base Zechstein


Exploration – Norway – Grosbeak, Gnatcatcher

Gnatcatcher/Grosbeak (PL378)• Premier 20% equity (non-operated)• Successful Grosbeak well completed in July 2009

– Close to nearby infrastructure– Oil in Middle Jurassic sandstones– Estimated reserves 35-80-190 mmboe

• Gnatcatcher resource estimate 31-40-60 mmboe• Moderate to high risk for oil• Q4 2010 Gnatcatcher exploration well and Q1 2011

Grosbeak appraisalGnatcatcher

SW NE


Appraisal – Vietnam – Block 07/03 – Cá Rồng Đỏ

Cá Rồng Đỏ• Premier 30% equity, reserves estimate 10-60-80 mmbo

gross resource• Appraisal well planned for Q1 2011

CRV

NW

CRD / CRD North EastCRD Discovery

SE

Anomalies associatedwith Hydrocarbons

Anomalies associatedwith Hydrocarbons?

Gas above CRD


Exploration – Vietnam – Block 07/03

2011 exploration well (Block 07/03)• Premier 30% equity• Two potential drilling candidates

identified on existing 3D, new 3D dataset available in Q1 2011

• Reserves estimate 10-45-70 mmbo• Targeting multiple stacked Tertiary

reservoirs; moderate risk for oil • One exploration well planned for

Q3 2011


Exploration – Indonesia – Tuna – Belut Laut

Belut Laut (Tuna PSC)• Premier 65% equity, reserves estimate 40-90-200 mmboe• Targeting multiple stacked Tertiary reservoirs in fault dependent

closure – prospect is independent of Gajah Laut Utara• Amplitude supported• Moderate risk for oil • Well planned for Q1 2011

PTD

Top Arang DepthC.I.=100 metres

2500m

Belut Laut

2 Km

PRIMARYTARGET

SE

SECONDARYTARGET

Belut LautPTD 4300m MD (3870m TVD)

NW


Exploration – Indonesia – Tuna – Gajah Laut Utara

Gajah Laut Utara (Tuna PSC)• Premier 65% equity, reserves estimate 65-160-350 mmboe• Targeting multiple stacked Tertiary reservoirs in major fault

dependent closure • Amplitude supported at crest of trap• Moderate risk for oil • Well planned for Q4 2010


2500m

2 Km

PRIMARYTARGET

W E

SECONDARYTARGET

PTD

Gajah Laut UtaraPTD 4250m MD (3550m TVD)

Gajah Laut Utara


Exploration – Indonesia – Natuna – Anoa Deep

Anoa Deep (WL-5 extension) (Natuna PSC)• Premier 28% equity, reserves estimate 47-57-90 bcf• Targeting Lama Formation reservoirs in faulted structural closures

directly underlying the West Lobe platform on Anoa field. Lama Formation produces oil and gas in nearby Kakap field

• Moderate risk for gas• Well planned for Q2 2011

Top Lama

Top H

Top A

PTD

Top Lama DepthC.I.=50 feet

5000m

1400 acre

Lowest Closing Contour

WL5

PRIMARYTARGET

SE

SECONDARYTARGET

Anoa Deep

NW

5 Km


Exploration – Indonesia – Natuna – Biawak Besar

Biawak Besar (Natuna PSC)• Premier 28% equity, reserves estimate 66-79-92 bcf• Targeting Arang formation reservoirs in a stratigraphic trap off

structure from the Iguana gas discovery. Seismic attribute analysis and 3D inversion supports presence of gas

• Play opening well – low risk for gas• Well planned for Q3 2011

PTD3D Seismic Inversion

indicating gas pay


2000m

Iguana Discovery

Biawak Besar-1

Bison Iguana Biawak Besar

PRIMARYTARGET

500m

SENW


North Sea• UK: Up to four wells planned in greater Catcher

area and a well on West Rochelle• Norway: Gnatcatcher exploration and Grosbeak

appraisal wells. Gardrofa exploration well planned for Q3 2011

SE Asia• Vietnam: Block 07/03 - CRD appraisal and an

additional exploration well. Commitment well on Block 104-109/5

• Indonesia: Two Tuna wells and near field exploration wells in Natuna A. Exploration well on Buton

Middle East-Pakistan• Pakistan: Near field exploration wells

New Ventures• Actively pursuing new opportunities for 2012-2014

drilling

Exploration – Outlook

18-22 exploration and appraisal wells planned over next 12 months

Firm wellsContingent wells


Operations update


Operations highlights

• 2010 production on track• Gajah Baru 64% complete and

WHP jacket installed• Chim Sáo 73% complete and

WHP installed• Good progress on Huntington• Catcher added to development

portfolio


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

H1 2010

• Full year production forecast around 44,000 boepd

• Singapore gas demand strong

• Pakistan production strong and negligible impact from floods

• Burghley field will tie-in to Balmoral in September reducing operating costs


Natuna Block A gas sales forecast

450

Block A gas sales forecastBBtud

400

0

350

ExplorationpotentialIguanaNagaGajah BaruBisonGajah PuteriPelikanAnoaExport capacityGSA2/3/4GSA1

300

50

100

200

250

2006

150

2008

2010

2012

2014

2016

2018

2020

2007

2009

2011

2013

2015

2017

2019

2021

Dou

ble

prod

uctio

n ov

er 3

yea

rs Explorationto increaseproduction

Extra availableexport capacity

Block A development schematic


• Wellhead platform installation is ongoing• West Callisto rig will start drilling in September• Central Processing Platform construction well under way• Overall project 64% complete

Gajah Baru – on schedule for October 2011

Pics of WHP and CPP jackets and topsideses requested by 23rd Aug

from Bryce Walker:

“No problem Mary. FYI the GB wellhead jacket is due to load out on 8 August so we will definitely have

photos of that but the deck is not due to load out until 28 August.

Regarding installation, based upon the Castoro Otto finishing up on or ahead of schedule on the Topaz

work the jacket installation could be done in late August. Again if that happens we’ll have photos and a

movie. “


• WHP jacket and topsides installed• ENSCO 107 currently drilling

development wells • Gas export pipeline laid and tie-in

under way• FPSO mooring and mid-water

arches installed• FPSO conversion on track• Premier equity 53.125%

Chim Sáo – on schedule for first oil in July 2011


Huntington – on schedule for 2012

• Letter of Intent signed with Sevan for provision of Voyageur FPSO• Field development plan submitted to DECC• Target date for project sanction 1 October 2010• Long-lead items being purchased• Rig bids have been received• Earliest possible first oil is late 2011


North Sumatra Block A (Indonesia)• PSC extension approval process remains ongoing• Optimisation of development plan has continued• First gas 2013

Asia developments

Dua• Internal concept selection complete

Cá Rồng Đỏ• 2009 discovery • Development studies will commence after

upcoming appraisal well


Norway developments

Frøy• Tenders received for production facilities• Leading option is a Sevan FPSO

bridge-linked to a wellhead platform• Impact of nearby exploration wells being assessed

Bream• Evaluating responses to ITT for production unit

Grosbeak and Blåbær• 2009/2010 discoveries• Development studies will commence after

upcoming appraisal and exploration wells


UK developments

Catcher• Preliminary studies will commence later this

year leading to concept selection in 2011• Multiple stand-alone facilities options exist

– Fixed platform– FPSO

Solan• Option to participate in a 45 mmbbls fast track

(2012) development at 40% equity• Project sanction decision scheduled for year-end

CatcherOther possible UK developments• Scott satellites• Caledonia• Ptarmigan• Moth


A path to 100,000 boepd

120

Production(kboepd net)

40

20

0

60

80

100

Development capex($m)

2010 2011 20142012 2013 2015

Future Asia developmentsFuture Norway developmentsFuture UK developmentsHuntingtonChim Sáo, Gajah BaruOn production

600

200

100

0

300

400

500

2010 2011 20142012 2013 2015

Future Asia developmentsFuture Norway developmentsFuture UK developmentsHuntingtonChim Sáo, Gajah BaruOn production


Summary


Summary: delivering against strategy

Progress

• Chim Sáo and Gajah Baru on schedule for 2011, Huntington for 2012.

• Solan, Frøy, Bream, Duaprogressing towards development sanction in 2011.

• Blåbaer and Catcher successes in 2010. Active second half drilling programme.

• Solan option. Value to be found in financing smaller companies through development and will be pursued.

• Committed 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

Target

• Build three quality businesses which deliver 100 kboepdfrom 400 mmbbls of reserves

Production by region H1 2010(kboepd)

15.220.1

11.3

46.6

North Sea / West AfricaAsiaMiddle East-Pakistan

Cashflow by region H1 2010($million)

49

29

144222


Appendix


HSE performance – a top priority

• Recordable Incident Rate trend is downwards

• Performance is top quartile in the industry• Challenge for staff is to sustain this

performance

• TRIF = Lost Time Injury (LTI) + Reduced Work Day Case (RWDC) + Medical Treatment Case (MTC) frequency per million man-hours

• There was 1 LTI and 0 RWDC incidents in 2008• There were 2 LTI and 0 RWDC incidents in 2009

• Association of Oil and Gas Producers Benchmarking Survey, 2009

6

Total recordable injury frequency (TRIF)

5

4

3

2

1

02003 2004 2005 2006 2007 2008 2009

Premier TRIF

12

Total recordable injury ratePer million hours worked by company with contractors

11

9

10

8

7

6

5

4

3

2

1

0

Top Quartile


Strike Line

P1181 Lacewing Prospect • Equity: Premier 57%• Reservoir: Triassic• Reserves range: 21-71-135 mmboe• Net well cost: $35 million• Plan to drill Q3/Q4 2011 subject to further peer review

Exploration – UK – Lacewing

Lacewing 23/22b-4

Lacewing


P1466 Bluebell Prospect (15/24c,15/25f)• Equity: Premier 100%• Reservoir: Palaeocene Forties reservoir• Reserves range: 9 -19 - 31 mmboe• Net well cost: $12.5 million• Well spud date: has to be drilled by March 2011• Valuable tieback opportunity for Brenda/Balmoral – could help

unlock Ptarmigan discovery

Exploration – UK – P1466 Bluebell

Top Forties Depth SS, CI=5 m

Top Forties Lambda Rho Extraction

Top Forties Lambda Rho Extraction Near Offset

Lamda Rho, HC Indicator

Bluebell

Bluebell

Bluebell Well Location

Bluebell Site Survey

Bluebell


Exploration – UK – West Orkney Basin

P1577: West Orkney Basin• Premier 100%• 1,700 km2 acreage covering West Orkney Basin depo-centres• Shallow water, low cost environment• Frontier Rift Basin exploration opportunity• Target is Pre-rift Devonian system preserved in Mesozoic rifts

• Petroleum system proven - exhumed oil accumulations on Orkney• Key uncertainty is presence and preservation of traps• Material unrisked play potential, presently high risk

• Work programme commensurate with risk reduction• 6 year concession with a drill or drop option• Purchase 6,000 km of existing 2D data• Reprocess selected lines

• Go Forward plans• Firm: Purchase, reprocess and interpret data 2010/2011• Optional: Acquire 3D seismic data 2012 and Drill 2013• PhD studentship starting September 2010

A’A

Orkney Islands;Inverted Devonianbasins, withBreached oilfields

Metamorphic highs; exposed at seabed

Half grabens with possible Devonian source and reservoirs and proven Zechstein seal

Terraces with probable Devonian source and reservoirs and probable Zechstein seal

West Orkney Basin Structure Top Devonian

Orkney Isles

Half grabens with Pre-rift section: Potenential for Devonian source and reservoirs plus Zechstein seal


Exploration – Norway – Bream, Gardrofa

Bream (PL406)• 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 third quarter 2011

9/1-1 Gardrofa Prospect Well Location

Success at Gardrofa will lead to a new core area for Premier in Norway


Blåbaer

Blåbaer (PL374)• Premier 15% equity, operated by BG• Well 34/5-1 proved 65m of gross oil bearing Cook

Formation• The 34/5-1 Sidetrack, drilled into a separate fault

block was dry• The gross resource range remains within the

15mmbo to 75mmbo predicted pre-drill• A decision on the future delineation of the

discovery is subject to ongoing evaluation

Exploration – Norway – Blåbaer

C.I. 10m

Sidetrack

2 Km2 Km


Exploration – Vietnam – Block 104-109/05

2011 Exploration Well (Block 104-109/05)• Premier 50% equity• 445km² of 3D acquired Q3 2010• Potential drilling candidates to be matured on

new 3D• Reserves estimates to be determined• Targeting multiple stacked Tertiary reservoirs • High risk for oil • 1 Exploration well planned for Q3 2011

Area of acquired 3D coverage

W NE Leads E

Faulted Structuresto be imaged by 3D


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• Benteng prospect first to be drilled• Drilling planned Q1 2011

BentengNW SE

0 5000


K28

2010/2011 drilling in Pakistan

SW NE

E-Sand

K25 Compartment:• Premier 15.79% equity• Reserves estimate

1-2-4 mmboe• Targeting E-sand reservoir in

step-out compartment north of K-19 producing compartment

• Lateral seal risk on the northern plunge

• Well spudded on 2nd August 2010

K18

K18

ST

K18ST Compartment:• Premier 15.79% equity• Reserves estimate

0.5-2-5 mmboe• Targeting E-sand reservoir in

adjacent step-out compartment east of K-18 depleted compartment

• Moderate fault seal risk present

• Well planned in Q4 2010

K28 Compartment:• Premier 15.79% equity• Reserves estimate

9 mmboe• Targeting E-sand

reservoir in step-out compartment south of K10 block

• Moderate fault seal risk present

• Well planned in 2Q 2011

Badhra Area-B Appraisal well:• Premier 6% equity; Reserves

estimate 22 mmboe• Targeting Mughalkot reservoir

channel sands• Moderate to high reservoir

presence and quality risk • Reprocessing is ongoing to

improve image to mitigate reservoir risk

• Well is contingent upon reprocessing results

• Well planned in Q2 2011

K25

SW NE

E-Sand

K18ST

SW NE

E-Sand

Badhra Area-A

Badhra Area-B

26 August 2010 | Page 51www.premier-oil.com 26 August 2010

August 2010 Interims Presentation 260810 final · This presentation may contain forward-looking...

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