INVESTOR PRESENTATION //

Transcription

1 INVESTOR PRESENTATION // June 2013

2 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. June 2013 // Page 1

3 INTRODUCTION TO PREMIER //

4 Our business model Growing the underlying value of the business NAV/share CAGR >10% Deliver high quality, high return developments Chim Sáo, Huntington, Catcher, Bream, Sea Lion FPSOs West Natuna, North Sumatra Asian gas position Acquire in our core areas, existing fields, future developments Disposal of non-operated/non-core assets Drill play-opening wells and high impact prospects Disciplined spend Maintain balance sheet strength and good liquidity Initial dividend payable June 2013 Grow cash flow substantially Underlying production growth to 100 kboepd and beyond June 2013 // Page 3

5 Five year track record Premier has generated impressive growth in all key metrics Five year NAV/share CAGR at >15% at constant oil prices June 2013 // Page 4

6 Independent valuations 2P + Sea Lion independent valuations at 10% discount rate At $85/bbl, $6.5 billion ~ 6/share At $105/bbl, $9.8 billion ~ 10/share Excludes other contingent discoveries and exploration June 2013 // Page 5

7 Fully funded programme Funding outlook Significant growth in cash flow $2 billion pa post-catcher* $2.5 billion pa post-sea Lion* Surplus cash flows * before discretionary exploration spend Gearing position unchanged through to Sea Lion first oil at $85/bbl Forward profile funded by cash flow and facilities down to $65/bbl Development capex (US$ million) Standby Funding Sea Lion Premier * Assumes US$100/bbl June 2013 // Page 6

8 Outlook Growing production Quality execution of development projects Increasingly material and higher impact exploration Continuing portfolio management Strong growth in cash flow generation Commenced cash returns to shareholders Rapidly rising production and cash flow (kboepd) A continued focus on growing the underlying NAV/share Catcher Sea Lion June 2013 // Page 7

9 BUSINESS UNITS ANALYSIS //

10 Falkland Islands Deliver the 300 mmboe Sea Lion project Exploit the remaining exploration potential in the basin Acquired 60% interest in Rockhopper s assets for $231 million cash and $770 million carry Sea Lion Concept selection mid-2013 Project sanction mid-2014 Generates IRR of >20% at $85/bbl oil Substantial exploration upside Up to 3 well progamme with mmboe resource potential Attractive fiscal regime with an effective tax rate of 32.6% June 2013 // Page 9

11 UK Production and development Run rate of 25 kboepd once Huntington ramped up and Rochelle onstream Run rate >50 kboepd once Solan and Catcher on-stream 1st phase of Solan development drilling commenced Catcher development concept agreed; first oil timing dependent on FPSO tender process Disproportionate increase in cash flows due to UK tax position Exploration Success at Bonneville on the Catcher licence Lacewing, Premier s first HPHT well, drilling Full suite of operated exploration, development and production assets Next generation of UK development projects will drive continuing growth * Assumes 4Q 2016 for Catcher June 2013 // Page 10

12 Norway Focus on developments which meet internal metrics Pursue high impact exploration Actively manage portfolio Blåbaer Grosbeak; Skarfjell extension Increased equity in Bream to 40% Project sanction early 2014 First oil 2017; initial production run rate of 35 kbopd Commercial discussions to develop a central processing hub continue at Frøy Non operated discoveries under review Significant oil discovery at Luno II Mature leads and prospects on Mandal High for drilling Myrhauk prospect targeted for 2014 drilling Frøy Luno II Mandal High Bream June 2013 // Page 11

13 Vietnam Optimise production from Chim Sáo and Dua oil fields Drill potentially play opening Ca Voi well Chim Sáo produced 15.1 kboepd Jan to April 2013 Addressing power issues which could lead to greater deliverability Dua on track for first oil in 2014 Production and pigging flow lines laid in 1Q 2013 ahead of future tie in to Chim Sáo FPSO Forecast average gross production rate of 8-10 kbopd in the first 12 months High impact Ca Voi well planned for June Silver Sillago and CRD appraisal planned for 2H 2013 Dua pipe lay February 2013 June 2013 // Page 12

14 Indonesia Build on existing strong share of the Singapore gas market through development and ongoing exploration activity Jan to April 2013 production from Natuna Sea Block A averaged 12.3 kboepd Total sales capacity increasing with Anoa Phase 4, Pelikan and Naga expected onstream 2013/2014 Rising market share offsets impact of LNG in Singapore Block A Aceh project sanction expected by year-end Capex estimate of ~$650mm Matang success adds resources Kuda Laut and side track to Singa Laut prospect planned for 2H 2013 Follow up on Anoa Deep discovery Gross accessible prospective resource ~2 TCF Anoa phase 4 Construction of Pelikan/Naga jackets June 2013 // Page 13

15 Pakistan High returns, low reinvestment cash cow Pakistan achieved production of 15.9 kboepd over the first four months of 2012 Exploration success at K-32 in Q1 2013, to be tied in before year-end Further potential to be tested June 2013 // Page 14

16 EXPLORATION //

17 Transforming the exploration portfolio APA 2012 and Brazil 11 th Round awards added in 2013 Transforming the exploration portfolio, adding higher impact plays with significant follow on potential All four exploration wells drilled year-to-date successful Luno II, Matang, Bonneville & K-32 Successful testing of Luno II & Matang Lacewing drilling; Ca Voi to spud shortly June 2013 // Page 16

18 2013 exploration drilling programme Asia Vietnam Block 121 Ca Voi Block 07/03 Ca Duc Tuna Block Kuda Laut & Singa Laut North Sea UK P1181 Lacewing Rest of World Kadanwari K-36 Pakistan Badhra South Deepening-1 Badhra-Bhit Badhra BN-2 Kenya Contingent well Mauritania Tapendar Q2 Q3 Q4 Ocean General Ocean General Ocean General Maersk Resiliant Weatherford 812 SLB Rig-23 SLB Rig-23 All well timings are subject to revision for operational reasons Firm Wells: Rig Contracted Firm Wells: Rig TBC Contingent Wells Four upcoming high impact wells targeting ~125 mmboe of net unrisked prospective resources Wells to watch June 2013 // Page 17

19 2013 North Sea exploration Bonneville discoveries 30 million barrels of STOOIP confirmed Luno II discovery Success on the south west margin of the Utsira high Flow rate of 2,044 bpd achieved on test Lacewing (1H 2013) HPHT Triassic test; learnings will be applied to UK and Norway Gross prospective resource: mmboe Critical risks: trap effectiveness and reservoir quality Well currently drilling; results expected in July Inner Moray Firth Bonneville Grosbeak; Skarfjell extension Quad 16 Mesozoic Luno II Lacewing Mandal High Greater Catcher Area June 2013 // Page 18 Lacewing

20 Luno II significant oil discovery 1Q 2013 Luno II significant oil discovery Success on the south west margin of the Utsira high Tested >2,000 bpd of good quality oil (36 API) Luno II South discovery: mmboe gross resource Luno II North prospect: mmboe gross prospective resource Appraisal well expected Q Luno/Apollo PL km Ragnarrock Luno II discovery Johan Sverdrup BCU Time Map C.I. 100 ms Luno II core sampling June 2013 // Page 19

21 2013 play-opening well Ca Voi First test of the Oligocene play in the Phu Khanh Basin; well planned for June 2013 Gross prospective resource: mmboe A successful Whale (Ca Voi) well de-risks multiple leads Unexplored intra-basinal highs in the deep water part of Block 121 Block resource potential >1 bnboe NW 121-CV-1X SW Block 121 Prospects and Leads 121-CV-1 Proposed Surface Location Basin Edge Leads Swordfish Whale & East Whale Deep Water Leads Area 25km June 2013 // Page 20

22 2013 Nam Con Son programme Silver Sillago (Ca Duc) (2H 2013) Analogous to Chim Sao Critical risk: fault seal Gross prospective resource: mmboe Kuda/Singa Laut (2H 2013) Faulted dip closed structure up dip from a proven source kitchen to the east Low risk for gas, high risk for commercial oil Gross prospective resource: mmboe NW Kuda Laut Singa Laut Belut Laut-1 TD 4977m Gajah Laut Utara-1 TD 4687m NW Top Basement SE Ca Duc 2km Top NCS MMU Dua Top Cau SE MMU L.Terumbu Depth of Top Oligocene in Gajah Laut Utara Arang Gabus June 2013 // Page 21

23 Kenya exploration (2013/14) High impact opportunities Kenya (L10A & L10B) Oil (Miocene carbonate) play in the West, deeper Cretaceous sandstone (gas?) play in the East 3D seismic over inboard play being interpreted Upcoming drilling in 2014, possibly late 2013 Gross prospective resource: ~1bn boe Partners are BG (operator) and PanContinental SW Tembo Trough NE W Block L10B Kiboko Prospect, Block L11B E Sunbird prospect Turaco prospect Babbler prospect Inboard Reef Play Green arrows highlight potential hydrocarbon migration routes from underlying Tertiary source rocks to Miocene reef reservoirs 4 km Outboard Plays 10 km June 2013 // Page 22

24 Lama play (2014/15) Anoa Deep ~300 feet of fractured Lama Sandstones within the Anoa field bcf total gas in place Significant follow-on potential Gross accessible prospective resource: ~2TCF Exploration drilling in 2014 and 2015 Lama Prospects and Leads June 2013 // Page 23

25 Mandal High (2014/15) Shares similar characteristics to that of the Utsira High in 2008 Proven Kitchen to west of High Proven Jurassic sands to east of High Hydrocarbons proven in basement Myrhauk prospect is targeted for drilling in 2014 Gross resource potential mmboe Mandal High Premier has access to ~ 200 mmbo of net prospective resources on and around the Mandal High June 2013 // Page 24

26 Falkland Islands exploration (2014/15) Defined lead and prospect inventory 3 exploration wells planned Play opening wells below Sea Lion sands & in up-dip east flank sands mmboe total gross resource potential in multiple stacked targets Casper South Discovery Beverly Discovery Fan 3 Fan 1 Fan 5 Fan 2 Fan 4 Fan 1 Fan 2 Fan 3 June 2013 // Page 25

27 Brazil Exploration new country entry Premier awarded 3 blocks in Brazil s 11 th Round Under-explored, but proven deep water basins offshore NE Brazil Plays targeted are above and within Cretaceous Rift basins Prospect and leads each capable of delivering > 250 mmbbl 5 year exploration periods 3D seismic acquisition planned for 2014/2015 in each block Commitment to 3 exploration wells 1 in Block FZA-M-90 2 in Block CE-M-717 June 2013 // Page 26

28 Brazil Foz Do Amazonas Block 90 Premier 35% Proven Cretaceous play on-lapping a rift basin high 1 bn bbl prospective resource potential in 3 leads 3D required to validate trap extent and mature lead inventory 3D planned in 2014/ commitment exploration well FZA-M-90 Top Rift / Base Drift June 2013 // Page 27

29 Brazil Ceará Basin Block CE-M-717 Premier 50% (Op) Proven Cretaceous Rift Play Up dip extension of an Early Cretaceous syn-rift discovery 250 mmbbl prospective resource potential; key risk is reservoir quality Upper Cretaceous on-lap play in SW of Block mmbbl prospective resource potential; 3D required to validate trap extent 3D acquisition and reprocessing planned in back-to-back exploration wells planned to test 2 independent plays SW CE-M-717 NE June 2013 // Page 28

30 Brazil Ceará Basin Block CE-M-665 Premier 50% (op) Cretaceous plays on-lapping a rift basin high Unrisked prospective resource: mmbbl 3D required to validate trap extent 3D in 2014/2015 (no well commitment) SW CE-M-665 NE R S 10km June 2013 // Page 29

31 Discoveries Exploration maturity curve Premier s portfolio FRONTIER EMERGENT EARLY MATURE MATURE UK Inner Moray Firth Nam Con Son Basin Block A Aceh Norway Utsira High (Luno II) UK CNS Natuna Sea Pakistan Norway Mandal High UK CNS (Deep/HPHT) Natuna Sea Lama Play Offshore Kenya Deepwater Mauritania Phu Khanh Basin Iraq (Block 12) Brazil (Foz do Amazonas Basin) Falklands (NFB) Brazil (Ceará Basin) Exploration Maturity / Wells Drilled Premier is replenishing the portfolio by entering frontier and emergent plays in rift and frontal fold belt geologies June 2013 // Page 30

32 KEY DEVELOPMENTS //

33 Key developments 1 to be booked at project sanction 2 Including FPSO lease costs Huntington UK CNS Solan W. of Shetland Catcher UK CNS Bream Area Norway Sea Lion Falkland Islands Premier equity 40% 60% 50% 40% 60% Operator No Yes Yes No Yes First Oil Reserves (2P) 27 mmboe 44 mmbbls 90 mmbbls 68 mmboe mmboe 1 Plateau production kboepd 24 kbopd kbopd kboepd kboepd Capex (gross field) $20/boe $20/bbl $18/bbl $19/boe $17/boe Opex (LOF) $34/boe 2 $19/bbl $32/bbl 2 $34/boe $26/boe June 2013 // Page 32

34 Solan project update Key milestones Full DECC and partner approvals received in April First oil targeted for Q4 2014; initial production run rate of 24 kbopd Capex ~$20/bbl Producers Injectors Subsurface and drilling Detailed reservoir studies ongoing; well planning complete Rig contracted Phase 1 April 2013: 2 injectors & producer upper hole sections Phase 2 April 2014: finish drilling 2 producers Solan well plan Solan reservoir cross section June 2013 // Page 33

35 Solan project update Platform and Subsea Platform fabrication commenced at Methil yard, Scotland Construction of subsea storage tank commenced in December in Dubai Heavy lift installation in Summer 2014 Contract for associated subsea flow-lines and control lines awarded Platform manned for first year only, thereafter monthly maintenance visits Operations support contract awarded Platform fabrication at Methil Subsea tank fabrication Solan development schematic June 2013 // Page 34

36 Catcher project update Key milestones JV formally agreed development concept in December 2012 Leased FPSO Subsea development of three fields Sanction targeted for end 2013 First oil modelled for 2H 2016, subject to FPSO proposals Subsurface and drilling Reservoir modelling being updated to optimise subsurface development and drilling plans Rig procurement process to commence shortly FPSO and subsea wells June 2013 // Page 35

37 Catcher project update FPSO and subsea Funded tender for the leased FPSO commenced in February with three FPSO providers Subsea FEED is underway 2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Now FPSO Bids Order Long Lead Items Project Sanction FPSO Funded Tender Process FPSO Evaluate Bids Finalise Contracts Subsea Drilling and Subsurface Select Gas OfftakeRoute Subsea Feed Optimise Subsurface Development Plan Tender Drilling Rig CATS / Fulmar Negotiations Tender Subsea EPCI Contract(s) JV Approval Process Approvals Prepare Environmental Statement Prepare DECC Field Dev. Plan DECC Approval Process June 2013 // Page 36

38 Sea Lion project update Key milestones Concept selection targeted for mid-2013 Project sanction targeted for mid-2014 First oil targeted for Q Subsurface and drilling Detailed static and dynamic reservoir modelling underway for Sea Lion Rig contracting strategy being developed and discussions with rig companies commenced Evaluating options and timing for satellites Planning logistics and base requirements for the development drilling campaign June 2013 // Page 37

39 Sea Lion project update FPSO and subsea FPSO market enquiries undertaken to assess options for conversions and new builds Technical studies ongoing, reviewing FPSO fatigue life, turret designs and offloading operability Technical reviews undertaken to study option of gas lift instead of HSPs Preliminary topsides designs being assessed Design studies underway to assess towed bundles as an alternative to conventional flowlines Evaluation of contractors for subsea FEED has commenced June 2013 // Page 38

40 End P reserves and contingent resources 2P Reserves Falkland Islands Indonesia Norway Pakistan & Mauritania UK Vietnam Total On production Approved for development Justified for development Total Reserves C Contingent Resources Development pending Development unclarified / on hold Development not currently viable Total Contingent Resources Total Reserves & Contingent Resources June 2013 // Page 39

41 2012 RESULTS //

42 Record profits Working Interest production (kboepd) Entitlement production (kboepd) Realised oil price (US$/bbl) - pre hedge Realised gas price (US$/mcf) - pre hedge 12 months to 31 Dec months to 31 Dec Highlights Operating costs (US$/bbl) UK Indonesia Pakistan Vietnam Group US$m US$m Sales and other operating revenues 1, Cost of sales (743) (415) Hedging Gross profit Exploration/New Business General and administration costs Operating profit Financial items Profit before taxation 666 (187) (24) 455 (95) (211) (26) 176 (34) 142 Net impact on 2012 of US$25 million post-tax 17% of 2013 production hedged at average equivalent of US$105/bbl Rolling forward sale programme for 2014 targeting US$110/bbl Tax charge/(credit) (108) 29 Profit after taxation June 2013 // Page 41

43 Rising cash flows Cash flow from operations Taxation Operating cash flow Capital expenditure Acquisitions/disposals, net Finance and other charges, net Pre-licence expenditure Net cash out flow 12 months to 31 Dec 2012 US$m 1,041 (233) 808 (772) (210) (163) (29) (366) 12 months to 31 Dec 2011 Capital expenditure split (US$m) US$m (44) 486 (661) (90) (50) (23) (338) Development Exploration 772 Five-year acquisition cost: US$6.6/bbl (including carries) Five-year development capex (new projects): US$14.3/bbl Five-year exploration/appraisal cost (post tax): US$5.4/bbl Acquisitions, development and finding costs 2013 Forecast of US$1 billion (development) and US$200 million (exploration) June 2013 // Page 42

44 Strong liquidity and balance sheet position 12 months to 31 Dec 2012 US$m 12 months to 31 Dec 2011 US$m Debt maturity profile (including Letters of Credit) Cash Bank debt (500) (484) Bonds (577) (341) Convertibles (220) 1 (228) Net debt position Gearing 2 (1,110) 36% (744) 36% Average debt costs of 4.6% (fixed) and 2.3% (floating) Facilities extended post year-end by US$150 million Cash and undrawn facilities 1,110 1,116 Excludes uncommitted facilities of $310 million 1 Maturity value of US$245 million 2 Net debt/net debt plus equity Stable balance sheet; continued access to multiple debt markets June 2013 // Page 43

45 Group taxation position Tax charge UK Tax Losses/Allowances Position 12 months to 31 Dec 2012 US$m 12 months to 31 Dec 2011 US$m As at 31 Dec US$m Overseas Allowances brought forward 1,360 Prior period provisions/revisions (11.9) 70.0 Net additions 398 UK RFES 129 PRT Tax allowances carried forward 1,887 CT Current charge Deferred tax credits (100.3) (177.0) Overseas tax position Tax paying - Indonesia, Pakistan, Vietnam Expected effective rates for 2013: Tax charge/credit for the year (29.7) % of Operating Profit* Indonesia 50 Pakistan, Vietnam *Before exploration write off Tax paying overseas; no UK CT expected until post-2018 June 2013 // Page 44

46 APPENDIX //

47 UK and Asia assets June 2013 // Page 46

48 Premier Oil Plc 23 Lower Belgrave Street London SW1W 0NR Tel: +44 (0) Fax: +44 (0) June 2013