2011 Half Yearly Results 25 August 2011 - Premier Oil · •12 developments proceeding through development stages ... Chim Sáo –WHP WHP Jacket prior to Load Out WHP Topsides onto

2011 Half Yearly Results 25 August 2011

25 August 2011 | 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

Introduction and highlights Simon Lockett

Chim Sáo and Gajah Baru update Robin Allan

Future developments update Neil Hawkings

Exploration update Andrew Lodge

Financial results Tony Durrant

Summary Simon Lockett


2011 Overall highlights

• Chim Sao and Gajah Baru projects on stream imminently

– Production of 60,000 boepd by year end

• 12 developments proceeding through development stages

– Building towards 100,000 boepd

• Resource additions through exploration on track to deliver 200 mmboe of

2P reserves by 2015

• Wytch Farm, Solan and Fyne acquisitions add 43 mmboe of reserves and

resources at a cost of around $5/bbl

• Financial strength positions us well

– Profits after tax of $88.5 million

– Growing operating cash flows exceed capital commitments

– Cash and undrawn bank facilities of $1.3 billion


Chim Sáo and Gajah Baru update


Chim Sáo – WHP

WHP Jacket prior to Load Out

WHP Topsides onto Jacket

WHP Jacket Sail Away

WHP Topsides onto Jacket

WHP Topsides Lift Off Barge

Ensco 107 Rig & WHP


Trading Tanker prior to Conversion Conversion of FPSO in Dry Dock

Sail Away of Lewak Emas

Arrival of Lewak Emas on Location

Chim Sáo – FPSO


• FPSO is on location with mooring system,

risers and connections to the WHP

installed and tested

• Safe handover of the FPSO processing

equipment from commissioning to

operations is imminent

• Production crew familiarisation is ongoing

• First oil in tank expected 15 September

• Total costs of project within original budget

of $800 million

Chim Sáo – production imminent


Chim Sáo – reserves increasing

Chim Sáo

• Six production wells ready to produce

• MDS5 reservoir is significantly better than prognosed

• Additional potential in shallow MDS1 reservoir

Near field success

• N2P well intersected a 20m oil column

• Additional gross resource estimate 7 to 12 mmbo

Dua

• Dua subsea development is nearing project sanction 2000m

3060mss

Chim

Sáo

West Closure

Far Closure

Near Closure


Gajah Baru – Central Processing Platform (CPP)

CPP Jacket Load Out from

NSB Yard (Batam)

CPP Jacket Launch from Saipem S45

CPP Topsides Load Out from SM0E Yard (Batam)

Up-ending of CPP Jacket by Castoro 8


Gajah Baru – CPP topsides float-over

Completed Gajah Baru Complex

CPP Topsides Float-over Operation

Export Pipeline Installation

Bridge Installation


Gajah Baru – WHP, CPP

CPP from WHP

Sea Aaryan Hook-up

Accommodation Vessel

CPP and WHP

WHP from CPPCPP from Sea Aaryan


• Project ahead of schedule

– Development drilling successfully

completed in February 2011

– Jacket installed and piling completed in

June 2011

– CPP topsides installed on jacket and

bridge-linked to wellhead in July 2011

– Gas export pipeline installed and tested in

July, dewatered and dried in August

• Production for fuel gas ready

• Gas export to start early September ahead of

contract date of 1 October

Gajah Baru – production imminent


Future developments update


Progress towards 100,000 boepd

Catcher

Development planning underway

Huntington

Development drilling underway

Gajah Baru

Early first gas

Rochelle

Unitised development

Chim Sáo

First oil in next few weeks

2011 2012 2013-16

Fyne

Operatorship acquired

East Fyne

Central Fyne

Appraisal target


Chim Sáo

Bream

Project Initiation

Project Sanction Ready for

Production

As

iaN

ort

h S

ea

Future development portfolio

Concept Selection

Gajah Baru

Catcher Solan

Caledonia

Rochelle

Huntington

Dua

Cá Rồng Đo

Fyne

Frøy

Block A Aceh

Pelikan &

Naga

No

rth

Se

aA

sia


Huntington

• Drilling template installed

• First development well highly successful

• Work continuing on the Sevan Voyageur

FPSO upgrade project and sub-contracted

modules

• Sevan’s plan is for FPSO sail-away in

April, implying June 2012 for first oil


Rochelle

• Phase 1 field development plan approved (East area)

• Single field development area determined by DECC

• Unitised development – Premier 15% equity

• Plans for West area being integrated

– West area pipeline route survey completed (May)

• Scott tariff arrangements concluded

– Initial tie-in works completed

during Scott shutdown (August)

• Subsea long lead equipment ordered

• Drilling rig contract being negotiated

• First gas targeted for 4Q 2012

Rochelle


Natuna Sea Block A

• 2010 was a record year for Block A gas sales

– From Singapore demand of 355 bbtud,

Block A sold 160 bbtud vs a DCQ of 126

bbtud

• 1H 2011, Singapore demand was 373 bbtud

with Block A supplying 154 bbtud

• Gajah Baru builds up to 130 bbtud in 2012

• In 2011 expect to approve:

– Anoa phase 4 compression expansion

(2013)

– Pelikan and Naga field developments

(2013)

• Total sales capacity will increase to

400 bbtud

• Gajah Puteri planned for 2015

Natuna ‘A’ 2015


Catcher

• Formal concept selection underway

• Development options

– FPSO

– Fixed Platform

– FSO

– Subsea wells

– Platform wells

– Gas export/injection

• Premier’s objective is to

proceed with fast track

development

Catcher Development Field Illustration


Fyne

• In May, option exercised to become operator with a 39.9% equity stake

– Pre-development work progressed

– Joint venture partners evaluating development options

– Project sanction planned for early 2012 with first oil targeted for mid-2014

• Development options

– Stand-alone

– FPSO

– Platform

– Subsea-tieback to host

– Eg Anasuria

• Additional discoveries and exploration potential

provide upside opportunity

– Appraisal well planned for Q4 2011 to de-risk

East Fyne area

– Erne exploration well planned for Q4 2011

East Fyne

Central Fyne

NW Fyne

Appraisal targetHeight

above

4583ft

N1000m


Solan

• SPA and Loan Agreement executed in May

• Premier will become the operator with a 60% equity stake

• Further engineering studies are underway

• Project now targeting 2014 for first oil-8

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-9800-9700-9600-9500-9400-9300-9200-9100-9000-8900-8800-8700-8600-8500-8400-8300-8200-8100-8000-7900-7800-7700-7600-7500-7400-7300

Depth

Producer at reservoir level (Active 8 ½” Section)

Injector at reservoir level(Active 8 ½” Section)

Background Map =Top Solan Depth ft TVDSSwith P50 Field Outline

Well Penetrations shown at Top Solan

N1km

P1

P2 8 ½” (June 2013)

W1 8 ½” (June 2012)

W2

P3 in Upside Case (July 2014)

Location of Wellhead Cluster at Sea Bed

Producer & Injector 12 ¼” Sections at reservoir level (Cased)

Injector at reservoir level(Inactive 8 ½” Section)

W1 12 ¼” (May 2012)

P2 12 ¼” August 2012

P1 12 ¼” (July 2012)

P1 8 ½” (May 2013)

W2 (June 2014)

Main decision points for well steering or completion options

Current uncertainty in FWL across field


Progress on other developments

Bream (Norway)

Dua (Vietnam)Block A Aceh (Indonesia)

Frøy (Norway)

Caledonia (UK)

CRD (Vietnam)

CRD-1X CRD-2X

Anomalies associated

with Gas

Cau sequence


A path to 100,000 boepd

1000

Development capex

(US$ million)

400

200

0

500

700

900

2011 20132012 2015

800

600

100

300

2014

120,000

Production outlook

(bbls/day)

40,000

20,000

0

60,000

2011 20142012 2013 2016

100,000

80,000

2015

Future Norway Developments

Future UK Developments

Future Asia Developments

End of Year Run Rate

Huntington, Rochelle (UK)

Chim Sáo, Gajah Baru (Asia)

On Production


Exploration update


Progress towards 200 mmboe of discoveries

200

100

50

02010 2011

150

2012 2013 2014

250

Target cumulative risked additions

Actual cumulative proved and probable discovered resources

Actual cumulative plus possible resources

Global exploration:

Forecast resource additions (mmboe)

2009

Exploration and appraisal drilling

• At least 9 wells planned for the remainder of 2011

• Discoveries at Burgman in the UK, K27 in

Pakistan and North West of Chim Sáo in Vietnam

• Grosbeak and Cá Rồng Đo appraisal wells

successfully completed

• Net estimated resource additions 20 to 30 mmboe

New ventures

• PSCs signed for exploration blocks L10A and

L10B in Kenya

• Exercised option to farm-in to the Greater Fyne

area in the UK – East Fyne appraisal well and

Erne prospect to be drilled 2H 2011

• Premier pre-qualified for the Iraq 4th Exploration

round in 2012

• Actively pursing new venture opportunities in all

focus areas and themes


Unrisked Resource Portfolio

Risked Resource Portfolio

Discovered resource

under appraisal 80 mmboe

Leads

1,500 mmboe

Prospects

450 mmboe

Total

1,950

mmboe

Leads

180 mmboe

Prospects

120 mmboe

Total

380

mmboe

• Unrisked prospective resource portfolio – 1,950 mmboe

– 450 mmboe in prospects

– 1,500 mmboe in leads

• Portfolio increased from 2010

– Increased lead inventory in MEAP (Kenya)

– Prospect inventory adjusted post Tuna drilling

• Risked pospective resource portfolio – 380 mmboe

– 120 mmboe in prospects

– 180 mmboe in leads

– Greater focus to lead maturation in 2012

• Discovered resource under appraisal – 80 mmboe

Resource portfolio

On track to deliver 200 mmboe

of 2P reserves by 2015

Discovered resource under

appraisal 80 mmboe


Samedi15

Norway

PL378: Grosbeak

UK

P077: East Fyne

P1784:

Typhoon14

PL406:

Gardrofa

P1466:

Bluebell

P1212: Stingray12

Blk 104:

Jackfruit34 6

Natuna:

Biawak Besar

4

Natuna:

Anoa Deep

3.5

Buton:

Benteng23 3

Aceh:

Matang18 10

K-29

P1875:

Erne

Badhra-7

K-30

Badhra-6 Parh

Norway

PL374S: Blabaer

P1430: Cougar

P1420:

New York53

P1420: Manhattan

P1420: Newark

K-32

Badhra South

Blk 07:

Blue Marlin72 6

Blk 07:

Silver Sillago60

151

2

1

4

2

P1430:

Rapide

P1430:

Bonneville

Blk 07:

AD Deep

Aceh:

Peudawa Rayeu

Tuna:

Singa

Laut

Blk 07:

CRT

P1559:

Cornet

3 1

1

24

4

PL359: Luno II21 4

P1181:

Lacewing15 2

P1430: Carnaby10 7

11 4

17 6

26

11

28

<11

24

<1<1

<11

Vietnam

Block 12W: CS NW

Vietnam

Block 07/03: CRD

LeadsTotal Unrisked: 1500

Total Risked :180

ProspectsTotal Unrisked: 270

Total Risked: 63

Mature ProspectsTotal Unrisked: 180

Total Risked: 57

AppraisalTotal: 80

AppraiseDrillEvaluate

Acquire Licence

Drill Decision

Appraisal

Approval Gate

Project

Extension

Gate

ME

AP

No

rth

Se

aA

sia

NB: Resource estimates identified for 2011-2012

prospective drilling candidates

<10 10-25 25-50 >50

Prospect potential resource

mmboe (net unrisked):

Risked

Progress towards 200 mmboe of discoveries

Pre-

Development

Seismic

32

6

60 10


Exploration – Indonesia/Vietnam – Nam Con Son Basin

Key prospects with Oligocene reservoirs at optimum depths

Gajah Laut Utara

Belut Laut

Silver Sillago Fault Terrace

CRD NEBlue Marlin

AD Deep

Mackerel

Singa Laut Fault Terrace

Top Oligocene

Structure Map

CRD

• Unique integrated

database

• New petroleum system

established

• 600 mmbo and

>1 TCF of unrisked

prospective resource

potential


Silver SillagoChim SáoSW NE NW SE

Top NCS

Top Basement

Top Cau

MMU

Dua

• Similar proximal access to source package

• Fault seal remains a key risk

Silver Sillago Line

Chim Sáo Line

Exploration – Vietnam – Block 07/03

Chim Sáo vs Silver Sillago

CS

-2X

MMU

Top Basement

Top Cau

MDS5


• Oligocene prospectivity remains up dip from proven source kitchens

• Singa Laut /Kuda Laut

– Oligocene sandstones at 3,000 mss

– Fault seal risk mitigated by anticline to the west of bounding fault (Kuda Laut)

– Unrisked resource estimate 100 mmboe

Gajah Laut Utara-1TD 4687m

Belut Laut-1TD 4977m

Kuda

Laut

Singa

Laut

MMU

L.Terumbu

Arang

Gabus

Exploration – Indonesia – Tuna PSC

Depth of Top Oligocene

in Gajah Laut Utara


• Premier has the regional database to

pursue amplitude supported Tertiary

prospects throughout the Central North

Sea

• The focus is towards basin margin

settings in structural/stratigraphic traps

• Over the next 12 months Premier will

drill at least 5 exploration wells on

this play

• These wells will test a total gross

unrisked prospective resource of

100 mmbo (net 40 mmbo)

• New venture options are being actively

pursued both in the UK and Norway

Exploration – North Sea

Building on the Catcher success

Carnaby

East Fyne / Erne

Bluebell

Eocene Turbidite Sand Fairway

Typhoon


Appraisal – UK – Block 21/28a – Greater Fyne Area

East Fyne Appraisal

• Premier 39.9% equity

• Well planned for Q4 2011, targeting Eocene Tay Sands

• Gross prospective resource estimate 9-12-16 mmbo

Erne

• Premier equity 50%

• Well planned for Q4 2011 – ‘Catcher’ Tay play type analogue

• Gross prospective resource estimate 10-18-35 mmbo

Main

Mid-Tay

Chalk

Upper

Tay

Horda

Central Fyne East Fyne

Appraisal well21/28a-9

21/28a-9Y

East Fyne

Approx position of

predicted OWC in TWT

W. GuillemotErne Prospect

Chalk

Upper

Tay

BTM

Tay amplitudes

Erne Prospect


Bluebell (P1466 ) (15/24c,15/25f)

• Premier 60% equity

• Palaeocene reservoir – Crevasse play

• Gross prospective resource estimate 9-19-31 mmboe

• Partial carry by farm-in partner

• Well planned for Q4 2011

• Valuable tieback opportunity

Exploration – UK – 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

Bluebell Well Location

Bluebell


Block 21/7b

Typhoon (21/7b)


• Block awarded in 2010

• Gross prospective resource estimate

– 20-27-36 mmbo (Tay reservoir)

• Risk assessment

– Moderate risk

– Seismic reprocessing ongoing


Exploration – UK – Typhoon

Typhoon

Scolty Oil discovery

Block 21/8

Typhoon Amplitude response

on inverted data

Typhoon Prospect


Carnaby

Exploration – UK – Carnaby

Carnaby (28/9)


• Gross prospective resource estimate– 15-30-50 mmbo (Tay reservoir)

• Expected phase oil– Gas in shallower Eocene targets (Upper Tay)

• Risk assessment– Moderate risk at lower Tay level - oil quality

– High risk at Cromarty level - reservoir

presence and charge

• Acquisition of new 3D seismic data ongoing


Varadero

Carnaby Catcher

N & E

Catcher Main

Catcher E

Carnaby

Varadero

NS

Lower Tay

Upper Tay

Burgman

Cromarty Depth Structure

Carnaby Prospect

Eocene ( Lower Tay) amplitude extraction

Carnaby

Burgman

Burgman


Exploration – Norway – Luno II

Luno II (PL 359)• Premier equity 30%

• Greater Luno is a regional high

– Focus for oil migration

– Regional top seal drapes the high

– Jurassic/Triassic reservoirs flank the high and, where

fractured, basement is also a reservoir

– ~2,000 mmboe discovered to date

• Key play risks

– Reservoir presence on the margins of the high

– Lateral seal

• Aldous Major South discovery

– Proves eastern margin of the basement high

– Reserve estimate ~1,200 mmbo

• Luno II

– Southwest margin prospect down dip from cemented

basement- up dip from proven source kitchen

– Mesozoic sand presence interpreted from seismic and

local well data

• Gross prospective resource estimate

– 45-148-286 mmbo (Operator estimate)


Aldous/ Avaldnes

PL 359

BCU Time MapC.I. 100 ms

Luno/Apollo

Ragnarrock

NELuno II Prospect

BCU

Jurassic

Triassic

SW

10km

Luno II Prospect


Asia2011 2012

Q3 Q4 Q1 Q2

Vietnam 104/109-05 Qua Mit Vang (Jackfruit)

Buton Benteng-1

Natuna Sea Block A Anoa Deep

Biawak Besar

Block A Aceh Matang

North SeaNorway PL406 Gardrofa

PL359 Luno II

UK P1466 Bluebell

P077 East Fyne

P1430 Carnaby

P1212 / P1771 Stingray

Block 21/29d Erne

P1784 Typhoon

P1557 West Orkney

Middle East & PakistanPakistan Kadanwari K-29

K-30

Bhit-Badhra Badhra-6 Parh

Kenya Blocks 10A & 10B 2D & 3D Seismic

Exploration drilling Q3 2011 to Q2 2012

• ~ 300 mmboe

gross unrisked

resource

• 2011 full year

exploration

expenditure

~ $250 million

pre tax

12 to 15 exploration and appraisal wells planned in 2012

Contingent Wells

Firm Wells: Rig Contracted

Firm Wells: Rig TBC

Seismic Programme

All well timings are subject to revision for operational reasons

Aqua Marine Driller

W Callisto

Antareja-8

W Callisto

Bredford Dolphin

Sedco 704

Sedco 704

WilPhoenix


Financial results


Production update

1H 2011

• Steady performance in Pakistan

• Anoa field in Indonesia continues to

respond well to Singapore demand

• Reduced facility up-time in UK North Sea

Outlook

• Recovery in UK performance

• New fields in Asia drive 60 kboepd year-

end run rate

• 2012 average of around 60 to 65 kboepd

• 75 kboepd run rate post Huntington

80

Production (working interest)

(kboepd net)

20

0

30

50

70

2010 A 2011 E1H

2011

2H

2011 E

2012 E

60

40

10

Mid Point Estimate

End of Period Run rate


Revenue and income statement

6 months to30 June 2010

Average gas pricing ($/mcf)

2011 2010

Singapore $18.5 $13.8

Pakistan $3.7 $3.3

Average Brent oil price was $111.1/bbl

(2010: $77.3/bbl)

Operating costs per barrel ($/bbl)

2011 2010

UK $34.2 $24.7

Indonesia $9.6 $7.1

Pakistan $2.1 $1.6

Group $14.0 $12.9

Tax credit arises due to revaluation of

UK tax allowance pool following UK

government tax changes

Highlights6 months to30 June 2011

Working Interest Production (kboepd)

Entitlement Interest Production (kboepd)

Realised oil price ($/bbl)

Realised gas price ($/mcf)

Sales and other operating revenues

Cost of sales

Gross profit

Exploration/New Business

General and administration costs

Operating profit

Financial Items

Profit before taxation

Taxation credit/(charge)

Profit after tax

46.6

42.6

78.1

5.8

$m

367

(189)

178

(46)

(8)

124

(12)

112

(50)

62

36.9

33.8

109.7

8.3

$m

342

(200)

142

(91)

(9)

42

(9)

33

56

89

2011 sales revenues include realised

hedging loss on oil and gas

production of $58.2 million (pre-tax)


Overseas

UK

PRT

CT

Prior period revisions

UK deferred tax credits

Tax credit for the period


$m

Group taxation position

27.8

17.7

nil

(18.4)

27.1

22.5

49.6

Recognised previously as deferred tax asset

Currently unrecognised

Tax allowances at 1 Jan 2011

2011 estimated net additions

Estimated end 2011 position

UK Tax Allowance Position$m

972

140

1,112

238

1,350

• Additional deferred tax credits mainly due to change in UK tax rate

• UK allowances of $140 million not yet recorded

• UK cash corporate taxes not anticipated until at least 2015


$m

46.0

30.4

nil

(0.6)

75.8

(131.8)

(56.0)


Cash flow

Cash flow from operations

Taxation

Operating cash flow

Capital expenditure

(Acquisitions)/disposals, net

Finance and other charges, net

Pre-licence expenditure

Net cash flow


$m1H 2011

Development

Exploration

Estimated capex split ($m)

178

119

297

1H 2011 2010

Cash

Net Debt

Balance sheet ($m)

300

406

902

483

582

804Undrawn facilities

273

(51)

222

(212)

20

(27)

(11)

(8)


$m1H 2010

142

70

212

246

(4)

242

(297)

(87)

(24)

(10)

(176)

Outlook

• Forecast full-year 2011 spend – $500m (development) and $250m(exploration)

• Net debt of around $600m (gearing of 32%)

• Net debt peak of around $750m on forward curve

31 Dec


Summary


• Asian development project success

• Stronger North Sea production performance anticipated in 2H

• Good progress on pipeline of development projects

• Exploration on target to deliver 200 mmboe of discoveries

• Acquisition track record at reasonable prices

• Strong first half year financial results and balance sheet position

Delivering on strategy

25 August 2011 | Page 45www.premier-oil.com 25 August 2011

Documents

2011 Half Yearly Results 25 August 2011 - Premier Oil · •12 developments proceeding through development stages ... Chim Sáo –WHP WHP Jacket prior to Load Out WHP Topsides onto