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2006 Interim Results Presentation 21st September 2006
Page 3 | 2006 Interim Results Presentation
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.
Page 4 | 2006 Interim Results Presentation
Interim Results Presentation
Highlights Simon Lockett
Financial Results Tony Durrant
Exploration & Appraisal Robin Allan
Production & Development Neil Hawkings
Page 5 | 2006 Interim Results Presentation
Highlights
Page 6 | 2006 Interim Results Presentation
Operational highlights
2006 successes on Dua, Lembu Peteng, Macan Tutul, Lukah, and West Lobe, with more wells to follow
• Operated drilling success in Indonesia & Vietnam
• Significant progress on new gas sales in Pakistan & Indonesia
Zamzama, Bhit, Badhra, Kadanwari, Zarghun, Qadirpur, North Sumatra Block A, Natuna Sea Block A
Production up on 2005 full year average (33,235 boepd), tangible progress towards 50,000 boepd target
• Production of 33,521 boepd
Production Profile by Region(boepd)
2006
60000
0
80000
2007 2008 2009 2010
50000
40000
30000
20000
10000
70000
Production Profile(boepd)
2006
60000
0
80000
2007 2008 2009 2010
50000
40000
30000
20000
10000
Potential new projectsBooked reserves
70000
AsiaM/East & PakistanWest AfricaNorth Sea
• Acquisition in North Sumatra with significant upside
110 bcf net undeveloped certified reserves, with a ready gas buyer. Significant potential upside
Page 7 | 2006 Interim Results Presentation
Financial highlights
• Expenditures on track $50m exploration $100m development
Significant cash inflow in January 2006
• Profit after tax - up 64% to $33.7m
Rising oil and gas prices, stable production
1H 2005 1H 2006
64%
• Healthy cashflow – up 218% to $172.3m
Disciplined approach to expenditure
1H 2005 1H 2006
218%
• Improved balance sheet
Half year net cash position of $43.8m vs. year end net debt position of $26.2m
End 2005 1H 2006
-26.2m
+43.8m
Page 8 | 2006 Interim Results Presentation
AsiaBuilding on ourNatuna Sea position
• Lembu trend appraisal and Anoa oil finds
• Dua & Swan development studies
• Blackbird exploration well results in Q4
• North Sumatra Development Planning
• Gas sales and Ratnanegotiations ongoing
Asia
Middle East / PakistanEnhancing the Pakistangas business
• Continuing production growth
• New gas contracts and field expansion
• New business focus in the region
Middle East/Pakistan
Page 9 | 2006 Interim Results Presentation
North SeaReturning to growth• Frøy development plan on track• Applications in UK and Norway licensing rounds• UK Peveril well in 4th Quarter
North Sea
West AfricaBuilding a new core Business• Seeking to optimise Chinguetti development• Tiof development studies• High impact exploration in Guinea Bissauand Congo
West Africa
Page 10 | 2006 Interim Results Presentation
Financial Results
Page 11 | 2006 Interim Results Presentation
Production and Income Statement
Working Interest Production (mboepd)Entitlement Interest Production (mboepd)Realised oil price ($/bbl)Realised gas price ($/mcf)
Sales and other operating revenuesCost of salesExploration/New BusinessGeneral and administration costsOperating profit Financial ItemsProfit before taxationTaxationProfit after tax
Prepared in accordance with IFRS
12 months to31 Dec 2005
6 months to30 June 2005
33.328.748.4
3.8
34.830.238.1
3.4
$m149.3(73.7)
(5.7)(9.1)60.8
1.262.0
(41.5)20.5
Highlights
Underlying operating costs per barrelflat at $5.2/bblIncludes $9.2m of exploration write-off principally in Egypt
Effective tax rate of 43% of gross profit
Includes $15.9m of mark-to-market hedging adjustments
Strong gas prices in SingaporeAverage 1% premium to Brent crude
Oil and gas split steady at around 30/70
6 months to30 June 2006
33.531.066.5
5.3
$m219.6(85.5)(15.8)
(8.2)110.1(18.6)
91.5(57.8)
33.7
Page 12 | 2006 Interim Results Presentation
Cashflow
Net cash flow from operationsNet interest TaxationOperating cash flowCapital expenditurePre licence exploration costsNet cash flow before financing
6 months to30 June 2005
$m
6 months to30 June 2006
$m
223.6(1.3)(50.0)172.3(95.9)(6.6)69.8
93.9(0.1)(39.6)54.2
(62.0)(-)
(7.8)
2006 2005
Development
95.9 62.0
Exploration 28.0
34.0Acquisitions -17.0
39.0
39.9
Page 13 | 2006 Interim Results Presentation
Balance Sheet
Intangibles
Producing and Development AssetsCash and EquivalentsNet Working CapitalLong-Term DebtProvisionsNet Assets
As at31 December 2005
$m
As at30 June 2006
$m
111.6
570.143.8
(54.8)-
(258.3)412.4
63.9
568.938.55.5
(63.6)(250.5)376.1
Unused facility of $275 million
Favourable movement in working capital dueto cargo delivery schedule
Net cash resources of $43.8 million atperiod end
Vietnam farm-out will complete after Blackbird well
Page 14 | 2006 Interim Results Presentation
Commodity pricing compared with hedges 2003-2012
Dated Brent Oil($/bbl)
80.00
20.00
100.00
03
70.00
60.00
50.00
40.00
30.00
90.00
04 05 06 07 08 09 10 11 12Year
HSFO Singapore 180($/metric tonne)
450.00
150.00
500.00
03
400.00
350.00
300.00
250.00
200.00
04 05 06 07 08 09 10 11 12Year
Commodity Priceand Forward Curve
Average CapAverage Floor
Page 15 | 2006 Interim Results Presentation
Financial strategy
• Disciplined exploration spend of $50 million on a pre-tax basis – under review for 2007 in light of E&A success
• Strong balance sheet and unused funding available for development capital and acquisitions
• Fully capturing current oil and gas pricing
• Buyback programme available according to market conditions
Page 16 | 2006 Interim Results Presentation
Exploration Highlights
Page 17 | 2006 Interim Results Presentation
Blocks 12E & W Operator – Premier• Dua (spudded 1st May 2006)• Blackbird• Swan commericalisation
opportunities for 2007• Falcon, Peacock and Quit:
follow-on prospects
Dua Structure
12E-CS-1X
Blackbird Structure
Quit
Peacock
Falcon
Swan
Dua
Blackbird
Vietnam
Canary
Page 18 | 2006 Interim Results Presentation
Dua-1X
12-A-1X
Dua-1XDiscovery
Dua-2X
PremierDua-4X
5km
Vietnam - Dua
PremierDua-5X
Page 19 | 2006 Interim Results Presentation
• Dua-4x and -4xst intersected gas-bearing reservoirs
• Dua-5x intersected gas and oil-bearing reservoirs
PremierDua-4X & -4Xst
PremierDua-5X
Additional oil and gas discoveries in shallower reservoirs
Vietnam – new Dua
NCS sandstones
NCS carbonates
Page 20 | 2006 Interim Results Presentation
Indonesia drilling update – Natuna A PSC
Natuna SeaBlock A PSC
• 2006 Success in:
• Macan Tutul-1
• Lembu Petang-1
• Lukah-1
• Planned Ibu Lembu follow-up drilling Q4 2006
Lembu Peteng-1
Lukah-1
Macan Tutul-1
Page 21 | 2006 Interim Results Presentation
IbuLembu-1
Lembu Peteng follow-up potential
• A new oil and gas trend within tie-back distance to existing infrastructure Lembu
Peteng-1
Lembu Peteng
Page 22 | 2006 Interim Results Presentation
Exploration – the next 12 months
West AfricaGuinea Bissau: Eirozes-1
Espinafre-1Mauritania : Kibaro-1Gabon : Themis-1
M/East & PakistanPakistan : Anne-1
AsiaIndonesia : Ibu Lembu-1
: 3-4 further wells (commencing September): Kakap
Vietnam : Blackbird-1 : Dua-5x
India : Masimpur-3: Hailakandi-1: Kanchanpur-1
North SeaUK : Peveril
2007JAN FEB MAR APROCT NOV DEC MAY JUN JUL AUG SEP
2006SEP
Appraisal wells
Exploration wells
Contingent Wells
High impact wells
Page 23 | 2006 Interim Results Presentation
Vietnam – opportunity set
FlamingoMajor high, 3D reprobeing interpreted
SwanPossible well to test gasvolumes in SW of closure
QuitRisky but big potential
BlackbirdIn success case, 3D April 2007,appraisal well April 2008
Falcon & OthersOn trend, follow-up to Blackbird
JayNear field exploration to Dua
Chim DauNear field exploration to Dua
Dua FieldFurther appraisal
Page 24 | 2006 Interim Results Presentation
Existing Well 12E-LX-1XDrilled outside structure
Premier 12E-CS-1XPlanned at crest
12E-LX-1XThick sands with residual oil;
drilled close to mapped contact
Anticipated Oil Water Contact at
spill-point
Blackbird Prospect – estimated 80 million barrels reserves potential
Vietnam - Blackbird
Page 25 | 2006 Interim Results Presentation
Indonesia drilling programme - 2007
Lembu Peteng-2
Natuna SeaBlock A PSC
• 3-4 wells are planned for 2007. Contenders are shown
Ibu Lembu
Kakap LembuTenggiling
Ganesha
Tupai
Page 26 | 2006 Interim Results Presentation
India high-impact wells
Cachar Block
• 2 Tcf gas prospect• Masimpur-1 mobilising for December 2006 spud• Hailakandi-1 & Kanchanpur-1 follow-up wells,
each with high potential
Masimpur AnticlineNW
Primary Target:Oligocene Renji
Formation
Seismic line POC-03-12SE
Page 27 | 2006 Interim Results Presentation
Pakistan – Anne high impact exploration
Anne-1 EW
• Key well for Indus Delta
• 300 million barrels potential
• Now scheduled for July 2007
Page 28 | 2006 Interim Results Presentation
Gabon and Congo
Page 29 | 2006 Interim Results Presentation
Block Marine IX
Highly prospective block, with significant reserve potential.
Premier 58.5% – Operator
Congo high impact exploration
Kitina150 m bbls
Moho110 m bbls
N’Kossa280 m bbls
Frida Prospect
Page 30 | 2006 Interim Results Presentation
Congo Block IX : Frida Prospect
• Decree authorising award of PSC issued May 19th
• Presidential approval expected in August 2006
• JOA signed by all parties
• Possible drilling end 2007–early 2008
• Estimated reserves >200MMBO
Top Lower Albiandepth map with
Miocene channeldepth overlay
Page 31 | 2006 Interim Results Presentation
South Gabon Exploration Portfolio
Gabon : Dussafu and Themis PSC’s
Moubenga-1 discovery
Walt Whitman-1 discovery
GMC-1 discovery
Themis Marin PSC• 2005 3D• Rig contracted for 3Q
2007 well
Dussafu Marin PSC• Large oil-prone block• Reassessing existing
discoveries previously regarded as ‘sub-commercial’ at loweroil prices
• Finalising prospects for 2007-8 drilling (subject to rig availability)
Page 32 | 2006 Interim Results Presentation
• At $50/bbl oil price economics generates $7 NPV/bbl
• Firm drilling programme commencing January 2007
Guinea Bissau high-impact wells
135 mbbls
100 mbbls
180 mbbls
80 mbbls
151 mbbls
230 mbbls
110 mmbbls
Eirozes190m bbls
300 mmbbls
Espinafre70 mbbls
Sinapa-1 Sinapa-2,2z175 mbbls190 mbbls
30 mbbls
Page 33 | 2006 Interim Results Presentation
North
Eirozes-1Proposed Well
(WD= 120 metres)
Eirozes Prospect: mean reserves 190 million barrels
TopAlbianSand
Salt
South
Guinea Bissau high-impact wells
Page 34 | 2006 Interim Results Presentation
Espinafre Prospect: mean reserves 70 million barrels
North
Top Albian Sand
Salt
South
Espinafre-1Proposed Well
(WD= 34 metres)
Guinea Bissau high-impact wells
Page 35 | 2006 Interim Results Presentation
UK exploration - Peveril
Blocks 39/2, 39/7
• Premier share 30%
• Carried interest
• 40m bbl prospect
• Close to Fife infrastructure
• Drilling December 2006
Peveril Prospect
Page 36 | 2006 Interim Results Presentation
UK exploration - Peveril
Page 37 | 2006 Interim Results Presentation
Building for the future
• Licensing Rounds – outstanding applications• Indonesia• Egypt• Norway• UK
• Out-of-round applications
• Farm-ins
• Acquisitions
Page 38 | 2006 Interim Results Presentation
Operational Highlights
Page 39 | 2006 Interim Results Presentation
Vietnam – moving Block 12 into development
Page 40 | 2006 Interim Results Presentation
Indonesia - North Sumatra Block A
• Certified 110 bcf (~18mmboe) netdiscovered gas reserves with a ready gas buyer at a good price.
• 20+ exploration prospects, 1.5 tcf+ gross• Partnership with ConocoPhillips, Medco and Japex (Premier Interest 16.67%)
• Low initial entry cost of $17 million
Page 41 | 2006 Interim Results Presentation
Indonesia – Natuna Sea Block A
Anoa Development – GSA 1
• Existing oil and gas process and export
Wet Gas Area
• Potential for Liquids Development
• Further Appraisal required
Gajah Baru
• Focus of GSA2 Plans
• 500 Bcf of Certified Reserves
• First Gas 2010
Page 42 | 2006 Interim Results Presentation
Indonesia – ongoing Anoa development
West Lobe
Central Lobe
East Lobe
Anoa Field 3D Reservoir View
• West Lobe development drilling proceeding well
• 67 ft oil column confirmed in Central Lobe area -Potential to significantly increase Anoa oil production
• 100 ft hydrocarbon bearing interval encountered above the main Anoa reservoir
• Tie-in Opportuinity - Macan Tutul
• Further 2007 Exploration Opportunities
Page 43 | 2006 Interim Results Presentation
Indonesia – Block A drilling plans
JUL2006SEP NOV SEP NOVJULMAYMARJAN
2007
2006 Drilling Programme
West Lobe Wells – Batch Drilled
West Lobe Well Completions
Ibu Lembu
SA-21 WO
Rig on contract to Serica
2007 Drilling Programme
Central Lobe Development and Comp
E&A Well 1
E&A Well 2
West Lobe-5
E&A Well 3
E&A Well 4 (Option)
Indonesia
Page 44 | 2006 Interim Results Presentation
Kadanwari• Further development drilling to proceed
in 2006 and 2007
Qadirpur• Further plant expansion to proceed• Term sheet agreed for further 100
mmscfd from 2008• Deeper reservoir being drilled
Zamzama• Phase 2 project progressing to plan• 150 mmscfd - first gas in 2007
Bhit/Badhra• GSA awaiting formal signature• First gas in 2008
Zarghun South• Agreement reached on GSA
Pakistan - a continually growing gas business
K18
K17
K16
Page 45 | 2006 Interim Results Presentation
Mauritania – optimising the Chinguetti development
• Production commenced at ~70,000 bopd, 5,700 bopd net Premier
• Current production 30,000 to 35,000 bopd - complex reservoir architecture
• Reserves under review by Operator
• Further development drilling in Q4 2006 (Phase 2A)
• Additional development wells also being considered for 2007-8 (Phase 2B and 3)
Page 46 | 2006 Interim Results Presentation
• New seismic acquired and processed
• Geological model constructed
• Reservoir model being built
• Development concept selection under way
• 20-50 mmbbl of reserves
• Development Plan submission mid-2007
• First oil 2010
Norway - progressing the Frøy development
FPSOJack-up with Processsing
Page 47 | 2006 Interim Results Presentation
Building for the future
• Premier is continually seeking new opportunities to add production growth opportunities to our portfolio via:
• Acquisitions
• License Rounds
• Farm-ins
• During the first half of the year we have been actively pursuing new production growth opportunities
Page 48 | 2006 Interim Results Presentation
Summary
Page 49 | 2006 Interim Results Presentation
Strategy
Progress
• Drilling a high quality exploration programme, already yielding results
• Gained Sumatra entry via acquisition
• Norway organic growth starting to deliver
• Delivering growth in existing assets in Pakistan & Indonesia
Strategy
• Targetingproduction growthto 50,000 bopd
• Minimum of 4 high impact wells per annum within disciplined spend
• Acquisitions focuson core areas
• Operating in 4 regional Businesses
Page 50 | 2006 Interim Results Presentation
5 Year production potential
Production Profile by Region(boepd)
2006
60000
0
80000
2007 2008 2009 2010
50000
40000
30000
20000
10000
70000
Production Profile(boepd)
2006
60000
0
80000
2007 2008 2009 2010
50000
40000
30000
20000
10000
(NB: Only includes discovered hydrocarbons (no exploration success assumed or acquisitions))
Potential new projectsBooked reserves
70000
AsiaM/East & PakistanWest AfricaNorth Sea
Page 51 | 2006 Interim Results Presentation
Exploration – the next 12 months
West AfricaGuinea Bissau: Eirozes-1
Espinafre-1Mauritania : Kibaro-1Gabon : Themis-1
M/East & PakistanPakistan : Anne-1
AsiaIndonesia : Ibu Lembu-1
: 3-4 further wells (commencing September): Kakap
Vietnam : Blackbird-1 : Dua-5x
India : Masimpur-3: Hailakandi-1: Kanchanpur-1
North SeaUK : Peveril
2007JAN FEB MAR APROCT NOV DEC MAY JUN JUL AUG SEP
2006SEP
Appraisal wells
Exploration wells
Contingent Wells
High impact wells
Page 52 | 2006 Interim Results Presentation
Look Ahead
• Close out gas sales contracts in Indonesia/Pakistan
• Commercialise Frøy, Dua & North Sumatra
• High impact exploration in Guinea Bissau, Vietnam, India, UK and Pakistan
• Actively target acquisitions in core areas
Page 53 | 2006 Interim Results Presentationwww.premier-oil.com September 2006