Investor Presentation

Transcription

1 Investor Presentation

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. January 2019 P1

3 Delivery against 2018 targets Production Cost base Catcher Area Tolmount Main Growth projects Exploration and appraisal Non-core disposals Net debt reduction 80.5 kboepdachieved, up 7% on 2017 and a record year for the Group Production averaged 92 kboepd, ahead of forecast, in Nov / Dec Forecast full year opex of $16.9/boe, below 17-$18/boe guidance 2018 capex of $355m, below previously reduced guidance of $365m FPSO producing at increased oil rates of 66 kbopd(gross) Averaged 34.7 kboepd(net) in Nov/Dec with 97% operating efficiency Tolmount Main sanctioned, platform construction started High valuetolmount East appraisal well to spud mid-year Key contractors selected and completing FEED Progressing senior funding structures ahead of Sea Lion FID Captured highly prospective acreage (Mexico, Indonesia) First Zama appraisal well (Zama-2) spudded, results expected shortly Babbage Area, ETS and Kakap disposals completed, $65m received Pakistan sale to complete shortly YE18 net debt $2.3 bn, below forecast, and a $390m reduction on 2017 Leverage ratio of 3.0x vs covenant of 5.0x January 2019 P2

4 Finance highlights and priorities 2018 highlights Net debt reduced by $390 million Robust operating cash flow Reduced operating costs and capex Completion of non-core disposals Early exchange of convertible bonds Leverage ratio reduced to 3.0x Cash receipts of $75m from announced & completed disposals Priorities 1. Debt reduction Targeting x EBITDA by end Q1 2019, reducing thereafter 2. Fund selected projects without compromising balance sheet Maintain capital discipline Targeting >20% IRR 3. Protect downside through hedging Oil hedging Oil swaps/ forwards H H Volume (mmbbls) ETS, Kakap Babbage Pakistan 2018 total cash receipts Average price $69/bbl $71/bbl January 2019 P3

5 2018 net debt reduction ahead of forecast Accounting net debt $m Factors influencing 2018 debt reduction FX / LIBOR FY 2018 Debt Reduction $390m Commodity prices Timing of cargo lifts Production Timing of disposal receipts Capex phasing 1600 YE 2017 Bond conv. 1 JV Cash FCF YE 2018 Covenant leverage ratio forecast to fall to 3x EBITDA by YE 2018 and to x by end Q January 2019 P4 1 Conversion of US$237 million bonds reduces accounting net debt by US$181 million 2 One off movement in gross joint venture cash balances of $52 million

6 Asia production New acreage captured Chim Sáo(op, 53.13%) 15.2 kboepd Opex $11/boe Ongoing well interventions Crude sold at premium to Brent Natuna Sea Block A (op, 28.67%) Increased market share of GSA1 Opex <$7/boe 2018 poduction 28 kboepd BIG-P (op, 28.67%) On schedule and budget First Gas Q January 2019 P5

7 UK production Catcher (op, 50%) On plateau Solan(op, 100%) High uptime 2020 infill drilling Huntington (op, 100%) Well intervention programme FPSO lease extended to 2020 Maximising uptime Infill drilling / well intervention Extending field life kboepd 60 Existing Production Tolmount Sustaining ~50 kboepd Elgin-Franklin (5.2%) Long life field Low opex Ongoing infill drilling January 2019 P6

8 Catcher Area, UK (50%, operator) Production Record day rates of over 70 kboepd FPSO at increased rates of 66 kbpd 16 mmbblsproduced to date with 32 cargo offloads FPSO Oil plant stable Gas and water injection plants commissioned Final acceptance certificate issued in November 2018 Wells Good reservoir communication High delivery capacity: >100 mbd Final 2 Burgman producers online Q4 Outlook Maximise uptime Evaluate options to increase production Net pay length (ft x1000) Predicted Cum (ft) Actual Cum (ft) 2018 wells Oil rate (stb/d) 97% uptime (Nov/Dec) 69 kboepd (Nov/Dec) Producer January 2019 P7

9 Catcher upside, UK (50%, operator) 1. Reserves upside being assessed Positive production results Well-connected sands Good pressure support Reservoir quality above expectations 2. Infill drilling 4D seismic acquisition Burgman East Cromarty and Tay targets at Catcher Varadero Infill West 3. Tie back of near-field discoveries Catcher North, Laverda plans well advanced with sanction scheduled for Q January 2019 P8

10 Tolmount Main (Operator, 50 per cent) Sanctioned in August Reserves booked at YE18 Key contracts awarded Platform construction started Funding secured Gross Reserves 500 Bcf Gross Peak Production 58 kboepd Net Capex $120 m Net Cash Flow >$1 Bn IRR >100% Area Potential 1 Tcf Robust economics, capital efficient January 2019 P9

11 Tolmount infrastructure Infrastructure partnership Dana and HGSL will own the platform and export pipeline and pay for the terminal upgrades Tolmountgas will use the facilities in return for a production based tariff Tariff structure $10/boeaverage tariff based on 500 Bcf (Tolmount Main) <250 Bcf Bcf Bcf >650 Bcf Terminal Commercial agreement signed with CSL s Easington terminal Platform and Topsides EPCIC contract awarded to Rosetti Transportation and installation by Heerema Pipeline Saipemselected as EPCI pipeline contractor Drilling and wells Contract awarded to Ensco 4 wells plus options January 2019 P10

12 Tolmount upside Sanctioned Tolmount Main Key contracts awarded for Tolmount Main Construction of platform started Construction of pipeline Terminal upgrade Acquisition of 3D seismic Appraise Tolmount East Offshore installation of platform, pipeline Development drilling starts TolmountMain 1st gas Sanction Tolmount East Exploration well on TolmountFar East (targeting 150 Bcf, gross unrisked resource) 1st gas from TolmountEast development Tolmount East 220 Bcf, gross unrisked resource Testing extension to Tolmount Main Structural closure above gas/water contact Mongour Tolmount Far East SW 42/28d-12 Tolmount East NE Tolmount East Gas water contact Tolmount Tolmount Tolmount East January 2019 P11

13 Sea Lion update LOIs with key contractors FPSO Drilling Rig SURF / SPS Well Services Subsea Installation Helicopter Services Focus remains on securing funding ahead of FID Vendor loan notes Senior debt (export credit agencies and project finance providers) Next phase of contracting Supply vessels Onshore logistics Annual average oil rate (kbopd) Years from first production Phase 2 Phase 1 January 2019 P12

14 Mexico: Block 7, Zama appraisal Zama-1 discovery made in mmbbls(p90-p10); API 30 Zama appraisal programme underway: Zama-2: tests OWC and Marte prospect Zama-2ST: tests reservoir distribution and will be flow tested Zama-3: tests lateral reservoir continuity Comprehensive logging, sampling and testing programme Zama-2ST1 Zama-1 Zama-2 Zama-3 Ensco 8503 Block 7 prospect map Marte Zama January 2019 P13

15 Mexico: Block 30 exploration, Wahoo & Cabrilla Awarded 30% interest in Round 3.1 South west of Zama discovery Wahoo: Flat spot similar to Zama 3D seismic acquisition planned for 2019 ahead of drilling activity in 2020/21 Block resource potential mmbbls A Analogue to Zama 1. Identical trapping geometry 2. Down dip amplitude shut off 3. Similar age reservoirs 4. Evidence of a clear flat spot Flat Spot B Top Structure Map Cabrilla B Wahoo 5km A January 2019 P14

16 Brazil: Ceará Basin High impact prospects in stacked targets matured for drilling Berimbau/Maraca (Block 717) Itarema/Tatajuba(Block 661) Block 717 (Premier, 50% operator) Drilling operations planned for well campaign >500 mmbbls Block 661 (Premier, 30%) January 2019 P15

17 Indonesia: Tuna appraisal and Andaman II exploration Tuna (Premier, 65% operator) Proven oil and gas discoveries (100 mmboe) Evaluation of potential development scenarios ongoing Outline development scheme confirmed to export gas to Vietnam Agreement signed with Vietnam and Indonesia Governments to access Vietnam infrastructure Farm-in offer agreed subject to contract Andaman II Awarded in Q Proven hydrocarbon basin Oligocene sandstones gas target Clear DHIs on 2D seismic Outlook 3D seismic acquisition to commenced Drilling targeted for 2021 Line A Line B TIMPAN CANAI BARAT CANAI TIMUR Targeting >2 TCF CANAI BARAT CANAI TIMUR TIMPAN 3Km January 2019 P16

18 Balanced capital allocation 7 year capital allocation % 30% 20% 40% 10% Net operating cash flow Debt reduction Producing assets New projects Exploration At $65/bbl the business will deliver Positive free cash flow in all years to 2024 Production > 100 kboepd at period end Covenant level of <1x at period end January 2019 P17 Reinvestment will be measured against cash returns to shareholders

19 Future growth plans UK Catcher Infill & Satellites Tolmount East Tolmount Main Tolmount Far East Solan Infill Asia BIGP Tuna Andaman Sea RoW Zama Brazil 717 & 661 wells Zama Wahoo, Cabrilla Sea Lion Appraisal drilling Exploration drilling Infill /development drilling Near term resource base 200 mmboeof net undeveloped reserves/resources 165 mmboeof net contingent resource to be appraised 450 mmboeof net prospective resource to be drilled January 2019 P18

20 January Premier Oil Plc 23 Lower Belgrave Street London SW1W 0NR Tel: +44 (0) Fax: +44 (0)