17 August 2009 Dr Abdul Jaleel Al Khalifa, CEO Tarun Ohri, Director of Finance. Phone: +44 (0) ;

Transcription

1 Dragon Oil plc 2009 Interim Results 17 August 2009 Dr Abdul Jaleel Al Khalifa, CEO Tarun Ohri, Director of Finance Phone: +44 (0) ;

2 Forward looking statement The directors of Dragon Oil accept responsibility for the information contained in this presentation. To the best of the knowledge and belief of the directors (who have taken all reasonable careto ensure such is the case) the information contained in this presentation is in accordance with the facts and does not omit anything likely to affect the import of such information. Davy Corporate Finance, which is regulated in Ireland by the Financial Regulator, is acting for the Company and no-one else in relation to the Approach and will not be responsible to anyone other than the Company for providing advice in relation to the Approach. HSBC Bank Plc, which is authorised and regulated by the Financial Services Authority, is acting for the Company and no-one else in relation to the Approach and will not be responsible to anyone other than the Company for providing advice in relation to the Approach. Any person who is a holder of one per cent. or more of any class of shares in Dragon Oil plc may be required to make disclosures pursuant to Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2007 and This presentation contains statements that constitute "forward-looking statement". Forward-looking statements appear in a number of places in this presentation and include statements regarding Dragon Oil plc s (the "Company" or "Dragon Oil") intent, belief or current expectations with respect to its results of operations and financial condition. These statements reflect the Company s current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation as anticipated, believed, estimated, expected or intended. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. The Company is under no obligation, and disclaims any obligation, to update or alter the forward-looking statements included in this presentation, whether as a result of new information, future events or otherwise after the date of this presentation. 2

3 Operational overview Dr Abdul Jaleel Al Khalifa, CEO 3

4 Operational overview Average gross production increased by 11% over the 1H 2009 period to 42,808 bopd (1H 2008: 38,482 bopd) Entitlement rate increased to 65% (1H 2008: 54%) Two wells successfully completed in 1H 2009 Further two wells came on stream in July and August 2009 On track to have three full-time rigs and one more rig on a short-term basis drilling by the year-end Dzheitune (Lam) B platform currently being installed Storage capacity added and Phase 2 upgrade of the export facility completed 4

5 Production and marketing in 1H 2009 Gross field production from the Cheleken Contract Area increased by 11% to 7.7m 7m barrels of oil in 1H 2009 (1H 2008: 7.0m) Entitlement barrels of 5.0m barrels at 65% of gross production (1H 2008: 3.8m barrels at 54% of gross production) Sales of 4.9m barrels after 0.1m barrels adjustment for movement in inventory and underlift (1H 2008: 3.5m barrels) Average realised crude oil price of US$50 (1H 2008: US$108) Export routes in 1H 2009 Approx. 90% through a swap agreement to Neka (Northern Iran) for equal volume of Iranian crude oil from Kharg (Southern Iran) for marketing to international third parties 10% via Baku, Azerbaijan to maintain marketing flexibility Additional potential routes monitored 5

6 Drilling Two full-time rigs currently employed Another platform-based rig to start drilling in Q The Astra jack-up rig to commence drilling in Q Two wells competed in 1H 2009 Further two wells completed in July and August 2009 Four more wells are to be completed before the end of the year 6

7 Infrastructure Dzheitune (Lam) B platform currently being installed to be ready for drilling in Q Dzheitune (Lam) 63 platform upgraded Phase 2 upgrade of the export facility at the Aladja Jetty completed Increases loading capacity and enables simultaneous loading of two tankers to accommodate future production growth Additional slots on the Dzheitune (Lam) platforms being added Three more oil storage tanks built at the Central Processing Facility Significantly increases storage capacity 7

8 Gas monetisation Intention to commence discussions on gas pricing Tendering for Front End Engineering Design for onshore Gas Treatment Plant is ongoing Following this project, the engineering, procurement and construction contract would be tendered : Gas Treatment Plant to enable production of high quality treated sales gas and removal of gas liquids 8

9 Financial overview Tarun Ohri, Director of Finance 9

10 Financial overview Working interest Entitlement Average production, bopd 1H H ,782 33% 20,850 42,808 38,482 11% - 10,000 20,000 30,000 40,000 50,000 Entitlement barrels increased from 54% in1h 2008 to 65% ofgross production in 1H The rate was determined by operating and development expenditure and realised crude oil prices 1H H 2008 Revenue Top-line, US$m Top-line performance was affected by significantly lower realised crude oil prices that were only partially offset by higher sales volume -130 Cost of Sales

11 Income statement 1H 2009 US$m 1H 1H Change Comment Revenue % Revenue in 1H 2009 includes movement in underlift position of US$15m Barrels of oil sold, m % Attributable to higher production and entitlement rate in 1H 2009 compared to 1H 2008 levels Average realised price per bbl, $ % 2% discount to Brent achieved in 1H 2009 Cost of sales (129.6) (73.5) 76% Operating & production (29.9) (11.8) 153% 1H 2008 lower due to reversal of 2007 overlift charge of US$24m Depletion & depreciation (99.7) (61.7) 62% Increased production in 1H 2009 and upward revision of long-term field development costs Administrative expenses, other income/(loss) Operating profit % (11.9) (99.7) -88% 1H 2008 other losses included loss on fair value of derivative financial instruments of US$91.4m Finance income/(costs) % Result of higher cash balances maintained in 1H 2009 Income tax expense (34.4) (44.7) -23% Higher applicable rate offset by lower profit before tax Net profit % 11

12 Cashflow statement 1H 2009 US$m 600 Cash from operations Cash from investing Cash from financing ( g, p, (including interest of US$17m, capex of US$155.1m, of which US$136.3m cash used in investing activities plus net change in creditors and accruals of US$18.8m, amounts placed in term deposits of US$293m) Opening Closing Cash and term deposits total US$875m at period-end and include: Cash and term deposits of less than three months nil Term deposits of more than three months of US$719.6m comprising the opening balance of c.us$426.7m and the movement of c.us$292.9m 12

13 Balance sheet 1H 2009 US$m Non-current assets 30 June December 2008 Comment PPE & intangible assets Increase due to US$155.1m of capex offset by depletion and depreciation charge Current assets Inventories & trade receivables Cash & term deposits Total assets 1, , Increase primarily due to underlift debtors valued at higher market price and higher trade receivable for sale of crude oil Total equity 1, ,442.3 Increase attributed to profit for the period Liabilities Non-current liabilities Maintained zero-debt position Current liabilities Lower by US$32.1m as a combination of US$60.7m movement in current income tax liability partly offset by US$28.7m increase in trade and other payables Total equity & liabilities 1, ,

14 Capital expenditure in 1H 2009 US$155m 47% on drilling projects 53% on infrastructure development Two wells completed One workover performed Dzheitune (Lam) B platform Dzheitune (Lam) 63 platform Phase 2 upgrade of the export facility Additional slots on the Dzheitune (Lam) A platform Three more oil storage tanks 14

15 Outlook for

16 Outlook for 2009 On track to complete eight wells during 2009 Production growth for 2009 is likely to be below 15%; but we maintain the target of annual gross field production growth of up to 15% on average during Ensure three full-time rigs and one more rig on a short-term basis drilling by the year-end Secure another platform-based rig to commence drilling from Dzheitune (Lam) 28 in Q Commence drilling from Dzheitune (Lam) B platform in Q using the Iran Khazar jack-up rig Initiate discussions on gas pricing 16

17 Outlook for Drilling : up to 35 development wells to be completed Average daily production rate Up to 15% annual production growth on average Capital expenditure Infrastructure capex of US$ m Capital expenditure for drilling is mainly determined by the number of wells drilled. The progress is dependent on availability of rigs in the Caspian Sea region Gas development capex of US$ m 17

18 Thank you 18