RESULTS PRESENTATION

Transcription

1 2002 PRELIMINARY RESULTS PRESENTATION 2002 P 25 MARCH 2003

2 PRESENTATION Introduction Results and Restructuring Exploration Update Business Development Summary and Outlook Sir David John John van der Welle Neil Hodgson Robin Allan Charles Jamieson 2

3 RESULTS 3

4 FINANCIAL HIGHLIGHTS Production 53.6 mboed (2001: 40.9 mboed) up 31% Turnover 263.1m (2001: 213.8m) up 23% Operating profit (1) 117.2m (2001: 88.6m) up 32% Net profit after tax 25.0m (2001: 20.3m) up 23% Pre-exceptional net profit after tax 38.1m (2001: 20.1m) up 90% Operating cashflow after interest, tax 136.1m (2001: 94.6m) up 44% Net debt 249.5m (2001: 379.3m) down 34% Gearing 80% (2001: 122%) down 42% (1) Before exceptional items 4

5 4 YEAR RECORD Working Interest Production Reported Profit After Tax mboepd m Net Debt (Including JV s) Unit Operating Costs m /boe

6 OPERATIONAL HIGHLIGHTS Production up 31% on % above target range of mboepd Record levels of over 60 mboepd in Nov/Dec Higher volumes in Myanmar and Indonesia Cost reduction drive continues Unit opex down 18% at 3 per boe Development projects on target/budget Yetagun capacity upgrade Bhit/Zamzama Top quartile HSE performance on operated assets 6

7 PROFIT & LOSS ACCOUNT Production (working interest) (mboepd) Realised oil price ($/bbl) Realised gas price ($/mcf) Turnover less: share of JVs turnover Group turnover Operating costs and royalties Amortisation Exceptional ceiling test write down Exploration expenditure written off Gross profit Administrative costs Operating profit Operating profit in JVs Total operating profit Exceptional profit on disposal Net interest and exchange movements Profit before tax Taxation Profit after tax Profit after tax (before exceptional items) Earnings per share - basic and diluted (pence) m 263 (64) 199 (54) (53) (13) (5) 74 (8) (31) 73 (48) m 214 (47) 167 (53) (44) (42) - 28 (7) (40) 49 (29) Higher production and strong gas prices Unit opex (incl. JVs) 3.0/boe - down 18% Unit DDA (incl. JVs) 3.14/boe - in line with 2001 Increased contributions from Myanmar and Pakistan Reduced interest rates and repayment of debt in Myanmar Higher taxes due to higher profits and impact of Budget

8 CASHFLOW 2002 (As reported) m 2002 (Incl. JVs) m 2001 (Incl. JVs) m Net cash flow from operations Net interest 124 (17) 184 (26) 152 (34) Increase in line with higher net revenues Taxation Operating cash flow (after interest and tax) Capital expenditure Disposals (21) 86 (54) 30 (22) 136 (73) 30 (23) 95 (80) 73 Reduced capital expenditure, and greater focus on exploration Excl JV JV Total m m m Net cash flow Exchange Movement in net debt Yetagun interest accrued (2) 88 (13) 75 (9) Exploration Fields Other 3-3 JV funding 12 (12) Opening net debt Closing net debt (272) (181) (379) (250) (445) (379) Exchange gains on $ debt due to $ weakening against Operating cash flow funds exploration costs 3.9x cover (2001: 4.8x ) Interest cover now 7.1x (2001: 4.5x) 8

9 RESTRUCTURING 9

10 RESTRUCTURING DEAL Transformation into a fully independent E&P company Transfer of Myanmar and just over half of Indonesian West Natuna block A to Petronas and Hess Cancellation of Hess' and Petronas' shares in Premier Effective date 30 September 2002 Subject to various approvals/consents prior to completion Independently verified core NAV up to 43p per share (31 December 2002 proforma) Debt and gearing reduced to 47m and 17% (31 December 2002 proforma) 10

11 COMPLETION Completion imminent: Achieved Signature of framework agreement and 16 September 2002 $210m bridge facility EGM shareholder approval 5 November 2002 Yetagun partners participation agreed February 2003 Indonesia Government approval March 2003 Pending Written Myanmar Authorities approval Court sanction and completion expected early second quarter

12 PROFORMA BALANCE SHEET Balance Sheet at 31 December 2002 m Impact of Restructuring m Proforma Balance Sheet at 31 December 2002 m Cash (including JVs) Debt (including JVs) Net debt (including JVs) Shareholders funds Gearing ratio 167 (417) (250) % (139) (41) N/A 28 (75) (47) % Transformed finances 12

13 VALUATION ROLL FORWARD Core Net Asset Value of Proven and Probable reserves (excluding exploration and appraisal, technical reserves and other upsides) 31 December 2002 (3) 30 September 2002 (2) 10% discount factor 10% discount factor Before Restructuring $ million After Restructuring $ million Before Restructuring $ million Assets sold at consideration (1) After Restructuring $ million Value of assets remaining (5) (1) (1) Total assets Other investments Net debt (401.7) (75.8) (444.5) (120.7) Net asset value Total number of shares (in millions) Net asset value per share (in pence) (4) Accretion in net asset value per share 23% 20% (1) Assets valued at D&M valuation except for assets sold where restructuring value applied as per Circular (2) 30 September 2002 valuation as per Circular (3) 31 December 2002 valuation - year-end reference date (4) NAV per share converted at $1.55= 1, close Friday 13 September, as per Circular (5) Oil price of $20 in 2003 escalating at 3% pa 13

14 POST RESTRUCTURING RESERVES AND PRODUCTION Premier 2P Reserves 203 mmboe Working Interest Production UK 16% Indonesia 52% 40,000 Annualised (2) Assets sold Retained assets 35,000 30,000 25,000 boepd 20,000 Pakistan 32% Indonesia Pakistan UK 15,000 10,000 5,000 Notes (1) Proforma total reserves at 31 December 2002 (2) Proforma 2003 production assumes completion 31 March for illustration

15 EXPLORATION 15

16 EXPLORATION DRILLING UPDATE Playmaker 204/16-1 High Impact UK 204/16-1 Indonesia Area IV Pakistan Dumbar Kirthar Benir-2 Hallel-1 Zirkani-1 Kuda Nil-1 Binturong-1 16

17 PAKISTAN EXPLORATION 2003 UPDATE: DUMBAR Bhit Field Zamzama Field: 2.4 TCF P2 Reserves (Premier Discovery 1998) Badhra Field Zirkani-1 Bhandak-A Benir-2 Benir-2 encountered gas in the Cretaceous Pab Formation Gas fields Prospects/Leads Zirkani-1: A large (1.8 TCF unrisked) simple gas prone structure, proven reservoir and trapping style to the north (Bhit and Zamzama Fields) 17

18 GUINEA BISSAU EXPLORATION 2003: SINAPA Dome Flore 800m BOIP Discovery Sinapa-2 Location Senegal Guinea-Bissau Bissau Block 2 Premier Block 4a Premier Sinapa Block 5a Premier om and R 3D Area of prospective shelfal salt diapir play Esperança Atlantic Ocean e Lin Guinea 18

19 GABON EXPLORATION 2003 PHENIX Currently finalising negotiations converting Phenix TEA into a PSC Expect to spud Dusafu well 4 th quarter 2003 Oil fields Prospects/Leads Mayumba Phenix TEA Atlantic Ocean Most likely first drilling candidate:- Dusafu prospect. A Medium Risk Pre-salt Playmaker. Dusafu Gabon Congo 19

20 2003 EXPLORATION DRILLING PLAN Q2-Q4 Pakistan Zirkani-1 (drilling) Bhandak-1 (contingent) Dumbar-1 (contingent) Badhra-2 re-entry (operating) Kadanwari West Guinea Bissau Sinapa Esperanca Sinapa Dusafu Jaipur Gabon Dusafu NE India Jaipur (provisional) Zirkani-1 Bhandak-1 Dumbar Badhra-2 re-entry Kadanwari West 20

21 BUSINESS DEVELOPMENT 21

22 STRATEGY IMPLEMENTATION Delivery of exploration success Play-makers Quality Commercial deal-making: Value adding through smart acquisitions Optimising the portfolio: - Lower R/P ratio - Managing portfolio risk - Realising value 22

23 BUSINESS DEVELOPMENT SOUTH AND SOUTH-EAST ASIA Exploit competitive advantage Grow organically from exploration Seek out and acquire properties where we can add value 23

24 BUSINESS DEVELOPMENT - UK Twin strategy: Maintain / build our North Sea production Selective exploration Premier competitive edge: Long experience Extensive data-base Favourable tax position 24

25 BUSINESS DEVELOPMENT WEST AFRICA Vast range of opportunities: Foothold in Gabon, Guinea Bissau Opportunities in an advanced state Focus is on playmakers and value-additive production acquisitions 25

26 GEOGRAPHIC FOCUS Premier s strategy will remain principally focused on our 3 core areas: UK UK: Growing and extending the business to retain a significant UK base South and South East Asia South and South East Asia: Leveraging on experience West Africa: Building a material business West Africa Existing Business Unit Geographic Focus Area 26

27 SUMMARY AND OUTLOOK 27

28 2002 ACHIEVEMENTS 2002 A watershed year culmination of 4 years of financial and operational achievement. Very strong 2002 performance Production ahead of expectation at 54 mboepd Increased cashflow and profits Reduced net debt Restructuring - completion imminent Solid base business 35 mboepd 200 mmboe of developed reserves Gearing <20% Fully independent after 8 years 28

29 PREMIER STRATEGY High impact explorer and commercial dealmaker Base business - e.g ,000 boepd Cycle out/farm down assets when significant growth potential has been exploited Realise early value for shareholders 29

30 OUTLOOK Premier goals Increasing value Closing value gap By Significant exploration success Active portfolio management Financial / operational strength + independence = flexibility and opportunity 30

31 2002 PRELIMINARY RESULTS PRESENTATION 2002 P 25 MARCH 2003

32 APPENDIX 32

33 PLANNED EXPLORATION ACTIVITY Pakistan: Zirkani-1 Pakistan: Dumbar-1 Pakistan: Bhandak-1 Pakistan: Hallel-1 Pakistan: Badhra-3 & Badhra-2 re-entry Pakistan: Kadanwari West Indonesia: Binturong-1 Gabon: Dusafu-1 Guinea Bissau: Sinapa-2 Guinea Bissau: Esperanca-1 India: Jaipur-1 India: Cachar 2003 Jan Feb Mar Apr May Jun Jul APPRAISAL SEISMIC PSC CONTINGENT APPRAISAL CONTINGENT 2004 Aug Sept Oct Nov Dec Jan Feb APPRAISAL CONTINGENT SEISMIC SEISMIC 33

34 PRODUCTION ANALYSIS 2003 YTD (mboepd) 2002 (mboepd) 2001 (mboepd) UK Pakistan Myanmar Indonesia Total % Gas Notes (1) Working interest production (2) 2003 YTD is first two months 34