to the Approach. HSBC Bank Plc, which is authorized and regulated by the Financial Services Authority, is acting for the Company and no one

Transcription

1 Driving Dii Production Growth Dragon Oil plc 2009 Full Year Results Dr. Abdul Jaleel Al Khalifa, CEO Emad Buhulaigah, General Manager Petroleum Development Tarun Ohri, Director of Finance

2 Forward Looking Statements 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 care to 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 authorized and regulated by the Financial Services Authority, is acting for the Company and no one else in relation lti to the Approach and will not be responsible to anyoneother than the Company for providing advice di 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 materialize, 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 1

3 Operational overview Dr Abdul Jaleel Al Khalifa, CEO 2

4 Operational Highlights g Landmark production of 50,000 bopd reached at the turn of Average gross production rose 9% to 44,765 bopd (2008: 40,992 bopd) Entitlement barrels was 58% (2008: 60%) of gross production Eight wells successfully completed during 2009 with two full time rigs New Dzheitune (Lam) B platform completed with plans to support 8 new wells by 2011 Additional slots on Dzheitune (Lam) A platform installed and Dzheitune (Lam ) 63 platform refurbished and upgraded Construction of 30, 40km trunkline and Phase 2 expansion of Central Processing Facility expected to be completed H2 10 3

5 Production and Marketing Gross field production increased by 9% to 16.3m barrels of oil in 2009 (2008: 15.0m) Entitlement barrels increased by 6% to 9.5m (2008: 9.0m) barrels 40% increase in sales volume to 10.5m (2008: 7.5m) barrels on adjustment of 1m barrels towards movement in inventory and lifting position Average realised crude oil price of US$62 (2008: US$91) )per barrel Export routes in 2009 Approx. 90% through a swap agreement with Iran 10% via Baku, Azerbaijan to maintain marketing flexibility 4

6 Drilling Two rigs employed during 2009 Completed 8 wells in 2009 Astra jack up rig operating on 6 months basis Contract for Iran Khazar jack up rig extended ddto May 2011 Platform based NIS rig secured for Contract with Yantai Raffles Offshore Ltd for new Super M2 jack up rig to commence drilling in Q

7 Infrastructure New Dzheitune (Lam) B platform installed in November 2009 with plans to drill 8 wells from this by end 2011 Dzheitune (Lam) 63 platform upgraded Additional slots on Dzheitune (Lam) A platform added 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 30 trunkline project and Phase 2 expansion of Central Processing Facility expected to be completed during H2 10 6

8 Gas monetization Strategic importance to monetize 3.1 tcf 2C gas resources 30, 40km trunk line expected to be completed dduring H2 10 Contract awarded to Saipem in Feb 2010 for Front End Engineering Design of onshore Gas Treatment Plant Following this project, the engineering, procurement and construction contract would be tendered : 12: GasTreatment Plantto to enable production of high qualitytreated treated sales gas and removal of gas liquids Discussions continue with Government of Turkmenistan on gas pricing 7

9 Strong localization program Our main asset People Turkmenistan Nationals comprise over 90% of in country manpower Emphasis to provide qualified Nationals an open career path Dragon Oil Excellence Center Dedicated training facility in Hazar Provides programs in key skill areas 8

10 High Angle, Extended Reach Wells Leveraging gtechnology 3D Seismic Imaging & Reservoir Simulation Models (over 1 million cells) Operations Visualization Centre 9

11 Corporate Social Responsibility Inauguration of the Hazar 1,500 m3/day desalination plant Plan to build a polyclinic in Hazar to serve local community Refurbishment of Hazar School #3 School playground 10

12 Financial overview Tarun Ohri, Director of Finance 50,000 Average Gross Daily Production 800 Sales Revenue 40, ,000 20, , Net Profit 1500 Cash Balance

13 Financial overview Average production, bopd Top line US$m En ntitlement (Approx) Working interes st ,000 24, , Revenue 40,992 9% 706 (282) Cost of sales 6% (193) 10,000 20,000 30,000 40,000 50,000 Entitlement barrels was approximately 58% of gross production in 2009 compared to 60% in The rate is dependent, amongst other factors on operating and development expenditure, fiscal terms and realised crude oil prices. (400) (200) Top line performance was affected by significantly lower realised crude oil prices that were only partially offset by 40% higher sales volume. 12

14 Income Statement 2009 US$m Change Comment Revenue (12%) Lower revenue in 2009 is primarily attributable to a lower average realised price partially offset by a 40% increase in the volume of crude oil sold Barrels of oil sold, m % Attributable to increased production, changes in the lifting position and movement in inventory, slightly offset by lower entitlement production as compared to 2008 Average realised price per bbl, $ (32%) Almost at par with the Brent in 2009 Cost of sales (282.3) (193.2) 46% Operating & production (93.8) (43.8) 114% 2009 higher due to change in the lifting position and a lower crude oil inventory at year end. Depletion & depreciation (188.5) (149.4) (26%) Increased production in 2009 and upward revision in estimates of long term field development costs Administrative expenses, other income/(loss) Operating profit (34%) (26.8) (38.9) 31% Decrease of 31% was due to a hedging loss in 2008 with no losses in current year, offset by higher admin expenses related to ENOC approach, investigations and corporate restructuring. Finance income/(costs) % Result of higher cash balances maintained in 2009 Income tax expense (86.0) (130.0) 0) 34% Lower tax expense as a result of lower profit before tax Net profit (30%) 13

15 Cashflow Statement Cash from operations Cash from investing Cash from financing Capital expenditure in 2009 was US$320m of which US$269m was cash outflow and US$51m change in creditors and accruals Opening cash Closing cash Cash and term deposits total US$1,138m as at year end includes: Term deposits of less than three months US$203m Term deposits of more than three months of US$870m comprising the opening balance of US$426m and the movement of US$444m Abandonment and decommissioning fund of US$126m 14

16 Balance Sheet 2009 US$m Comment Non current assets PPE & intangible assets Increase due to US$320m of capex offset by depletion and depreciation charge Current assets Inventories, trade & other Decrease primarily due to lower inventory and lower trade receivables receivable for sale of crude oil Cash & term deposits 1, Increase is due to cash generated from operations Total assets 2, ,768.8 Total equity 1, ,442.3 Increase attributed to profit for the period Liabilities Non current liabilities Maintained zero debt position Current liabilities Higher by US$112.5m as a combination of US$4.4m movement in current income tax liability, overlift creditors of US$17m and a US$91.1m increase in trade and other payables Total equity & liabilities 2, ,

17 Capital expenditure in % Drilling Projects Eight wells completed US$317m New Dzheitune (Lam) B platform installed Dzheitune (Lam) 63 50% Infrastructure Development platform upgraded d Phase 2 upgrade of export facility finished Additional slots on the Dzheitune (Lam) A platform added Three additional oil storage tanks 16

18 Outlook for Wells Four rigs to be employed during 2010, two full time Infrastructure Two additional wellhead and production platforms to be built and installed in next 2 3 Plan to complete lt 11 wells years during the year Total capex of US$ m Plan to drill in west of on infrastructure for crude oil Cheleken Etension Extension planned d , 12 including US$250m for 2010 Up to 40 development wells, including 5 appraisal Additional capex of US$150 wells, planned for m for gas development Production Expect production growth of 15% for 2010 Target average annual production growth of 10% to 15% during