2011 half yearly results 25 august 2011 - premier oil · •12 developments proceeding through...
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2011 Half Yearly Results 25 August 2011
25 August 2011 | Page 1
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.
25 August 2011 | Page 2
Agenda
Introduction and highlights Simon Lockett
Chim Sáo and Gajah Baru update Robin Allan
Future developments update Neil Hawkings
Exploration update Andrew Lodge
Financial results Tony Durrant
Summary Simon Lockett
25 August 2011 | Page 3
2011 Overall highlights
• Chim Sao and Gajah Baru projects on stream imminently
– Production of 60,000 boepd by year end
• 12 developments proceeding through development stages
– Building towards 100,000 boepd
• Resource additions through exploration on track to deliver 200 mmboe of
2P reserves by 2015
• Wytch Farm, Solan and Fyne acquisitions add 43 mmboe of reserves and
resources at a cost of around $5/bbl
• Financial strength positions us well
– Profits after tax of $88.5 million
– Growing operating cash flows exceed capital commitments
– Cash and undrawn bank facilities of $1.3 billion
25 August 2011 | Page 4
Chim Sáo and Gajah Baru update
25 August 2011 | Page 5
Chim Sáo – WHP
WHP Jacket prior to Load Out
WHP Topsides onto Jacket
WHP Jacket Sail Away
WHP Topsides onto Jacket
WHP Topsides Lift Off Barge
Ensco 107 Rig & WHP
25 August 2011 | Page 6
Trading Tanker prior to Conversion Conversion of FPSO in Dry Dock
Sail Away of Lewak Emas
Arrival of Lewak Emas on Location
Chim Sáo – FPSO
25 August 2011 | Page 7
• FPSO is on location with mooring system,
risers and connections to the WHP
installed and tested
• Safe handover of the FPSO processing
equipment from commissioning to
operations is imminent
• Production crew familiarisation is ongoing
• First oil in tank expected 15 September
• Total costs of project within original budget
of $800 million
Chim Sáo – production imminent
25 August 2011 | Page 8
Chim Sáo – reserves increasing
Chim Sáo
• Six production wells ready to produce
• MDS5 reservoir is significantly better than prognosed
• Additional potential in shallow MDS1 reservoir
Near field success
• N2P well intersected a 20m oil column
• Additional gross resource estimate 7 to 12 mmbo
Dua
• Dua subsea development is nearing project sanction 2000m
3060mss
Chim
Sáo
West Closure
Far Closure
Near Closure
25 August 2011 | Page 9
Gajah Baru – Central Processing Platform (CPP)
CPP Jacket Load Out from
NSB Yard (Batam)
CPP Jacket Launch from Saipem S45
CPP Topsides Load Out from SM0E Yard (Batam)
Up-ending of CPP Jacket by Castoro 8
25 August 2011 | Page 10
Gajah Baru – CPP topsides float-over
Completed Gajah Baru Complex
CPP Topsides Float-over Operation
Export Pipeline Installation
Bridge Installation
25 August 2011 | Page 11
Gajah Baru – WHP, CPP
CPP from WHP
Sea Aaryan Hook-up
Accommodation Vessel
CPP and WHP
WHP from CPPCPP from Sea Aaryan
25 August 2011 | Page 12
• Project ahead of schedule
– Development drilling successfully
completed in February 2011
– Jacket installed and piling completed in
June 2011
– CPP topsides installed on jacket and
bridge-linked to wellhead in July 2011
– Gas export pipeline installed and tested in
July, dewatered and dried in August
• Production for fuel gas ready
• Gas export to start early September ahead of
contract date of 1 October
Gajah Baru – production imminent
25 August 2011 | Page 13
Future developments update
25 August 2011 | Page 14
Progress towards 100,000 boepd
Catcher
Development planning underway
Huntington
Development drilling underway
Gajah Baru
Early first gas
Rochelle
Unitised development
Chim Sáo
First oil in next few weeks
2011 2012 2013-16
Fyne
Operatorship acquired
East Fyne
Central Fyne
Appraisal target
25 August 2011 | Page 15
Chim Sáo
Bream
Project Initiation
Project Sanction Ready for
Production
As
iaN
ort
h S
ea
Future development portfolio
Concept Selection
Gajah Baru
Catcher Solan
Caledonia
Rochelle
Huntington
Dua
Cá Rồng Đo
Fyne
Frøy
Block A Aceh
Pelikan &
Naga
No
rth
Se
aA
sia
25 August 2011 | Page 16
Huntington
• Drilling template installed
• First development well highly successful
• Work continuing on the Sevan Voyageur
FPSO upgrade project and sub-contracted
modules
• Sevan’s plan is for FPSO sail-away in
April, implying June 2012 for first oil
25 August 2011 | Page 17
Rochelle
• Phase 1 field development plan approved (East area)
• Single field development area determined by DECC
• Unitised development – Premier 15% equity
• Plans for West area being integrated
– West area pipeline route survey completed (May)
• Scott tariff arrangements concluded
– Initial tie-in works completed
during Scott shutdown (August)
• Subsea long lead equipment ordered
• Drilling rig contract being negotiated
• First gas targeted for 4Q 2012
Rochelle
25 August 2011 | Page 18
Natuna Sea Block A
• 2010 was a record year for Block A gas sales
– From Singapore demand of 355 bbtud,
Block A sold 160 bbtud vs a DCQ of 126
bbtud
• 1H 2011, Singapore demand was 373 bbtud
with Block A supplying 154 bbtud
• Gajah Baru builds up to 130 bbtud in 2012
• In 2011 expect to approve:
– Anoa phase 4 compression expansion
(2013)
– Pelikan and Naga field developments
(2013)
• Total sales capacity will increase to
400 bbtud
• Gajah Puteri planned for 2015
Natuna ‘A’ 2015
25 August 2011 | Page 19
Catcher
• Formal concept selection underway
• Development options
– FPSO
– Fixed Platform
– FSO
– Subsea wells
– Platform wells
– Gas export/injection
• Premier’s objective is to
proceed with fast track
development
Catcher Development Field Illustration
25 August 2011 | Page 20
Fyne
• In May, option exercised to become operator with a 39.9% equity stake
– Pre-development work progressed
– Joint venture partners evaluating development options
– Project sanction planned for early 2012 with first oil targeted for mid-2014
• Development options
– Stand-alone
– FPSO
– Platform
– Subsea-tieback to host
– Eg Anasuria
• Additional discoveries and exploration potential
provide upside opportunity
– Appraisal well planned for Q4 2011 to de-risk
East Fyne area
– Erne exploration well planned for Q4 2011
East Fyne
Central Fyne
NW Fyne
Appraisal targetHeight
above
4583ft
N1000m
25 August 2011 | Page 21
Solan
• SPA and Loan Agreement executed in May
• Premier will become the operator with a 60% equity stake
• Further engineering studies are underway
• Project now targeting 2014 for first oil-8
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-9800-9700-9600-9500-9400-9300-9200-9100-9000-8900-8800-8700-8600-8500-8400-8300-8200-8100-8000-7900-7800-7700-7600-7500-7400-7300
Depth
Producer at reservoir level (Active 8 ½” Section)
Injector at reservoir level(Active 8 ½” Section)
Background Map =Top Solan Depth ft TVDSSwith P50 Field Outline
Well Penetrations shown at Top Solan
N1km
P1
P2 8 ½” (June 2013)
W1 8 ½” (June 2012)
W2
P3 in Upside Case (July 2014)
Location of Wellhead Cluster at Sea Bed
Producer & Injector 12 ¼” Sections at reservoir level (Cased)
Injector at reservoir level(Inactive 8 ½” Section)
W1 12 ¼” (May 2012)
P2 12 ¼” August 2012
P1 12 ¼” (July 2012)
P1 8 ½” (May 2013)
W2 (June 2014)
Main decision points for well steering or completion options
Current uncertainty in FWL across field
25 August 2011 | Page 22
Progress on other developments
Bream (Norway)
Dua (Vietnam)Block A Aceh (Indonesia)
Frøy (Norway)
Caledonia (UK)
CRD (Vietnam)
CRD-1X CRD-2X
Anomalies associated
with Gas
Cau sequence
25 August 2011 | Page 23
A path to 100,000 boepd
1000
Development capex
(US$ million)
400
200
0
500
700
900
2011 20132012 2015
800
600
100
300
2014
120,000
Production outlook
(bbls/day)
40,000
20,000
0
60,000
2011 20142012 2013 2016
100,000
80,000
2015
Future Norway Developments
Future UK Developments
Future Asia Developments
End of Year Run Rate
Huntington, Rochelle (UK)
Chim Sáo, Gajah Baru (Asia)
On Production
25 August 2011 | Page 24
Exploration update
25 August 2011 | Page 25
Progress towards 200 mmboe of discoveries
200
100
50
02010 2011
150
2012 2013 2014
250
Target cumulative risked additions
Actual cumulative proved and probable discovered resources
Actual cumulative plus possible resources
Global exploration:
Forecast resource additions (mmboe)
2009
Exploration and appraisal drilling
• At least 9 wells planned for the remainder of 2011
• Discoveries at Burgman in the UK, K27 in
Pakistan and North West of Chim Sáo in Vietnam
• Grosbeak and Cá Rồng Đo appraisal wells
successfully completed
• Net estimated resource additions 20 to 30 mmboe
New ventures
• PSCs signed for exploration blocks L10A and
L10B in Kenya
• Exercised option to farm-in to the Greater Fyne
area in the UK – East Fyne appraisal well and
Erne prospect to be drilled 2H 2011
• Premier pre-qualified for the Iraq 4th Exploration
round in 2012
• Actively pursing new venture opportunities in all
focus areas and themes
25 August 2011 | Page 26
Unrisked Resource Portfolio
Risked Resource Portfolio
Discovered resource
under appraisal 80 mmboe
Leads
1,500 mmboe
Prospects
450 mmboe
Total
1,950
mmboe
Leads
180 mmboe
Prospects
120 mmboe
Total
380
mmboe
• Unrisked prospective resource portfolio – 1,950 mmboe
– 450 mmboe in prospects
– 1,500 mmboe in leads
• Portfolio increased from 2010
– Increased lead inventory in MEAP (Kenya)
– Prospect inventory adjusted post Tuna drilling
• Risked pospective resource portfolio – 380 mmboe
– 120 mmboe in prospects
– 180 mmboe in leads
– Greater focus to lead maturation in 2012
• Discovered resource under appraisal – 80 mmboe
Resource portfolio
On track to deliver 200 mmboe
of 2P reserves by 2015
Discovered resource under
appraisal 80 mmboe
25 August 2011 | Page 27
Samedi15
Norway
PL378: Grosbeak
UK
P077: East Fyne
P1784:
Typhoon14
PL406:
Gardrofa
P1466:
Bluebell
P1212: Stingray12
Blk 104:
Jackfruit34 6
Natuna:
Biawak Besar
4
Natuna:
Anoa Deep
3.5
Buton:
Benteng23 3
Aceh:
Matang18 10
K-29
P1875:
Erne
Badhra-7
K-30
Badhra-6 Parh
Norway
PL374S: Blabaer
P1430: Cougar
P1420:
New York53
P1420: Manhattan
P1420: Newark
K-32
Badhra South
Blk 07:
Blue Marlin72 6
Blk 07:
Silver Sillago60
151
2
1
4
2
P1430:
Rapide
P1430:
Bonneville
Blk 07:
AD Deep
Aceh:
Peudawa Rayeu
Tuna:
Singa
Laut
Blk 07:
CRT
P1559:
Cornet
3 1
1
24
4
PL359: Luno II21 4
P1181:
Lacewing15 2
P1430: Carnaby10 7
11 4
17 6
26
11
28
<11
24
<1<1
<11
Vietnam
Block 12W: CS NW
Vietnam
Block 07/03: CRD
LeadsTotal Unrisked: 1500
Total Risked :180
ProspectsTotal Unrisked: 270
Total Risked: 63
Mature ProspectsTotal Unrisked: 180
Total Risked: 57
AppraisalTotal: 80
AppraiseDrillEvaluate
Acquire Licence
Drill Decision
Appraisal
Approval Gate
Project
Extension
Gate
ME
AP
No
rth
Se
aA
sia
NB: Resource estimates identified for 2011-2012
prospective drilling candidates
<10 10-25 25-50 >50
Prospect potential resource
mmboe (net unrisked):
Risked
Progress towards 200 mmboe of discoveries
Pre-
Development
Seismic
32
6
60 10
25 August 2011 | Page 28
Exploration – Indonesia/Vietnam – Nam Con Son Basin
Key prospects with Oligocene reservoirs at optimum depths
Gajah Laut Utara
Belut Laut
Silver Sillago Fault Terrace
CRD NEBlue Marlin
AD Deep
Mackerel
Singa Laut Fault Terrace
Top Oligocene
Structure Map
CRD
• Unique integrated
database
• New petroleum system
established
• 600 mmbo and
>1 TCF of unrisked
prospective resource
potential
25 August 2011 | Page 29
Silver SillagoChim SáoSW NE NW SE
Top NCS
Top Basement
Top Cau
MMU
Dua
• Similar proximal access to source package
• Fault seal remains a key risk
Silver Sillago Line
Chim Sáo Line
Exploration – Vietnam – Block 07/03
Chim Sáo vs Silver Sillago
CS
-2X
MMU
Top Basement
Top Cau
MDS5
25 August 2011 | Page 30
• Oligocene prospectivity remains up dip from proven source kitchens
• Singa Laut /Kuda Laut
– Oligocene sandstones at 3,000 mss
– Fault seal risk mitigated by anticline to the west of bounding fault (Kuda Laut)
– Unrisked resource estimate 100 mmboe
Gajah Laut Utara-1TD 4687m
Belut Laut-1TD 4977m
Kuda
Laut
Singa
Laut
MMU
L.Terumbu
Arang
Gabus
Exploration – Indonesia – Tuna PSC
Depth of Top Oligocene
in Gajah Laut Utara
25 August 2011 | Page 31
• Premier has the regional database to
pursue amplitude supported Tertiary
prospects throughout the Central North
Sea
• The focus is towards basin margin
settings in structural/stratigraphic traps
• Over the next 12 months Premier will
drill at least 5 exploration wells on
this play
• These wells will test a total gross
unrisked prospective resource of
100 mmbo (net 40 mmbo)
• New venture options are being actively
pursued both in the UK and Norway
Exploration – North Sea
Building on the Catcher success
Carnaby
East Fyne / Erne
Bluebell
Eocene Turbidite Sand Fairway
Typhoon
25 August 2011 | Page 32
Appraisal – UK – Block 21/28a – Greater Fyne Area
East Fyne Appraisal
• Premier 39.9% equity
• Well planned for Q4 2011, targeting Eocene Tay Sands
• Gross prospective resource estimate 9-12-16 mmbo
Erne
• Premier equity 50%
• Well planned for Q4 2011 – ‘Catcher’ Tay play type analogue
• Gross prospective resource estimate 10-18-35 mmbo
Main
Mid-Tay
Chalk
Upper
Tay
Horda
Central Fyne East Fyne
Appraisal well21/28a-9
21/28a-9Y
East Fyne
Approx position of
predicted OWC in TWT
W. GuillemotErne Prospect
Chalk
Upper
Tay
BTM
Tay amplitudes
Erne Prospect
25 August 2011 | Page 33
Bluebell (P1466 ) (15/24c,15/25f)
• Premier 60% equity
• Palaeocene reservoir – Crevasse play
• Gross prospective resource estimate 9-19-31 mmboe
• Partial carry by farm-in partner
• Well planned for Q4 2011
• Valuable tieback opportunity
Exploration – UK – Bluebell
Top Forties Depth SS, CI=5 m
Top Forties Lambda Rho Extraction
Top Forties Lambda Rho Extraction Near Offset
Lamda Rho, HC Indicator
Bluebell
Bluebell
Bluebell Well Location
Bluebell Site Survey
Bluebell
Bluebell Well Location
Bluebell
25 August 2011 | Page 34
Block 21/7b
Typhoon (21/7b)
• Premier 70% equity
• Block awarded in 2010
• Gross prospective resource estimate
– 20-27-36 mmbo (Tay reservoir)
• Risk assessment
– Moderate risk
– Seismic reprocessing ongoing
• Well planned for Q2 2012
Exploration – UK – Typhoon
Typhoon
Scolty Oil discovery
Block 21/8
Typhoon Amplitude response
on inverted data
Typhoon Prospect
25 August 2011 | Page 35
Carnaby
Exploration – UK – Carnaby
Carnaby (28/9)
• Premier 35% equity
• Gross prospective resource estimate– 15-30-50 mmbo (Tay reservoir)
• Expected phase oil– Gas in shallower Eocene targets (Upper Tay)
• Risk assessment– Moderate risk at lower Tay level - oil quality
– High risk at Cromarty level - reservoir
presence and charge
• Acquisition of new 3D seismic data ongoing
• Well planned for Q2 2012
Varadero
Carnaby Catcher
N & E
Catcher Main
Catcher E
Carnaby
Varadero
NS
Lower Tay
Upper Tay
Burgman
Cromarty Depth Structure
Carnaby Prospect
Eocene ( Lower Tay) amplitude extraction
Carnaby
Burgman
Burgman
25 August 2011 | Page 36
Exploration – Norway – Luno II
Luno II (PL 359)• Premier equity 30%
• Greater Luno is a regional high
– Focus for oil migration
– Regional top seal drapes the high
– Jurassic/Triassic reservoirs flank the high and, where
fractured, basement is also a reservoir
– ~2,000 mmboe discovered to date
• Key play risks
– Reservoir presence on the margins of the high
– Lateral seal
• Aldous Major South discovery
– Proves eastern margin of the basement high
– Reserve estimate ~1,200 mmbo
• Luno II
– Southwest margin prospect down dip from cemented
basement- up dip from proven source kitchen
– Mesozoic sand presence interpreted from seismic and
local well data
• Gross prospective resource estimate
– 45-148-286 mmbo (Operator estimate)
• Well planned for Q2 2012
Aldous/ Avaldnes
PL 359
BCU Time MapC.I. 100 ms
Luno/Apollo
Ragnarrock
NELuno II Prospect
BCU
Jurassic
Triassic
SW
10km
Luno II Prospect
25 August 2011 | Page 37
Asia2011 2012
Q3 Q4 Q1 Q2
Vietnam 104/109-05 Qua Mit Vang (Jackfruit)
Buton Benteng-1
Natuna Sea Block A Anoa Deep
Biawak Besar
Block A Aceh Matang
North SeaNorway PL406 Gardrofa
PL359 Luno II
UK P1466 Bluebell
P077 East Fyne
P1430 Carnaby
P1212 / P1771 Stingray
Block 21/29d Erne
P1784 Typhoon
P1557 West Orkney
Middle East & PakistanPakistan Kadanwari K-29
K-30
Bhit-Badhra Badhra-6 Parh
Kenya Blocks 10A & 10B 2D & 3D Seismic
Exploration drilling Q3 2011 to Q2 2012
• ~ 300 mmboe
gross unrisked
resource
• 2011 full year
exploration
expenditure
~ $250 million
pre tax
12 to 15 exploration and appraisal wells planned in 2012
Contingent Wells
Firm Wells: Rig Contracted
Firm Wells: Rig TBC
Seismic Programme
All well timings are subject to revision for operational reasons
Aqua Marine Driller
W Callisto
Antareja-8
W Callisto
Bredford Dolphin
Sedco 704
Sedco 704
WilPhoenix
25 August 2011 | Page 38
Financial results
25 August 2011 | Page 39
Production update
1H 2011
• Steady performance in Pakistan
• Anoa field in Indonesia continues to
respond well to Singapore demand
• Reduced facility up-time in UK North Sea
Outlook
• Recovery in UK performance
• New fields in Asia drive 60 kboepd year-
end run rate
• 2012 average of around 60 to 65 kboepd
• 75 kboepd run rate post Huntington
80
Production (working interest)
(kboepd net)
20
0
30
50
70
2010 A 2011 E1H
2011
2H
2011 E
2012 E
60
40
10
Mid Point Estimate
End of Period Run rate
25 August 2011 | Page 40
Revenue and income statement
6 months to30 June 2010
Average gas pricing ($/mcf)
2011 2010
Singapore $18.5 $13.8
Pakistan $3.7 $3.3
Average Brent oil price was $111.1/bbl
(2010: $77.3/bbl)
Operating costs per barrel ($/bbl)
2011 2010
UK $34.2 $24.7
Indonesia $9.6 $7.1
Pakistan $2.1 $1.6
Group $14.0 $12.9
Tax credit arises due to revaluation of
UK tax allowance pool following UK
government tax changes
Highlights6 months to30 June 2011
Working Interest Production (kboepd)
Entitlement Interest Production (kboepd)
Realised oil price ($/bbl)
Realised gas price ($/mcf)
Sales and other operating revenues
Cost of sales
Gross profit
Exploration/New Business
General and administration costs
Operating profit
Financial Items
Profit before taxation
Taxation credit/(charge)
Profit after tax
46.6
42.6
78.1
5.8
$m
367
(189)
178
(46)
(8)
124
(12)
112
(50)
62
36.9
33.8
109.7
8.3
$m
342
(200)
142
(91)
(9)
42
(9)
33
56
89
2011 sales revenues include realised
hedging loss on oil and gas
production of $58.2 million (pre-tax)
25 August 2011 | Page 41
Overseas
UK
PRT
CT
Prior period revisions
UK deferred tax credits
Tax credit for the period
6 months to30 June 2010
$m
Group taxation position
27.8
17.7
nil
(18.4)
27.1
22.5
49.6
Recognised previously as deferred tax asset
Currently unrecognised
Tax allowances at 1 Jan 2011
2011 estimated net additions
Estimated end 2011 position
UK Tax Allowance Position$m
972
140
1,112
238
1,350
• Additional deferred tax credits mainly due to change in UK tax rate
• UK allowances of $140 million not yet recorded
• UK cash corporate taxes not anticipated until at least 2015
6 months to30 June 2011
$m
46.0
30.4
nil
(0.6)
75.8
(131.8)
(56.0)
25 August 2011 | Page 42
Cash flow
Cash flow from operations
Taxation
Operating cash flow
Capital expenditure
(Acquisitions)/disposals, net
Finance and other charges, net
Pre-licence expenditure
Net cash flow
6 months to30 June 2010
$m1H 2011
Development
Exploration
Estimated capex split ($m)
178
119
297
1H 2011 2010
Cash
Net Debt
Balance sheet ($m)
300
406
902
483
582
804Undrawn facilities
273
(51)
222
(212)
20
(27)
(11)
(8)
6 months to30 June 2011
$m1H 2010
142
70
212
246
(4)
242
(297)
(87)
(24)
(10)
(176)
Outlook
• Forecast full-year 2011 spend – $500m (development) and $250m(exploration)
• Net debt of around $600m (gearing of 32%)
• Net debt peak of around $750m on forward curve
31 Dec
25 August 2011 | Page 43
Summary
25 August 2011 | Page 44
• Asian development project success
• Stronger North Sea production performance anticipated in 2H
• Good progress on pipeline of development projects
• Exploration on target to deliver 200 mmboe of discoveries
• Acquisition track record at reasonable prices
• Strong first half year financial results and balance sheet position
Delivering on strategy
25 August 2011 | Page 45www.premier-oil.com 25 August 2011
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