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Transcript of Premier oil exploration_investor_presentation_january_2010_web_version
Exploration Investor Presentation January 2010
January 2010 | 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.
January 2010 | Page 2
Target
• Build three quality businesses which deliver 100 kboepd from 400 mmbbls of reserves
Strategy
• Attain 75 kboepd from 2P reserves of 265 mmboe
• Commercialise contingent resource base of 180 mmboe
• Add 200 mmboe of2P reserves from exploration
• Make value-adding acquisitions in three core areas
• Maintain a conservative financing plan
Exploration is a fundamental part of Premier’s growth strategy
Target and strategy
January 2010 | Page 3
2009• Premier added 20 mmboe to 45 mmboe of net
resources• 5 exploration and 2 appraisal wells (excl Egypt;
now sold)• Exploration success rate: 40%• Finding cost: $4/boe
2010-2012• Unrisked target resource: 800 mmboe• Risked resource target: 100 mmboe• 12 Exploration and appraisal wells planned in 2010• Material prospects targeted• Drilling candidates from existing portfolio
2012 to 2014• Resource additions must come from success case
follow on and/or new ventures
Add 200 mmboe net reserves by 2015
Exploration – Targets
250
200
100
50
02009 2010 2011
150
300
2012 2013 2014
350
400Success Case/NV UnriskedSuccess Case/NV RiskedUnriskedRiskedCum risked additions
Global Exploration:Forecast 2C resource additions (mmboe)
January 2010 | Page 4
The majority of the worlds petroleum resources are found in 3 basin types:• Rift Basins: e.g. North Sea, SE Asia, onshore Africa and West Siberia• Passive Margins: e.g. West Africa / SE Brazil, NW Australia and the Gulf of Mexico• Fold-belts / Forelands: Columbia, Iran / Iraq and Pakistan
Premier has a competitive advantage in value creating exploration of Rifts and Fold-belts / Forelands
Premier will continue to explore the rift basins of SE Asia and the North Sea and will look to exploit its competitive advantages in selected rifts and fold-belt basins of Africa, the Middle East and Central Asia
Premier – Petroleum basin focus
January 2010 | Page 5
• Premier began exploring in 1986, initially via entry into SE Asia
• To date Premier has discovered net 800 mmboe at an overall commercial success rate of 22%
• The commercial discoveries have been made in two basin types:1) Rifts: Southeast Asia and Norway2) Frontal Fold-belts: Pakistan
• The success rate in these basin types is ~40%
• Since 2000 the exploration success has been dominated by Rift Basin exploration in Asia and latterly in Norway
Exploration – Historic performance
800
Premier Discoveries 1986-2009* (net mmboe)
500
400
200
100
01985 1990
300
600
700
1995 2000 2005 2010
* Does not include Egypt
Annual discoveriesCumulative annualdiscoveries
January 2010 | Page 6
Exploration strategy
Near-term programme• Asia: Nam Con Son Basin (Vietnam and Indonesia)
• North Sea: UK Central North Sea and Norwegian North Sea
New Venture Activity• Rift Basins: new acreage in the North Sea, Asia and potentially North/East
Africa or Central Asia
• Frontal Fold-belt plays: new acreage in the Middle East or Central Asia
The goal is to deliver 200mmboe 2P reserves through the drill bitfocussing on areas where we have demonstrated skills and expertise
January 2010 | Page 7
Exploration outlook – January 2010
Contingent WellsFirm Wells: Rig Contracted Firm Wells: Rig TBC Seismic Programme
All well timings are subject to revision for operational reasons
Unrisked net potential of 350mmboe
Pirkoh-1QadirpurPakistan
Middle East/PakistanOatesP1620
CatcherP1430
Bugle AppraisalP815UK
Grosbeak AppraisalPL378
GnatcatcherPL378
GardrofaPL406 (8/3)
Greater LunoPL359 (16/1,4)
BlabaerPL374S (34/2,5)Norway
North SeaLead BButon
Prospect B
Prospect ATunaIndonesia
Seismic104/109-05
Seismic (contingent)07/03Vietnam
Q4Q3Q2Q12010Asia
Transocean Winner
Bredford Dolphin
Transocean GSF Arctic IV
Galaxy II (STC)
Maersk Guardian
January 2010 | Page 8
Premier equities• 07/03: 30% and operator• Tuna: 65% and operator, target equity 40% pre-drill
Prospectivity• 10-15 leads and prospects• Cá Rồng Đó discovery May 2009 (10 mmbo to 70
mmbo gross resource)• Cá Rồng Vang - P&A December 2009• Resource potential 30-100 mmbo per prospect
2010 Plan• Fully interpret existing 3D• Acquire 3D over central part of Block 7/03• Drill 2 Tuna prospects
2011 Plan• Appraise Cá Rồng Đó discovery • Drill further exploration wells in 07/03
An integrated play-based approach to exploration
Exploration – Vietnam / Indonesia – Nam Con Son
January 2010 | Page 9
CRV
Amplitude analysis of 3D is potentially the key to unlocking the prize
NW
CRD / CRD North East
CRD Discovery
SE
Exploration – Block 07/03 – CRD discovery and CRV
Low amplitude area dueto gas in overburden
Anomalies associatedwith Hydrocarbons
Anomalies associatedwith Hydrocarbons?
Gas above CRD
January 2010 | Page 10
Exploration – Tuna – Regional prospectivity
Numerous material drillable prospects being defined on new 3D
NW SE
Plan to drill 2 prospects in Q3/Q4 2010Gajah Laut UtaraCacing LautSinga / Kuda Laut
Gabus
MMU
Base Muda
Basement
Arang
Top Oil Expulsion
ThermallyMature Source
ThermallyMature Source
January 2010 | Page 11
• Active 2010 programme targeting50- 200 mmboe net to Premier:
Prospect Potential(mmboe gross)
Gnatcatcher 31-60 mmboeGardrofa 15-115 mmboeGreater Luno 30-150 mmboeBlåbaer 15-75 mmboeBugle North 7-39 mmboeOates 25-107 mmboeCatcher 18-33 mmboe
• Preparing for 2011 drilling, e.g. Moth/Lacewing
Gnatcatcher
Moth/Lacewing
Gardrofa
Greater Luno
Blåbaer
Bugle Appraisal
Bream
Oates
Catcher
Premier’s rift basin expertise is being applied to the North Sea
Exploration – North Sea
January 2010 | Page 12
Huntington• Premier equity in Block 22/14b is 40% • Concept selection process ongoing• First production forecast for 2012• Unitization process underway• Exploration focus is to Pre-Tertiary potential
Moth• Appraisal of Moth and potentially a deep pre-
Cretaceous target (Lacewing) planned for 2011• Premier equity ~50% (BG operator)
Oates• Premier 50% equity and operator*• Oates prospect has 25 mmboe to 107 mmboe
potential• Low to moderate risk
* Subject to DECC approval
Building a new core area in the UK Central North Sea Rift basin
Exploration – Huntington, Moth and Oates
January 2010 | Page 13
Exploration – UK – Oates
Oates (P1620)• Premier 50% equity and operator• Reserve estimate 25-65-107 mmboe• Amplitude supported stratigraphic trap• Low to moderate risk for oil and gas• Drilling planned late Q2/Early Q3 2010• Follow up potential exists at Bowers
(10-65 mmboe unrisked reserves)
Oates
Bowers
Forties Isopach Map
OatesNW SE
Amplitude Bloom on Far Stacks
January 2010 | Page 14
Blåbaer Jordbaer
Blåbaer (PL374)• Premier 15% equity• Operated by BG• Reserves estimate 15-30-75 mmboe• Moderate risk for oil• Well status: drilling• Jordbaer project moving forward
Exploration – Norway – Blåbaer
January 2010 | Page 15
Exploration – Norway – Greater Luno
Greater Luno (Pl 359)• Premier 30% equity• Operated by Lundin• Targeting basement and possible Jurassic sandstones
related to the Luno discovery (95 mmboe) on adjacent Lundin-operated block
• Estimated reserve range 30-150 mmboe• Moderate risk for oil• Drilling planned for Q1 2010
16/4-5 Planned Well Location
Greater Luno
January 2010 | Page 16
Exploration – Norway – Bream, Gardrofa
Bream (PL 406)• Brent age oil discovered 1971, close to Yme Field• In 2009,17/12-4 and its sidetracks wells appraised
this discovery, testing 2,516 boepd• Operated by BG, Premier equity 20%• Estimated reserves 39-50-63 mmboe• Plan of development under review
Gardrofa (PL407)• Premier’s first operated licence in Norway• Premier equity 40%• Untested trap flanking a Salt dome feature• Estimated reserves 15-70-115 mmboe• Moderate risk for oil• Well planned for Q3 2010
9/1-1 Gardrofa Prospect Well Location
Success at Gardrofa will lead to a new core area for Premier in Norway
January 2010 | Page 17
Exploration challenges
1. Access to new opportunities in themes of choice
2. Maintaining exploration focus/discipline
3. Managing the natural tension between growth ambitions and the production/development of existing resources
4. Building a geoscience organisation for the future
January 2010 | Page 18
Exploration strategy
Near-term programme• Asia: Nam Con Son Basin (Vietnam and Indonesia)
• North Sea: UK Central North Sea and Norwegian North Sea
New Venture Activity• Rift Basins: new acreage in the North Sea, Asia and potentially North/East
Africa or Central Asia
• Frontal Fold-belt plays: new acreage in the Middle East or Central Asia
The goal is to deliver 200mmboe 2P reserves through the drill bitfocussing on areas where we have demonstrated skills and expertise
January 2010 | Page 19
Look forward
End 2012
• Significantly increased reserve base
• Run-rate production of 75 kboepd with related cash flow expansion
• Follow-on portfolio of development projects to add 10-15 kboepd
• Fully evaluated Nam Con Son basin opportunity
• Replenished exploration portfolio in areas of existing geological knowledge
End 2010
• Stable production from established assets
• Development drilling commenced on key projects in Indonesia and Vietnam
• New project approvals e.g. Dua, Bream, Bugle, Fife, Frøy
• Twelve well exploration programme completed
• 10-20 prospects brought to drillable status for 2011/2012 programme
January 2010 | Page 20
Appendix
January 2010 | Page 21
Exploration – Norway – Grosbeak, Gnatcatcher
Gnatcatcher/Grosbeak (PL 378)• Premier 20% equity (non-operated)• Successful Grosbeak well completed in July 2009
– Close to nearby infrastructure– Oil in Middle Jurassic sandstones– Estimated reserves 30-90-170 mmboe
• Gnatcatcher resource estimate 31-40-60 mmboe• Moderate to High risk for oil• Q3 2010 Gnatcatcher Exploration well and Q4 probable
Grosbeak appraisalGnatcatcher
SW NE
January 2010 | Page 22
Exploration – UK – Bugle North
Bugle North (P815)• Premier 41% equity, likely to move to 50%• Nexen operator• Nearfield exploration opportunity• Gross reserves estimate 7-17-39 mmboe• Adjacent Bugle discovery flowed 7,398 bopd and 9.06 mmscfd gas• Drilling planned for Q1 2010
January 2010 | Page 23
Moth (P1181)
• 50% equity in 23/21
• 57.5% operated equity in 23/22b
• 70% operated equity in 7/7d and 7/10a
• Moth discovery max flow rate 24.4 mmscfd gas and 2460 bopd
• Appraisal of Moth and potentially a deep pre-Cretaceous target (Lacewing) are under evaluation
• Drilling planned 2011
Exploration – UK – Moth
January 2010 | Page 24
Exploration – UK – Catcher
2 Km
Catcher (P1430)• Premier equity 50%• Encore operator• Reserves estimates 18-25-33 mmboe• Low risk for gas• Drilling planned Q2 2010
CatcherWTop Cromarty depth Map E
Balder
Chalk
Top Cromarty
Phase Change
2 Km
Blocks28/9 & 10c
January 2010 | Page 25
Exploration – Indonesia – Buton
meters
‘B’
Buton PSC• Premier equity 30%• Japex operator• Lead B reserve estimates 35-100-300 mmboe• High risk for oil• Prospect maturation ongoing• Drilling planned Q4 2010/Q1 2011
Lead BNW SE
0 5000
January 2010 | Page 26
North Sea / West AfricaAsiaMiddle East-Pakistan
Premier Oil – a snapshot
500
Reserves and resources(mmboe)
2005
400
0
200
300
2006 2007 2008 Proforma30/6/09
100
181
265
2009Production by type
2009Commodity price exposure
Production by region(kboepd)
Reserves and resources by category(mmboe, at 30 June 2009)
2009 2013
62% 38% 16.0 17.2
11.0Direct oil price linkedRegulated gas pricing
Reserves by region(mmboe, at 30 June 2009)
49 59
157
53 158
235
North Sea / West AfricaAsiaMiddle East-Pakistan
181 121
144
In productionIn developmentContingent resources
39% 61%
OilGas
2C reserves2P reserves
Reserves and resources by region(mmboe, at 30 June 2009)
44.2
265 446446
15.5 21.0
41.0
77.4
North Sea / West AfricaAsiaMiddle East-Pakistan
January 2010 | Page 27www.premier-oil.com January 2010