Harbour Energy Plc · LSE:HBR

Harbour Energy — Premier Oil — FY2019 Earnings Presentation

26 slides from Harbour Energy's earnings presentation, March 2020

  1. Slide 1: 2019 Annual Results Presentation

    2020 2019 Annual Results Presentation 01 October 2018

  2. Slide 2: Agenda

    Contents Agenda 1. 2019 Performance ………………….……………………….…….. Tony Durrant 2. Financial results and acquisition status …………..……. Richard Rose 3. Operational performance …..…………………………….. Stuart Wheaton 4. Emissions policy and development update ……………. Robin Allan 5. Exploration pipeline …………………………………………

  3. Slide 3: 2019 Performance Highlights

    Highlights 2019 Performance Production outperformance  Production of 78.4 kboepd  High operating efficiency of 93% Excellent HSE performance  No recordable injuries at Premier sites  Historic low GHG intensity Continued tight cost control Catcher reached payback in October  $11/bbl opex (exclud

  4. Slide 4: Financial highlights and priorities

    Finance Financial highlights and priorities 2019 Highlights Net debt $m  Increased profitability to $164m  Continued cost control and disciplined capital allocation  Net debt reduced to less than $2bn 2500  Leverage materially reduced to 2.3x 2020 Priorities  Continued debt reduction  Complete

  5. Slide 5: 2019 Financials

    Finance 2019 Financials Increased UK production and tight cost control resulted in higher cash margins FY 2019 FY 2018 Realised pricing Production (kboepd) 78.4 80.5 2019 2018 Operating cost/boe 11 10 Oil (pre hedge) ($/bbl) 66.3 67.9 Lease cost/boe 7 7 Oil (post hedge) ($/bbl) 68.1 63.5 Cash flow (

  6. Slide 6: Disciplined spend, strong cost control

    Finance Disciplined spend, strong cost control Capex expenditure (P&D, E&A) Capital expenditure1 $m  2020 capex weighted towards P&D Abex P&D E&A – High return, quick pay back 90 400 – Tolmount drilling 46  Right sizing future spend – Tolmount infrastructure partnership 106 320 – Sea Lion, Tuna fa

  7. Slide 7: Hedging programme

    Finance Hedging programme 2020 leverage to commodity prices (post hedging) Oil hedging  $5/bbl change in oil price results in a c.$60m FCF 2020 1H 2020 2H move % of production 40% 14 Average price ($/bbl) 64 63  5p/therm change in UK gas price results in a c.$5m FCF move UK gas hedging1 2020 2021

  8. Slide 8: UK acquisitions materially improve financial position

    Finance UK acquisitions materially improve financial position  Additional free cash flow increases Anticipated timetable to completion debt reduction 7 Jan Announcement of Acquisitions and  Accelerates use of $4.2bn of tax losses Underwritten Financing Launch of Schemes of Arrangement  Reduces co

  9. Slide 9: Production assets overview

    Production Production assets overview 2019 operational performance UK Outlook  Record Group operating efficiency  Rising production profile  Record UK production – Increased contribution from  15 mmboe of 2P reserves addition SE tax advantaged UK assets Asia from production projects – Stable Asi

  10. Slide 10: Catcher outperforming, Premier 50% operated

    Production Catcher outperforming, Premier 50% operated 2019 performance Outlook  Very high operating efficiency  Maintain high operating efficiency  Improved base profile  Acquisition of 4D seismic  10 mmboe (gross) reserves upgrade  Infill drilling and near field tie-backs  Low GHG intensity

  11. Slide 11: Other UK production

    Production Other UK production Elgin Franklin (5.2 per cent, non-operated) Huntington production kboepd  2019: 6.0 kboepd (net)  Low opex 12 E.ON's base sales case Actual  Infill drilling, well interventions 8  Long field life 4 Solan (100 per cent, operated) 0 2016 2017 2018 2019 2020 ytd  201

  12. Slide 12: UK assets to be acquired

    Production UK assets to be acquired Rising UK pro forma production to c. 90 kboepd Andrew Area (50-100 per cent, operated) Shearwater (27.5 per cent, non-operated)  2019: 18 kboepd1 (net)  20191: 5 kboepd1 (net)  Low opex of $17/boe1  Partner pre-emption rights lapsed  Low emissions of 13 kg/bo

  13. Slide 13: South East Asia

    Production South East Asia Cash generative: $120 million of free cash flow generated from SE Asian assets in 2019 NSBA, Indonesia (28.7% op) NSBA production kboepd (net)  2019: 11.5 kboepd (net) 15  Low opex of $8/boe  BIG-P first gas 10  Infill wells maintain profile  Reserves upgrade 5 63% 0

  14. Slide 14: Development asset review – a Net Zero Commitment

    Development Development asset review – a Net Zero Commitment Low Carbon by Design  Measuring, managing and minimising Premier’s emissions  Emissions Hopper approach  Best Available Technology Carbon Neutral by Commitment  Nature-based offsetting in Premier’s geographies  All operated developmen

  15. Slide 15: Tolmount – Low Carbon by design

    Development Tolmount – Low Carbon by design  On track for first gas by year-end – Platform sailaway in April – Offshore platform installation in May – Development drilling to start in June – 20” gas export pipelay during summer  Acquisition of additional 25 per Tolmount pre-commissioning underway

  16. Slide 16: Operated development asset review

    Development Operated development asset review Low Carbon by Design Carbon Neutral by Commitment Tolmount East Area Andrew Lwr. Cretaceous Sea Lion Phase 1 Tuna Discoveries  160-300 BCF gross  Under test since 2018  250 mmbbls gross  100 mmboe gross resource (P50-P10)  Adds 9 mmboe (net),  Conv

  17. Slide 17: High value exploration portfolio

    Exploration High value exploration portfolio Targeting under explored plays in proven hydrocarbon basins 2019 E&A highlights  Successful Zama appraisal campaign (Mexico) Alaska United Kingdom – Resource increased – Unitisation and sales process underway  Tolmount East discovery (UK) Mexico Indones

  18. Slide 18: Alaska North Slope: new country entry

    Exploration Alaska North Slope: new country entry  Renewed industry interest in under-explored conventional Major ANS Licence holders Brookian play following technological advances  Farmed in for a 60% interest in Area A with option to acquire 50% of Area B or C on appraisal completion  BP drille

  19. Slide 19: Alaska North Slope: Area A

    Exploration Alaska North Slope: Area A Charlie-1 (Malguk-1 appraisal)  Premier 60 per cent interest  Spudded 2 March  Two flow tests planned to test the deliverability of the Torok sandstones – Targeting 200 bopd on test  Secondary targets in the Schrader Bluff  50 Day well; initial results exp

  20. Slide 20: Brazil: Block CM-E-717

    Exploration Brazil: Block CM-E-717  Premier operated, 50 per cent interest  Well to spud in Q3 2020  600m water depth Berimbau  2 intervals to be intersected – Berimbau: 230-450 mmbbls (Pmean to P10) Maraca gross resource – Maraca: 85-165 mmbbls (Pmean to P10) gross SW Exploration Well NE resour

  21. Slide 21: Mexico: Sureste Block 30 and Burgos Blocks 11 & 13

    Exploration Mexico: Sureste Block 30 and Burgos Blocks 11 & 13 Wahoo prospect Block 30, Sureste Basin >300 mmbbls  Premier 30 per cent non-op On block gross resource potential  Water depth of 40-200m  Block-wide 3D seismic survey completed  Wahoo flat spot similar to Flat Spot Zama  Drilling ta

  22. Slide 22: Andaman Sea: play opening programme

    Exploration Andaman Sea: play opening programme  Expanded position in South Andaman Sea gas play Multi-TCF  3D survey completed; highly encouraging initial results gross potential  Timpan (Andaman II, Premier 40 per cent op), planned for 2021 – Targeting 1.5 TCF of gross unrisked resource – Large

  23. Slide 23: 2020 Outlook

    Summary 2020 Outlook Generate free cash flow, driving further debt reduction  Production of 70-75 kboepd pre-acquisitions  Maintain tight cost control  Deliver Zama sale Progress high value projects  Add up to 15 kboepd through infill and workover activity  Deliver Tolmount first gas; sanction

  24. Slide 24: Forward production profile

    Summary Forward production profile  Rising, highly cash generative production base  Near to medium term growth from UK assets; South East Asia stable  Longer term growth from new international projects Indicative production profile Base profile Awaiting approval UK Acquisitions Growth projects kb

  25. Slide 25: 7 year balanced capital allocation (2020 to 2026)

    Summary 7 year balanced capital allocation (2020 to 2026) Reinvestment in new projects will be measured against shareholder returns Non-discretionary Discretionary 100% 25% 10% 10% 10% 45% 2018-2019 allocation At $65/bbl, 40p/therm the business will deliver  Debt reduction 40%  Positive free cash

  26. Slide 26: March 2020

    March 2020 www.premier-oil.com Premier Oil Plc 23 Lower Belgrave Street London SW1W 0NR T: +44 (0)20 7730 1111 E: premier@premier-oil.com

Premier Oil — FY2019 Earnings Presentation on 6ix