Harbour Energy PLC · LSE:HBR
Harbour Energy — Chrysaor Holdings — Merger or Acquisition (November 2020)
32 slides from Harbour Energy's merger presentation, Nov 3, 2020
Slide 1: Creating a New Independent Oil & Gas Company
Creating a New Independent Oil & Gas Company 03 November 2020 STRICTLY PRIVATE & CONFIDENTIAL
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE: THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE BEING SUPPLIED TO YOU FOR YOUR INFORMATION ONLY AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY TO ANY OTHER PERSON OR IN OR INTO OR FROM THE UNITED STATES OF AM
Slide 3: Definitions
Definitions Term Description 2P Proven and probable reserves 2C Contingent resources boe Barrels of oil equivalent CPR Competent person’s report E&P Exploration & production EBITDA Earnings before interest, taxes, depreciation, and amortization EBITDAX Earnings before interest, taxes, depreciation,
Slide 4: Table of Contents
Table of Contents 1 EXECUTIVE SUMMARY 2 INTRODUCTION TO CHRYSAOR 3 PROPOSED COMBINATION WITH PREMIER OIL 4 SUMMARY 3 Strictly Private and Confidential Restricted - External
Slide 5: Executive Summary
Section 1 Executive Summary 4 Strictly Private and Confidential Restricted - External
Slide 6: Introduction
Introduction Overview ▪ Proposed Premier Oil acquisition of Chrysaor through a reverse takeover results in creation of the largest UK-listed independent oil and gas (O&G) company ▪ Combined Company will join the ranks of other large, international independent O&G companies like AkerBP, Lundin, Hess,
Slide 7: Highly Experienced Executive Team
Highly Experienced Executive Team The new company will be led by Linda Cook (currently CEO of Harbour Energy) as CEO, and Phil Kirk (current CEO of Chrysaor) as President. Both Linda Cook and Phil Kirk will also serve on the Board as Executive Directors ⚫ Ms. Cook will serve as the CEO of the combin
Slide 8: Introduction to Chrysaor
Section 2 Introduction to Chrysaor 7 Strictly Private and Confidential Restricted - External
Slide 9: The Evolution of Chrysaor
The Evolution of Chrysaor The Shell & ConocoPhillips North Sea asset acquisitions are the foundation of Chrysaor’s current asset base July 2014 November 2017 September 2019 2020 North Sea North Sea Harbour Energy Founded Chrysaor’s Shell Acquisition ConocoPhillips Acquisition Chrysaor Today ⚫ Harbou
Slide 10: Chrysaor Portfolio Today
Chrysaor Portfolio Today Company Summary Key Assets ⚫ Chrysaor is the UK’s leading North Sea independent oil and gas company Chrysaor Operated Clair and largest net producer Chrysaor Non-Operated Schiehallion Bressay ⚫ Average production in H1 2020 of 187mboepd, 2P reserves of 542mmboe 1 and 2C reso
Slide 11: 2P Reserves Breakdown
2P Reserves Breakdown Diverse asset base with no single asset accounting for more than 25% of reserves, mix of oil & gas and with a high degree of operational control 2P Reserves by Asset (%) Hydrocarbon Mix (%) Operatorship (%) Armada Schiehallion 4% 5% Beryl J-Block 6% 25% Other 7% Non-Operated Ga
Slide 12: Diverse Production Base and Leading UK Position
Diverse Production Base and Leading UK Position Historical Production by Asset (mboepd) 2019A Daily Production (mboepd)1 Armada Buzzard Everest Lomond Area Elgin Franklin Beryl Schiehallion 188 J-Block Britannia Clair East Irish Sea Other 250 Sep. 2019 Closed Conoco 156 acquisition 200 128 122 Nov.
Slide 13: Competitive Operating Costs
Competitive Operating Costs Chrysaor has reduced unit operating costs by 32% since 2017 Chrysaor Average Unit Operating Costs ($/boe) 18.0 16.0 15.0 14.0 12.6 11.5 12.0 10.2 10.0 8.0 2017A 2018A 2019A 1H 2020A Peer Group - 2019A Unit Operating Cost ($/boe) 30.0 Norwegian Listed Independents UK-Liste
Slide 14: Successful O&G Reserve Replacement
Successful O&G Reserve Replacement Since the Shell acquisition in 2017, Chrysaor replaced >100% of production organically Historical 2P Reserves Movement (mmboe) 1.5 Year Period: 1-Jul-2016 1.0 Year Period: 1-Jan-2018 1.0 Year Period: 1-Jan-2019 to 31-Dec-2017 to 31-Dec-2018 to 31-Dec-2019 547 542 (
Slide 15: Chrysaor Summary Financials
Chrysaor Summary Financials Production (mboepd)1 EBITDAX ($mm)2 187 1,692 137 1,405 113 1,168 105 920 2017A 2018A 2019A 1H20A 2017A 2018A 2019A 1H'20A Free Cash Flow ($mm)2,3 Net Debt / LTM EBITDAX (x)2 Capex: $213 $350 $530 $354 1.1x 1.1x Abex: $0 $22 $29 $97 957 0.8x 909 908 0.4x 397 2017A 2018A 2
Slide 16: Balance Sheet Overview
Balance Sheet Overview Balance Sheet Summary at 30-June-2020 ▪ RBL Key Terms: Security Outstanding Capacity Rate ▪ Borrowing base of $2.5bn and LC sub-limit of $750mm; total facility size of $3.0bn Reserve-Based Loan $1,440 $2,500 L + 3.25% ▪ Annual borrowing base redetermination using CPR (independ
Slide 17: Energy Transition & Climate Change
Energy Transition & Climate Change ESG1 Highlights ESG Leadership Committed to industry ESG leadership and UK’s Net Zero ambitions GHG2 Intensity Lower carbon intensity than UK average with targets in place for further improvement Debt Facility Debt facility includes incentive for emissions reductio
Slide 18: Chrysaor Leadership
Chrysaor Leadership Chrysaor Leadership Team Bob Fennell | EVP, Operations Patrick Wolfe | EVP, Operated Steve Cox | EVP, Integration, Karl Tolson | EVP, Technical Services Phil Kirk | CEO Previous: Nexen, BP Assets Non-Operated Assets & Norway Previous: CH4, Petrofac Experience: 25+ Years Ex-Conoco
Slide 19: Chrysaor Governance | Board of Directors
Chrysaor Governance | Board of Directors Chrysaor Board of Directors Chrysaor Equity Ownership % Ownership Investor of Chrysaor Harbour Energy 50.20% EIG (Harbour) Co-Invest 39.40% NGP Energy Capital 4.12% R. Blair Thomas | N.E.D. Terence Jupp | N.E.D. Ben Vinocour | N.E.D. Northwarf Nominees 4.12%
Slide 20: Summary – Chrysaor
Summary – Chrysaor Material production generating significant near/mid-term free cash flow Diverse portfolio (multiple hubs, mix of oil & gas) with a high degree of operational control Robust margins…with additional cost synergies to come Strong balance sheet with material liquidity protected by a w
Slide 21: Proposed Combination with Premier Oil
Section 3 Proposed Combination with Premier Oil 20 Strictly Private and Confidential Restricted - External
Slide 22: Transaction overview and key terms
Transaction overview and key terms PROPOSED MERGER OF PREMIER AND CHRYSAOR PRO-FORMA OWNERSHIP STRUCTURE ⚫ Premier to acquire Chrysaor, comprising a reverse takeover for Premier under PMO the Listing Rules s/holders Existing ⚫ Premier’s London listing retained 5.5% Premier Other Creditors ⚫ Completi
Slide 23: Combination with Premier – Compelling Strategic Logic
Combination with Premier – Compelling Strategic Logic ⚫ Combined production of >250 mboepd in H1 2020 ⚫ Significant international growth opportunities Creates the UK’s largest-listed 1 ⚫ Upper tier of FTSE250 independent O&G company ⚫ Competitive within peer group of large, international, independen
Slide 24: Premier Oil Overview
Premier Oil Overview Company Overview Production History (mboepd) ⚫ Premier Oil is a leading independent exploration and production UK Indonesia Vietnam Other company listed on the London Stock Exchange (LSE) ⚫ The company was founded in 1934 in Scotland to pursue oil and gas 81 75 78 exploration an
Slide 25: Combined Company: Global portfolio with leading UK position
Combined Company: Global portfolio with leading UK position 2P Reserves as at YE2019 2C Resources as at YE2019 Vietnam Norway 2% Chrysaor 3% Indonesia Indonesia Vietnam UK 10% 1% Premier Oil 4% 93% Mexico 12% Falkland 717 927 Islands 43% mmboe mmboe UK 33% Norway UK Mexico Key Asset: Zama Vietnam Ke
Slide 26: Combined Company – Key Operational Metrics
Combined Company – Key Operational Metrics Commentary OPEX/BBL – Peers Benchmarking1 2020 0.0 5.0 10.0 15.0 20.0 25.0 ⚫ Diversified asset base with global footprint Lundin ⚫ High degree of operating control enables opportunity to pursue efficiencies and drive investment decisions Energean Total Aker
Slide 27: Summary of Financial and Operational KPIs
Summary of Financial and Operational KPIs H1 2020 Unaudited KPIs Premier Oil Chrysaor Combined Company1 Production (mboepd) 67 187 254 Operational 2P Reserves (mmboe) 175 542 717 Year End 2019 Revenue ($mm) 531 1,230 1,761 EBITDAX ($mm) 352 920 1,272 Financial Opex/boe ($/boe) 11.4 10.2 10.5 CAPEX (
Slide 28: Financing the combined company
Financing the combined company Commentary Leverage Ratio4 Net debt/EBITDAX as at 30-June-2020 ⚫ Simplified capital structure and strong balance sheet 2.7x 2.6x ⚫ Significantly lower cost of debt 1.7x ▪ Current Premier average cost of debt ~7.9%1 1.3x ▪ Combined Company average cost of debt ~3.5%2 ⚫
Slide 29: Creating a New, Global Independent O&G company
Creating a New, Global Independent O&G company Post- UK-listed International Peers Norwegian Peers North American Peers Transaction 500 1H’20 Production 400 (mboepd) 300 200 100 -- Energean Tullow Cairn Diversified Aker BP Lundin Apache Hess Marathon Murphy Combined Oil Energy G&O Energy Oil Oil Com
Slide 30: Summary
Section 5 Summary 29 Strictly Private and Confidential Restricted - External
Slide 31: Combination with Premier – Compelling Strategic Logic
Combination with Premier – Compelling Strategic Logic ⚫ Combined production of >250 mboepd in H1 2020 ⚫ Significant international growth opportunities Creates the UK’s largest-listed 1 ⚫ Upper tier of FTSE250 independent O&G company ⚫ Competitive within peer group of large, international, independen
Slide 32: Contact Information
Contact Information Investor Relations Contacts: Elizabeth Brooks / Lucy Driver Telephone: +44 (0)20 7824 1116 / +44 (0)20 7824 1113 Email: investor.relations@premier-oil.com 31 Strictly Private and Confidential Restricted - External
Chrysaor Holdings — Merger or Acquisition (November 2020) on 6ix