Harbour Energy Plc · LSE:HBR

Harbour Energy — Premier Oil — FY2018 Earnings Presentation

31 slides from Harbour Energy's earnings presentation, March 2019

1. Slide 1: Annual Results Presentation

   2018 Annual Results Presentation 01 October 2018

2. Slide 2: 2018 Highlights

   Highlights 2018 Highlights Group production Catcher plateau production DELIVER kboepd Kboepd (gross) 100 75  Record Group production, high uptime 75  Catcher – successful execution 50  Net debt reduced, profitability restored 50 25 25 EXPLOIT 0 0 2016 2017 2018 2018 Sanction Actual 1H 2H  Field

3. Slide 3: Financial highlights

   Finance Financial highlights Increased operating Capital discipline Return to profit cash flow maintained Net profit ($m) Operating cash flow ($m) Total capital expenditure ($m) 200 800 800 100 600 600 0 400 400 -100 200 200 -200 -300 0 0 2016 2017 2018 2016 2017 2018 2016 2017 2018 Low and stable I

4. Slide 4: 2018 Financials

   Finance 2018 Financials Catcher increased oil rates delivered a step up in operating cash flow and profits in the second half of 2018 FY 2018 FY 2017 Realised pricing Production (kboepd) 80.5 75.0 2018 2017 P&L ($m) Oil (pre hedge) ($/bbl) 67.9 52.9 Sales revenue 1,438 1,102 Oil (post hedge) ($/bbl)

5. Slide 5: Disciplined spend

   Finance Disciplined spend Capital expenditure Capex $m Abex P&D E&A  Tolmount capex minimised through 400 partnership with Kellas Midstream 46 300 100  Development capex lower year-on-year 38 with completion of Catcher 200 234  E&A spend heavily weighted towards 237 190 appraisal (Zama, Tolmount

6. Slide 6: Net debt reduction continuing

   Finance Net debt reduction continuing Targeting leverage ratio of 1.5x over the cycle Accounting net debt  Significant debt reduction in 2018 $m  Further debt reduction this year 2800 driven by improved cash margins and cost control 2600  Leverage to commodity prices after hedging 2400 – $5/bbl m

7. Slide 7: 2019 Finance priorities

   Finance 2019 Finance priorities DELIVER  Continued debt reduction  Maintain low cost base  Fund selected projects without compromising balance sheet  Protect downside through hedging  Refinance by 2021 at lower cost Estimated leverage ratios using accounting net debt as at year-end 2018 1 Oil h

8. Slide 8: Group production – two core areas

   Production Group production – two core areas 2018 record of 80.5 kboepd Improved cash margins $/boe (Operating cash flow/production)  New Catcher production  High operating efficiency 30% UK Higher margins 2019 guidance of 75 kboepd  Underlying 5% increase after SE 2018 2019 Asia adjustment for d

9. Slide 9: UK production

   Production UK production Premier Oil UK UKCS1 Growing production Extending Basin life kboepd mboepd 15 47 >60 1.4 1.6 1.7 2013 2018 2021F 2013 2017 2021F Reduced operating costs Reduced operating costs US$/boe US$/boe 40 13 13 26 15 2013 2018 2019F 2013 2017 58 kboepd Improved operating efficiency I

10. Slide 10: South East Asia production

    Production South East Asia production 2018 net cash flow c.$230 million Stable production High operating efficiency Low cost base kboepd % US$/bbl 30 100 12 20 8 50 10 4 28 28 80 96 10 6 0 0 0 2013 2018 2013 2018 2013 2018 March 2019 P9

11. Slide 11: Chim Sáo (53.125% operated interest)

    Production Chim Sáo (53.125% operated interest) Discovered Chim Sáo in 2006; acquired additional 25% stake for $72 million in 2009 DELIVER  15.2 kboepd (net), uptime>90% Chim Sáo field  Low cost base ($5/boe opex, $6/boe lease) Chim Sáo South Central  $3/bbl premium to Brent; $4/bbl 2019 ytd  Tw

12. Slide 12: Natuna Sea Block A (28.67% operated interest)

    Production Natuna Sea Block A (28.67% operated interest) Dominant position in the Natuna Sea delivering gas in Singapore under long term gas sales agreements Anoa Field and DELIVER Infill Opportunities  13.2 kboepd (net); increased share of GSA1  High quality offtake contracts  Low operating cost

13. Slide 13: Catcher (50% operated interest)

    Production Catcher (50% operated interest) Discovered in 2010, increased stake via EnCore acquisition in 2012 Catcher Area oil production profile (gross) kbopd DELIVER 70  Final acceptance certificate issued Sanction Current / Forecast Upside  Increased oil rates of 66 kbopd (gross) 60  High oper

14. Slide 14: Huntington (100% operated interest)

    Production Huntington (100% operated interest) Acquired through Oilexco (2009), subsequently increased stake via partner defaults (2015) and E.ON acquisition (2016) DELIVER  5.8 kboepd (2018); >6 kboepd 2019 ytd  Reduced lease cost  COP deferred EXPLOIT  Plant modifications to enable gas import

15. Slide 15: Elgin Franklin (5.2% non-operated interest)

    Production Elgin Franklin (5.2% non-operated interest) Acquired as part of the $120 million E.ON acquisition in 2016 DELIVER  6.7 kboepd (net), high operating efficiency  Low operating cost ($6/boe in 2018)  Reserves increased (extended COP, 4 infills and alignment with operator) EXPLOIT  Infill

16. Slide 16: Strong portfolio with material upside

    Development Strong portfolio with material upside Appraisal Delivering value via infrastructure led operations and growth projects NA required EXPLOIT Well Infill Near field Exploration Third party Field life intervention drilling additions upside business extension Catcher Elgin Franklin Solan Hunt

17. Slide 17: Tolmount Main – on track

    Development Tolmount Main – on track Progressing as planned Offshore installation Jul 18 Dec 18 Jul 19 Dec 19 Jul 20 Dec 20 Jul 21 (Heerema’s Sleipner) Partner sanction Detailed engineering Onshore construction Modifications Offshore installation Drilling First Steel Cut at Rosetti’s Production Rave

18. Slide 18: Tolmount Main – key milestones

    Development Tolmount Main – key milestones Acquired 50% operated interest through E.ON acquisition in 2016; sanctioned August 2018  Construction of Tolmount platform (Q4 2018)  Easington terminal modifications (Q1 2019) Net Capex Payback  Saipem pipeline ordered (Q2 2019) $120 m <1 year  Platfor

19. Slide 19: Tolmount East

    Development Tolmount East  Spud July 2019 SW 42/28d-12 NE  Targeting up to 300 Bcf (gross)  Testing extension to Tolmount Main Gas water contact  Structural closure above gas water contact  On success, tied back to Tolmount Main for first gas in 2023 Tolmount Tolmount East Indicative developmen

20. Slide 20: Greater Tolmount Area – upside

    Development Greater Tolmount Area – upside High value tie-backs with low tariff rates  GTA 3D seismic survey to commence in Q2 Mongour Tolmount Far East  Infill drilling targets  Exploration prospects  3rd party volumes Tolmount East Gross potential resource Tolmount >1 Tcf Greater Tolmont Area

21. Slide 21: Sea Lion – a multi-phased project

    Development Sea Lion – a multi-phased project Carry arrangements restructured in 2016 for Sea Lion Phase 1  Contractor LOIs being converted into fully termed contracts  FEED to complete end Q1; onshore logistic projects underway Total Basin Gross resource potential Phase 1  Financing structure pr

22. Slide 22: Zama development planning underway

    Appraisal Zama development planning underway Acquired interest via Mexico’s Round 1 and subsequently exercised option to increase stake to 25% ZAMA ZAMA ZAMA  McDermott & IO NORTH CENTRAL SOUTH progressing early FSO engineering work  Appraisal results to be integrated ahead of concept select  Tar

23. Slide 23: Zama drilling update

    Appraisal Zama drilling update Programme ahead of schedule and budget  Zama-2, down-dip, confirmed OWC, higher net to gross ratio  Zama-2ST1 underway; results of flow tests expected early Q2  Zama-3 will test lateral reservoir continuity  Comprehensive logging, sampling and testing programme A B

24. Slide 24: Disciplined approach to exploration and appraisal

    Exploration Disciplined approach to exploration and appraisal 450 mmboe of net prospective resource to be drilled (excluding appraisal) Tolmount East 4D seismic over Catcher spud (Jul 2019) Area (2020 1H) United Kingdom Seismic over Greater Mexico Tolmount Area (Q2 2019) Brazil Indonesia 3D Seismic

25. Slide 25: Block 30, Mexico (30% non-operated interest)

    Exploration Block 30, Mexico (30% non-operated interest) Secured 30% interest via Mexico’s Round 3.1 in March 2019, most contested block  Block-wide 3D seismic acquisition on track to A B start Q2 2019  Drilling activity targeted for 2020  Wahoo: Flat spot similar to Zama Flat Spot  Significant

26. Slide 26: Andaman II (40% non-operated interest)

    Exploration Andaman II (40% non-operated interest) Awarded 40% interest in the 2017 Indonesian Licence Round  Proven hydrocarbon basin  Oligocene sandstones gas target  Clear DHIs on 2D seismic  3D seismic acquisition commenced MUSKAT SELATAN PGS Apollo  Drilling targeted for 2021  Significant

27. Slide 27: Brazil

    Exploration Brazil Secured acreage in Ceara basin via Brazil’s 11th Round  High impact prospects in stacked targets Block 717 (Premier, 50% operator) matured for drilling – Berimbau/Maraca (Block 717) – Itarema/Tatajuba (Block 661)  Drilling operations planning well underway BERIMBAU for 2020 MARA

28. Slide 28: Outlook

    Summary Outlook DELIVER Robust base business EXPLOIT Significant low cost upside within existing assets GROW Portfolio of projects underpinning future growth profile to 2030+ Indicative production profile kboepd 100 - 2019 2020 2021 2022 2023 2024 2025 March 2019 P27

29. Slide 29: Balanced capital allocation (2019 to 2025)

    Finance Balanced capital allocation (2019 to 2025) Reinvestment will be measured against cash returns to shareholders 100% 30% 10% 10% 40% 10% Net Operating Debt reduction Producing assets Abandonment New projects Exploration cash flow 2018-2019 allocation At $65/bbl, the business will deliver  Deb

30. Slide 30: Q&A

    Summary Q&A DELIVER EXPLOIT GROW March 2019 P29

31. Slide 31: March 2019

    March 2019 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 — FY2018 Earnings Presentation on 6ix