Harbour Energy Plc · LSE:HBR
Harbour Energy — Merger or Acquisition (December 2020)
35 slides from Harbour Energy's merger presentation, Dec 17, 2020
Slide 1: Creating a resilient UK independent oil and gas company of scale
2020 Creating a resilient UK independent oil and gas company of scale with a global footprint December 2020
Slide 2: Important notice
Important notice 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
Slide 3: Important notice
Important notice To the fullest extent permitted by law, neither the Company, nor the Banks nor any of their respective Related Persons, nor any other person accepts any responsibility or liability whatsoever (whether in contract, tort or otherwise) for or makes any representation, warranty or under
Slide 4: Agenda
Agenda 1. Introduction and strategic rationale ………...…………… Richard Rose 2. Harbour Energy plc ……..………….……………………………….. Linda Cook 3. UK portfolio ………………………………………………………………….. Phil Kirk 4. International portfolio ……………………………………………... Linda Cook 5. Financial position ………………………….…..………………….. Richard Rose
Slide 5: Harbour Energy: a new, unique investment opportunity
Harbour Energy: a new, unique investment opportunity Combined production of 235 kboepd for first 11 months of 2020 Significant international growth opportunities UK’s largest-listed 1 independent O&G company Upper quartile of FTSE250 Competitive within peer group of large, international, ind
Slide 6: Milestones to completion
Milestones to completion Timing Milestone 6 Oct 2020 Transaction announcement 3 Nov 2020 Creditor support announced 23 Nov 2020 RBL syndication completed 30 Nov 2020 Norway (MPE) regulatory approval received 3 Dec 2020 European Commission merger control clearance received 16 Dec 2020 Publication of
Slide 7: Harbour Energy plc
Harbour Energy plc = ae CHRYSAOR——_(® PremierOil
Slide 8: Harbour Energy plc
Harbour Energy plc A sustainable business with a commitment to Net Zero by 2035 UK’s largest-listed independent O&G company Stable, cash generative UK business of scale Significant international growth opportunities Strong balance sheet, potential for investment grade credit rating Ambit
Slide 9: The evolution of Harbour Energy plc
The evolution of Harbour Energy plc Asset base underpinned by Shell & ConocoPhillips North Sea asset acquisitions and merger with Premier Oil July 2014 November 2017 September 2019 Ongoing 2021 Shell UK ConocoPhillips North Sea UK North Sea Harbour Energy Founded Chrysaor’s Shell Acquisition ConocoP
Slide 10: Highly experienced leadership team and Board
Highly experienced leadership team and Board Linda Cook Phil Kirk TBC CEO, President & CEO of Europe, CFO, Executive Director Executive Director Executive Director Currently Managing Director and Executive Currently CEO of Chrysaor, which he It is expected that a new Chief Financial Committee
Slide 11: Harbour Energy plc: a sustainable O&G business
Harbour Energy plc: a sustainable O&G business PURPOSE: AIM: To play a significant role in meeting the world’s energy needs Deliver value in a responsible manner for all stakeholders in through the safe, efficient and sustainable production of accordance with key global standards, ensured by strong
Slide 12: Harbour Energy plc: a UK listed independent of scale
Harbour Energy plc: a UK listed independent of scale Production 2P+2C Opex Leverage ratio2 Expectation of Net Zero 2020F Resources1 2020 ytd 2020 1H a dividend commitment c.235 kboepd 1.7 bn boe <$12/boe <1.3x near-term by 2035 1 Chrysaor’s CPR as at 30 June 2020; Premier’s YE 2019 2P+2C less 2020 1
Slide 13: UK portfolio
UK portfolio a < :
Slide 14: UK: a business of scale generating material cash flows
UK: a business of scale generating material cash flows Diversified, tax-efficient asset base 607 mmboe 436 mmboe Balance of oil vs gas UK 2P reserves1 UK 2C resource1 Low, stable operating costs Significant interest in major UK long life, hub assets High degree of operating control High
Slide 15: UK: a business of scale generating material cash flows
UK: a business of scale generating material cash flows UK: a strong performance in a competitive basin UK production Proforma UK Revenue >$9bn of proforma Proforma, kboepd Total UK, mmboepd $m UK revenue (2017-2020 1H) Proforma 250 2.0 Proforma Total UK production1 3000 2000 200 1000 0 150 2017 2018
Slide 16: UK: operator of key hubs with material upside
UK: operator of key hubs with material upside Existing opportunities Operated Plant Well work / Infill / near field Exploration Third party assets modifications reservoir mgt additions upside business J-Area (CHR, 67%-67.5%) AELE-Hub (CHR, 32%-100%) G. Britannia Area (CHR, 26%-87.5%) Catcher Area (P
Slide 17: Material value within operated UK portfolio
Material value within operated UK portfolio UK non-operated UK non-operated Schiehallion Other (non op.) Beryl AELE Bressay Beryl Clair AELE Clair Elgin / UK UK J-Area Franklin 2P reserves 1 Other (op.) 2C resources 1 607 mmboe 436 mmboe EIS Buzzard Tolmount EIS GBA J-Area Catcher Tolmount Catcher G
Slide 18: Shell asset acquisition: a track record in creating value
Shell asset acquisition: a track record in creating value Key transaction metrics1 Reserve diversification1 CPR 2P Reserve replacement - 90% mmboe mmboe Effective date: 1 July 2016 Schie- hallion J-Area Acquisition price: $3.0 bn CPR1 2P reserves: 305 mmboe Beryl 169 153 – Oil / gas split: 58%
Slide 19: J-Area: a significant operated UK hub
J-Area: a significant operated UK hub Acquired c. 30% via Shell and additional Production kboepd (gross, 2P reserves profile)1 c. 37% and operatorship via ConocoPhillips Four oil and gas-condensate producing 60 Jade and Joanne fields: Judy, Joanne, Jasmine, Jade incremental wells – Multiple stac
Slide 20: Non-operated portfolio: high quality, long life assets
Non-operated portfolio: high quality, long life assets Elgin-Franklin Clair Area (19.3%) (7.5%) Total-operated BP-operated COP in 2040 COP in 2057 Established operators High margin hubs STOIIP vs recovery as at 30 June 20201 mmboe STOIIP Recovery as at 30 June Buzzard (21.73%) 2,000 CNOOC-
Slide 21: Optimisation of UK decommissioning programme
Optimisation of UK decommissioning programme Potential for material financial and operational Chrysaor decommissioning liability1 $m synergies 6,000 – Strong operational control over portfolio – UK tax history partially shelters UK abex Opportunity to extend field life and defer 4,000 abandonmen
Slide 22: Established decommissioning track record
Established decommissioning track record Shell Acquisition assets Abandonment deferral for operated hubs1 Shell Acquisition assets cumulative decommissioning spend1 $m (pre-tax effect) 2000 2018 - >2027 Armada Original CPR Profiles Mid-Year 2020 CPR Profiles Everest / 2028 - >2031 1000 Lomond J-Area
Slide 23: Path to Net Zero by 2035
Path to Net Zero by 2035 1 Low Carbon by design Measure, manage and minimise emissions Improve plant operational efficiency and minimise all venting and flaring Electrification of platforms and connection to renewable sources where possible Brown field modifications, best available technolog
Slide 24: International portfolio
International portfolio
Slide 25: A platform for future growth
A platform for future growth Ability to pursue a fully funded growth strategy 1.7 bn boe1 Broad set of organic growth options Combined Group 2P & 2C A growing international M&A opportunity set Diversity provides increased growth options UK Norway Ability to high-grade opportunities drives
Slide 26: Diverse portfolio of international growth projects
Diverse portfolio of international growth projects Block 7 Zama oil field1, Mexico Tuna field, Indonesia Sea Lion Phase 1, Falkland Islands PMO, 25% non-op PMO2, 50% op PMO2, 40% op Andaman Sea, Indonesia Ceara Basin, Brazil Investment criteria Investment framework Strategic fit Staying within l
Slide 27: Financial position
Financial position
Slide 28: Strong financial position
Strong financial position Simplified capital structure and strong Leverage – peer benchmarking2 Net Debt (ex. LCs) / EBITDA balance sheet 3 Expected proforma net debt on completion of $3.2bn; no near-term debt maturities – 7 year RBL (2 year repayment grace 2 period) – Shell Junior debt: First p
Slide 29: Proforma history and 2021 guidance
Proforma history and 2021 guidance Production Operating costs kboepd $/boe International UK 20 200 15 10 100 5 0 0 2017 2018 2019 2020F 2021F 2017 2018 2019 2020F 2021F Total capex2 EBITDAX1 Brent $/bbl $m UK International Abex P&D Exploration $m NBP p/therm 64 35 1000 3000 72 60 2000 42 500 19 55 1
Slide 30: Concluding remarks
Concluding remarks
Slide 31: Capital allocation priorities
Capital allocation priorities 1 Balance sheet strength Targeting conservative leverage profile through the cycle Potential for an investment grade credit rating 2 Ensuring a robust and diverse portfolio of production, reserves and resource Invest in the UK to maintain production and cash flow
Slide 32: Creating a new, independent O&G Company
Creating a new, independent O&G Company Entering a New Peer Group UK-listed International O&G1 Proforma2 Norwegian Peers1 North American Peers1 500 500 2020 1H Production 400 400 300 300 (kboepd) 200 200 100 100 0 0 Energean Tullow Cairn Diversified Combined Lundin Aker BP Apache Hess Marathon Murph
Slide 33: Harbour Energy plc investment highlights
Harbour Energy plc investment highlights A UK-listed O&G company joining the US & European peer group of super independents UK’s largest independent oil & gas producer with material operated position Diversified and low-cost asset base with an attractive global footprint Strong balance sheet with st
Slide 34: Sc: Nae
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Slide 35: December 2020
December 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
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