Slide 1: 2017 Full Year Results
2017 Full Year Results 8 March 2018
Slide 2: Forward-looking statements
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,
Slide 3: 2017 highlights
2017 highlights Comprehensive 1 refinancing completed Previous maturities Revised maturities 2017 2018 2019 2020 2021 2022 400-800 mmbbls Zama 3 Tolmount funding secured 2 discovery, Mexico 4 First oil achieved from Catcher March 2018 | P2
Slide 4: 2017 performance
2017 performance Production 5% 75 kboepd Opex 4% $16.4/boe Capex 58% $275m Reserves and resources 8% 902 mmboe Operating cash flow 15% $496m Net debt 2% $2,724m March 2018 | P3
Slide 5: Asia production portfolio
Asia production portfolio Chim Sáo (op, 53.125%) Natuna Sea Block A (op, 28.67%) Producing >30 kboepd • Active well intervention programme • GSA1 market share increasing • Ongoing reservoir optimisation • Improving gas price • Infill drilling opportunities • BIGP first gas 2019 • Crude sold at premi
Slide 6: UK production portfolio
UK production portfolio • Reserves Huntington (op, 100%) Elgin-Franklin (5.2%) • One of the upgrade UK’s largest • FPSO lease producing fields extended • Long field life • Cost reductions (COP 2035+) secured • Active well • Current intervention production programme >10 kboepd UK • Exploration produc
Slide 7: Financial highlights and outlook
Financial highlights and outlook 2018 P&D capex 2017 highlights ($m) 120 • Comprehensive refinancing completed • Positive free cash flow of $71m 80 • Operating costs of $16.4/boe • P&D and exploration capex 58% lower at 40 $275m • $300m non-core disposals announced 0 Q1 Q2 Q3 Q4 • Cash and undrawn f
Slide 8: 2017 Financials
2017 Financials 12 months to 12 months to Realised prices 2017 2016 31 Dec 2017 31 Dec 2016 Oil (post hedge) Production (kboepd) 75.0 71.4 52.1 52.2 ($/bbl) Opex per Barrel ($/boe) 16.4 15.8 UK gas (p/therm) 47.2 47.6 Indonesia gas P&L and cash flow $m $m 8.4 7.8 ($/mmscf) Sales revenue 1,102 983 Pr
Slide 9: Portfolio management
Portfolio management • Seek opportunities with strategic fit within existing geographic units – Focus on operated long-life assets – Material working interest – Critical mass locally – UK tax optimisation – Covenant accretive • Dispose of non-core assets to accelerate debt repayment 2017 highlights
Slide 10: Capital expenditure and abandonment
Capital expenditure and abandonment P&D capex and exploration spend 2017 P&D capex and exploration ($m) 300 • 2017: $275m, 60% lower than 2016 – $126m Catcher drilling and subsea – $17m Chim Sáo infill wells 200 – $38m exploration, includes Zama well • 2018 guidance of $300m 58% 100 lower – $170m Ca
Slide 11: Hedging
Hedging Hedging policy • 30-50% of future oil and gas volumes on a rolling 12-18 month basis • Minimum required under lender agreement is 20% Liquids hedging • Progressively increased as oil price rose • 50% of 2018 oil production hedged 60% of oil production UK gas hedging exposed to • 29% of UK ga
Slide 12: Net debt
Net debt Estimated leverage ratios using accounting net debt as at year-end 20181 6x 5x 4x Investment 3x grade equivalent 2x 1x - YE17 YE18 Premier European peers US Peers • Net debt of $2.72bn, reduced from year-end 2016 position • Early conversion of Convertible Bonds in January 2018 • Average cos
Slide 13: Catcher – the journey to first oil
Catcher – the journey to first oil What we achieved in 2017 • FPSO hull and topsides completed and integrated • Sailaway of FPSO from Keppel yard • HSE Acceptance of Safety Case • Drilling and completion of 6 wells • Successful tie-in of wells and deployment of subsea control pods • Hook up of STP b
Slide 14: 2017 successful full cycle delivery of Catcher
2017 successful full cycle delivery of Catcher • Experienced project management team in delivery of FPSO projects On schedule • World class contractors Forecast total capex 30% below budget • Early operations involvement in project Plateau production • Collaborative and strong increased by 20% relat
Slide 15: Catcher Area commissioning status
Catcher Area commissioning status Oil Booster Gas Gas lift Dec Jan Feb Mar Apr 60 kbopd treatment gas treatment 2018 and export 2017 2018 2018 2018 production plant compression plant compression Operations • Good uptime; oil plant up and stable 1.3 mmbbls • Water injection commissioned produced sinc
Slide 16: Catcher Area upside
Catcher Area upside Catcher North: • Potential for reserves upside Laverda: Tie-back via Varadero Joint development with Laverda – Conservative initial recovery factor assumed – Positive production test results – Well-connected sands with good pressure support – Reservoir quality and sand quantity a
Slide 17: Tolmount – high value project
Tolmount – high value project Adds significant resource – 540 bcf Indicative production profile boe equivalent (100 mmboe) (kboepd) 60 Provides next phase of UK 50 growth – 50 kboepd peak production 40 30 Low capex requirement – $100m 20 (Premier’s share) 10 Low life of field total project cost – 0
Slide 18: Tolmount Main project update
Tolmount Main project update 2017 highlights • Key terms agreed for funding of Tolmount facilities • Draft Field Development Plan submitted to OGA • Project FEED nearing completion • Final negotiations with platform, pipeline and drilling contractors • Regulatory, environmental and planning statemen
Slide 19: Tolmount Area Development
Tolmount Area Development Tolmount East • Subsea well tie-back • Sanction Tolmount Main 2018 • New 3D seismic over • 220 Bcf Greater Tolmount Area • Extends Tolmount Main plateau SW 42/28d-12 NE • Construction of platform, pipeline, onshore mods 2019 starts Gas water contact • Appraise Tolmount East
Slide 20: Sea Lion – substantial progress
Sea Lion – substantial progress 1 World scale resource 2 Proven development concept 160 • 1 bn bbls in new • Technically straightforward FPSO Annual average oil rate Phase 2 140 province Phase 1 120 development (similar to Catcher) • Well understood • Extensive project development and (kbopd) 100 re
Slide 21: Sea Lion 2018 targets
Sea Lion 2018 targets • Select preferred contractors and secure vendor financing – LOIs signed for c. $1.5 bn of total Owners Costs contracts value • Drilling rig • Well services >$400m Pre-first • Subsea equipment Oil capex of vendor Subsea Wells $1.5bn • Subsea installation loan notes services • L
Slide 22: Refocused exploration portfolio
Refocused exploration portfolio • Repositioned towards emerging plays in Prospect Y proven hydrocarbon provinces – Early success in Mexico at Zama; Prospect Z looking to increase acreage footprint – Managed position in Brazil to focus on Ceara Basin; high impact prospectivity identified – Capture of
Slide 23: Mexico
Mexico • 2015: Awarded Blocks 2 and 7 in Mexico Round 1 Potential appraisal • 2016: Increased interest in Block 7 to 25% locations • 2017: Zama-1 discovery made on Block 7 – 400-800 mmbbls1 (P90-P10) – API 30° • 2018/2019: Zama appraisal programme – Pemex to spud Asab-1 in Q2 2018 1 • Forthcoming Li
Slide 24: Indicative full field Zama development
Indicative full field Zama development Indicative development metrics • P50 resource 600 mmbbls • Capex +/- $1.8bn (operator estimates) • Peak production 100-150 kboepd • First oil 2022/23 Appraisal and 2020 2022/3 2018 2019 FEED Development pre-FEED FID First oil March 2018 | P23
Slide 25: The asset portfolio
The asset portfolio Largest 5 fields accounted for c. 70% of production in 2017 March 2018 | P24
Slide 26: Strategic framework, NAV focused
Strategic framework, NAV focused Debt • Priority in 2018/2019 reduction • Targeting 2.5x EBITDAX by end Q1 2019 • Core operations in UKCS and Natuna Sea Producing – Maintain cost base of <$20/boe assets – Discretionary spend of $100m per annum • Continue to leverage FPSO expertise Develop- – Targeti
Slide 27: Balanced capital allocation, returns driven
Balanced capital allocation, returns driven 7 year capital allocation 2018-2024 Net operating Debt cash flow reduction 100% 30% Producing assets 20% New projects 40% Exploration 10% A sustainable position At $65/bbl • Positive free cash flow in all years to 2024 the business • Production > 100 kboep
Slide 28: 2018 outlook
2018 outlook Catcher ramp up to 1 60 kbopd 2 Tolmount sanction 3 Zama appraisal 4 Debt reduction March 2018 | P27
Slide 29: Premier Oil Plc contact details
March 2018 www.premier-oil.com Premier Oil Plc 23 Lower Belgrave Street London SW1W 0NR Tel: +44 (0)20 7730 1111 Fax: +44 (0)20 7730 4696 Email: premier@premier-oil.com