Harbour Energy Plc · LSE:HBR
Harbour Energy — Premier Oil — H1 2018 Earnings Presentation
24 slides from Harbour Energy's earnings presentation, Aug 23, 2018
Slide 1: 2018 Half-Year Results
2018 Half -Year Results
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: Highlights
Highlights Catcher at plateau New exploration acreage captured Tolmount Main sanctioned Improving financial position Profit after tax EBITDA 2017 1H 2018 1H 2017 1H 2018 1H August 2018 | P2
Slide 4: Delivery against 2018 targets
Delivery against 2018 targets 76.2 kboepd in 1H; 86.2 kboepd in July Production Guidance of 80-85 kboepd unchanged Opex of $17.2/boe, 5% below budget Cost base Forecast full year opex of $17-$18/boe and capex of $380m unchanged Plateau production rates of 60 kbopd achieved Catcher Area Evaluating op
Slide 5: Finance highlights and priorities
Finance highlights and priorities 2018 1H highlights Priorities • Profit after tax more than doubled 1. Debt reduction • Robust operating cash flow • Targeting 2.5x EBITDA by end • Stable operating costs Q1 2019, reducing thereafter • Further non-core disposals 2. Fund selected projects without • Ea
Slide 6: 2018 1H Financials
2018 1H Financials 6 months to 30 6 months to June 2018 30 June 2017 Production (kboepd) 76.2 82.1 Realised prices 2018 2017 1H 1H Opex per Barrel ($/boe) 17.2 14.7 Oil (post hedge) ($/bbl) 61.6 49.9 P&L and cash flow $m $m UK gas (p/therm) 49 46 Sales revenue 643 566 Indonesia gas ($/mmscf) 9.7 8.6
Slide 7: Acceleration of debt reduction
Acceleration of debt reduction Accounting net debt $m Factors influencing 2800 2018 debt reduction Production 2600 Commodity prices Timing of cargo lifts 2400 Timing of disposal receipts FX / LIBOR 2200 Capex phasing 2000 FY 2018 1800 Debt Reduction $300-400m 1600 YE 2017 Bond conv.1 JV Cash 2 2018
Slide 8: Asia production
Asia production New acreage Chim Sáo (op, 53.13%) captured • >16 kboepd 2018 1H • Opex <$10/boe • Ongoing well interventions • Crude sold at premium to Brent Producing ~30 kboepd Natuna Sea Block A (op, 28.67%) • Increased market share of GSA1 • Opex <$7/boe BIG-P (op, 28.67%) • On schedule and budg
Slide 9: UK production
UK production Catcher (op, 50%) Solan (op, 100%) Huntington (op, 100%) • On plateau • High uptime • Well intervention programme • 2020 infill • FPSO lease extended to 2020 drilling • Maximising uptime Elgin-Franklin (5.2%) • Infill drilling / well intervention • Long life field • Extending field lif
Slide 10: Catcher Area at plateau production
Catcher Area at plateau production Production FPSO Wells Outlook • Plateau production of • Oil plant stable • Good reservoir • Maximise uptime 60 kbopd achieved • Gas and water communication • Evaluate options to • Record day rates up to injection plants • High delivery increase production 70 kboepd
Slide 11: Catcher upside
Catcher upside 1. Reserves upside being assessed • Positive production results • Well-connected sands • Good pressure support • Reservoir quality above expectations 2. Infill drilling • 4D seismic acquisition • Burgman East • Cromarty and Tay targets at Catcher • Varadero Infill West 3. Tie back of
Slide 12: Tolmount Main (Operator, 50 per cent)
Tolmount Main (Operator, 50 per cent) Sanctioned in August Reserves to be booked at year-end Key contracts awarded Platform construction to start Q4 Funding secured Gross Gross Reserves Peak Production Net Capex 500 Bcf 58 kboepd $120 m Net Cash Flow IRR Area Potential >$1 Bn >100% 1 Tcf Robust econ
Slide 13: Tolmount infrastructure
Tolmount infrastructure Infrastructure partnership Tariff structure • Dana and HGSL will own the platform and export pipeline and pay for the terminal upgrades • Tolmount gas will use the facilities in return for a production based tariff • $10/boe average tariff based on 500 Bcf (Tolmount Main) <25
Slide 14: Tolmount upside
Tolmount upside 2018 2019 2020 2021 2022 • Sanction Tolmount • Construction of • Offshore installation • Exploration well on • 1st gas from Main pipeline of platform, pipeline Tolmount Far East Tolmount East • Key contracts • Terminal upgrade • Development drilling (targeting 150 Bcf, development aw
Slide 15: Sea Lion update
Sea Lion update LOIs with key contractors FPSO Drilling Rig SURF / SPS Well Subsea Helicopter Services Installation Services 160 • Focus remains on securing funding Phase 2 Phase 1 Annual average oil rate (kbopd) 140 ahead of FID 120 – Vendor loan notes 100 – Senior debt (export credit agencies and
Slide 16: Mexico: Block 7, Zama appraisal
Mexico: Block 7, Zama appraisal • Zama-1 discovery made in 2017 Zama-3 – 400-800 mmbbls (P90-P10); API 30° • Zama appraisal programme to start in Q4: Zama-1 – Zama-2: tests OWC and Marte prospect – Zama-2ST: tests reservoir distribution and will be flow tested – Zama-3: tests lateral reservoir conti
Slide 17: Mexico: Block 30 exploration, Wahoo & Cabrilla
Mexico: Block 30 exploration, Wahoo & Cabrilla • Awarded 30% interest in Round 3.1 A B • South west of Zama discovery Analogue to Zama • Wahoo: Flat spot similar to Zama 1. Identical trapping geometry • 3D seismic acquisition planned ahead of 2. Down dip amplitude shut off drilling activity in 2020/
Slide 18: Brazil: Ceará Basin
Brazil: Ceará Basin • High impact prospects in stacked targets Block 717 (Premier, 50% operator) A B B matured for drilling 1-CES-075 4-CES-128 – Berimbau/Maraca (Block 717) 1-CES-160 – Itarema/Tatajuba (Block 661) Berimbau 041 Turonian/ Cenomanian • Drilling operations 2 well campaign 044 Albian pl
Slide 19: Indonesia: Tuna appraisal and Andaman II exploration
Indonesia: Tuna appraisal and Andaman II exploration Tuna (Premier, 65% operator) • Proven oil and gas discoveries (100 mmboe) • Evaluation of potential development scenarios ongoing • Outline development scheme confirmed to export gas to Vietnam • Agreement signed with Vietnam and Indonesia Governm
Slide 20: Balanced capital allocation
Balanced capital allocation 7 year capital allocation 2018-2024 100% 30% 20% 40% 10% Net operating Debt Producing New Exploration cash flow reduction assets projects At $65/bbl • Positive free cash flow in all years to 2024 the business • Production > 100 kboepd at period end will deliver • Covenant
Slide 21: Balanced capital allocation
Balanced capital allocation 7 year capital allocation 2018-2024 2018-2019 100% 40% 20% 2018-19 2018-19 -10% +10% 30% 10% Net operating Debt Producing New Exploration cash flow reduction assets projects At $65/bbl • Positive free cash flow in all years to 2024 the business • Production > 100 kboepd a
Slide 22: Future growth plans
Future growth plans 2019 2020 2021 UK Catcher Infill & Satellites Tolmount East Tolmount Main Tolmount Far East Solan Infill Asia BIGP Tuna Andaman Sea RoW Zama Brazil 717 & 661 wells Zama Wahoo, Cabrilla Sea Lion Appraisal drilling Exploration drilling Infill /development drilling Near term resourc
Slide 23: Q&A
Q&A 1. Cutting of first steel for Tolmount platform 3. Zama appraisal 4. Debt reduction 2800 2. Increasing free cash flow generation 2600 2400 2200 2000 1800 1600 YE 2017 2018 1H YE 2018 F YE 2019 F August 2018 | P22
Slide 24: Premier Oil Plc contact details
August 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