Premier Oil Live Discussion

lots_of_sense 13 Nov 2019

Just seen Catcher Q3 Production via MOL results For whatever reason I saw a story on MOL buying some Chevron assets and looked into it. That led to a look at their Q3 results released on 30 Oct which included information regarding Catcher. They have 20% ownership and it produced 13 kboed in Q3 for them, that would make PMO’s share as 32.5 kboed at 50% so still running above nameplate capacity at 65 kboed in total which is good news. Anyway, seems some of the short positions finally reducing and hopefully a positive Trading Update tomorrow.

Ripley94 05 Nov 2019

Brent crude back over $74 again. Is $74.24 as I type this SIA…PHAR… XXXX Another tranche / top up today @ 57p

Ripley94 23 Oct 2019

Brent crude back over $74 again. Is $74.24 as I type this Pharos Energy Picks Chair After Changing Name From Soco; COO Departs from Alliance News | 17th October 2019 08:50 (Alliance News) - Newly renamed oil & gas firm Pharos Energy PLC said Thursday that Non-Executive Director John Martin has been appointed chair-elect from March 2020, whilst its longstanding operations chief takes his leave. Martin - a non-executive since 2018 - will replace current Chair Rui de Sousa on March 13, 2020. Martin previously served as chair of Falkland Oil & Gas Ltd as well as being a non-executive at BowLeven PLC. De Sousa said he was “delighted” that Martin will succeed him as chair at Pharos, which changed its name from Soco International PLC on Wednesday. “John has contributed a great deal of knowledge and expertise during his tenure as independent non-executive director,” De Sousa added. “John has breadth and depth of experience in the industry, in leadership and finance. There is no doubt that John will continue to make a great contribution to the company and steer it in the right direction as it enters a new phase - return to growth.” In addition, Pharos announced Chief Operating Officer Antony Maris will step down at the end of 2019. Pharos Chief Executive Officer Ed Story said: “Antony has been our chief operating officer for 15 years and, instrumental in the challenging drilling and development successes the company has had in many different countries and environments, I wish him well for the future.” Shares in Pharos were down 3.1% at 62.00 pence in London on Thursday. By Ahren Lester; [email protected] Copyright 2019 Alliance News Limited. All Rights Reserved. executive changesignificantcompaniesFTSE Main

MarcAdmin 08 Oct 2019

New website up and running

Beatley 04 Oct 2019

Shale Watch (Off Topic) A thread highlighting the stupidity of the shale players and their drill into oblivion mantra. Even now, with their share prices at all time lows, demand struggling, negative pricing for gas (in places) and NGL prices in the gutter, the IEA are expecting shale to grow another 1mbpd next year. Absolutely crazy. Not sure I agree it will happen, but time will tell. Anyways, we’ll start with Exxon, far from being a shale play, but a great example of the stupidity in the market nonetheless. Exxon proudly displayed this slide in their H1 results, boasting about their shale growth rates and how it’s a ‘manufacturing operation’. 12AB60F6-4E64-45D3-B157-C54A5A007EAD.jpg1334x750 114 KB As most readers will already know, the only area in the world with significant growth over the last few years is the US, so it’s fair to say the shale growth is keeping prices suppressed. Now for the kicker, here’s Exxon highlighting the impact of ‘lower prices’ on their Q3 results. As one poster would often say, you really couldn’t make this up. U.S. – 2 Oct 19 Weak oil prices hit Exxon's third-quarter earnings: filing Exxon Mobil Corp's operating profits fell last quarter for the fourth conse... I’m sure Exxon’s shareholders will be forgiving though, after all they have a manufacturing operation in the Permian…or maybe not… 892A18E1-BA61-4170-B73E-A25CD5705F15.jpg750x1334 177 KB

Beatley 01 Oct 2019

2020 fcf Not sure what’s happened to your post?! But I certainly hope you’re correct on Sea-Lion.

tes123 29 Sep 2019

2020 fcf I don’t think Sea Lion will be much of an issue esp. if there is a sizable acquistion in NS to balance it. The project is definitely attractive in terms of fiscal terms and if you look at Talos’ slide on project breakevens, SL sits even below Guyana’s Liza development. Its breakeven even sits below Cairn’s SNE development, which if i recall is also aiming to finalise a Project Finance facility for the SNE dev. H1’19 result says; "…form the basis of a financing guarantee application package for the senior debt component of the project financing which was submitted to export credit agencies in July. (emphasis) The project is now in a period of lender due diligence which will entail, among other items, finalising the term sheets with potential senior lenders. " Don’t think they would bother due diligence if not keen on project. If I recall, Catchers (gross 90mmbbls) net development cost around 800-900mn through the downturn. So net c.$1bn for 250mmbbls development would not be too bad, especially when breakevens are even better than in Guyana/SNE. RKH would anyway need cap. to survive for 3.5 years post FID, so can be scoopedupcheap given a lack of ‘keeping lights on’ cap. for them?

Beatley 29 Sep 2019

2020 fcf The boards strategy with sea-lion is clear enough. Farmout, vendor financing and the export financing will certainly de-risk the project from Premier’s perspective, but as you mention, this will certainly reduce the number of barrels net to the company. My concern here is not the strategy, I think it’s definitely the right way to go, its actually getting the export financing. Premier have already mentioned that any additional equity partners would want the benefit of the financing, but what if it doesn’t come off?! Even with some contribution from the vendors, say $400m, it’d still be a huge capex bill ($1bln+) for Premier to undertake. Nothings been said about Premiers ability to get the financing, but with the renewed environmental concerns sweeping the globe I’m just not convinced it will happen. If it doesn’t, then the company has the option to walk away, there would be a huge balance sheet hit and TD would undoubtably have to be the fall guy, or alternatively, raise some additional equity and look to take to production. Neither option would be good from a shareholders perspective imho. Thoughts? Couldn’t agree more on the need for more UK barrels, although I’m not sure how making a bid on the Chevron assets would have been possible given the weak balance sheet. I do think any sizeable acquisition comes with the risk of an equity raise, but given the tax losses it’d be much palatable to the market than raising money for development capex. Couple of other bits from IR for info - Tolmount East appraisal results are due early to mid October. Outcome of Zama sales process hopefully before year-end.

tes123 29 Sep 2019

2020 fcf Hi Beatley, You bring up an important point regarding where the future production growth will be coming from. The latest presentation suggests that current 75kboepd rate can be maintained until 2021 and can be extended out for two more years i.e. 2023 via incremental/infill production. Post that there is no new project coming online, apart from SL which could be FOIL in 2024 - of course unless Alaska discovery is derisked and fast tracked to first oil in 2023. Sea Lion is important but not sure how game changing it will be for us post farmout assuming a revised 50% or a 40% stake. In kbpd terms it will be around 30/40kbpd. Also, SL is vendor financed so our net capex would be 20%-30% of the total project capex depending on any farmouts (not $1.1bn). SL project finance debt would sit anyways outside the balance sheet. My view is that PMO should look to accelerate the tax losses in UK NS by adding barrels in NS. Its significant value sitting dormant. Equity doesn’t value it to much, neither does anyone else. What I think PMO should do is get net debt down to $1.5bn by end 2020 or sooner. Refinance at lower rates (100-200bps lower?) for the lower amount of debt. That should give a $1bn dollar of borrowing headroom for a sizable UK NS acquistion. Or best if we can go the same route as Delek and use a RBL facitlity for the acquisiton - like TLW. I think we should have gone ahead with the Cheron acquisition when we had the chance, even at a price tag of $1.8bn. Although that still wouldn’t have guaranteed a winning bid. But now there aren’t many great assets in UK for buying, unless we can go after individual op. assets that we like but the likes of Delek , Chrysor, etc. are not keen on. Once an acquisition is made there can be a lot of value extracted from the paid 2p reserves but also the near field development via which we can extend the production plateau significantly. What are your thoughts on the above?

Beatley 29 Sep 2019

2020 fcf Hi tes123, Those sorts of differentials will benefit us massively given the current oil price levels, would certainly be good to see year-end debt come in slightly better than expected, but as you say, the gas prices certainly aren’t helping. What this exercise does demonstrate is that failing another massive decline in the oil price Premier should exit next year with a reasonable level of debt, I am hoping that I’m underestimating the proceeds from the Zama sale but time will tell. What’s are your current thoughts on Sea-Lion? Its getting to the point where the longer-term future of Premier is questionable without the additional barrels coming from the Falklands. I’m by no means a pessimist, but given the renewed focus on the CO2 emissions, the prospects of the government signing off on the export financing does seem slim to me. Without it, and considering the development carry, I don’t see how we’d be able to stump up the $1.1bln of our share of the capex and manage to find another $0.3bln for Rockhoppers share. Would another equity partner be willing to come in without the financing?

tes123 28 Sep 2019

2020 fcf Cheers Beatley. From the '19 1H Data book, for production, oil is 70% while gas is 30%, and for revenue gas contributed only 19% for H1. Need to exclude Pak gas assets going forward which contributed roughly 3kboepd in 1H. Gas prices this year have been over 50% lower than last years…flood to shale gas depressing the global LNG, gas markets. IR might be able to provide you the contribution to revenues by gas/oil split or the rough calc. Chim Sao crude seem to be going for $6/bbl premium and can extrapolate Catcher crude blend going for a premium of $3/bbl to spot Brent… “PV Oil was heard to have sold its Chim Sao crude cargoes for November-loading at premiums of around $6/b to Platts Dated Brent, FOB, while a November-loading Su Tu Den crude cargo was sold at a premium of around $5.60/b to Platts Dated Brent, FOB.” /www.spglobal.com/platts/en/market-insights/latest-news/oil/092619-southeast-asian-sweet-crudes-hit-5-year-highs-after-saudi-supply-disruption There is a massive discount embedded into the oil price which has to do with perceived global demand worries. By contrast, physical markets are extremely tight driving differentials and premiums for certain medium crudes.

Beatley 28 Sep 2019

2020 fcf Realised oil price of $60, Zama sale upped to $300m net , cash finance costs increased after discussions with IR to $220m.

Beatley 28 Sep 2019

2020 fcf Hi Lots_of_sense, Apologies for the late reply, started a new job so had a crazy few weeks. I have tried to take into account the mix of oil and gas, I’ll try explain where I’m coming from. In H1-2019 total revenue was $883m, entitlement production was 79,900boepd so 14.5m barrels, and the realised oil price was $68.3. Based on the revenue number we know that each BOE equalled $61, which is 89% of the realised oil price of $68.3. In my revenue number for next year, I’ve used 88% of the anticipated realised oil price, so unless the production mix changes I hope I have that covered, unless I’m missing something? Agree, the Brent price does look at bit ambitious currently. But if our oil on average is trading at a $1 dollar premium to Brent then we only need $64 for this to become a reality. Personally, I’m in the camp that US shale surprised to the downside for the rest of 2019 and throughout 2020, which would give us the $65 average for next year, but I will post a revised estimate at $60 oil to get a feel for the different scenarios.

riverside_red 10 Sep 2019

Talos Zama update [link]

riverside_red 06 Sep 2019

Talos Zama update Upstream Online | Latest oil and gas news – 5 Sep 19 Talos granted more exploration time at Zama US independent approved for an additional two years to explore block awarded in Round 1.1