12005 Interim Results Presentation

September 20052005 Interim Results Presentation

September 2005

2

Highlights

Profit before Tax

020406080100

H1

05

H1

04

2004

2003

2002

2001

US$

mill

ion

FINANCIAL

• Pre-tax profit up 388% to US$97.2m (US$19.9m)

• EPS up 564% to US 59.9c (US 9.0c)

• OCF up 179% to US$108.6m (US$39.8m)

• Interim dividend of 2.5 p per share

Cash Flow from Operations

020406080100120

H1

05

H1

04

2004

2003

2002

2001

US

$ m

illio

n

OPERATIONAL

• Average WI production up 95% to 29,100 bopd

• 24 successful development wells since Jan

• 3D interpretation under way (Congo, Turkmenistan)

Production - Working Interest

05,000

10,00015,00020,000

25,00030,000

H1

05

H1

04

2004

2003

2002

2001

Bar

rels

per

day

Congo

Nebit Dag

CORPORATE

• 8 year extension of M’Boundi license + sale of 3.5% interest in M’Boundi and Kouilou to SNPC

• Signature of North Hurghada Marine PSC

• 26% stake in HOEC more than doubled in value

3

Income StatementH1 2005 H1 2004 +/- % Comment

US$m US$m

Turnover 168.1 63.1 166% Sales volumes + 88%, avge price + 48%

Gross Profit 104.6 26.8 291% Net of US$14.3m hedge losses, (US$4.7m unrealised)Depreciation tripled to US$32.0m (higher per bbl rates)

G&A expenses (6.4) (6.6) -2%Other opex (0.5) 0.0 Write off of pre-license costsShare of associate's profit 0.5 0.0

Operating Profit 98.1 20.2 386% US$9.9m of EBIT deferred owing to 255k bbl underliftNet Interest (0.9) (0.3)

Pretax profit 97.2 19.9Tax (14.2) (7.7) Turkmen profits tax (20%)

Net profit after tax 82.9 12.3 575%Dividends (7.6) 0.0 2004 dividend

Retained Earnings 75.4 12.3 514%

EPS - basic cents 59.9 9.0 564%EPS - diluted cents 57.9 8.6 573%

Effective tax rate 15% 38%

Gross profit H1 2005

62%

38%

Turkmenistan

Congo

Gross profit H1 2004

79%

21%Turkmenistan

Congo

4

Per Barrel Analysis

H1 2005 H1 2004 H1 2005 H1 2004 H1 2005 H1 2004US$/bbl . US$/bbl US$/bbl . US$/bbl US$/bbl . US$/bbl

Average realised Brent 50.78 34.90 51.82 35.10 49.60 34.37Avge discount to Brent (6.89) (5.20) (6.20) (6.29) (7.65) (2.30)Avge realised oil sales price 43.89 29.70 45.62 28.81 41.95 32.07Hedge losses (3.55) (6.97) (3.55) (6.97) (3.55) (6.97)Net oil price 40.34 22.73 35.87 15.55 30.75 22.80

Production costs 3.36 3.96 2.41 3.09 4.67 5.86G&A ( excl. incentive schemes, shipping) 1.27 1.21 1.27 1.21 1.27 1.21DD&A 7.91 4.96 4.97 3.41 11.55 8.62Tax 3.54 3.60 6.40 5.12 0.00 0.00

16.08 13.73 15.05 12.83 17.49 15.69

Gross Margin 24.26 9.00 20.82 2.72 13.26 7.11Gross Cash Margin ( excl DD&A) 32.17 13.96 25.79 6.13 24.81 15.73

Avge discount to BrentBreakeven Brent price 22.97 18.93 21.25 19.12 25.14 17.99Cash Breakeven Brent price 15.06 13.97 16.28 15.71 13.59 9.37

Group Turkmenistan CongoEntitlement basis

5

Per Barrel Trend

Group Operating Cost per barrel (working interest)

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

H1 05H1 042004200320022001

cost

per

bar

rel (

US

$)

Group Operating Cash Flow per barrel before hedging (entitlement)

$0.00$4.00$8.00$12.00$16.00$20.00$24.00$28.00$32.00

H1 05H1 042004200320022001

OCF

per

bar

rel (

US

$)

6

Cash Flow

H1 2005 H1 2004 +/- % CommentUS$m US$m

Cash generated by operations 110.3 38.9 183%Tax paid (1.6) 0.0

Net Cash from operating activities 108.6 38.9 179% $20m working capital increase (trade debtors)Capital expenditure (85.0) (42.7) 99%Investment in associate (26.0) 0.0 HOEC Initial Investment (26%)Deposit in blocked account (25.1) 0.0 HOEC tender offer : release imminent

Net cash flow before finance (27.5) (3.7) 641%

Issue of share capital 1.6 1.0Movement in net debt 10.9 0.2

Decrease in cash (15.1) (2.5)

Capex by region H1 2005

48%49%

3% TurkmenistanCongoEgypt

Capex by function H1 2005

97%

3% 0% DevelopmentExplorationOther

7

Balance Sheet

H1 2005 H1 2004 +/- % CommentUS$m US$m

Non-current assets 322.2 209.2 54%

Inventory 1.3 0.9Debtors 85.5 17.0 403% Includes US$25m HOEC escrow accountCash 24.7 34.7 Will be increased by US$25m escrow release

Current Assets 111.5 52.6

Creditors (38.9) (24.4) 60%Fair value of oil price derivatives (15.2) (13.0) will get released to P&L in H2 against realised hedge lossesShort Term Debt (10.7) (0.7)

Current Liabilities (64.8) (38.1)

Debt > 1 year (5.6) (6.3)Deferred Tax (23.2) (11.2)Minorities

Net Assets 340.0 206.2 65%

Share Capital 134.4 132.8Reserves 205.6 73.4

340.0 206.2

Total Debt (16.3) (7.0)Net Cash 8.4 27.7

8

Turkmenistan : Location Map

KAZAKHSTAN

RUSSIA

TURKMENISTAN

IRAN

UZBEKISTAN

AZERBAIJAN

IRAQ

ARMENIA

GEORGIA

Aral Sea

Caspian Sea

BURUN

KUYDZHIK

KYZYLKUM

ERDEKLI

GOGRAN’DAG

EKIZAK

BUGDAYLI KORPEDZHE

KAMYSHLDZHA

OKAREM

BARSAGELMES

KOTURTEPE CHELEKEN

KUMDAG

KOMSOMOL E. CHELEKEN

NEBIT DAG LAM

ZHDANOV

KARATEPE

S. BUGDAYLI

NEBIT DAGPSA

Operator : BurrenWkg Intrst : 100%Area : 1050 sq. km

9

Turkmenistan : Activity

• H1 2005 average production (working interest*) : 15,150 bopd (+ 50%)– Current working interest production 15,650 bopd

• 12 development wells in year to date : 5 deep, 7 shallow– 1 more in 2005 before exploration drilling starts

• Exploration drilling starts Q4 2005– Seismic interpretation & mapping completed in November

– 2 deep drilling rigs by year end, 3rd to follow in 2006

– 8 deep exploration wells targeted by end 2006

• Water injection pilot (5,000 bwpd) in operation by year-end

* excludes Initial Oil

10

Burun Field Production 1997-2005

Burun Production Since 1997

0

5,000

10,000

15,000

20,000

25,000

1997 1998 1999 2000 2001 2002 2003 2004 2005

Oil

Prod

(bbl

s/d)

0

5,000

10,000

15,000

20,000

25,000New Well ProdW/O ProdGL Prod

PSA production commences

Burren acquires 100% and becomes Operator

Main development drilling starts

Burun well Numbers Since 1997

0

20

40

60

80

100

120

140

160

1997 1998 1999 2000 2001 2002 2003 2004 2005

Wel

l Num

ber

0

20

40

60

80

100

120

140

160New WellsOriginal WellsGL Wells

11

Burun New Facilities : September 2005

Injection Pumps Compressors #3, #4

Produced Water Treatment

New Separators (in the back) Tanks (oil and water)

12

Turkmenistan : Prospectivity – Upside Potential

Prospect values are estimated potential

recoverable reserves derived from ongoing

technical work

Burun South Flank40 mmbo

Nebit Dag Deep120 mmbo

Nebit Dag South30 mmbo

Nebit Dag East86 mmbo

Burun Field

129mm bbls booked reserves* + 276mm bbls potential reserves* (*Working Interest Basis)

13

Congo (Brazzaville) : Location Map

Operator : M&P

Wkg Intrst : 37%

Area : 2800 sq. km

Operator : M&P

Wkg Intrst : 35%

Area : 2600 sq. km

14

Congo : Activity

• H1 2005 average production (working interest) : 13,950 bopd net (+ 187%)– Current WI production : 18,500 bopd (3 new wells onstream in Sept)

• 17 new M’Boundi wells in year to date: – 14 on production, 1 imminent, 3 shut-in

– 25 target total new wells for year : 4 rigs in operation

• Exploration drilling on M’Boundi extensions to commence by end of 2005– 3D/2D seismic interpretation completed during Q4

– Minimum 7 exploration wells (M’Boundi & Kouilou) by end 2006

• Water injection pilot (20,000 bwpd) operational in Q2 2006

• New FOB sales terms to commence in Nov 2005 - $6.0 bbl improvement

15

Congo : Production

CONGO - 2004/5 Production Shares

05000

10000150002000025000300003500040000450005000055000

16/08

/2004

13/09

/2004

11/10

/2004

08/11

/2004

06/12

/2004

03/01

/2005

31/01

/2005

28/02

/2005

28/03

/2005

25/04

/2005

23/05

/2005

20/06

/2005

18/07

/2005

15/08

/2005

12/09

/2005

Week Commencing

Bar

rels

per

day

Gross ProductionContractor ShareBurren Share

16

MBD Well Activity September 2005

Well Status

Currently Drilling

Wells drilled on Production

Wells drilled not on Production

MBD-1004Tested 4200bopd

MBD-1901Tested 5000bopd

MBD-1802Tested 2000bopd

MBD-1902Drilling

MBD-1005Drilling

MBD-1803Drilling

MBD-1103Drilling

MBD-1102Tested 2500bopd

52,000 bopd from34 wells

17

Congo : SNPC sale

• Sale of 3.5% for $35m + 8 yr extension to M’Boundi + Noumbi ratification

• Positives :– Certainty of license to 2025 (previous first expiry date 2017 + 5 year extension)– Additional 8 yrs to 2030 has value on STOIIP growth and /or higher recovery factor– Ratification of La Noumbi was by no means certain in absence of a deal

• Perceived up-front loss of value likely to be more than recovered in future– 5% increase in STOIIP + 25% recovery factor US$100m net NAV gain

18

M’Boundi : License Extension

M'Boundi Production vs RF

0102030405060708090

100

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Year

Fiel

d Pr

oduc

tion

mbo

pd

RF 30%RF 25%RS Audit 2004 - RF 21%

Extension: 2022-2030

25 - 50 million barrels

Net gain / loss in NAV (net to Burren) with changing assumptions

$40/bbl long term Brent10% discount rateNAV / WI bbl : US$5.8

Source : Burren estimates 31.12.04 audit assumptions

US$m

12.6 21% 22% 23% 24% 25%0% -48.4 -20.2 8.1 36.3 64.55% -18.8 10.9 40.5 70.2 99.8

10% 10.9 42.0 73.0 104.1 135.115% 40.5 73.0 105.5 138.0 170.420% 70.2 104.1 138.0 171.8 205.7In

crea

se in

S

TOO

IP

Recovery Factor

19

Congo : Prospectivity – Upside Potential

Dongou52mmbo

Prospect values are estimated potential

recoverable reserves derived from ongoing

technical work

•M’Boundi Extensions•North 50mmbo•South 60mmbo

LA NOUMBI

KOUILOU

M’Bemba Updip

40mmbo

N M’Boundi40mmbo

Basin Margin Terraces60mmbo

Tchivouba10mmbo

NE Tchissakata

50mmbo

SW Tchissakata

20mmbo

116mm bbls booked reserves* + 120mm bbls potential reserves* (*Working Interest Basis )

20

Egypt : Location Map

North Lagia1,457 km²

N. HurghadaMarine

242 km²

East Kanayis4,300 km²

Total acreage 6,000 km²

21

Egypt : Activity

• Deep drilling rig mobilising in November

• 4 well exploration drilling programme on East Kanayis to end 2006– Locations & order of drilling being finalised

– Plus re-entry of Qattara Rim well.

• PSC signed in August for North Hurghada Marine block (shallow Gulf of Suez)– North Lagia block (onshore Gulf of Suez) expected to be signed before year-end

• Cairo office staffed and fully operational

22

Egypt : East Kanayis Prospectivity

Prospect values are estimated potential

recoverable reserves derived from ongoing

technical work

Cretaceous Prospects29 mmbo

Jurassic Prospects65 mmboe

94mm bbls potential reserves* (*Working Interest Basis )

23

India : Hindustan Oil Exploration Co (“HOEC”)

• Stake remains at 26% after closing of tender offer– Open offer take-up minimal as expected (offer price Rs 92 vs. market price Rs 170)– Options into additional 15% likely to lapse / default (price rise)

• Company will require debt and equity finance to complete PY-1– Burren prepared to support financially and technically

• Strategy unchanged, execution modified– India remains a strategic target and HOEC remains chosen investment vehicle– PY-1 project remains the core attraction: 2009 onwards FCF ~ US$50m p.a.– Medium term goal to achieve 51% control, but not at any price– Timescale likely to be longer than originally envisaged

24

2005/6 : Exploration Drilling

Prospect Burren Interest Wells

Potential Gross Recoverable

Reserves

Potential Working Interest Reserves

(mmbbls) (mmbbls)

TurkmenistanSouth Burun 100% 40 40Nebit Dag Deep 100% 120 120Nebit Dag East 100% 86 86Nebit Dag South 100% 30 30

8 276 276Congo

M'Boundi south ext'n 31.5% 60 19M'Boundi north ext'n 31.5% 50 16Dongou 31.5% 52 16M'Bemba 31.5% 40 13North M'Boundi 31.5% 40 13Basin Margin 31.5% 60 19Tchivouba 31.5% 10 3NE Tchissakata 31.5% 50 16SW Tchissakata 31.5% 20 6

7 382 120Egypt

East Kanayis Shallow 100% 29 29East Kanayis Deep (boe) 100% 65 65

4 94 94India (HOEC) HOEC Intrst

CY-OSN - 97/1 80%19 752 490

25

Geographic Sphere of Interest

26

2005/6 Looking Forward

• Continue development of 246mm bbls booked reserves – Group WI production to reach 37,000 bopd at y/end (31,000 bopd avge for FY 2005)

• Exploration drilling in Turkmenistan, Congo and Egypt– c. 20 wells over period to end 2006 – Capex c. US$65m– Targeting 490 mm bbls potential gross prospect reserves on WI basis– Total of 6 rigs drilling by end 06 : 3 in Turkmenistan, 2 in Congo, 1 in Egypt

• Several new organic growth possibilities under review– Within current geographic focus areas

27

Summary

On course for a 4th successive year of more than doubled profits from organic growth alone

Continuing emphasis on low cost operation

Maintain development of core assets, but increase exploration activity

Strategy unchangedStick to frontier marketsOrganic growth led : driven by investment return, not empire creationBalance development growth potential and exploration upsideStrive to unlock gas value in geographic regions

28

Appendices

29

Burun Field : Historic Production Profile

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Calendar

Dai

ly P

rodu

ctio

n of

Oil,

Wat

er (m

3/d)

and

Gas

(Mm

3/d)

0

2

4

6

8

10

12

14

16

Cum

ulat

ive

Oil

(MM

m3)

96 : PSA signed. Monument operator. Burren 35%

98 : PSA productioncommences

00 : Burren acquires 100%and becomes Operator

04 : Development drilling

Oil

Gas

Water

Burun Field: 100-200mmcfd potential+ 5,000-10,000 bcpd of condensate

30

Burun Field – 2005 Drilling Programme

D DW 9 DDW10

4250

4750

4500

4250

4250

4000

4750

4500

4250

4500

4750

Apsheron Trend Strike Slip Fault

Burun Field – South Flank

Burun Field – North Flank

Nebit Dag Deep

B125

B062

B124

B129

B191

B127

B128

B183

B061B243

B060

B058 B059 B240

B232zB242

KEYShallow Well Location (planned)Deep Well Location (planned)Deep Well (drilled 2003-2005)Proven + ProbablePossible

Apsheron Drilling

B063

B126

B198

September 2005

B235

B248

B244

B245

B064

B188

B196

B189B195

B145

B146

B147

B148

B247

B246

B078z

B150

31

Gas Export

Gas Pipeline Infrastructure Caspian & Black Sea Region

32

HOEC Production, Development & Exploration Assets

33

HOEC Cauvery Basin Assets

PY-1 Gas Field

PY-3 Associated Gas

CY-OSN-97/1Oil & Gas

Exploration Prospects

Planned Gas Pipeline

CauveryBasin

34

Principal Shareholders

As at 30 August 2005 # shares(million) %

Baring Vostok Capital Partners 18.3 13.1%

Tacoma E&P 15.6 11.2%

Barclays Global Investors 15.4 11.1%

Sunfloat Shipping 10.7 7.7%

Balor Holdings* 5.2 3.7%

Management 0.9 0.7%

Free float 72.9 52.4%

Total 139.0 100.0%

* Finian O'Sullivan has beneficial interest

Management + Balor own 7.5% of diluted equity