a new premier with stronger finances and competitive
TRANSCRIPT
A new Premier with stronger finances and competitiveA new Premier with stronger finances and competitiveadvantage in Asiaadvantage in Asia
A primary investment vehicle forA primary investment vehicle forPETRONAS and Amerada Hess in AsiaPETRONAS and Amerada Hess in Asia
and
Capital injection andstrategic alliance with
a
a
Tan Sri Dato’ MohdHassan Marican
President & ChiefExecutive Officer
Sam Laidlaw
President & ChiefOperating Officer
PRESENTATION TEAM
Charles Jamieson
Chief Executive Officer
Sir David John
Chairman
a
TRANSACTION SUMMARY
n Premier to become a primary investment vehiclefor PETRONAS and Amerada Hess in Asia
n PETRONAS and Amerada Hess to become 25%shareholders through injection of £136m of cashvia a combination of new voting and non-votingshares
n Subscription for new equity at 25 pence per share
n Appointment of two non-executive Directors fromPETRONAS; Amerada Hess to retain two non-executive Directors
n Unanimously recommended by the Board ofPremier
a
RATIONALE FOR THE TRANSACTION
n Strengthens Premier’s balance sheet in optimal manner
l enables retention of key assets
l enables financial challenges to be overcome
n Introduces PETRONAS as a key strategic partner
l the partner of choice in Asia
l builds on existing Yetagun relationship
n Reinforces Amerada Hess relationship and highlights theirlong term commitment to Premier’s Asian gas strategyand growth potential
a
n 30% premium toyesterday’s closingshare price
n 27% premium toshare price on daybefore Interims andannouncement ofdiscussions
PREMIUM PAID FOR STRATEGIC STAKE
6 month share price
APR MAY JUN JUL AUG SEP10
12
14
16
18
20
22
24
26
28
Source: DATASTREAM
Subscription price
a
CORPORATE GOVERNANCE AND MANAGEMENT
n Majority of Directors will be independent from majorshareholders
n A Consultative Committee will maximise opportunities forsynergies (four Premier, two PETRONAS, two AmeradaHess)
n An Operations Director will be appointed
n Two PETRONAS non-executive Directors will be appointed
a
BACKGROUND
n Declared Asian gas focus
n Proven track record of finding and developingworld class gas projects in Asia at low cost
n Reserve growth of 500% over 5 years
n Cashflows are low compared to capexrequirements
n Financial capability prevents development of fullpotential of current business and new projects
n Challenge identified and several options reviewedto address it: strategic investor route preferred
a
BALANCE SHEET STRENGTH AND FLEXIBILITY
Funding gap solvedFunding gap solved
300
200
100
0
122Covenant
600
400
200
0
399m
Gearing Lender Gearing
£ m
illio
n
Gea
ring
(net
deb
t/net
ass
ets)
(%)
Interims
Proforma
263m
80%
205%
105%
37%
Net Debt
a
THE FIT OF PREMIER AND PETRONAS
n Builds on existing relationship
n Secures support of leading NOC in region of focusl strong relationships and influencel infrastructure and downstream skillsl transfer of skillsl strong financial standingl gas project synergies
Existing trust, dialogue and relationshipsExisting trust, dialogue and relationships
The ideal partnerThe ideal partner
a
THE PETRONAS PERSPECTIVE
n Establish new vehicle to develop Asian gas business
n Allies PETRONAS with Premier’s successful Asian growthl existing projectsl proven track record of creating projectsl entrepreneurial skills
n Partnership built on trust and existing co-operation
Existing trust, dialogue and relationshipsExisting trust, dialogue and relationships
The ideal vehicleThe ideal vehicle
a
THE AMERADA HESS PERSPECTIVE
n Strong reserves growth to-date
n Alliance with PETRONAS ensures momentum of growth continues
n Wider influence in the ASEAN region
n Operational overlap
An enhanced investment proposition for all shareholdersAn enhanced investment proposition for all shareholdersincluding Amerada Hess with increased competitiveincluding Amerada Hess with increased competitive
advantage in Asiaadvantage in Asia
Existing relationship cementedExisting relationship cemented
a
THE ALLIANCE TODAY
nn New fundingNew funding
nn Platform for growth in AsiaPlatform for growth in Asia
nn Consultative group established to capitaliseConsultative group established to capitalise on synergies on synergies
THE ALLIANCE VISION
Creation of a new high growth investmentCreation of a new high growth investmentvehicle for Asian Gasvehicle for Asian Gasnn Exploitation of major operating synergiesExploitation of major operating synergies
nn Organic growthOrganic growth
nn Selective asset acquisitions to create theSelective asset acquisitions to create the leading independent in Asia leading independent in Asia
a
ALLIANCE ASSETS IN ASIA
n Spread of assetsprovidespotential tocreate thedominantposition in Asia
Premier assetsAmerada assetsPetronas assets
a
THAILAND OVERLAPS
Thailand
Myanmar
Wang Noi
Rayong
Surat Thani
Khanom
Ratchaburi
M10 M13 M12
Mergui
YANGON
PHUKET
Andaman Sea
BANGKOK
Alliance interestsGas fieldsProposed pipelineExisting pipeline
Yetagun
Gulf of Thailand
Pailin
JDA
n Thai gas market is inearly stages ofprivatisation
n Indigenous natural gaswill be used withimported gas fromMalaysia and Myanmar
n The Alliance ispositioned to capitaliseon its assets
a
Premier interestsGas fields
KadanwariGhauspurQadirpur
Dadhar
Kirthar Dadu
KNS
Dumbar
Sukkur
Karachi
Lahore
Quetta
ZarghunDiscovery
Bhit Field BadhraDiscovery
Pakistan
ZamzamaDiscovery
Bolan
Islamabad
PAKISTAN INFLUENCEn Premier is in
most of theexisting andfuture gasdevelopments
n PETRONAS arealreadyestablished inPakistan
n The existing andnew gas pipelinenetworks willlead in time tothe import of gasfrom the MiddleEast
a
INDONESIAN SYNERGY
n First gas export toSingapore fromPremier’s West Natunaassets underway
n Potential second gasexport to Malaysia fromWest Natuna underdiscussion
n New export of gas toSingapore from Ameradaacreage in Sumatra nowagreed
n ASEAN gas grid nowbecoming a reality
SINGAPORE
Lingga Isl.
Banka
Anambas Isls.
Singkep Isl.
Mentawai Isls
Su nd a Stra
it
St rait of Malacca
PENINSULARMALAYSIA
JAVA
SUMATRA
THAILAND South China Sea
Natuna Sea
0 100 Km
Johor Baru
Kerteh
Penang
Panjang
Palembang
Jambi
Dumai
Kuala Lumpur
Sin
gapo
r e N
at u
n a G
as T
r unk
line
Anoa
Kakap
PREMIER
DuyongSotong
Guntong
SemangkokTapis
JernehLawit
Jakarta
a
SUMMARY OF THE DEAL
n Clear synergies with PETRONAS and Amerada
n Greater regional influence
n Stronger finances
n Access to infrastructure and downstream skills
n Platform for creation of the leading independent in Asia
Adding value for all shareholdersAdding value for all shareholders
A new and stronger Premier withcompetitive advantage in Asia
A primary investment vehicle for PETRONAS and Amerada Hess in Asia
a
ALLIANCE VISION IN ASIA
n Major Asian gasplayer working inderegulatedmarkets
n Inter countryinfrastructureoperator
n Identifier andmarketer of newgas reserves
Premier assetsAmerada assetsPetronas assets