OIL SEARCH LIMITED Good Oil Conference September 2008 1
Summary Oil Search has delivered sustained top quartile growth over past five years (53% annualised return) Delivery of PNG LNG Project over next four years, together with progressive development of 2nd and 3rd tier gas, has…
Profile Established in Papua New Guinea (PNG) in 1929 Operates all of PNGs producing oil and gas fields. Current gross production 44,000 boepd, net share 23,000 boepd As operator, responsible for generating 22% of PNGs export…
Consistent strong performance over past 5 years Ranked No.5 TSR Performer amongst current ASX 100 for 5 year period to Dec 2007 (53% on an annualised basis) 7.00 Share price (rebased to OSH) 6.00 Oil Search 5.00 4.00 Woodside…
World Class Safety Performance Total Recordable Incidents (TRIs) 1998 2007 14 TRI / 1,000,000 Hours OSH OGP APPEA 12.7 12 10.6 10.7 9.8 Australian Companies 10 9.4 9.3 8.3 8.5 9.1 8 7.8 8.2 7.0 7.3 6.8 6.3 6 5.8 4.7…
Clear Strategy to Deliver Value 2007/08 Strategy Review defined initiatives to continue top quartile returns by unlocking value within existing asset base Major strategy objectives 2007/08 Strategy Review decision for PNG LNG…
PNG LNG Project AsiaPacs next LNG development 7
Primary Focus - PNG LNG PNG LNG Project represents PNGs cornerstone gas development, will more than double country's GDP Affects economy of PNG and its balance of trade situation profoundly (ACIL Tasman report , Feb 2008) Will…
Regional LNG markets are robust Regional market Pacific Basin LNG Supply and Demand to 2020 mmpta fundamentals remain robust 300 Steady expansion from LNG supply unlikely to keep up with demand with existing markets (Japan, high…
LNG Projects Under Construction and Proposed Large number of possible projects under consideration Not many possible projects will be able to cover the demand gap in 2013 Western Australia: strong cost pressures and competition…
LNG Pricing Strong pricing drivers: LNG (/mmbtu) 20 Supply/demand fundamentals Pull from Europe Delays in other projects Environmental advantages Crude Oil Parity 15 Pricing and challenges with competing energy sources Recent…
PNG LNG: The Premier AsiaPac LNG Project World Class and World Scale LNG Project 2C resources of 9.3 tcf 6.3 mmtpa, 2 train LNG project Clean gas rich in liquids No technology issues or concerns Well positioned for the Asia…
PNG LNG Project Integrated development of Hides, Angore and Juha gas fields plus associated gas from the Kutubu, Agogo, Gobe and Moran oil fields Upstream infrastructure including production wells, processing facilities and…
PNG LNG Project Milestones Reached in 1H08 Commercial alignment achieved, with Joint Operating Agreement (JOA) executed in March 2008 amongst the Project Owners Initial funding interests pre-Government back-in agreed (OSH 34%)…
Project Status High quality project team assembled ExxonMobil personnel plus secondees from partners including OSH FEED activities proceeding on schedule. Target completion in 3Q09 (13 months): EOS (KBR/ WorleyParsons JV)…
Project Status Marketing: Negotiations commenced between Project and selected offtakers Project is strongly positioned, competitive advantages recognised by customers Targeting end 08/early 09 for HOAs, SPAs prior to FID Government…
PNG LNG Capex Estimates EM Project Execution First phase capex (2008 2014) Performance expected to be between US10 Actual vs. Funded (%) 11 bn (real mid-2007 s) 125 Cost Schedule Historically, ExxonMobil has delivered projects…
PNG LNG Financing Debt: Joint debt financing approach, led by a Finance Committee co- ordinated by ExxonMobil with key input from OSH. Soc Gen financial advisor Recent road shows elicited strong interest from Export Credit…
Economic Importance of PNG LNG Project ACIL Tasman Report 6 February 2008 Affects economy of PNG and its balance of trade situation profoundly GDP will more than double Oil & Gas exports will increase 4 fold Up to 7,500 jobs in…
Impact on Oil Search For Oil Search, the Project will provide: Annual incremental net production of 20 mmboe Booking of 550 mmboe of Oil Searchs 2C gas resources providing positive impact on depreciation Past costs pay back by…
Benchmark of OSH Peers by AV/2P Reserves PNG LNG FID will allow booking of 550 mmboe of 2P reserves Agg. Value / 2P Reserves US/boe 60 54.7 International Australian 25 20.4 20.0 20 18.1 15.1 15.0 15.0 14.1 14.1 Median =…
Growth Opportunities 23
Gas Growth Opportunities PNG LNG Project sets the stage for additional gas-based growth opportunities Additional LNG developments command the highest value: Sufficient 2C resources for additional train already exist in PNG…
Gas Resource Base PNG discovered gas resources by field (Source: Wood Mackenzie Path Finder) Gobe Area Kuru Iehi Bwata Koko SE Mananda Technical Technical Gas Gas 17,000 17,000 bcf bcf 2% 1% 1% 0.3% 0.1% 0.1% Pandora B Pasca…
Oil Search Vision for LNG Expansion 3.5 4.0 tcf additional gas tcf Forelands & volumes required to 25 Offshore underpin construction of Resources additional train Other 3C Exploration Highlands PNG LNG fields comprise JV Partner…
Other Gas Growth Opportunities Other gas commercialisation opportunities can also offer attractive returns, diversification and timely delivery. These range from export oriented projects to domestic micro projects including:…
PNG Oil Operations 28
Oil Operations: Providing Cash for Growth Since Oil Search took over operatorship of PNG oil fields in 2003, fields have produced 45 mmbbl in excess of previous operators expectations and field life extended Aim is to optimise PNG…
Production Summary Net Production (mmboe) 6.0 MENA Hides GTE 5.0 SE Mananda SE Gobe 4.0 Gobe Main Moran Kutubu 3.0 2.0 1.0 0 1H 06 2H 06 1H 07 2H 07 1H 08 31
Exploration 32
PNG Exploration Cecilia Wasuma Iwa Cobra 33
MENA Exploration Le Kef Tajerouine Bina Bawi Shakal Area 18 Dubai Office Sanaa Office Block 7 Block 3 34
Financial Overview 35
Treasury Update US600 million in cash following receipt of MENA asset sale funds. No debt Refinancing of 5 year US oil facility in final stages: Very positive response from bank market with competitive offers for more than twice…
Summary 37
Gas set to dominate portfolio over time Value NPV Over Time (Unrisked) Substantial unrealised value exists within Oil Searchs current asset portfolio (particularly PNG gas) Fourth Train Current share price discounts assessed PNG…
Summary PNG LNG Project and commercialising remaining gas will drive Company value. Rising NPV over time, as cash flows get closer and Project de-risks Core PNG oil business remains robust, with stable production and cost outlook,…
Loading...
