OIL SEARCH LIMITED Oil Search Field Trip November 2005 1
Field Trip Overview HIDES AMBUA LODGE MORO/RIDGE SE MANANDA KUTUBU 100 km 2
Our Vision To be an acknowledged leader in oil and gas exploration and production in developing countries To be a top quartile performer on the ASX among the 200 ASX leaders We operate our business with the best interest of all…
Areas of Operational Expertise Developing country specialist Ability to work co-operatively with host governments and local communities Culturally sensitive Experienced in operating in challenging environments Low cost, flexible…
2005 Production Optimisation Strong performance from mature fields has been achieved by: Kutubu 4 successful infill wells drilled in 2005 2 successful workovers Focused well optimisation swing well and zone change management…
PNG production (gross) 7
OSH performance 2005 to end Sep incl. Yemen 2005 Net 2004 Net Production Production % Difference (stb/d) (stb/d) Kutubu 13,755 12,818 +7.3% Moran 9,322 7,336 +27.1% NW Moran 114 - - Gobe Main 2,407 3,172 -24.1% SE Gobe 3,648…
OSH 1H05 operating costs Oil Field Costs per Barrel 9 8 Kumul, 7 1.30 Tariffs, Tariffs, 6 1.29 1.48 5 4 Net Field Net Field 3 Costs, Costs, 2 5.04 5.26 1 0 1H04 1H05 1H05 net field cost per barrel of US5.26/bbl…
Costs The major focus in the field has been to increase production without significantly increasing opex per barrel. This has been achieved by: Focus on well work and facilities debottlenecking to increase production Sustaining…
1H05 Net Profit After Tax USm US cents 90 6 5.7 80 5 70 60 3.7 4 50 3.2 3 Net Profit 40 63.9 Expln Exp 30 1.8 2 41.7 EPS 20 36.5 1 10 17.9 0.2 3.2 0 0 1H 01 1H 02 1H 03 1H 04 1H 05 1H05 net profit up 53% on…
Impacts on 2H 2005 NPAT Expect to have neutral inventory position by year end, compared to significant underlift in first half. Together with unhedged exposure to oil price, will boost revenues. No 2H impact from Kumul terminal…
Balance Sheet 250 Gearing % 200 40 150 30 Debt Cash 100 20 Gearing 50 10 0 2002 2003 2004 Jun-05 US171 million in cash at end September, debt at US136.5 million Liquidity of over US300 million, including undrawn…
Reserves OSH objective is to replace oil production plus 15% on a three year rolling average basis To end 2004, oil replacement ratio was 264% of 2P oil on a 3 year rolling average basis, 58% excluding acquisitions 3 year rolling…
2002 Strategic Objectives Strategic Initiatives Focused on 5 Main Areas Achieve top quartile TSR (25%-35% p.a.) over the next 3-4 years Objective by improving underlying earnings performance A. Maximise B. Control OSH C. Grow E.…
Strategic Themes for 2006 Onwards Deliver Value Extract Value Create Value Capability Maximise Deliver Gas Create Growth Ensure Develop Operating Project & what Opportunities Financial Organisational Performance else Capability…
Where will future growth come from Further value to be extracted from PNG oil fields Production optimisation New developments Exploration opportunities Gas Commercialisation Multiple development options Increased…
PNG Gas Project 18
PNG Gas Project 19
PNG Gas Project 20
PNG Gas Project Configuration 600 mmscfd Sales Gas HIDES PRODUCTION New CENTRAL Full Condensate Recovery Condensate Gas GAS CONDITIONING FACILITY pipeline pipeline PLANT (CGCP) KUTUBU CPF 700mmscfd Oil production & 165 mmscfd…
PNG Gas Project - FEED FEED on PNG Gas Project: 93% complete as at October 2005 No real surprises on technical issues Examining capacity increases, to accommodate growth and/or potential petrochemical plant to 300 PJa or more OSH…
Gas Markets Update AGL (75 95 PJ/a) aggregator, wholesaler, retailer Building to 75 PJa for NSW market 20 PJ/a Townsville Power Station, Queensland (announced Oct 2005), earmarked to come from PNG Alcan at Gove, NT (43 PJ/a) To…
Other Markets by Financial Close Continue to seek additional markets in NT, QLD and southern states North West Queensland (+25PJ/annum) Existing contracts expire 2012-2014 Major users are CS Energy/Xstrata and BHP Billiton…
Oil Search has played an important role Deliberate strategy to achieve stakeholder alignment Project FEED Decision Joint Venture Alignment Market / Customer and Downstream Alignment Sold 10% in project to AGL Largest east coast…
PNG Gas Project Importance of AGL Deal Sale of interests in PDL2 and PDL4 by OSH to AGL delivers 10% interest in Gas Project Deal to complete at Gas Project Financial Close Introduces new, regionally aligned, upstream partner…
OSH Funding Requirements Seeking project finance - 70:30 debt: equity For equity component, Company balance sheet very robust zero gearing and strong cash reserves US100 m committed revolver currently undrawn and does not expire…
Sources of Project Debt Finance Commercial banks to provide primary funding commitment, subject to sufficient PRI cover right sector, geographical growth area, banks asset hungry and opportunity poor in resources OSHs existing…
Other Gas Projects 30
Gas Commercialisation Other Activities OSH has material 2P gas resources, of which less than half is committed to PNG Gas Project seeking markets for balance Once PNG Gas Project spine is in place, further gas developments will…
Methanol/DME Project Overview World-scale Petrochemical plant near Port Moresby to co- produce methanol/DME Capable of 7,000 tpd methanol or 5,000 tpd DME Co-producing capability provides natural market hedge Proven & existing MGC…
Project Stakeholders Oil Search local company, leading investor and oil & gas producer and explorer in PNG Japan DME (JDME) - the Japanese companies below are the leading consortia competing for DME entry to Japan, cooperating with…
Methanol & DME Markets Methanol Global 30+ mm tonnes per annum commodity market well understood with shifting supply base Global demand growth anticipated steady at 3-3.5% pa * Far East/Asia Pacific our target market, the fastest…
Potential DME Utilisation LPG-Substitute GAS Power Generation Synthetic Gasoline DME Chemicals To Olefins, Acetic Acid, etc. Aerosol Propellant Diesel DME Bus Substitute Schematic Courtesy of JDME 35
MGC Large-scale DME Process 1 Pass Conversion = 50 80% MGC Methanol Selectivity 98% Synthesis Technology Purge Gas Syn. Gas Natural MeOH Reformer MeOH Gas Synthesis Integration Off Gas DME Synthesis Distillation DME…
Methanol/DME Project Status JDME Detailed Feasibility Study on schedule to finalise by end 05 Potential plant sites short-listed PNG is JDMEs 1st preference for its 1st large-scale DME plant world-wide DME marketing efforts have…
Indicative Timetable End 2005 JDME complete detailed feasibility study 2H 2006 JDME conclude DME marketing and commence FEED Mid 2007 Final Investment Decision and construction commences Mid-2010 - first gas 38
CNG Project Overview Regional solution to New Zealands gas supply issues Complements efforts to commit the PNG Gas Project to Australia Gas transits the PNG Gas pipeline to E. Coast Australia, and is then compressed and shipped to…
CNG Project Stakeholders CNG Proponents Oil Search majority equity holder of PNG natural gas reserves EnerSea leading technology provider for CNG transportation Itochu Corporation major Japanese trading house with finance & other…
The NZ Market Looming Unsatisfied Gas Demand in New Zealand Active E&P sector but: Imported gas (LNG exclusively) was being strongly considered in the absence of an informed market, before the Oil Search initiative eg. 60-100+ PJ/a…
The Right Technology EnerSea CNG technology now available Large volume transport possible at economical rates No massive infrastructure investment required No liquefaction, terminal, cryogenic storage or re- gasification…
CNG Project Status Comprehensive Transportation Feasibility Study completed but under continual refinement Expressions of interest received from NZ gas buyers Discussions on Indicative Terms Agreements underway with likely…
Juha Field Appraisal and Conceptual Development 44
Juha Appraisal Gas-Condensate Field 10km 3 wells drilled Currently 0.5 tcf proven gas-in-place (OGIP) PRL2 x-section Two wells being considered one appraisal of Juha discovery Mega-Juha - Exploration one exploration of…
Juha Recycle Conceptual Development 2 TCF Recycle Recycle Rate = 600 mmscfd (raw) Peak Production = 45,000 bbl/d Cum Production = 95 mmbbl Total Capital 840 mill Hides Facility Upgrade Juha - Hides 70 km 12 Condensate…
Juha Condensate Production 50,000 45,000 Annual Condensate Production 40,000 2 tcf Scenario 35,000 Yields 95 mmbbl Cumulative Production 30,000 4 tcf Scenario (stb/d) 25,000 Yields 175 mmbbl 20,000 Cumulative…
Conclusions Oil Search gas commercialisation strategy is progressing in each key area. 2004 - a year of activity in gas PNG Gas FEED major step Focus on Methanol & CNG 2005 - several paths running in parallel PNG Gas Project…
Middle East/North Africa 49
International Diversification Oil Search commenced programme of measured international diversification in 2000, to augment exploration activity in PNG Middle East / North Africa was selected as focus area. Required criteria for…
International Diversification 2003 2003 acreage position 2 Yemen licenses BLK 35 Yemen (operated) Sanaa Office BLK 15 Current Position Yemen 6 Yemen licenses (5 operated) Present Area 18 Libya Cairo Office 2 Egypt…
Yemen Assets Masilah Basin Play Fairway 120,000bopd Pipeline Marib-Shabwah Basin Play Fairway 250,000bopd Pipeline Interests in the two major producing basins in Yemen: Masilah Basin Marib/Shabwah basin Have…
Why Yemen World class petroleum system success rates 30% Relatively under explored petroleum basins, recent discoveries and new developments Access to good acreage (but getting more competitive) Low capex and opex…
Sanaa, Yemen Sanaa Republic with democratically elected President Population 20 million Relatively mature oil industry with good infrastructure Oil exports primary source of national income: 280,000 300,000 bopd World-scale…
Yemen Generalised Fiscal Terms PSC based system Royalty on production Cost oil 50% Profit oil 30% Cost recovery 50- 75% Yemen remains attractive compared to peer group MENA countries Competitive Bid Rounds tightening…
Nabrajah Block 43 Production from Qishn Sandstone commenced in July 2005 16 months after discovery Development comprises: 4 production wells water injection well construction of leased Central Production Facility 12 kilometre…
Nabrajah Basement Appraisal Basement reserves based on Nab-5 well Block 14 only: 40-70 mmbbl range best estimate Key uncertainties (risk) in reserve Nabrajah estimation are: Ultimate height of producible oil column…
Nabrajah Development Milestones Phase 1 July 2005: Pre-CPF production started 2 Qishn producers + 1 Qishn water injection well 3,500 bopd start-up 5,000 bopd capacity Phase 2a October 2005: CPF upgrade 10,000 bopd, 30,000 bfpd,…
Nabrajah-type Basement Reservoir Granite forms core of horst and tilted fault blocks In the Masilah basin the granite appears to be naturally (joints) and tectonically fractured (faults) Effective Porosity 0.01% Aerial exposure…
Block 43 Entitlements When reporting production, Oil Search intends to book net entitlements Based on 28.3% working interest, net entitlement is expected to be approximately 20% in early years Based on OSH modelling, NPV per…
Block 15 Energy Searcher contracted for 2 Ras Ghashwah-1X Sarar-1X Recovered 1700 litres Masilah-1X wells + options Recovered 38 API oil from 45 API oil from Oil and Gas shows fractured Eocene limestone Cretaceous sands…
New Yemen Exploration Blocks Block S2: OMV Habban - Masilah 1 Basin Play New Basement Fairway Discovery 120,000bopd Pipeline Marib-Shabwah Basin Play Fairway 250,000bopd Pipeline The continuing trend of oil…
Blocks 3 and 7 Blocks 7 (34% Operator) and 3 (60% Operator) OMVs recent Habban-1 basement discovery in Block 3 Basement Map Block S2 and YICOMs West Ayad fields are on- trend to untested basement structures identified in Block 7 and…
Block 74 Blocks 74 (34% Operator) Similar geological setting Block 14 Fields to Block 43 1.2 billion bbls reserves Block 35 OSH 46% Block lightly explored with potential for Basement and conventional Nabrajah Qishn/Saar/Kholan…
Egyptian Assets OSHs Egyptian assets include: Recent Purchase of Area A, Gulf of Suez 4 development and 2 exploration concessions OSH operator, 100% equity: PSA & ESA East Ras Qattara, Western East Ras Qattara Western Desert…
Area A Egypt Area A provides: Ras Gharib Cluster A highly prospective 470MMbblls exploration portfolio Potential to rapidly add Prospective material production on Nubian fairway July Field 1.5 BBlls exploration and/or…
Area A Egypt Material upside identified in the Nubian play in Area A Accounts for 40% production from the GoS Ras Gharib Field 300 mmbbls Well rates 8,000 bopd Nubian Play inadequately tested in Block A Untested Nubian…
Libya Area 18 Libya EPSA IV award: Area 18 (30%) Petrobras operator (70%) Commitment 2,000km 2D & 500 sq km 3D & 1 well Seismic acquisition planned for 1Q06 Well in 2007 3 major leads Lead size 150-450 mmbbl potential 68
Analogue Basement Field Sunah Field Block 14 Sunah Field Basement reserves estimated at 60-200 mmbbl after 10 years of production: S-4 well has produced over 30 mmbbls No Basement OWC seen in field Proven oil column 600m TVD…
Analogue Basement Field Kharir Field Block 10 Block 10 producing 30,000 bopd: 80% comes from the Basement (4 wells) Recent KH A210 well flowed 7,000 bopd; 500m oil column Depth of deepest open fractures has not yet been found in…
Summary 2005 shaping up to be another record year of production and profitability Gas commercialisation continues to dominate activities Diversification into MENA has accelerated and is starting to pay off Tomorrow: Still many…
Oil Searchs PNG Operations 75
Agenda Safety Oil Search mature field optimisation strategy Kutubu, Moran, Gobe SE Mananda development Exploration Summary 76
Safety Focus Paper To Performance Visible management commitment Involve all employees, contractors and relevant third parties in process Communicate, communicate, communicate Do what we say we do Monitor completion of plan…
Safety Performance PNG OPERATIONS: TRIFR 1997 - 2005 PER 1,000,000 TRI Frequency Rate APPEA Hours worked 14 12.7 7500000 12 10.57 10.63 7000000 HOURS WORKED 9.789.4 9.3 TRI / 1,000,000 10 9.1 6500000 8.51 8.4 7.8…
2006 Actions / Initiatives Safety Awareness Packages: Hand Safety; Slips/Trips/Falls; Near Miss Reporting Promoting Positive Performance Tools within OSH Field Operations during toolbox & HSES Group meetings: STOP Program, JHA,…
Oil field optimisation 80
2006 Budget Philosophy Cost Management: Continued prudent control of base operating activity in tight market environment Revenue: Continue to undertake value adding capital and major expense production improvement activity Risk…
Cost Management Field T otal Production & Controllable Costs 2005 US (Adjusted For CPI and Exchange Rate) bbls/day 75,000 75,000 70,000 70,000 65,000 65,000 60,000 55,000 60,000 2005 50,000 Production / day 55,000 45,000…
Production Although PNG fields are mature, a large range of production opportunities have been identified Board direction is to aggressively pursue these opportunities in 2006 and beyond, particularly in light of current high…
Kutubu 2006 programme Commence an extensive workover programme comprising 6 to 8 workovers. Planning already underway. Date of commencement dependent on rig availability Work up and drill three wells, subject to studies and approvals…
Moran & NW Moran - 2006 programme Drill M7 sidetrack to capture unswept oil in A block. Complete workovers in cost effective and timely manner Drill and complete NW Moran Gas injector and producer to capture unexploited oil in K…
Gobe - 2006 programme Gobe Main SE Gobe High grade drilling opportunities in PDL4 Aggressively pursue development of the wedge area notably to the SE of Saunders-1 and the Significant upside production potential, as plunge end of…
Summary 2005 has been a successful year 10% increase in production from mature declining fields Infill drilling in Kutubu and success in the SEG Wedge proves that significant opportunities still exist Incremental production from…
SE Mananda - Outline The oil field that lay in wait Project Summary The challenges HSES performance Working with the Community In the Subsurface Drilling Surface Development The Hegigio Gorge Bridge APF where SEM enters the…
The oil field that lay in wait SE Mananda was discovered in 1991 with the drilling of SEM-1X Originally thought to have 24 mm barrels recoverable Focus at the time was on the development of the Kutubu fields on the eastern…
Project Summary Oil Searchs first oil field development project Full oil production rate of 10,000 bbl/d Drill three wells & one work-over Construct 17km of flowline Hegigio Gorge suspension bridge New compressor and…
Project Summary (contd) Execution methodology No road access due to rugged terrain and geographic isolation requiring helicopter supported rig location and flowline construction Narrow flowline right-of-ways for limited environmental…
The Challenges Weather - Extended inclement weather hampered mobilisation, construction and support of crews Unique oil characteristics Required additional engineering to handle wax/ashpaltenes in flowlines and facilities Difficult…
HSES Performance Minimising risk to personnel, property or the environment is primary priority Dedicated project HSES officers have focused on Helicopter Safety Motor Vehicle safety Manual Handling Slips/Trips/Falls Prevention…
Working with the Community SE Mananda landowners are made up of three separate three ethnic groups who dispute the location of each others boundaries These three groups have come together to work in a cooperative manner with…
In the Subsurface 3D view SE Mananda Top Toro C interpretation SEM 2X SEM 1X SEM 4 SEM 5 SEM 3 SE Mananda thrust Exploration upside with SEM3 plan to deepened to sub-thrust terrace sub-thrust 1 km terrace 97
Drilling the new wells with Rig 2 98
Surface Development Bush Camps 8 bush camps running from SEM 3/4/5 to the north abutment Tent camps Electricity Running water Pit latrines Camps spaced 1.5- 2km apart Workforce walks to work front, moving camps when they…
Surface Development Pipeline Progress Water Line SEM Ch 0 3/4/5 SEM 4481X 1000 2000 Charlie 3000 4000 Delta 5000 Echo 6000 4 Foxtrot 7000 Gulf 8000 Hotel 9000 Scale Mike 0 1000 2000 3000 4000 10000…
Loading...
