OIL SEARCH LIMITED Macquarie Australia Conference 2009 Resources & Energy 6 May 2009 1
Value Delivery Oil Search has delivered consistent top quartile performance over the past five years: 5 year total shareholder return (share price appreciation plus dividends) to December 2008 of 396% Delivery of the PNG LNG…
Strong 5 Year Share Price Performance TSR for five years to end 2008 of 396%, 7th out of ASX 100 Top quartile performer for 5 consecutive years 7.00 Share price (rebased to OSH) 6.00 Oil Search 5.00 4.00 3.00 Woodside…
Strategic Priorities Continue to achieve top quartile Total Shareholder Returns through: Commercialisation of 580mmboe of discovered resource through the development of PNG LNG Project Delivery of further growth through secondary…
World Class Safety Performance Total Recordable Incidents (TRIs) 1998 2008 14 12.7 12 Australian Companies TRI / 1,000,000 Hours 10.6 9.8 10.7 (APPEA) 10 9.1 9.4 9.3 8.3 8.5 8 8.2 7.8 7.0 7.3 6.8 6.3 6.8 6 5.8 5.2…
PNG LNG Project Platform for Major Growth 6
PNG LNG Project Juha Production Juha facility 250 mmscfd 960 mmscfd Hides Gas Hides & Conditioning Plant Angore 110km 8 65 km 14 gas Kutubu & Agogo condensate line line & 8 liquids line Gobe Existing 270km 20 crude pipeline…
PNG LNG Project Status Project momentum continues to build towards year end FID FEED activities on track, targeting completion end 3Q09 Markets being confirmed Government/Landowner agreements being progressed Financing negotiations…
Project Status - Marketing PNG LNG seen as quality project with high probability of delivery in 2013/14 timeframe, as demonstrated by market progress: Quality, conventional proven resource Excellent operator augmented by OSH with…
Project Status - Marketing Key terms of HOA agreed with major Asian buyer for 2 mmtpa Awaiting Government approvals Detailed terms being negotiated with a number of other potential buyers, more than enough demand to cover initial…
LNG contract pricing (FACTS Global Energy) Analysis of Recent Contracts to Japan, Korea, and China (DES) 18 December 06 April 2008 16 March 2008 September 07 14 August 2007 12 April - May 06 LNG (/MMBtu) 10 Mar -…
Asian LNG Markets Outlook LNG Uncontracted Demand (mtpa) 120 Other New Markets India 100 China Taiwan 80 Korea Japan 60 40 20 - 2007 2008 2009 2010 2012 2015 2020 Source: FACTS GLOBAL ENERGY, Feb 2009 Demand…
Project Status FEED & Contracting FEED activities targeting completion end 3Q09 Preparatory work for early works activities underway, subject to continued progress on markets and BSA Upstream contracting bids due early 3Q09…
Iran (Persian LNG) Iran (Pars LNG) CAPEX for LNG Projects Nigeria Brass LNG Australia Browse PNG LNG Australia Ichthys (FACTS Global Energy) Australias Gladstone Indonesia (Donggi LNG) Algeria (Gassi Touil) Angola LNG…
Project Status Benefits Sharing Benefits Sharing Agreement (BSA) is an overarching agreement between Government and landowners on how certain benefits are distributed: Equity ownership Development levies Royalties Magnitude of…
Project Status Benefits Sharing BSA discussion a major exercise in Project development democracy Forum currently taking place in Kokopo, with landowner representatives from all Project impact areas, Juha to Portion 152 in Port…
Project Status - Financing Detailed negotiations of financing Term Sheet now taking place with Export Credit Agencies (ECAs): Follows positive site visits Ongoing positive feedback from due diligence process Core financing proposal…
PNG LNG Milestones Commence Receive offers Early Works* of project finance Sign HOAs Receive Commence First LNG EPC bids construction sales 1Q 09 2Q 09 3Q 09 4Q 09 2010 2011 2012 2013 2014 Finalise Final Investment BSA…
PNG LNG Project On Track PNG LNG progressing very well. Schedule unchanged, targeting Final Investment Decision late 2009, LNG sales 2013/14 Seen as one of two projects in region moving to FID this year Entering favourable and…
Positioning for Gas Growth Positioning OSH for additional long term gas-based growth opportunities Further LNG developments command the highest value and are highest priority: Additional PNG LNG train: Based on Hides, Juha and…
Location of Oil & Gas Resources PRL03 Juha North Pnyang OSH Operated Licence Hides Juha OSH Interest Licence PRL02 PDL1 PRL11 Angore Petroleum Development Licence Hides FW Huria Petroleum Retention Licence PDL6 PPL239 PRL12…
Oil Operations 22
PNG Producing Oil & Gas Fields PRL03 Hides PRL02 PDL1 PRL11 PPL239 PDL6 PRL12 PDL5 Moran PPL233 SE Mananda Kutubu Agogo PDL2 PPL219 Gobe Main PPL190 PDL4 PDL3 SE Gobe PPL240 7S PRL08 PRL09 APPL300…
Providing Cash for Growth Since OSH took over operatorship of PNG oil fields in 2003, fields have produced 50 mmbbl in excess of previous operators expectations and field life extended Aim is to optimise PNG oil cash generation over…
2009 Production Outlook Production outlook for 2009 of 8.0 8.3 mmboe PNG production subject to results of: Drilling campaign at Kutubu (4 wells), Moran (2 wells) and workover campaign in Kutubu and in Moran Field uptime…
2009 Exploration Continued portfolio and exploration spend optimisation Focus on high value PNG gas and low cost MENA commitments PNG: MENA Farm-down to NOEX, Gedd acquisition, farm-in to PPL260 PNG Wasuma well in PPL219 (drilling…
PNG Exploration PRL03 Fold Belt PRL02 PDL1 PRL11 2011/12 Distal Foldbelt Oil Play PPL239 PDL6 PDL5 PRL12 PPL233 2010/12 Follow-up Sub thrust leads adjacent to 2009/10 Wasuma oil test Gobe, Hedinia and Hides. PDL2 PPL21 9…
MENA Exploration Le Kef Tajerouine Bina Bawi Shakal Area 18 Dubai Office Sanaa Office Block 7 Block 3 29
Challenges of lower oil price 30
Capital Management Measures In light of recent oil price falls, OSH has reviewed and commenced implementing prudent capital management strategies Focus is to ensure funding is available for areas of highest value creation: First…
Capital Management Measures Presently working in especially dynamic environment, where fundamentals remain unknown or uncertain Capital requirements impacted by: Oil price (as always) Capital cost requirement for PNG LNG (will be…
Capital Management Measures OSH starting from a solid base with a strong balance sheet Has already enacted active capital management programme Controlling discretionary spend in production, exploration and corporate Cost…
AGL Asset Sale: OSH Value Implications In October 2008, AGL sold its Core Assets interests in PDL 2, PL 2 and PDL 4 OSH AGL Comments for US800m to Merlin Petroleum Producing 53.8 10.4 As at 30/6/08. (NOEX) Oil mmbbl mmbbl…
Summary 35
Strategic Review being Updated Previous reviews have provided excellent basis for sustained top quartile performance 2009 Update now taking place with three time horizons: 6 12 months: PNG LNG Delivery Definition of what we can do…
OSHs key business priority is delivering the PNG LNG Project 2009 2010-2013 2014+ 1. Deliver 2. Project PNG Build, LNG Positioning 3. Project Completion, Delivering Growth Project for Growth 60,000 Oil Production (bopd)…
Summary Oil Search is in an excellent position for further growth PNG LNG moving forward, premier Asia Pac greenfields project, with all essential pieces coming together Strong balance sheet and liquidity to meet LNG obligations…
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