OIL SEARCH LIMITED 75th Annual General Meeting 12 May 2006 1
Achievements in 2005 2
2005 Achievements Record profit of US200.2m 87% increase on 2004 Shareholders rewarded by final dividend of US 3 cents plus US 2 cent special dividend, making US 7 cents for the year, representing a 75% increase on 2004 dividend…
Top Quartile Total Shareholder Returns 4th out of % 120 ASX 150 5th out of 100 ASX 150 8th out of 80 ASX 150 107% 60 81% 40 67% 20 0 2003 2004 2005 4
2005 Achievements Profit driven by: Production - growth in production achieved despite 4 week downtime resulting from Kumul, with increases from mature PNG oil fields against the 20% decline curve Two new developments brought into…
Oil Search Net Production 40,000 Kutubu Moran Gobe Main SE Gobe +17% Pre AGL Hides Nabrajah SEM 35,000 +10% -8% Post +6% AGL 30,000 +25% sale 25,000 +23% stb/d 20,000 15,000 10,000 5,000 0 2000 2001 2002 2003…
Net Profit After Tax = 102% CAGR in net profit over last four years 240 20 17.9 220 Net Profit 18 200 EPS 16 180 14 160 200.2 140 12 US cents USm 9.6 120 10 100 7.7 2H 8 80 136.3 4.5 6 60 107.3 85.7 1H 4 40…
12 USm 50 100 150 200 250 300 350 400 0 2 0 0 4 107 O il P ri c e 156 O il S al es 73 E Ex xp pe lo n rat di io tu n 27 re O pe A x m (23) or ti sa ti on (24) Ta…
Operating Cash Flows 600 Operating cashflow included US148.2m of 500 358 tax paid, a 113% increase on the prior year 400 USm 300 (263) Investing outflows included US169.0m on 200 (93) development and 210 212 US67.2m on…
Treasury Review 250 US212m in cash at end Cash Debt December, debt at US126m 200 Zero gearing based on net positive cash position The Groups US debt facility 150 was converted into a totally USm revolving structure in…
2006 Capital Outlook USm 2005 2006 Actual Outlook Investing : Exploration 32.4 100.0 Development 168.9 115.0 Gas (including FEED) 34.8 90.0 Financing : Dividends 55.9 55.9* Debt Repayment 42.6 126.0 *2005 final dividend…
Core Strategies to Deliver Further Growth Value enhancement of core assets Continue to optimise performance of PNG oil fields, with tight cost control Area A in Egypt Value extraction from discovered resources Commercialise /…
VALUE ENHANCEMENT 18
PNG Oil Production Outlook 80,000 STB/D Summary PNG Gross Production History 2000-2005 Programmes post- and Forecast 2006 operatorship change 70,000 have been successful OSH Current gross PNG 60,000 Operatorship production At…
PNG Oil Production Oil Production (stb/d) Oil Production (stb/d) 50,000 35,000 History Forecast History Forecast 45,000 KUTUBU 30,000 40,000 GOBE 25,000 35,000 30,000 20,000 25,000 15,000 20,000 15,000 10,000 Trend…
SE Mananda Development First Oil on 26 March with production currently on ramp up to 7,000 bopd Significantly more complex geology and reservoirs NW Moran intersected, leading to reduced SE Mananda oil in place, lower reserves…
Yemen - Nabrajah 2005 Summary Commenced production through Early Production Facility in July Presently producing around 10,000 bopd from four wells Nab-5 pressure data suggests substantial quantity of oil Outlook for 2006…
Nabrajah Appraisal Nab-10 being drilled into Surface location Top Basement location weathered Basement Possible location for Nab- Nabrajah 2 Nabrajah 9 11 is to west of Nab-5 Nabrajah 10 Nabrajah 11 3D seismic (400 km2) has…
VALUE EXTRACTION 25
Gas Commercialisation Significant change in global gas markets over past few years Australia an anomaly in the developed world World prices continue to climb Considerable new interest in PNGs static gas resources Focus to turn…
Gas Commercialisation Oil Search has over 1 billion boe of proven and probable uncontracted gas and associated liquids Resource is of considerable potential value, approximately 40% of resource dedicated to PNG Gas Project…
Gas Resource Status (Gross PNG) Recoverable Gas (bcf) Elevala 30,000 Ketu Pandora Recoverable Gas (bcf) 25,000 Uramu Kimu Barikewa 20,000 P'nyang Yet to Find Angore 15,000 Juha Hides 10,000 SE Gobe Gobe Main…
Gas Commercialisation Phase 1 : PNG Gas Project Delivery Significant progress, with markets largely underwritten Likely to be close to or at initial build plant capacity Commercialises significant volume of reserves Delivers…
PNG Gas Project Sale of gas from PNG Highlands to Australia through over 4,000 km of pipeline Conditional & firm contracts signed for total gas sales of 155- 229 PJ pa Major buyers: AGL, Alcan, Comalco, QAL, CS Energy…
Hides Area 31
Hides to Kutubu 32
Kutubu to Gobe 33
Gobe to Omati via Kopi 34
PNG Gas Project Focus on Delivery Substantial activities in PNG to finalise regulatory and landowner agreements Oil Project commitments and agreements being finalised Developing environment for Landowner Benefits distribution…
Requirements for a Project Sanction Decision Conversion of remaining indicative terms agreements into gas sales agreements Finalisation of local business development plan (NECL) and benefits distribution (GPCSA) Conclusion of…
Gas Commercialisation Phase 2 : Gas for PNG Industry Development and Further Exports New initiative recognising world market realities Significant interest for petrochemicals, GtL, fertiliser and new LNG developments Requires…
Phase 2 Gas Strategy Targeting 2010-12 In-Country Industry Development Requires more contractable reserves Strong interest from industry developers Petrochemical GtL Fertiliser LNG CNG local and export use Expanded exploration,…
Phase 2 Gas Strategy Aiming for 150 PJ pa initial market load in Port Moresby, growing to over 300 PJ pa Flexible gas supply options but to include potential development of Juha Barikewa Kimu Uramu Subject to further appraisal…
Current Oil Production and PNG Gas Project 40
Current Oil Production and PNG Gas Project Including Phase 2 Gas 41
New Appraisal and Development Programme Dedicated exploration / drilling resources Juha drilling programme 06-07 Barikewa seismic acquisition then appraisal drilling Kimu / Korobesea seismic then drilling Engineering and FEED…
Juha Cycling Engineering feasibility study on Juha gas and liquids cycling plant completed Juha 2 Potential for early or deferred Juha 3 Juha 1 gas sales Important source of gas for non-PNG Gas projects Current proven…
VALUE CREATION 44
2006 PNG Exploration PNG up to 5 Mananda Attic exploration wells Juha planned for 2006 NW Paua Mix of low risk/near Arakubi field opportunities Damami and higher River seismic risk/large potential (Mogulu) Foldbelt seismic…
Yemen 2006 Appraisal/Exploration Complete appraisal programme on Nabrajah: Nab-10 underway, Nab-11 to follow Complete acquisition/processing NABRAJAH of Block 43 seismic Up to six exploration Proposed Shaibah-1 wells planned…
Egypt & Libya Egypt - East Ras Qattara 3D has substantially increased block potential 2 wells commencing 3Q06 Two Wells Egypt - Area A 15 well/3 years committed development /exploration programme Exploration commences early…
Operating Environment The pressures: Rising prices of oil services and equipment Reduced availability of oil industry equipment, delivery delays Shortage of well qualified people Oil Searchs approach: Alliancing with key…
Outlook 49
Outlook Strong production outlook, with continued opportunities in PNG and growth in Middle East PNG performance driven by active development programme Yemen Nabrajah appraisal and Egypt Block A activities Production forecast…
Outlook Gas Commercialisation PNG Project Priority delivering Project Sanction in 2006 FEED optimisation Contracting Landowner / Government Agreements Second Phase Development Resource conversion Various commercialisation…
Outlook Corporate Very strong balance sheet supports major development expansion Continued measured new venture activity 52
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