Field Trip Route Hela Western Nogoli Enga Highlands Jiwaka Madang Ambua Lodge Hides Moro Airstrip Chimbu Southern Eastern CPF Highlands Highlands Morobe Gobe Elk / Antelope Raptor 1 Antelope 3 Purari Airstrip Western Day…
2014 Strategic Review Overview Oil Search Field Trip - 17-21 November 2014 5 Transformation underway Oil Search (OSH) undergoing major corporate transformation with commencement of PNG LNG Project and legacy cash flows: PNG…
2014 Strategic Review All-encompassing review focused on setting roadmap for next phase of growth: Thorough review of overall strategy, asset portfolio, operational capabilities, skills, succession planning, capital management and…
Key findings OSH can continue to deliver top quartile returns to shareholders over next five years based on assets within its existing portfolio Strong platform for growth in PNG: Optimisation opportunities from core PNG LNG and oil…
Many potential new LNG Suppliers. Canada Mediterranean Russia Announced 160 mmtpa Planned 15 mmtpa Announced 63.9 mmtpa PNG Planned 10 mmtpa US Under Construction 20 mmtpa Announced 290 mmtpa* Mozambique Australasia…
Delivered LNG prices expected to settle at US12- 14/mmBtu at destination, regardless of indexation Forecast landed LNG Price in 2020 to Northeast Asia* from various sources** 18 16 14 12 US/mmBtu 10 8 6 4 2 0 US…
Capabilities & Competences: OSHs competitive advantage in PNG Strategic Review has concluded OSH should focus on delivering high returning projects from existing assets in PNG over next five years Supported by capabilities and…
PNG Production Oil Search Field Trip - 17-21 November 2014 19 Strategy 1: Optimise value of existing assets Strategic Review has confirmed OSHs operating strategy to sustain and optimise value of PNG operating assets. PNG LNG…
PNG LNG Project Hides development PNG LNG Project drilling complete Gas Fields Papua New Guinea Hides Hides Juha Kutubu Future Juha Port Moresby Facility Angore Hides Gas Moran Conditioning Plant & Komo Airfield Agogo OSH…
PNG LNG Project start-up historic milestone for OSH Project delivered ahead of schedule and within revised budget Condensate production commenced late March 2014, with LNG production from Train 1 in April and Train 2 in May Sales of…
Debottlenecking of PNG LNG T1 & T2 offers potential for substantial incremental value 30% 25% 20% 15% 10% 5% 0% Bontang Bontang Brunei LNG Malaysia Sakhalin NWS (T1- Bontang Bontang Atlantic Bontang Adgas (T1-T2) (T3-T4)…
PNG LNG facilities LNG Plant Associated Gas Hides GCP LNG Tanker at Jetty Hides GCP Source: ExxonMobil Oil Search Field Trip - 17-21 November 2014 27 Unloading LNG from PNG LNG in Japan Unloading of first PNG LNG cargo…
Proven success optimising production from mature oil fields Since taking over oil field operatorship in 2003, OSH has: Drilled 41 development wells with 85% success rate Added +50mmbbls oil (gross) to 2P expected ultimate recoveries…
Production outlook PNG base business Base oil Hides GTE 30 Taza PNG LNG condensate (6.9mtpa) 25 PNG LNG Gas (6.9mtpa) 20 18 20 mmboe mmboe 15 10 5 - 2013 2014 2015 2016 2017 2018 2019 2020 1. LNG sales products at…
Strategy 2: Commercialise gas in PNG PNG LNG Project has delivered strong platform for growth: Major infrastructure, government and landowner support, Tier 1 LNG customers and financier confidence OSH played significant role in PNG…
of which OSH has interests in 9tcf gross OSH uniquely positioned to be lead 6 Gross 2C 10 Net 2C (OSH) gas aggregator in PNG: Cumulative Gross 2C 9 Cumulative Net 2C (OSH) 5 Cumulative 2C Gas Resource (tcf) One of largest…
NW Highlands: Pnyang (PRL 3) Key resource to support potential Papua New Guinea expansion from PNG LNG Project: Hides Kutubu Port Moresby OSH expects Pnyang resource base to increase Located 120 km NW of Hides Concept…
Gulf Hub: Elk/Antelope PRL 15 Pnyang Juha Juha North PPL260 PNG LNG Project Acquired 22.8% gross Gas Fields interest in PRL 15, containing Hides PNG LNG Project Elk/Antelope gas fields, in Facilities Angore March 2014 Proposed…
Resource requirements for next phase of LNG development NW Hub train: OSH estimates 4 tcf 2P required to underpin development decision Expansion is commercially attractive even based on shorter duration LNG contracts Gulf Hub train…
OSHs role in future developments Unique opportunity over next 12 months to drive optimal development plan, through promoting cooperation agenda: Extensive equity interests spanning sources of expansion gas Alignment with PNG…
Exploration Oil Search Field Trip - 17-21 November 2014 47 Strategy 3: Pursue high value opportunities Renewed focus on resource replacement as well as growth for future projects, given step change in production and resource…
Proven exploration performance OSH has track record of success in PNG and MENA across range of geological environments Exploration look-back analysis 2003-2013: Net expenditure of nearly US1.5bn Drilled 59 wells Discovered 440 mmboe…
PNG exploration running room Internal and external 5,000 assessments indicate only half Hides is largest field found to date Future field sizes likely smaller but still 4,500 of PNGs full resource potential Recoverable Volume…
PNG cream proven plays, test best emerging plays Continue to drill out lower risk proven plays: Hanging walls 1 Hanging wall Forelimbs 2 Forelimb Test high impact emerging plays: 3 Footwall Highlands Footwall Hides Deep…
International exploration International focus: Tunis Erbil Tajerouine KRI Sulaymaniyah Appraising high potential OSH Taza operated Taza oil discovery TUNISIA IRAQ Measured pursuit of material, high returning liquids-prone…
Comprehensive appraisal of Taza 2014-15 focus on defining field size and maximising value Appraisal programme: 600km2 of 3D seismic (includes SE Jambur lead) Jambur Kor Mor 95% complete Taza 2 oil proven 10km NW of Taza 1: testing…
Summary Significant exploration upside remains in PNG, with only half of PNGs estimated full potential of 10 bnboe discovered so far Aim to support PNG gas growth through drilling high impact wells through 2015-2016 Maximise value of…
Strategy 4: Lead PNG sustainability Strategic Review highlighted majority of OSH value growth over next 5-7 years will come from assets in PNG Social responsibility, sustainable development and enduring government and community…
Ensure PNG LNG benefits commitments are delivered Delivery of PNG LNG benefits commitments, as agreed in Umbrella Benefits Sharing Agreement, critical for project stability, to avoid social unrest and operational disruptions Improved…
Strategic sustainable development and social responsibility OSH has made significant contribution to health outcomes for staff and communities over past 10 years: Major provider of healthcare across operating areas in PNG Insert photo…
Delivery of power solutions cont. OSH can play pro-active role in coordinating industry and Government to deliver integrated power solution: Drive growth in PNG and industries supporting LNG expansion and operations Accelerate LNG…
Strategy 5: Enhance organisational capability Strategic Review has highlighted importance of PNG to OSHs future value growth Number of organisational changes will take place, to manage programmes needed to deliver this growth Several…
Strategy 6: Optimise capital management In light of commencement of cash flows from PNG LNG Project, OSHs financial and capital management policies were major component of Strategic Review Key objective is to ensure all future…
Balance sheet and cashflows to be optimised to secure cost effective financing Balance sheet to be conservatively managed to ensure all future growth opportunities can be prudently funded while accommodating dividend distributions in…
Cash Flow Priorities Available Cashflows After scheduled debt servicing, sustaining capital expenditure and commitments Dividends Payment in accordance with new dividend policy Growth Capital Investment I LNG expansion…
Investment, based on three LNG train development 2015 2019 Investment allocation PNG Gas Development PNG Appraisal MENA Appraisal PNG Exploration MENA Exploration PNG LNG (T1 + T2) PNG Oil Other Investment spend being…
Appendix 3: Strong safety performance has been key component in delivering superior returns Total Recordable Injury Rate of 1.55 for nine months to 30 September 2014 8 7.3 7.0 APPEA 6.8 7 6.3 OSH 6.0 6 TRI/1,000,000 Hours…
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