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2003 FULL YEAR RESULTS – Oil Search Limited

Oil Search Limited · Feb 25, 2004 · 61 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 1
    O I L S E A R C H L I M I T E D 2003 Full Year Results February 2004
  2. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 2
    2003 Results Review Presentation Program Safety Peter Botten Managing Director Results Highlights Peter Botten Managing Director Financial Summary Nigel Hartley Chief Financial Officer Operations Review Mark Wilson PNG…
  3. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 3
    A Core Value of Oil Search Safety, People and the Environment First An uncompromised focus on World Class HSES performance will be the foundation for growth in all areas of business The company recorded outstanding safety…
  4. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 4
    Safety Moment
  5. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 5
    2003 Highlights Core Operating Profit (After Tax) of US89.6m (A137.3m) 62% higher than 2002 A Record for the Company Profit After Tax (after exploration write- offs and capital profit) was US85.7 million (A131.3 million) 82% higher than…
  6. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 6
    Highlights Strong result based on: Oil and Gas Production 10.29 million boe (up 24%) Oil price US 29.80 (up 20%) Gold price US361 per ounce (up 13%) Balance Sheet strengthened Gearing 10.3% US 1 cent Dividend and US 1 cent Special…
  7. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 7
    Corporate Highlights Purchase of ChevronTexacos PNG Assets at highly competitive price Assumption of oil field operatorship a key achievement providing: Investment and programme leadership Opportunity to improve efficiency and reduce…
  8. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 8
    Corporate Highlights Gas Commercialisation A new approach needed to crystallise a major gas development Rigorous review of gas markets and marketing strategy Optimised development plan with integration of the oil and gas…
  9. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 9
    Financial Summary Nigel Hartley
  10. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 10
    2003 Results USM 2003 2002 Revenue 358.2 51% 237.0 Field Costs 90.3 57.1 Other Costs 27.3 18.8 Exploration w/o 12.5 14.0 EBITDA 228.1 55% 147.1 Net Amortisation 64.3 56.3 11.7 A 8.3 A EBIT 163.8 81% 90.7 (7.7 US ) (4.5 US )…
  11. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 11
    0 100 200 USm 47.0 2002 Result 36.0 Oil Price Oil Sales 55.6 11.6 Gold Cont. Oil Field 23.9 Costs 4.1 Admin 8.0 Amortisation Finance 3.8 Costs 5.8 Other 30.6 Tax 2003…
  12. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 12
    2003 Revenue USM 2003 2002 Oil Sales 280.6 187.1 Gold Hedging Cost (7.5) (5.6) 14% 273.1 181.5 Other 10% Tariff 13.2 9.5 Gas Sales 12.4 9.7 Oil 76% Gold Sales 51.1 28.6 349.8 229.3 Other 8.4 7.7 358.2 237.0 51%
  13. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 13
    Revenue Increase USm Oil Price 37.9 Gold Sales (19%) Liftings 55.6 Oil Price (31%) Other (4%) Hedging (1.9) Increase in Oil Sales 91.6 Oil Liftings (46%) Tariff 3.7 Gas Sales 2.7 Gold Sales 22.5 Other 0.7 121.2
  14. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 14
    Review of Expenses 8 US7.58 Other, 7 0.83 US5.92 USM 2003 2002 6 Field Costs 90.3 57.1 Other, 0.73 Other Operating 10.6 7.5 5 Field Site Restoration 6.0 3.6 4 Costs Administration 13.4 9.3 6.75 Field 3 Costs FX Gains (2.7) (1.5)…
  15. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 15
    Operating Cash Flows 300 USM 2003 2002 250 191.3 126.7 Receipts 326.1 225.7 200 Payments (92.6) (74.1) Tax Paid (36.8) (21.3) USmm 150 Net Interest (6.4) (3.6) 22.7 Other 1.0 1.2 100 USM 191.3 127.9 102.6 50 60.8 AM…
  16. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 16
    Balance Sheet Focus Net Debt USM Gearing % 250 USM 2003 2002 2001 Cash 102.6 60.8 40.3 200 Debt 200.0 192.1 215.0 30 150 Net Debt 97.4 131.3 174.7 20 100 Gearing 10.3% 14.4% 25.9% 10 50 0 2001 2002 2003 Debt Cash…
  17. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 17
    Capital Outlook USM 2004 2003 Outlook Actual Investing : Exploration 60.0 39.6 Development/Plant 30.0 21.3 Gas (including FEED) 30.0 10.4 Financing : Buy Back 18.9 Dividends 22.3 11.7 Net Debt Reduction 32.0 (7.9)
  18. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 18
    Hedging Summary Oil Hedging USM 2003 Cost Put Options 1.89 Swaps 5.61 7.50 2004 480,000 WTI Swaps at US23.85/bbl January June 2004 80,000 bbls/mth Exchange Exposure US Dollar risked company, natural hedges including US200m debt…
  19. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 19
    Core Profit After Tax US89.6m profit 62% higher than 2002 90 US 80 89.6 M 70 60 50 55.2 40 30 20 17.6 10 0 2003 2002 2001
  20. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 20
    Operational Overview Mark Wilson
  21. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 21
    2003 Production Summary Total Production 9.400 mmbbls +23% (25,754 BOPD) Gas Production 5.3BCF +29% (14.6 mmscfd) Total BOE 10.29 mmBOE +24% (28,194 BOEPD) Gross PNG Oil Prodn 47,809 BOPD +4%
  22. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 22
    Kutubu 2003 Production Yearly Results Kutubu Production Gross 40,000 2000 2001 2002 2003 Average Monthly Rate (BOPD) 35,000 Net 3.25 2.61 3.54 4.21 Production 30,000 (MMB) 25,000 20,000 15,000 Net Rate 8,887 7,144…
  23. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 23
    Gobe Main 2003 Production Yearly Results Gobe Main Production Gross 18,000 2000 2001 2002 2003 Average Monthly Rate (BOPD) 16,000 Net 1.49 0.72 0.99 1.11 14,000 Production (MMB) 12,000 10,000 8,000 6,000 Net Rate…
  24. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 24
    SE Gobe 2003 Production Yearly Results SE Gobe Production Gross 2000 2001 2002 2003 18,000 Average Monthly Rate (BOPD) 16,000 Net 1.02 0.88 1.36 1.50 14,000 Production (MMB) 12,000 10,000 8,000 6,000 Net Rate 2,796…
  25. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 25
    Moran 2003 Production Yearly Results Moran Production Gross 18,000 2000 2001 2002 2003 Average Monthly Rate (BOPD) 16,000 Net 1.32 2.02 1.72 2.58 14,000 Production (MMB) 12,000 10,000 8,000 Net Rate 3,612 5,545 4,723…
  26. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 26
    Reserve Audit 2003 Annual Audit currently underway conducted by Netherland, Sewell & Associates on behalf of Bank syndicate Provides a truly independent review Supports debt financing Supports corporate governance requirements…
  27. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 27
    2004 Activities & Outlook
  28. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 28
    Value Initiatives Following Operatorship transition, Value Optimisation Team established to identify cost and value initiatives. Programme in place prioritising high value work Production optimisation and drilling cost initiatives…
  29. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 29
    2004 Kutubu Production Activities & Outlook Production initiatives Continue optimising zone changes and swing well management Facility performance review underway including Granherne debottlenecking study assistance Well…
  30. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 30
    2004 Gobe Production Activities & Outlook Production Initiatives Water capacity upgrade Major reconfiguration underway Facility and well optimisation Ongoing focus on gas and gas lift Sand handling SEG-10ST1 continuous production…
  31. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 31
    2004 Moran Production Activities & Outlook Production Initiatives Moran 2 - Coiled Tubing clean-out currently underway Moran 6 TPS (Temporary Production System) awaiting Govt approval Debottlenecking study conducted, some initiatives…
  32. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 32
    NW Moran Extended Production Test NW Moran is in PPL-219 just outside the PDL-5 boundary Intention is to commence development with an EPT appraisal approach Well should be on production by early 2005, subject to PNG Government 728000…
  33. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 33
    SE Mananda Field Development Project SE Mananda is wholly located in PDL-2 and was discovered in 1991 not material to previous Operator Development challenge is remoteness combined with difficult topography Initial production rate…
  34. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 34
    Saunders Extended Production Test Well tied into Gobe production facilities in Sept 2003 via SEG-5 and SEG-6 flowlines Initial oil production accompanied by unusually high and sustained sand and clay production as a result of wellbore…
  35. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 35
    2003 Drilling Activity In 2003 the company participated in the drilling of 5 wells: Bosavi-1 was a dry hole, plugged and abandoned Moran-9 was a development well, completed as an oil producer NW Moran-1 was an oil discovery SE…
  36. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 36
    SE Moran-1 Drilling Performance Rig Move SE Moran 1X Days v Depth 2x as efficient as previous Days move (212 v 90 ton miles 0 0 10 20 30 40 50 60 70 80 90 / hour) Move rig Tech Limit Historical problem analysis Actual AFE Depth…
  37. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 37
    2004 Drilling and Exploration Activity Core Objective: Grow the Reserve base by 10% after production each year Risk analysis indicates participation in at least 6 exploration wells per year required to achieve significant growth PNG…
  38. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 38
    2004 Drilling Activity - PNG Benchmarking work has shown significant changes to rigs and contracting approach is required. Two initiatives are underway: Rig 2 upgrade taking place Re-tender for larger rig being prepared Significant…
  39. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 39
    2004 Exploration Activity PNG While companys PNG exploration portfolio is being matured, exploration activity in PNG will continue In 2004, Oil Search will Drill Kapul-1 in the Foreland, using Rig 2 Finalise Iehi-1 evaluation Shoot…
  40. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 40
    2003 Exploration Progress Middle East - North Africa In 2003 Oil Search continued with its measured diversification approach outside of PNG, with exploration activities in Yemen and New Venture activities in the Middle East and North…
  41. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 41
    2004 Exploration Activity Middle East - North Africa In 2004 seismic and exploration drilling planned in Yemen and Egypt with New Venture activities continuing: The company will participate in 2 Firm wells in Yemen Nabrajah-1 in…
  42. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 42
    Egypt: East Ras Qattara East Ras Qattara Block Proximal Fields 2004/5 Activity 1. Ratification of Concession Alamein (1966) February/March 04 Res : 80 mmbo East Yidma South Mariut 2. Acquire 1000km Yidma (1971) 2D seismic 3Q04…
  43. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 43
    Summary of 2004 Operations Production outlook remains Probable 2004-2005 Activities strong 10.5+ mmstbo in 2004 2004 2005 Slightly higher in 2005/06 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q subject to devt approvals Wildcat exploration well Moran…
  44. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 44
    Gas Commercialisation Peter Botten
  45. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 45
    Gas Commercialisation Major corporate focus on gas development with dedicated Gas Group in place Greater influence following CT acquisition Integrated oil and gas approach developed to optimise business value Primary immediate…
  46. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 46
    Gas Commercialisation Highlands Gas Project Major risk and value review over past six months The Reality: Project unable to secure much more than 100PJ per year of conditional agreements at any one time despite offering competitive…
  47. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 47
    The Markets are There A rolling development window does not allow major customer aggregation Greater development certainty is required to capture several market opportunities 2005 2006 2007 2008 2009 2010 2011 2012 2013 Townsville…
  48. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 48
    Highlands Gas Project Very active programme to review markets, optimise development plans, integrating oil, improve economics and reduce risk Provide a Catalyst for Change Approach
  49. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 49
    Highlands Gas Project What has changed Finalised an integrated oil and gas development model that maximises value for both products and infrastructure Natural extension of OSH original Hides cycling work Attractive project…
  50. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 50
    Highlands Gas Project Hybrid Gas and Oil Development Concept Gas produced at maximum rates from Hides (650 mmscf/d) Sent by pipeline to Kutubu where primary gas and liquids separation takes place Gas put in pipeline to Australia at…
  51. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 51
    Highlands Gas Project Hybrid Gas Project Hybrid Gas and Oil Development Concept Advantages: Provides accelerated condensate light oil recovery from original development plan, independent of market Optimises liquid recoveries…
  52. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 52
    Highlands Gas Project Total 765mmscfd Gas Production HIDES facilities production Full Condensate Recovery Multiphase 600mmscfd pipeline KUTUBU CPF Oil production & 165mmscfd gas AGOGO CPF Additional condensate oil up to…
  53. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 53
    Highlands Gas Project Market Capture Projections 250 Annual Contract Quantity (Petajoules per year) Likely market projection 200 P90 (pessimistic) market projection 150 100 50 0 2008 2013 2018 2023 Year
  54. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 54
    Highlands Gas Project Based on rigorous risk reward analysis Oil Search has decided to commit to FEED activities as soon as practical Oil Search = 54% FEED Costs (Total) US60m US70m Discussions taking place with all stakeholders…
  55. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 55
    Summary and Outlook Peter Botten
  56. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 56
    Focus Areas for 2004 Incident Free Operations Deliver Top Quartile TSR Performance Key focus areas Maximising Operating Performance Control Performance Levers Grow sustainable Returns Manage Business Risks Align Organisation to…
  57. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 57
    Focus Areas for 2004 Maximising Operating Performance Reduction in Operating Costs Optimise Production Reduce Drilling Costs Refresh Existing Exploration Portfolio Shorten Project Cycle times Only 3 months into Operatorship…
  58. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 58
    Focus Areas for 2004 Control Performance Levers Strong position in oil projects Developing position in gas Strong driver in delivering integrated oil and gas value
  59. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 59
    Focus Areas for 2004 Grow sustainable Returns Commercialise gas reserves Highlands Gas Project Hides Cycling Project Methanol JV with Itochu, Mitsubishi Other in country Participation in active exploration programme in PNG…
  60. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 60
    Focus Areas for 2004 Manage Business Risks Landowner and benefits management in PNG Full risk management review Corporate Assurance and Compliance Group in place Align Organisation to Deliver Job skills benchmarking Increase…
  61. 2003 FULL YEAR RESULTS – Oil Search Limited – slide 61
    Overall Excellent profit results, with significant progress made on key strategic initiatives Fundamentals are strong Production to increase in 2004 Gas Commercialisation the next step Step change in efficiency and cost structure…

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