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2002 HALF YEAR RESULTS – Oil Search Limited

Oil Search Limited · Aug 30, 2002 · 50 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. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 1
    2002 Half Year Results OIL SEARCH LIMITED
  2. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 2
    2002 Half Year Results Highlights Completion of the Oil Search Orogen Minerals merger, along with high commodity prices, has provided a platform for a strong Half Year Result. Merger was effective from 1April 2002. Core Profit (After…
  3. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 3
    2002 Half Year Results Highlights Production of oil and gas was 4.073 million BOE, up 10.9%, whilst oil production rose by 12.9% to 3.634 million bbls. Revenue from oil sales was US85.5million, up 50% on pcp. Average realised oil price…
  4. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 4
    2002 Half Year Results Highlights The Oil Search Orogen Minerals merger has given the company an unprecedented platform for growth Strong oil and gas reserve position Strong production base with growth Strong revenues and cash flows…
  5. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 5
    2002 Half Year Results Core Profit after Tax US23.9m (A44.9m), Up 369% US17.9m Profit after Tax (A33.7m), (including non core items) Up 460%
  6. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 6
    2002 Half Year Results Core Profit before Tax US39.9m (A75.1m), (pre Exploration write offs and capital profits) Up 303% Operating Revenue US105.2m (A198.2m), Up 82.3%
  7. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 7
    Financial Results First Half 2002 First Half 2001 USm Am USm Am Operating Revenue 105.2 198.2 57.7 113.0 EBITDA 67.9 127.7 40.0 78.3 Amortisation/Depreciation (28.1) (52.9) (21.9) (42.9) Negative Goodwill Amortisation 2.3 4.4 0.0 0.0…
  8. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 8
    Operating Revenue First Half 2002 First Half 2001 Kutubu Blend US23.48/BBL US27.71/BBL Hedging Costs US(0.70)/BBL US(10.48)/BBL Realised Oil Price 32% US22.78/BBL US17.23/BBL Gold Price US314.19/OZ - Oil Production (MMB) 13% 3.63 3.22…
  9. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 9
    2002 Half Year Results EBITDA (Core) First Half 2002 First Half 2001 USm Am USm Am Operating Revenue 105.2 198.2 57.7 113.0 Proceeds of Sale of Shares (non-core) (6.9) (13.1) - - Interest Income (1.1) (2.1) (1.2) (2.3) Core Revenue…
  10. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 10
    2002 Half Year Results EBIT (Core) First Half 2002 First Half 2001 USm Am USm Am EBITDA 67.9 127.7 40.0 78.3 Amortisation (27.9) (52.5) (21.7) (42.5) Depreciation (0.2) (0.4) (0.2) (0.4) Amortisation of Goodwill 2.3 4.4 0.0 0.0 EBIT…
  11. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 11
    2002 Half Year Results Accounting Methodology Merger/Acquisition Accounting Effective Date of Acquisition 1 April 2002 Cost of Acquisition USM Cash 77.4 Shares 243.4 Costs 7.1 327.9 Assets and Liabilities of Orogen Minerals…
  12. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 12
    2002 Half Year Results Accounting Methodology Change Pipeline/Facility Tariffs change in method of estimation Moran and Gobe pay a tariff to Kutubu for use of its pipeline and infrastructure Tariff receipt in Kutubu was previously…
  13. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 13
    Reported Profit First Half 2002 First Half 2001 USm Am USm Am EBIT (Core) 42.1 79.2 18.1 35.4 Net Interest (2.2) (4.1) (8.2) (16.0) Core Profit 334% 39.9 75.1 9.9 19.4 Tax Expense (16.0) (30.2) (4.8) (9.4) Core Profit After Tax 369%…
  14. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 14
    2002 Half Year Results Operating Cash Flow Summary First Half 2002 First Half 2001 USm USm Receipts 106.7 60.8 Payment (33.7) (19.0) Net Receipts 73.0 41.8 Net Interest (2.0) (7.4) Tax Paid (8.8) (4.7) Other 1.1 0.0 Operating…
  15. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 15
    2002 Half Year Results Balance Sheet Summary First Half 2002 Year End 2001 USm Am USm Am Cash & STDs 66 124 40 80 Term Loan Debt 215 405 215 428 Net Debt 149 281 175 349 Equity 758 1355 501 989 Gearing Ratios Net Debt/Net Debt +…
  16. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 16
    Net Debt & Gearing 250 35.00% 32. 40% Net Debt Net Debt/Net Debt + Equity Gearing Ratio 30.00% 200 26. 90% De bt 249 25. 90% Cash 35 25.00% Ne t De bt 214 De bt 215 150 Cash 33 20.00% USM Ne t De bt 182 De bt 215…
  17. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 17
    Oil Price Hedging Balance Acquired Through Balance Expired Total 12/01 Merger 3/02 6/02 during period Cost Exercise Expiry US Price/bbl Date MMBBLs MMBBLs MMBBLs MMBBLs USM Put Options 9.17av 6/03 4.5 - 3.00 1.50 1.88 Swaps 25.71…
  18. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 18
    Summary Oil Search has achieved a materially stronger result for the first half year, based on a variety of indicators as summarised earlier, driven by a combination of strong commodity prices, and an enlarged producing asset base…
  19. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 19
    2002 Half Year Results Production Total production of oil and gas : 4.073 million BOE (22,504 BOEPD) up 10.9% Total oil production : 3.634 million barrels up 12.9% Production increased from all oil fields with Hides marginally down on…
  20. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 20
    2002 Half Year Results Development Moran Central First phase of development nearing completion with production target 24,000 BOPD Moran successful development hole, Moran-7 require sidetrack Gas injection imminent Presently…
  21. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 21
    2002 Half Year Results Development Saunders Oil Field Slow progress on extended well testing Initial recycled pipe inadequate for production Facilities almost complete Negotiations with landowners taking place Mineral Assets Porgera…
  22. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 22
    Moran Digimu PDL 5 M6ST2 M4X Moran 8 M8 PPL 219 PDL 2 M1XST4 PPL 219 M2XST1 M2XST2 M1XST1- M1XST1- 3 Moran 7 M7 M5XST2 M5X M3XST1 M3XST2
  23. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 23
    Kutubu Toro Structure IDT10 IDT11 I3X I6XST1 I9XST1 I4X I6X IDT8ST1 IHT3 H7X IDT8 IST1 IHT2 IDD1 IDT7 IST2 IHT1A IDT21 IHT1 IDD4 IDT6 H3XST1 IDT5 IDT14 IWT1 IDT20 I5XST1 IDT17 IDT15 IDT19ST1 IDD3 IDT16 IDT13 H1XST1…
  24. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 24
    SE Gobe Iagifu PDL 4 PPL 219 G7XST1 G7XST3 G7X SEG1- ST1 SEG4 SEG9ST1 PDL 3 SEG9 PDL 4 SEG3 SEG1ST1 SEG10- ST1 SEG1 SEG8 SEG10 SEG2 SEG10ST1 G3X SEG7 SEG5ST1 SEG6 SEG6ST1
  25. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 25
    2002 Half Year Results Development PNG Gas Project Gas Agreement signed with PNG Government. Finalises all primary fiscal terms for development. Strong support from new Government. Agreement with AGL for sale of 40- 50PJ/year of gas in…
  26. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 26
    2002 Half Year Results Development PNG Gas Project Townsville decision required review of development options for PNG Project Available markets in SE Australia Pipeline configurations and transportation arrangements Competitive…
  27. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 27
    2002 Half Year Results Development PNG Gas Project Strongly competitive market position. Existing suppliers and new Australian sources of gas looking to fill existing contracts as they expire and deliver to new developments. Recognised…
  28. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 28
    Half Year Results Development Indicative Pipeline Route
  29. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 29
    2002 Half Year Results PNG Gas Project Intense marketing activities taking place in Queensland and SE Australia Material agreements at an advanced stage Clearly competitive in supply terms Need to build confidence in development…
  30. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 30
    2002 Half Year Results Exploration Three Exploration wells drilled in Half Year Saunders-1 : discovery with 22m oil column extended well test being prepared Marabou-1 : hydrocarbon column intersected but unable to evaluate due to…
  31. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 31
    2002 Exploration Wells : NW Moran-1 TWT SW NW Moran-1 Location NE Permit : PPL219 0.000 Drill date : 4Q02 Interests : PPL219 - Oil Search Limited - 47.52% 1.000 Chevron Texaco - 25.00% Darai LST ExxonMobil - 18.73% Merlin /…
  32. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 32
    2002 Exploration Wells : Bilip-1 SW Proposed Location NE Permit : PPL190 Drill date :4Q02 1.000 Interests : Oil Search Limited - 31.28% Santos - 31.28% Murray Petroleum - 26.50% Cue PNG Oil Co. - 10.95% Base Darai Classification :…
  33. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 33
    Yemen Asset: Block 15 - Beta & Gamma Leads S Beta Location N TWT 10ma Beta Lead 21ma 1.000 25ma 30ma Flank of Gamma Lead Basement 2.000 3.000 Eocene - Cretaceous Line Y01-15-037A Permit : Block 15 Drill date : 4Q04…
  34. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 34
    2002 Half Year Results Company Strategic Review Following merger, carried out major review of performance, using internal and external advisers Oil product analysis Gas commercialisation Operating performance Exploration…
  35. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 35
    Company Strategic Review Oil Search Historical Performance Relatively small scale stock driven by events Underlying returns below aspirations over last few years due to mixed operational performance of some assets (Gobe) and slow…
  36. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 36
    Company Strategic Review Benchmarking Comparison of PNG fiscal terms & oil reserves relative to other regions UNITED KINGDOM 5.0 Bnbo NIGERIA : FRONTIER 22.5 Bnbo total ANGOLA : FRONTIER 5.4 Bnbo total AUSTRALIA : OFFSHORE 2.9…
  37. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 37
    Company Strategic Review Benchmarking PNG has high finding & development costs compared to other regions 7+ 7 6.8 6.7 Finding & development costs (/boe) 6 5 4.5 4 3.3 3 2.9 2.3 2.2 2 1.9 1 0 S1 G pe US…
  38. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 38
    Company Strategic Review Benchmarking Average exploration well costs by region 25 Average well cost (USM) PNG Foldbelt ave well cost ME/Nth Africa 20 Yemen - Masilah Basin NW Shelf Australia 15 10 5 0 1990 1991…
  39. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 39
    Company Strategic Review Benchmarking Drilling performance over time 125 Drilling performance (metres per day) 120 117 100 96 88 75 68 66 67 65 61 61 55 54 50 49 42 41 36 35 30 25 0 Well Well Well Well Well Well…
  40. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 40
    Company Strategic Review Major Focus Areas: Maximise operating performance Control performance drivers Grow sustainable returns Optimise capital structure Align organisation to deliver 18 major initiatives and programmes have been…
  41. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 41
    Company Strategic Review Maximising Operating Performance Significant value remains in existing fields Initiatives include: Asset improvement teams for each field to identify production opportunities and deliver significant reserve…
  42. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 42
    Company Strategic Review Moran Development Slide ESTIMATED ULTIMATE RECOVERY DEPLETION RATE (% EUR) by FIELD based on NSA forecasts 35% Kutubu Gobe Main SE Gobe Moran 30% 25% %EUR pa 20% 15% 10% 5% 0% 0% 10% 20%…
  43. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 43
    Drilling Technical Limit Approach The Technical Limit approach has always delivered significant reduction in drilling times and costs Woodside Shell-UK Drilling time Drilling time Before After Before After Shell-US Amerada…
  44. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 44
    Company Strategic Review Control Performance Drivers Programme to develop operating skills and influence Secondments to field teams and operations Grow Sustainable Returns Gas Commercialisation PNG Gas Project, largely in ExxonMobil…
  45. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 45
    Company Strategic Review Grow Sustainable Returns Measured diversification in areas where expertise makes us very competitive Further opportunities in Yemen Developing strong relations with significant government companies…
  46. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 46
    Company Strategic Review Optimise Capital Structure Review existing lines of credit to optimise tenor and terms likely in conjunction with Gas Project finance Facilitate project debt for PNG Gas Project of up to US330m Other capital…
  47. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 47
    Company Strategic Review Fiscal Incentives in PNG World class gas fiscal regime Seeking changes to terms for exploration Tax ring fence relaxation Removal of APT Frontier terms Government is receptive to change
  48. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 48
    Company Strategic Review Optimise Value of Mineral Assets Mineral assets of material value with upgrade in reserves and performance Not long term holders of assets Finalising optimum divestment strategy and timing
  49. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 49
    Company Strategic Review Align Organisation Senior management additions now under way Adding commercial/financial and operating expertise Excellent candidates identified Review of Board expertise, committee charters and procedures…
  50. 2002 HALF YEAR RESULTS – Oil Search Limited – slide 50
    Outlook Second Half Results will benefit from full six months of enlarged production base Production - Activities at Kutubu and Gobe - Moran Central Ramp up - Saunders EWT Exploration - NW Moran - Bilip - Yemen seismic Gas…

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