2008 Full Year Results Agenda Introduction Brian Horwood Performance Summary Peter Botten Financial Overview Stephen Gardiner Operations Review Mark Wilson Gas Commercialisation Peter Botten Operating at US40/bbl Peter…
2008 Performance Summary 3
2008 Performance Summary Company in best economic position in eighty year history Excellent growth prospects, especially with PNG LNG and gas Strong balance sheet Good position to manage financial challenges Record core NPAT of…
2008 Performance Summary Board approves an unchanged final dividend for 2008 of four US cents, making eight US cents for the year Company introduces fully underwritten Dividend Reinvestment Plan, as part of a number of initiatives…
World Class Safety Performance Total Recordable Incidents (TRIs) 1998 2008 14 OSH OGP APPEA 12.7 12 TRI / 1,000,000 Hours 10.6 10.7 9.8 10 Australian Companies 9.1 9.4 9.3 8.3 8.5 8 8.2 7.8 7 7.3 6.8 6.3 6 5.8 5.2…
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 5.00 Oil Search 4.00 3.00 Woodside…
2008 Core Profit Drivers 350 USm 72.1 (16.7) 166.5 (97.0) (4.1) (59.3) 300 Volumes Net Interest Income Other Oil 7.5 Oil Price 250 25.2 5.0 240.0 Exploration Exp. Income Tax Amortisation Opex Cash…
Cash Opex Profile Overall cash opex down 2007 2008 4% year-on-year due to USm USm lower corporate net admin costs and sale of MENA Field Costs operating assets - Oil: PNG 64.1 76.9 PNG field opex per barrel - Oil: MENA 15.7 4.1…
Operating Cash Flows 875 USm 507 (235) 750 Investing 625 (81) Operating 535 Financing 500 375 344 Closing 250 Cash Opening Cash 125 0 Operating cashflow reduced by US25 million in tax payments for prior periods…
Significant Items MENA asset sale Consideration of US200 million, plus working capital Profit on sale of US128 million, tax free Impairment of carrying values following annual impairment review of US91.5 million, pre tax (US53.2…
Treasury Review US535 million in cash at year end (including share of JV cash balances of US18 million), no debt US435 million revolving facility established October 2008 with a syndicate of 16 banks. Achieved improved pricing and…
Operations Review 15
Net Production Net Production (mmboe) 14 MENA Hides GTE SEM 12 SE Gobe Gobe Main Moran 10 Kutubu 8 6 4 2 0 2004 2005 2006 2007 2008 2009F 16
2008 Performance Excellent safety performance Production 8.58 mmboe, within revised forecast range post MENA sale Good underlying performance from Kutubu base production enhanced by new Usano wells and workovers No new wells on…
2008 PNG Drilling Two new rigs (103 and 104) commissioned and operating since Feb 08 and Dec 08 Hydraulic workover unit commissioned in Aug 08 Significant performance improvements achieved, more to come Parker Rig 226…
2008 Exploration PNG PNG gas discovery at the Cobra 1A ST3 well in PPL 190 Highlands seismic programme safely completed Portfolio optimisation review. Culminated in Gedd purchase, farm-down to NOEX MENA Divestment of non-material…
Reserves & Resources At 31 December 2008, OSHs 2P reserves were 66.9 mmboe, compared to 73.5 mmboe at 2007 year end. Reduction reflects 2008 production of 8.58 mmboe, the sale of the Companys producing MENA assets (-1.1 mmboe) and an…
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 Exploration Expenditure (USm) PNG: 250 Jan 09: 4 block/4 well farm MENA down of PNG exploration…
Gas Commercialisation 23
PNG LNG Project - Summary PNG LNG progressing very well. On track for a Final Investment Decision in late 2009, first LNG sales 2013/14 Market fundamentals remain positive for 2013+ with strong buyer interest from key Asia Pac…
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 159km 20 crude pipeline…
PNG LNG Project Milestones reached in 2008 Commercial alignment achieved, with Joint Operating Agreement (JOA) executed in March 2008 between the Project Owners Marketing Representative Agreement signed and Project rolled-out to…
Project Update Marketing Market fundamentals remain positive for 2013+ and PNG LNG remains positively positioned for this time window: Credible and aligned Joint Venture Supportive Government Meeting all milestones no deferrals…
Project Update cont Financing Roadshow to ECAs, rating agencies completed in December 2008, field trip conducted in January 2009. Feedback is that project finance is available Expect to fund project 70% project finance, 30% equity…
Future 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…
Positioning for Gas Growth Key focus is to position 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,…
Location of Oil and Gas Resources Pnyang Juha North Hides Juha Huria Angore Hides FW Moran Mananda Attic Kutubu Agogo Gobe Main Hedinia FW Wasuma SE Gobe Gobe Deep Kimu Barikewa Barikewa Deep PNG LNG Project Gas…
Operating in a US40/barrel environment 32
Impact of Lower Oil Prices Significant drop in oil prices from Oil Price (Brent US/bbl) US140+/bbl in July 130 2008 to US40/bbl in early 2009 120 110 Lower oil price levels are likely to persist 100 into 2009 and 90 Macro-Oil…
Capital Management Measures Focus is on areas of highest value creation Priority is to fund OSHs share of PNG LNG Project Balanced development drilling programme to generate cash flow Exploration that progresses LNG expansion,…
2009 Capital Outlook USm 2008 2009* Actual Outlook Investing : Exploration 176 70 Gas (incl. PNG LNG) 81 110** Development/Production 162 130 Corporate (inc rigs) 32 10 MENA net sale proceeds (210) 0 Financing : ***…
Impact of Revised Budgets Production PNG oil fields are mature, require infill drilling, workover activity to maintain production rates. But will defer opex and capex work programmes that dont deliver payback in low oil price…
PNG LNGs competitive advantages at low oil prices Conventional LNG project no new technology = reduced risk Existing proven and probable resource base no new drilling required Economics helped by liquids - 15% of total revenue…
Summary 38
OSHs key business priority is delivering the PNG LNG Project 2009 2010-2013 2014+ 3. Project 1. Deliver PNG LNG 2. Project Build, Positioning for Completion, Project Growth Delivering Growth 70,000 LNG Liquids 60,000…
Summary Oil Search is in an excellent position for further growth PNG LNG moving forward, with all essential pieces coming together Strong balance sheet and liquidity to meet LNG obligations. Positive response from financing…
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