OIL SEARCH LIMITED Peter Botten, Managing Director Merrill Lynch New York Conference, October 2004
Oil Search Who are we Independent Papua New Guinea - based production and exploration company Market capitalisation of US1.1bn Developing country specialist low cost innovative operator Strong cultural awareness and sensitivity with…
Oil Search Who are we
Oil Search Who are we
Oil Search Who are we Company undergone substantial changes over past 3 years : Delivered 2 highly accretive merger / acquisitions Added to production and reserve base at world class cost Delivered operating control of core assets…
Oil Search Why PNG Stable and improving fiscal regime Competitive exploration success rates 1 : 5 success for oil 1 : 3 success for gas Over US3 billion of production infrastructure in country High margin production, US9/bbl all up…
PNG Licence Map Oil Search now owns over 70% of oil reserves and over 50% of discovered gas resources Operates all oil and gas fields
PNG Licence Map Oil Search is the largest investor in PNG responsible for 20% of export revenues and 14% of GDP
PNG Licence Map Oil Search has a strong commitment to develop the natural resources of the country Success built on Partnership
Where we are in 2004 Oil Search reported record profits for first half of 2004 Strongest financial position in Companys history Solid and growing production base, reflecting successful initiatives and developments Cost and production…
2004 First Half Results Revenue growth Profit after tax 25% CAGR over last 1H04 net profit after five years tax up 65% on 1H03 1H04 oil revenues up 69% increase in EPS 35% on 1H03 USm USm US cents 175 70 6 Minerals Net Profit 5.4…
Treasury Review 250 Gearing % Debt 200 40 Cash Gearing 150 30 100 20 50 10 0 2001 2002 2003 Jun-04 US187m in cash at end June 2004, debt at US184m Zero gearing based on net positive cash position at end June US 2 cent…
Very Strong Reserve Base Growth in oil reserves Substantial gas resources to commercialise mmboe 140 120 134.6 100 118.0 80 89.7 86.4 60 75.6 60.2 40 20 0 2001 2002 2003 1P Reserves 2P Reserves
Oil Search has delivered operationally Elected operator of all PNGs oil fields in October 2003. Oil Search now has control of the performance levers In first six months of operating oil fields, operating cost per barrel reduced from…
and corporately: Share buy-back completed in 2003, and dividend program re-commenced Acquired CTs PNG assets and divested gold interests inherited through Orogen merger. Both transactions highly earnings accretive for Oil Search Opened…
The Way Forward Focus Areas for Value Creation Maximise value of discovered Resources Attention to production optimisation Accelerated new field development Reduction in operating costs Field operating efficiencies Contract…
Production Optimisation Added 7,500 bopd Kutubu Production Forecast production to 40000 actuals Kutubu in 12 months 35000 No workovers, no infill drill Forecast with workovers only 30000 Forecast with workovers + 1 infill…
NW Moran Development NW Moran 1X well Successful appraisal of the NW extension to Moran Extended Production Test (EPT) Moran 10 On schedule NW Moran 1X Moran Field ST5 M ST4 ai n Th ru M4/6/9 Pad st NW Moran…
SE Mananda Development Marginal Field development of MANANDA HEGIGIO ATTIC stranded oil GORGE MANANDA NW MORAN Project on schedule FOOTWALL Development proposal with SE MANANDA Government MORAN includes 3-4 new wells, SE…
Gas Commercialisation Accelerated portfolio approach to commercialising gas resources New analysis with integrated oil and gas business approach Highlands Gas Project Alignment of Joint Venture on FEED requirements FEED programme…
Gas Commercialisation Design Concept To be fully reviewed through FEED HIDES facilities Multiphase Total 650mmscfd Gas Production production 600mmscfd pipeline Full Condensate Recovery KUTUBU CPF Oil production & AGOGO…
Gas Commercialisation Highlands Gas Project remains the priority Provides the biggest immediate prize (1/3 of resources) Hides liquids cycling attractive Awaiting decision on HGP Mitsubishi / Itochu Petrochemical Joint Venture will…
Increase exploration activity PNG Operatorship allows Oil Search to control pace of future exploration Mananda Attic Consolidation phase in 2004 refreshing of Mananda FW PNG exploration portfolio, putting new Arakubi Wasuma drilling…
Exploration cont. Middle East/North Africa Measured diversification into Middle East/North Africa to continue, following success at Nabrajah, Yemen Low cost drilling (US2-3 million per well) complements higher PNG costs 5…
Summary - Overview Oil Search in 2004 now has : Good record in delivery of core objectives Operational leadership in its core assets Ability to drive investment to capture value Significant identified potential in its assets A…
Summary The specifics Oil Search in 2004 now has : Growing production base, with two new developments (NW Moran & SE Mananda) and one potential development (Nabrajah) Improved profitability through delivery of value initiatives…
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