2009 Annual Meeting Agenda Introduction 2008 Performance Summary Strategic Priorities PNG LNG Project Update Commercialisation of Other Gas Oil Operations and Exploration Challenges of Present Oil Price Environment…
2008 Performance Summary Record core NPAT of US240.0 million, 70% higher than in 2007 (excluding MENA sale profit of US128) NPAT, including significant items, of US314 million, 128% higher than 2007 PNG LNG Project continued to…
2008 Performance Summary Board approved an unchanged final dividend for 2008 of four US cents, making eight US cents for the year (22 toea per share) Company introduced fully underwritten Dividend Reinvestment Plan, as part of…
World Class Safety Performance Total Recordable Incidents (TRIs) 1998 2008 14 12.7 12 Australian Companies TRI / 1,000,000 Hours 10.6 9.8 10.7 (APPEA) 10 9.1 9.4 9.3 8.3 8.5 8 8.2 7.8 7.0 7.3 6.8 6.3 6.8 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 Oil Search 5.00 4.00 3.00 Woodside…
Treasury Review US462 million in cash at the end of April (including share of JV cash balances of US6 million), no debt Cash invested with highly rated bank counterparties US435 million amortising revolving facility established in…
Strategic Priorities 9
Strategic Priorities Continue to add significant shareholder value through: Commercialisation of 580mmboe of discovered resource through the development of PNG LNG Project Delivery of further growth through secondary gas…
Strategic Priorities Previous strategic reviews have been instrumental in adding shareholder value and achieving sustained top quartile performance 2009 Strategy Update now taking place with three time horizons: 11
Strategic Priorities 6 12 months: PNG LNG Delivery Definition of what we can do to ensure delivery Optimal financing Corporate and operating structure FID to first gas production Support construction operations and financing…
PNG LNG Project Platform for Major Growth 13
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 270km 20 crude pipeline…
PNG LNG Project Status Project momentum continues to build towards year end FID FEED activities on track, targeting completion end 3Q09 Markets being confirmed Government/Landowner agreements being progressed Financing negotiations…
Project Status - Marketing PNG LNG seen as quality project, seen to be moving ahead with high probability of delivery in 2013/14 timeframe: Quality, conventional proven resource Excellent operator augmented by Oil Search with…
Project Status - Marketing Key terms of HOA agreed with major Asian buyer for 2 mmtpa Awaiting Government approvals Detailed terms being negotiated with a number of other potential buyers, more than enough demand to cover initial…
LNG contract pricing Analysis of Recent Contracts to Japan, Korea, and China (DES) 18 Crude Oil Parity RasGas to KOGAS (from 2007) 16 Dec 06 Shell (QG) to PetroChina 14 Apr 08 Bontang (Renewals) Mar 08 12 Average Australia…
Asian LNG Markets Outlook LNG Uncontracted Demand (mtpa) 120 100 Other New Markets India 80 China Taiwan 60 Korea 40 Japan 20 2007 2008 2009 2010 2012 2015 2020 Source: FACTS GLOBAL ENERGY, Feb 2009 Demand soft in…
Project Status FEED & Contracting FEED activities targeting completion end 3Q09 Preparatory work for early works activities underway, subject to continued progress on markets and BSA Upstream contracting bids due early 3Q09…
Project Status Benefits Sharing Benefits Sharing Agreement (BSA) is an overarching agreement between Government and landowners on how certain benefits are distributed: Equity ownership Development levies Royalties Magnitude of…
Project Status Benefits Sharing BSA discussion a major exercise in Project development democracy Forum in Kokopo, with landowner representatives from all Project impact areas, from Juha to Portion 152 in Port Moresby plus State…
Project Status - Financing Detailed negotiations of financing Term Sheet now taking place with Export Credit Agencies (ECAs) following positive site visits and good feedback from due diligence process Core financing proposal has…
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 BSA…
PNG LNG Project On Track PNG LNG progressing very well. Schedule unchanged, targeting Final Investment Decision late 2009, LNG sales 2013/14 Seen as one of two projects in region moving to FID this year Entering favourable and…
Commercialisation of Other Gas 26
Location of Oil & Gas Resources PRL03 Juha North Pnyang OSH Operated Licence Hides Juha OSH Interest Licence PRL02 PDL1 PRL11 Angore Petroleum Development Licence Hides FW Huria Petroleum Retention Licence PDL6 PPL239 PRL12…
Positioning for Gas Growth Key focus is to position Oil Search for additional long term gas-based growth opportunities beyond PNG LNG Further LNG developments command the highest value and are highest priority: Additional PNG LNG…
Programme for 2009/10 2009/2010 focus on de-risking gas prospects through seismic prior to exploration/appraisal drilling Gas portfolio management underway (farm- down to NOEX, Gedd purchase, PPL 260 farm- in) with number of…
Oil Operations and Exploration 30
PNG Producing Oil & Gas Fields PRL03 Hides PRL02 PDL1 PRL11 PPL239 PDL6 PRL12 PDL5 Moran PPL233 SE Mananda Kutubu Agogo PDL2 PPL219 Gobe Main PPL190 PDL4 PDL3 SE Gobe PPL240 7S PRL08 PRL09 APPL300…
Providing Cash for Growth Since Oil Search took over operatorship of PNG oil fields in 2003, fields have produced 50 mmbbl in excess of previous operators expectations and field life extended Aim is to optimise PNG oil cash…
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…
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 35
2009 Exploration Continued portfolio and exploration spend optimisation Focus on high value PNG gas and low cost MENA commitments PNG: Farm-down to NOEX, Gedd acquisition, farm-in to PPL260 Wasuma well in PPL219 (drilling likely…
PNG Exploration PRL03 Fold Belt PRL02 PDL1 PRL11 2011/12 Distal Foldbelt Oil Play PPL239 PDL6 PDL5 PRL12 PPL233 2010/12 Follow-up Sub thrust leads adjacent to 2009/10 Wasuma oil test Gobe, Hedinia and Hides. PDL2 PPL21 9…
MENA Exploration Le Kef Tajerouine Bina Bawi Shakal Area 18 Dubai Office Sanaa Office Block 7 Block 3 38
Challenges of Present Oil Price Environment 39
Capital Management Measures In light of recent oil price falls, Oil Search has reviewed and commenced implementing prudent capital management strategies Focus is to ensure funding is available for areas of highest value creation:…
Capital Management Measures Presently working in especially dynamic environment, where fundamentals remain unknown or uncertain Capital requirements impacted by: Oil price (as always) Capital cost requirement for PNG LNG (will be…
Capital Management Measures Starting from a solid base with a strong balance sheet Active capital management programme already underway Controlling discretionary spend in production, exploration and corporate Cost control/cutting…
Summary 43
OSHs key business priority is delivering the PNG LNG Project 2009 2010-2013 2014+ 1. Deliver 2. Project PNG Build, LNG Positioning 3. Project Completion, Delivering Growth Project for Growth 60,000 Oil Production (bopd)…
Summary Oil Search is in an excellent position for further growth PNG LNG moving forward, premier Asia Pac greenfields project, with all essential pieces coming together Strong balance sheet and liquidity to meet LNG obligations…
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