OIL SEARCH LIMITED US Investor Presentation March 2010 1
Oil Search Profile Established in Papua New Guinea (PNG) in 1929 Operates all of PNGs producing oil and gas fields. Current gross production 40,000 boepd, net share 21,000 boepd PNG Government is largest shareholder with 15%. In…
Oil Search Locations Tunis Tunisia Iraq Dubai Sanaa Yemen Papua New Guinea Kutubu Ridge Camp Port Moresby (Head Office) Australia Brisbane Sydney 4
2009 Performance Summary Highlight of 2009 was PNG LNG Project development decision: Less than two years from FEED to Sanction Transformational impact on Oil Search and PNG ExxonMobil quality operator Foundation for major LNG…
Outstanding Safety Performance Total Recordable Incidents (TRIs) of 1.16 in 2009 14 12.7 12 10.6 TRI / 1,000,000 Hours 9.8 10.7 10 Australian Companies (APPEA) 9.4 8.5 9.1 9.3 8 7.8 8.2 7.0 7.3 6.3 6.8 6.0 6 5.7…
Consistent TSR performance over 5 years Relative TSR performance for period ending 31 December, 2009 40 OSH Ranking 42nd 30 1st % TSR per annum 3rd 20 10 0 -5 1 Year 3 Year 5 Year ASX 100 Index Median Company…
Future Value Growth Driven by :- PNG LNG delivery Project optimisation Further LNG train development Reserve growth and exploration success Comprehensive programmes to deliver value through to PNG LNG first gas 8
PNG LNG Project 9
PNG LNG Project World class LNG project under construction Aligned joint venture ExxonMobil Operator excellent track record Supportive Government and communities Provides infrastructure for future growth Transformational for…
PNG LNG Project the road to sanction 2008 Signed JOA, aligning JV partners in March Signed Gas Agreement with Govt in May Commenced FEED in May Commenced marketing discussions late 2008 Developed financing plan 2009 Submitted…
PNG LNG Project the road to sanction December 2009 Completed LBSAs Signed 3 SPAs with TEPCO, Osaka Gas and Sinopec Development approval 8 December 2009 EPC contracts awarded 9 December 2009 Financing documents signed 15 December…
PNG LNG Project Construction has commenced (roads, bridges, camps, site preparation and training facilities). First LNG sales expected 2014 First phase CAPEX, including FEED and early works estimated at US15 billion Contracts: LNG…
Proposed PNG LNG Future Activities Continued early works. AG complete. First Gas from Detailed design. Pipe laying Train 1, Order long leads and (Kutubu to Omati). then Train 2 place purchase orders. Offshore pipe lay Opening…
PNG Gas Growth Key strategic priority for Oil Search is to grow gas business in PNG LNG remains optimum commercialisation route for additional gas PNG LNG will provide infrastructure and capacity to facilitate expansion and provide…
PNG Gas Growth Activities Two largely independent core gas development streams: PNG LNG dedicated fields Material core reserves Proven 300 mmboe (OSH share) sold Proven & probable 500 mmboe (OSH share) significant upside Field…
PNG Gas Growth Activities Foldbelt/Highlands: Adjacent to PNG LNG upstream infrastructure Large structures, moderate risk, high OSH equity 2010 and 2011 activity: Drilling Korka Barikewa seismic (completed) followed by appraisal…
PNG Offshore 3D Survey 4,700 km2 of 3D seismic to be acquired in 2010 largest in PNG history Gulf of 4,700 km2 3D Papua 22
Operations 23
Oil Search Production Net Production (mmboe) 14 MENA Hides GTE 12.17 SEM 12 SE Gobe 11.05 Gobe Main 10.21 Moran 10 9.76 Kutubu 8.60 8.12 8 7.2-7.4 6 4 2 0 2004 2005 2006 2007 2008 2009 2010 (Forecast) 24
2009 Production Performance Excellent safety Production impact of recent drilling at Usano performance 12,000 Oil Rate (bopd) 2009 production of 8.12 mmboe 10,000 Strong underlying performance UDT 10,12 in all fields Two new…
Oil development drilling continues to add value PNG Oil Fields Gross Ultimate Recoverable Reserves (pre-LNG) 560 Millions of Barrels 540 1P 520 2P 500 480 460 440 2003 2004 2005 2006 2007 2008 2009 Since 2003,…
Reserves & Resources 31 December 2009 Six-fold increase in proven (1P) reserves, from 50 mmboe at end 2008 to 344 mmboe: PNG LNG Project reserve booking of 301 mmboe 2009 production of 8.1 mmboe Oil reserve additions at Kutubu,…
2010 Operations Outlook Gas value driving revised Operating Framework: Field reliability management Gas conservation with minor oil production impact Value-adding PNG production activities will continue in 2010, including 1 2 wells…
Exploration Outlook PNG: Exploration for gas key to driving LNG expansion Additional oil focused exploration in 2010: Wasuma (25 mmbbl mean, currently drilling in PPL 219) Mananda Attic (30 mmbbl mean in PPL 219, plus gas play)…
MENA 2010 Exploration Activity Summary Le Kef Taj. + Le Kef 600km K42 Shakal 50km Tajerouine Shakal K42 200km Dubai Office Well Types Commitment Al Measher (20%) 20 mmstb Future Commitment Discretionary Jebel Milh…
Outlook and Summary 32
Outlook and Summary Oil Searchs core business in excellent shape to drive further value growth over next 3 years PNG LNG Project construction underway ExxonMobil quality operator for delivery Contractors mobilising Buyers secured,…
OSH good value on 1P reserves relative to Global Energy Sector Enterprise value (USm) / 1P reserves (mmboe) 40 35 30 25 20 15 10 5 0 Santos BP Chevron Talisman Shell Phillips Hess Devon ENI…
Active programmes to deliver in 2010 Field and development optimisation (Central Foldbelt) Seismic acquisition and drilling Accelerated exploration (NW Foldbelt and Gulf) Seismic and drilling, CSM Selected acquisitions (PRL 1,…
Strong balance sheet OSH has financial capacity: US1.29 billion in cash at end December US362.5 million available from term revolving facility, nil drawn down Group liquidity US1.65 billion Sanction of PNG LNG Project in December…
2010 Guidance Summary Production: 7.2 7.4 mmboe. Incremental activity in 2011 2013 expected to flatten decline curve Opex: US16-18/boe Increase due to FX, PNG inflation, increased spend to improve reliability & extend life and…
Production Outlook PNG LNG adds 18 mmboe pa to OSH at plateau in 2015 onwards. 30 year Project life T3 could add an additional 9 mmboe pa, with T4 of similar magnitude 90,000 80,000 Net Production (boepd) Potential T3 LNG…
Summary Primary focus in 2010/2011 on proving up sufficient contractible gas to underwrite T3/T4 Core oil production remains solid. Focus on life extension, reliability and gas conservation A new value equation Measured oil…
Appendix 2. Papuan Basin Major Areas OSH assessment NW Fold Belt Central Fold Belt Interior Fold Belt Large undrilled surface Only proven oil prone area. Numerous oil & gas seeps anticlines remain Significant subthrust indicate a…
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