OIL SEARCH LIMITED Morgan Stanley 9th Annual Asia Pacific Summit 2010 Singapore November 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 Proven reserves base of 344 mmboe, proven and probable of…
Strong Long Term Share Price Performance 7.0 Share price Oil (rebased to OSH) Search 6.0 5.0 4.0 Woodside WTI oil 3.0 Santos 2.0 ASX 100 1.0 0.0 Jan 05 Jul 05 Jan 06 Jul 06 Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan…
World Class Safety Performance Total Recordable Incidents (TRIs) of 1.71 in 1H 2010 14 12.7 12 10.6 10.7 TRI / 1,000,000 Hours 9.8 10 Australian Companies 9.4 (APPEA) 9.1 9.3 8.5 8 8.2 7.8 7.3 6.8 6.0 7.0 6.3 5.7 6…
Oil Search Locations Tunis Sulaymaniyah Tunisia Iraq Dubai Sanaa Yemen Papua New Guinea Kutubu Ridge Camp Port Moresby (Head Office) Australia Brisbane Sydney 5
Oil Search Locations - PNG Pnyang Madang LEGEND Proposed Hides Conditioning Plant Juha North Wabag Oil Field Hides Gas Field Huria Angore Mt. Hagan Juha Prospect 6S Proposed Moran Kundiawa Juha Goroka Lead Facility Mendi…
PNG LNG Project Overview 6.6 MTPA, 2 train development, operated by ExxonMobil Based on commitment of 6.5 tcf proven, 9.3 tcf proven and probable reserves from 7 fields Initial Equities: ExxonMobil - 33.2% Oil Search - 29.0% Kroton2…
PNG LNG Project Overview Main EPC contracts awarded in 2009/10: LNG Plant: Chiyoda/JGC Offshore Pipeline Saipem Hides Gas Plant CBI/Clough JV Onshore Pipeline Spiecapag Infrastructure McConnell Dowell/CCC JV Early Works…
PNG LNG Project Overview Estimated investment for initial phase unchanged at US15 billion (ex. shipping & finance costs) Capital cost being funded 70:30 debt: equity At end September 2010, US3.2bn gross (US649m net to OSH) had been drawn…
PNG LNG Project Construction Activities Planned/Underway Work to date has focused on: Opening supply routes (north, south, air bridge) Building/improving roads, bridges, camps, site preparation and training facilities Ordering…
PNG Plant Site Layout Future Expansion 13
LNG Plant site construction 14
Offshore Pipeline 450 km Subsea gas line 200,000 tonnes of steel Less than 100 metres deep Offshore pipeline route designed to avoid shipping and critical wildlife habitat 15
Onshore Pipeline Route aims to avoid: inhabited areas sacred areas Kopi Wharf archaeological sites critical wildlife habitat 16
Timetable Continued early works Complete AG Detailed design Commence Order long leads and onshore pipe lay First Gas from place purchase orders (Kutubu to Omati) Train 1, Complete offshore then Train 2 Open supply routes…
Mananda-5 Growth Opportunities 21
PNG Gas Growth Key strategic priority for Oil Search is to grow gas business in PNG, with LNG the optimum commercialisation route PNG LNG will provide infrastructure and capacity to facilitate expansion and provide excellent cost…
Sources and Timing of Gas Resource Maturation Resources required to underpin LNG expansion being considered at present: Studies underway Likely to be less than T1/2 threshold volumes Potential sources of gas - two core development…
Requirements for LNG train growth in PNG PNG LNG Project PPL260 Pnyang tcf Gas Resources 25 PRL03 Juha North Forelands Hides Huria Non PNG LNG Gas Juha & PRL02 PDL1 PRL11 Angore Resources Offshore Resources2 Hides Deep…
PNG LNG Dedicated Fields Potential upside possible in all PNG LNG fields Near term focus on: Associated Gas Fields (Kutubu/Moran/Gobe/Agogo) Recent wells and additional production history indicate increased gas resource.…
Onshore Exploration and Appraisal Huria (PRL 11/PDL 8) ExxonMobil (Op) & Oil Search Seismic completed over Huria prospect and Angore. Currently being interpreted Further dip line currently being acquired Targeting drilling decision…
Offshore Strategy Optimisation of licence holdings 8S taking place Proven gas bearing area (Pandora, Uramu & Pasca) 4,700km2 3D seismic acquisition to identify and de- risk prospects. First phase complete, second phase…
PNG CSG Exploration CSG effort run as small low cost team Three firm wells 4 commencing shortly Low cost wells, high risk, 1 potentially large prize Preliminary results by end 2010 2 3 6 5 30km 28
MENA Exploration Tajerouine + Le Kef K42 & Shakal Tunis Office - Currently completing 600km 2D - Recently completed 200km of - 2 commitment wells by 2Q 2012 2D in K42 and 50km of 2D in Shakal - Interpretation underway Dubai…
Production 31
Production Summary Oil Search Net Production (mmboe) 6.0 MENA Hides GTE 5.0 SE Mananda SE Gobe 4.0 Gobe Main Moran Kutubu 3.0 2.0 1.0 0 1H 07 2H 07 1H 08 2H 08 1H 09 2H 09 1H 10 32
2010 Performance to date Strong production performance to September 2010 only 2% below 2009 levels 5.8 mmboe (5.9 mmboe in Jan Sept 09) Kutubu and Agogo Production enhanced by 1,500 bopd from ADT2 ST3 (Agogo Deep) well Sustained…
Operational Outlook Following PNG LNG sanction, facilities life (and oil field life) will be extended. Particular focus on oil export system which will also be used for PNG LNG Project condensate storage and export Strong portfolio of…
2010/11 Development & Near- Field Appraisal Drilling Activity PPL260 PRL02 Hides PPL239 PDL1 PRL11 Juha Angore PRL 12 6S Moran: PRL12 PDL6 PDL5 2010 : 1 well PPL233 APPL350 2011: 1 well PPL219 PPL233 Kutubu: SE Mananda…
Production Outlook 2010 - 2011 2010 production likely to be slightly above previous 7.2 7.4 mmboe guidance range Recent and planned drilling and work-over activity expected to reduce decline curve in 2011 2013, offset by planned shut-in…
Long Term Production Outlook Despite maturity, recent development drilling success expected to reduce oil production decline curve prior to first LNG. High value barrels PNG LNG adds 18 mmboe pa to OSH at plateau in 2015 onwards. 30…
Strategic Review 38
Strategic Review Major strategic review nearing completion Undertaken by dedicated review team plus external experts Aim is to optimise growth path and prepare for substantial production and revenue growth Review has resulted in a range…
Strategic Review Seven key value drivers : Optimise PNG operating performance to sustain production and cash flows to first LNG Deliver PNG LNG T1&2 within time and cost estimates Drive Gas New Business (T3 & T4) with underwriting…
Summary PNG LNG T1/2 construction progressing steadily, timing and budget estimates unchanged. Project is in good hands With PNG LNG underway, new OSH strategic objective is LNG expansion: De-risking/appraisal of existing gas…
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