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Citi Australian and New Zealand Investment Conference – Oil Search Limited

Oil Search Limited · Oct 15, 2015 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 1
    Cover Slide
  2. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 2
    Overview ? Strong production from quality assets: ? PNG LNG Project performing above expectations ? Oil assets performing well ? Solid balance sheet with liquidity of ~US$1.6bn ? LNG growth projects advancing: ? PNG LNG production…
  3. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 3
    Oil Search licence interests, PNG PNG LNG Project Gas Fields PNG LNG Project Facilities Non PNG LNG Gas/Oil Fields Oil Field Gas Field Oil Pipeline Gas Pipeline Oil Facility Gas Facility OSH Operated OSH Interest Condensate…
  4. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 4
    PNG LNG Project ? producing consistently above nameplate capacity ? >150 cargoes loaded to date since Project start-up in 2014 ? Annualised production in 3Q15 of ~7.4 MTPA (1H15 of ~7.1 MTPA), compared to nameplate capacity of 6.9…
  5. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 5
    Net Production (mmboe) PNG LNG (T1 + T2) Hides GTE SE Mananda Gobe Moran Kutubu 19.27 27 - 29 21 - 22 6.3 ? 6.9 2015 Production Outlook 1 LNG sales products at outlet of plant, post fuel, flare and shrinkage 2 Oil forecast…
  6. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 6
    Next phase of LNG development in PNG ? OSH holds material positions in NW Hub (P?nyang field) and Gulf Hub (Elk-Antelope field), likely sources of gas for next phase of development ? Both PNG LNG expansion and Papua LNG Project in…
  7. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 7
    NW Hub: PNG LNG expansion and domestic power ? MoU signed in January 2015 by ExxonMobil (as operator of PNG LNG and PRL 3) and PNG Government sets schedule to develop P?nyang gas field, to underpin: ? PNG LNG Project expansion (high…
  8. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 8
    One, potentially two, P?nyang wells planned to further constrain 1C and 2C resource ? Preparatory work underway for P?nyang South 2 well: ? Location in SE of structure agreed by PRL 3 JV, to be drilled 2Q/3Q 2016 ? Potential second…
  9. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 9
    Muruk 1 well to target multi-tcf exploration prospect Citi 7th Annual Australian & New Zealand Investment Conference - October 2015 Hides Angore Juha Muruk P?nyang SW NE Darai Formation Muruk 0 2Km ? Muruk 1 ? PPL 402 (OSH…
  10. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 10
    Gulf Hub: Papua LNG Project facilities site locations agreed, operator transition to Total SA completed ? Potential second world-scale LNG development in PNG ? Significant progress achieved: ? Locations of key infrastructure sites…
  11. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 11
    Elk-Antelope appraisal programme underway, OSH certification targeted for 2Q16 ? Results of appraisal programme to date at upper end of OSH?s expectations: ? Antelope 4 extended good quality reservoir to south ? Antelope 5 testing…
  12. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 12
    Window for uncontracted LNG demand expected to re-emerge early next decade ?Window opening aligns with timeframes for potential PNG LNG T3 and Papua LNG ?Both projects aimed at high quality Asian customers Delta between forecast…
  13. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 13
    PNG gas quality well suited to major buyers Citi 7th Annual Australian & New Zealand Investment Conference - October 2015 13 1,000 1,020 1,040 1,060 1,080 1,100 1,120 1,140 1,160 1,180 HHV Btu/Scf Customer HHV Flexibility (Demand)…
  14. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 14
    LNG Projects with declining production Citi 7th Annual Australian & New Zealand Investment Conference - October 2015 14 Project Name Country Plateau Production Off Plateau ADGAS Abu Dhabi 7.8 MTPA 2020 Atlantic LNG (1 ? 4) Trinidad…
  15. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 15
    Expiry of existing LNG Contracts Citi 7th Annual Australian & New Zealand Investment Conference - October 2015 15 0 20 40 60 80 100 120 2015 - 2019 2020 - 2024 2025 - 2029 2030 - 2035 LNG Contract Size (MTPA) LNG Contract…
  16. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 16
    LNG projects from PNG competitive versus Australian and global alternatives (WoodMac) Source: Wood Mackenzie, full-life breakeven, 12% discount rate, Shipping costs are to Japan ? PNG LNG well placed compared to recently commissioned…
  17. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 17
    Oil Search exploration: Revitalising acreage and drilling programmes ? OSH estimates Yet-to-Find potential of >5 bnboe in PNG ? Focus on building PNG acreage to support: ? LNG expansion and potential additional trains ? High-graded…
  18. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 18
    Active PNG exploration/appraisal programme proposed PRL 15 Antelope 4 ST1 Antelope 6 Antelope South* PRL 3 P?nyang reserves evaluation P?nyang South 2* PPL 402 Muruk 1* PPL 269 Strickland 1* Well 2* PPL 339 Kalangar 1* PRL…
  19. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 19
    Taza 1, 2 & 3 unfractured region Taza 4 fault fracture zone Taza 3D Seismic Cube Main bounding fault Taza 3 Taza 4 Taza 1 Taza 2 Jeribe: Amplitude Measured appraisal of Taza in Kurdistan ? Three wells and 680km2 3D seismic…
  20. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 20
    Exploration and appraisal programme Citi 7th Annual Australian & New Zealand Investment Conference - October 2015 20 PNG Highlands Activity PRL 3 (OSH - 38.5%) P\'nyang South 2 & other possible appraisal activities* PPL 269 (OSH -…
  21. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 21
    Business environment outlook ? Oil market appears oversupplied into 2016, inventories remain at record levels ? Falling oil prices impacting LNG prices and markets ? ?Lower for longer? pervasive in management thinking ? Global…
  22. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 22
    ? Refocus organisation on core strategic priorities and value creation ? Ensure we have the right people in the right places and appropriate cost structure in lower oil and gas price environment ? Take advantage of current business…
  23. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 23
    Key milestones* PNG LNG Project/Expansion ? Continued operation above nameplate capacity of 6.9 MTPA ? Award of PDL for P?nyang field and integration into PNG LNG Foundation Project Papua LNG Project ? Drilling of Antelope 4 ST1…
  24. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 24
    OSH rejects Woodside?s non-binding conditional indicative proposal ? On 8 September 2015, OSH announced receipt of non-binding, conditional indicative, scrip only proposal from Woodside: ? One WPL share for every four OSH shares ?…
  25. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 25
    Summary ? Strong production, with excellent performance from PNG LNG Project and steady output from operated PNG fields: ? PNG LNG performing above nameplate capacity with further upside ? potential to create material additional value…
  26. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 26
    Appendix 1: Key metrics 202.5 175.8 205.7 353.2 227.5 0 100 200 300 400 2011 2012 2013 2014 1H2015 Net Profit After Tax (US$m) 4 4 4 14 6 0 5 10 15 2011 2012 2013 2014 1H2015 DPS (US cents) 6.7 6.4 6.7 19.3 21.7 0…
  27. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 27
    Appendix 2: Treasury Update (as at 30 Sep 2015) 1,047 488 210 960 867 0 300 600 900 1,200 2011 2012 2013 2014 3Q2015 ? Strong liquidity position of US$1.62 bn: Cash (US$m) ? US$867m of cash ? US$750m of undrawn revolving…
  28. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 28
    Appendix 3: 2015 Investment Outlook 2015 Capital Cost Guidance (US$600 ? 670m) ? Exploration & Evaluation: US$300 ? 320m ? Development: US$170 ? 200m ? Production: US$110 ? 125m ? Other PP&E: US$20 ? 25m 0 250 500 750 1000…
  29. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 29
    Appendix 4: 2015 Guidance Summary Production 2015 Guidance Oil Search operated (PNG Oil and Gas) 6.3 ? 6.9 mmboe PNG LNG Project LNG 92 ? 97 bcf Liquids 3.0 ? 3.2 mmbbl Total PNG LNG Project1 21 ? 22 mmboe Total Production1 27 ? 29…
  30. Citi Australian and New Zealand Investment Conference – Oil Search Limited – slide 30
    Appendix 5: Cash Flow Priorities Available Cashflows After scheduled debt servicing, sustaining capital expenditure and commitments Dividends Payment in accordance with dividend policy (35-50% of NPAT) Growth Capital Investment I…

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