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2016 February Investor Presentation – Oil Search Limited

Oil Search Limited · Feb 22, 2016 · 33 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. 2016 February Investor Presentation – Oil Search Limited – slide 1
  2. 2016 February Investor Presentation – Oil Search Limited – slide 2
    2015 Highlights ? Total production of 29.25 mmboe ? 52% higher than 2014 and all-time record ? Underpinned by excellent production performance from PNG LNG Project and good contribution from operated PNG fields ? top quartile…
  3. 2016 February Investor Presentation – Oil Search Limited – slide 3
    2015 Financial Highlights 2015 2014 Sales volume (mmboe) 28.76 17.76 Net (loss)/profit after tax (US$m) (39.4) 353.2 Core profit1 (US$m) 359.9 482.8 Operating cash flow (US$m) 952.7 992.3 Final dividend (US cents) 4.0 8.0 Net debt…
  4. 2016 February Investor Presentation – Oil Search Limited – slide 4
    2015 Financial Performance 10 ? Revenue stable ? 62% increase in sales volumes offset by lower realised prices ? Higher costs of production and DD&A mainly due to full year of PNG LNG production - 17% reduction in unit production…
  5. 2016 February Investor Presentation – Oil Search Limited – slide 5
    Unit production costs reduced to US$10.08/boe 11 US$m 2015 2014 Production costs: - PNG LNG - PNG Oil and Gas 149.9 144.9 103.6 131.8 294.8 235.4 US$/boe 10.08 12.21 Royalties and levies 12.4 19.7 Gas purchases 20.9 39.3…
  6. 2016 February Investor Presentation – Oil Search Limited – slide 6
    Cash Flows ? Strong operating cash flows reflect full period of earnings from PNG LNG: ? Operating cash flow of US$32.57/boe ? Investment spend driven by Taza drilling in Kurdistan, PRL 15 Antelope wells including related pre-FEED…
  7. 2016 February Investor Presentation – Oil Search Limited – slide 7
    Balance sheet solid, liquidity US$1.7bn 1,047 488 210 960 910 0 300 600 900 1,200 2011 2012 2013 2014 2015 Cash (US$m) 13 ? Strong liquidity position at 31 December 2015 of US$1.66 billion: ? US$910m of cash (incl. US$271m…
  8. 2016 February Investor Presentation – Oil Search Limited – slide 8
    PNG LNG debt repayment profile 14 ? Total debt of US$4.23bn, representing OSH share of debt drawn under PNG LNG Project finance facility: ? OSH guarantee to LNG lenders terminated at Financial Completion, debt now non recourse ?…
  9. 2016 February Investor Presentation – Oil Search Limited – slide 9
    2016 Investment Outlook 2015 Full Year Results ? 23 February 2016 15 2016 Capital Cost Guidance (US$315 ? 400 million) ? Exploration & Evaluation: US$210 ? 250 million (largely discretionary) ? Development: US$50 ? 70 million ?…
  10. 2016 February Investor Presentation – Oil Search Limited – slide 10
    2016 Guidance Summary Production 2016 Guidance1 Oil Search operated 5.7 ? 6.2 mmboe2,3 PNG LNG Project LNG 95 ? 100 bcf Liquids 3.3 ? 3.5 mmbbl Total PNG LNG Project 22 ? 23 mmboe2 Total Production 27.5 ? 29.5 mmboe Operating…
  11. 2016 February Investor Presentation – Oil Search Limited – slide 11
    Highest full year production in OSH?s history 18 ? FY15 production of 29.25 mmboe, 52% higher than 2014 and all-time record for OSH, reflecting: ? Outstanding performance by PNG LNG Project: ? Contributed 22.2 mmboe (96.6 bcf LNG…
  12. 2016 February Investor Presentation – Oil Search Limited – slide 12
    PNG LNG Project ? performing above expectations ? Annualised production in 2015 of 7.4 MTPA, 7% above nameplate of 6.9 MTPA: ? Further upside expected in 2016 ? 101 LNG cargoes sold : ? Includes 23 spot cargoes, with > 70% sold to…
  13. 2016 February Investor Presentation – Oil Search Limited – slide 13
    Potential value upside from accelerating gas supply from OSH-operated AG fields to PNG LNG ? Accelerated gas blowdown of OSH-operated Associated Gas (AG) fields to PNG LNG: ? Significant value opportunity identified by 2015 Life of…
  14. 2016 February Investor Presentation – Oil Search Limited – slide 14
    Stable contribution from operated oil fields 21 ? 2015 net operated production of 7.0 mmboe (produced at gross average rate of ~35,165 boepd) ? Similar to 2014 production of 7.1 mmboe ? Excellent outcome given maturity of fields ?…
  15. 2016 February Investor Presentation – Oil Search Limited – slide 15
    At end Dec 2015 Oil and condensate (mmbbl) % Change Gas (bscf) % change 2P Reserves 87.2 ? 9% 2,177.9 ? 5% 2C Resources 57.1 ? 27% 3,610.0 ? 2% Total 144.3 ? 17% 5,787.9 ? 0.4% 2015 Full Year Results ? 23 February 2016 22…
  16. 2016 February Investor Presentation – Oil Search Limited – slide 16
    2016 Focus Items 2015 Full Year Results ? 23 February 2016 23 ? Add value to mature oil fields in low oil price environment: ? Optimise operated production by reducing planned downtime, improving reliability of facilities ? Ongoing…
  17. 2016 February Investor Presentation – Oil Search Limited – slide 17
    5 0 10 15 20 25 30 2012 2013 2014 2015 2016F Net Production (mmboe)1,2 PNG LNG (T1 + T2) Hides GTE SE Mananda Gobe Moran Kutubu 19.27 27.5 ? 29.5 22 - 23 5.7 ? 6.2 29.25 3 2016 Production Outlook 24 1 LNG sales…
  18. 2016 February Investor Presentation – Oil Search Limited – slide 18
    Gas growth driving value 2015 Full Year Results ? 23 February 2016 26 26 ? Gas commercialisation activities in Highlands and Gulf Province made significant progress in 2015: ? PNG LNG Project: production optimisation,…
  19. 2016 February Investor Presentation – Oil Search Limited – slide 19
    PNG LNG expansion: P?nyang (PRL 3) ? Potential PNG LNG Project expansion includes: ? High-value production optimisation/debottlenecking ? Potential third LNG train (~4 MTPA) ? Delivery of domestic power ? Potential benefits of…
  20. 2016 February Investor Presentation – Oil Search Limited – slide 20
    28 Muruk 1 (PPL 402): High potential exploration ? Muruk 1 expected to spud early 2Q16: ? Pad currently under preparation for drilling with OSH rig ? Operated by OSH in co-venture with ExxonMobil ? Targeting multi-tcf prospect…
  21. 2016 February Investor Presentation – Oil Search Limited – slide 21
    Papua LNG (PRL 15): potential second LNG development in PNG ? Significant progress made in 2015: ?Total SA assumed operatorship in 3Q 2015 and ramping up in country presence ?Locations of key infrastructure sites selected for…
  22. 2016 February Investor Presentation – Oil Search Limited – slide 22
    Encouraging PRL15 appraisal results to date ? Appraisal results to date are considered positive compared to OSH?s current resource booking of 5.3 tcf : ? Antelope 4 ST1 and 5 extended high quality carbonate reservoir to south and west…
  23. 2016 February Investor Presentation – Oil Search Limited – slide 23
    LNG demand expected to exceed supply in early 2020s ? Global LNG market increasingly competitive ? new projects in Australia, North America exports ramping up ? Market over supplied near term and will only come into balance around…
  24. 2016 February Investor Presentation – Oil Search Limited – slide 24
    LNG projects from PNG competitive versus Australian and global alternatives (WoodMac) ? PNG LNG well placed compared to recently commissioned Australian projects. Production optimisation adding material value, debottlenecking can…
  25. 2016 February Investor Presentation – Oil Search Limited – slide 25
    2016 OSH value-adding focus areas ? Low oil price provides impetus to maximise value of PNG LNG Project expansion and proposed Papua LNG Project through co operation ? Co-location of LNG plant sites allows opportunity to drive…
  26. 2016 February Investor Presentation – Oil Search Limited – slide 26
    Exploration Activity in 2015 ? Focus on building long-term growth portfolio, with major ?whole of country? study conducted in 2015: ? Core areas ranked ? Review of cost and technology ? PNG believed to have yet-to-find potential of…
  27. 2016 February Investor Presentation – Oil Search Limited – slide 27
    Replenishing PNG exploration portfolio 37 ? Low oil prices provide opportunity to build/optimise acreage ? ?Whole of country? review has defined areas of greatest potential: ? To support long-term gas growth potential ?…
  28. 2016 February Investor Presentation – Oil Search Limited – slide 28
    2016/17 PNG exploration/appraisal programme targeting ~5-6 tcf gas (unrisked) close to existing infrastructure PRL 8 ? Kimu West and North* PRL 9 ? Barikewa 3* PRL 10 ? Uramu 2 * Subject to JV approval 2015 Full Year Results ? 23…
  29. 2016 February Investor Presentation – Oil Search Limited – slide 29
    PNG Highlands Activity PRL 3 (OSH - 38.5%) PPL 269 (OSH - 10%) Strickland 1 + 2* PPL 402 (OSH - 50%) Muruk 1* PNG Gulf Activity PRL 15 (OSH - 22.8%) Antelope 6 PRL 9 (OSH - 45.1%) PPL 339 (OSH - 70%) PRL 8 (OSH - 60.7%) Kimu W*…
  30. 2016 February Investor Presentation – Oil Search Limited – slide 30
    Taza impairment ? Prudent approach to evaluation ? Taza 2 and 3 wells plus interpretation of 3D seismic completed in 2015 ? Results indicate: ? Fractures largely absent in drilled locations ? Commercial production from central area…
  31. 2016 February Investor Presentation – Oil Search Limited – slide 31
    ? OSH believes there is YTF potential of ~5 billion boe in PNG ? Measured 2016 programme to support long-term gas reserves: ? Drill Muruk 1 (PPL 402) and Strickland 1 (PPL 269) wells in Highlands ? Drill Antelope 6 and possibly…
  32. 2016 February Investor Presentation – Oil Search Limited – slide 32
    Operating environment remains volatile ? Short-term, oil price may go lower: ? Current production > demand by ~2 mmbopd ? Inventories at highest level in years, with Iran to ramp-up ? Weak demand in China, Japan, Europe ? Global…
  33. 2016 February Investor Presentation – Oil Search Limited – slide 33
    PNG and OSH remain well positioned ? PNG: ? Production of oil, condensate and LNG highly competitive ? PNG LNG recognised as world-class project ? Performing well above nameplate capacity ? Significant positive impact on perception…

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