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Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited

Oil Search Limited · Nov 12, 2014 · 37 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. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 1
  2. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 2
    ? Established in Papua New Guinea (PNG) in 1929 ? Market capitalisation ~A$13bn (US$12bn) ? Listed on ASX and POMSOX (Share Code OSH) plus ADR programme (Share Code OISHY) ? Operates all PNG?s currently producing oil fields ?…
  3. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 3
    Oil Search Licence Interests, PNG 3 PNG LNG Project Gas Fields PNG LNG Project Facilities Non PNG LNG Gas/Oil Fields Oil Field Gas Field Oil Pipeline Gas Pipeline Oil Facility Gas Facility OSH Operated OSH Interest…
  4. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 4
    Transformation underway 4 ? Oil Search (OSH) undergoing major corporate transformation with commencement of PNG LNG Project and legacy cash flows: ? PNG LNG Project start-up in 2Q 14 a major milestone for Oil Search and PNG ? In…
  5. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 5
    8 6 4 2 0 10 12 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Implementing core strategies from previous strategic reviews has delivered significant share price appreciation Acquisition…
  6. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 6
    External environment ? oil price outlook 80 90 100 110 120 130 140 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 US$/bbl Wood Mackenzie FGE Brokers Consensus Oil Search Update - November 2014 Nominal Brent oil…
  7. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 7
    Long term demand growth for energy from Asia still strong, especially for LNG ? Asian and ME LNG demand nearly doubles by 2030 ? Incremental demand in Asia will be driven primarily by China and India ? Demand from Thailand, Singapore…
  8. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 8
    *Capacity per Department of Energy authorization to Free Trade Agreement countries, in addition to capacities under construction **Project partners? plan includes expansion up to 50 mmtpa Many potential new LNG suppliers Canada…
  9. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 9
    LNG from PNG has many competitive advantages and is in strong position to capture markets Oil Search Update - November 2014 Source: Oil Search and Wood Mackenzie, Q3 2014, Project names removed US$/mmBtu 8 6 4 2 0 10 12 14 16…
  10. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 10
    8 6 4 2 0 10 12 14 16 18 US UK/EU Canada Australia Mozambique US$/mmBtu *Japan (Chiba) used as proxy for Asia Pacific **Based on FGE scenarios for Henry Hub, NBP, slope indexation and/or shipping costs Delivered LNG prices…
  11. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 11
    Strategy 1: Optimise value of existing assets ? Strategic Review has confirmed OSH?s operating strategy to sustain and optimise value of PNG operating assets. ? PNG LNG T1 + T2 ? the new base business: ? In first full year (2015), PNG…
  12. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 12
    PNG LNG Project 17 PNG LNG Project Gas Fields Juha Kutubu Proposed Juha Facility Hides Angore LNG Facility Gobe Main Hides Gas Conditioning Plant & Komo Airfield Moran Agogo Gas Pipeline Oil Field Gas Field Oil…
  13. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 13
    ? 6.9 MTPA, 2 train development, operated by ExxonMobil ? Expected to produce more than 9 tcf of gas and 200+ million barrels of associated liquids over its 30 year life ? Equity Interests: ? ExxonMobil (33.2%), Oil Search (29.0%),…
  14. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 14
    PNG LNG debottlenecking offers potential for substantial incremental value Oil Search Update - November 2014 ? Global benchmarks suggest 10-15% increase in capacity achievable through debottlenecking ? High value add ? generally,…
  15. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 15
    Proven success optimising production from mature oil fields Oil Search 2014 Strategic Review - 23 October 2014 23 ? Since taking over oil field operatorship in 2003, OSH has: ? Drilled 41 development wells with ~85% success rate ?…
  16. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 16
    - 5 10 15 20 25 30 2013 2014 2015 2016 2017 2018 2019 2020 mmboe Base oil Hides GTE Taza PNG LNG condensate (6.9mtpa) PNG LNG Gas (6.9mtpa) ? From 2014, PNG LNG (T1 + T2) will supplant oil as OSH?s base business ?…
  17. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 17
    >20 tcf of discovered gas in PNG of which only 9 tcf is under development Oil Search Update - November 2014 Papua New Guinea Hides Kutubu Port Moresby ~6 tcf ~6 tcf ~1…
  18. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 18
    Gas resource evaluation ongoing in two key hubs ? NW Highlands and Gulf ? Key resource evaluation activities are ongoing. Will provide greater certainty through 2015 on development plans: ? Structural remapping and reservoir…
  19. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 19
    NW Highlands: Hides F1 Deep Exploration Well 29 ? Hides F1 Deep spudded in October from Wellpad F ? Designed to be completed as a Hides development well and to penetrate Koi-Iange reservoir (currently mapped ~700m below Hides…
  20. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 20
    Gulf Basin: Elk/Antelope ? PRL 15 30 ? Acquired 22.8% gross interest in PRL 15, containing Elk/Antelope gas fields, in March 2014 ? Largest undeveloped gas resource in PNG with significant exploration upside ? Appraisal…
  21. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 21
    PRL 15 appraisal programme 31 ? Up to three appraisal wells to be drilled, to determine whether gas resources can support one or two LNG trains ? Antelope 4 spudded in September; Antelope 5 expected to spud in 4Q14: ? Comprehensive…
  22. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 22
    Resource requirements and value maximisation of expansion trains ? NW Hub train: ? OSH estimates ~2 tcf 1P (4 tcf 2P) required to underpin development decision ? Expansion is commercially attractive even based on shorter duration…
  23. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 23
    OSH?s role in future developments ? Unique opportunity over next 12 months to drive optimal development plan, through promoting cooperation agenda: ? Extensive equity interests spanning sources of expansion gas ? Alignment with PNG…
  24. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 24
    Strategy 3: Pursue high value opportunities Oil Search Update - November 2014 ? Renewed focus on resource replacement, given step change in production and resource conversion with PNG LNG Project start up ? Exploration programmes to…
  25. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 25
    0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 0 50 100 150 200 250 300 350 Cumulative Discovered P50 Recoverable Volume (mmboe) Well Number ? Hides is largest field found to date ? Future field sizes likely…
  26. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 26
    NW Highlands ? 11tcf unrisked potential ? NW Highlands contains mix of undeveloped resource plus material running room: ? Lead inventory currently contains ~11 tcf unrisked, 1.5 tcf on risked basis ? Potential exploration targets…
  27. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 27
    International exploration ? International focus: ? Appraising high potential OSH operated Taza oil discovery ? Measured pursuit of material, high returning liquids-prone opportunities, with long term running room ? Leverage strong…
  28. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 28
    Oil discovery at Taza, Kurdistan Region of Iraq: Comprehensive appraisal underway 38 IRAN TURKEY SYRIA IRAQ JORDAN SAUDI ARABIA Caspian Sea Persian Gulf KURDISTAN REGION OF IRAQ Taza PSC IRAN TURKEY IRAQ KURDISTAN…
  29. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 29
    Comprehensive appraisal of Taza ? 2014-15 focus on defining field size and maximising value ? Appraisal programme: ? >600km2 of 3D seismic (includes SE Jambur lead) ~70% complete ? Taza 2 ? oil proven 10km NW of Taza 1: testing…
  30. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 30
    Forecast application of free cash-flow, 2015 ? 2019 Oil Search Update - November 2014 PNG International Allocation of cash generated PNG vs International Capex Splits ? Expect to generate ~US$1.5bn pa in operating cash flow before…
  31. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 31
    OSH has potential to provide material production growth as well as dividends Oil Search Update - November 2014 ? Possible production growth profile 1 LNG sales products at outlet of plant, post fuel, flare and shrinkage 2 Oil…
  32. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 32
    Appendix 1: TSR performance (to 30 Sep 2014) 48 4.1 39.2 11.6 73.3 -7.1 23.8 -17.1 192.7 -0.3 36.7 3.9 180.4 4.2 60.0 42.3 592.3 -60 40 140 240 340 440 540 640 % TSR Median TSR ASX200 Median TSR ASX200 Energy…
  33. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 33
    Appendix 2: Key metrics 185.6 202.5 175.8 205.7 152.5 0 50 100 150 200 250 2010 2011 2012 2013 HY2014 Net Profit After Tax (US$M) 4 4 4 4 2 5 4 3 2 1 0 2010 2011 2012 2013 HY2014 DPS (US cents) 7.7 6.7 6.4 6.7 5.4 8 6…
  34. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 34
    Appendix 3: Treasury update 1,264 1,047 488 210 595 0 500 1,000 1,500 2010 2011 2012 2013 3Q 2014 Cash (US$M) 50 ? New bilateral revolving facilities totalling US$250 million established during 1H14 ? Total liquidity of…
  35. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 35
    Appendix 4: FY 2014 guidance summary Production Oil Search operated (PNG Oil and Gas) 6.5 ? 6.9 mmboe1 PNG LNG Project LNG 49 ? 57 bcf Liquids 1.8 ? 2.0 mmbbl Total PNG LNG Project 11.5 ? 13.1 mmboe1 Total Production 18 ? 20 mmboe…
  36. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 36
    Appendix 5: Investment outlook 2014 0 500 1,000 1,500 2,000 2,500 2010 2011 2012 2013 2014 Guidance US$M Exploration & Evaluation PNG LNG Production Other PP&E 52 GUIDANCE RANGE (US$1,890 ?…
  37. Morgan Stanley 13th Annual Asia Pacific Summit – Oil Search Limited – slide 37
    Appendix 6: Key milestones 2014-15 Oil Search Update - November 2014 Appraisal/development Exploration *Subject to JV approvals 2014 2015 Q4 Q1 Q2 Q3 Q4 Highlands Based Activity External Factors Gulf Based Activity…

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