2016 Annual Meeting Strong Foundations 9.30am, Friday 13 May, 2016 Crowne Plaza Hotel, Port Moresby, PNG Oil Search Limited ASX: OSH POMSoX: OSH US ADR: OISHY ARBN 055 079 868 www.oilsearch.com
Strong performance in challenging environment Strong production from high quality, low cost quality assets with low sustaining capital requirements OSH generating positive cash flows even at current oil prices: Cash flow breakeven…
2015: Third consecutive year of improved safety performance 5.0 Total Recordable Incident Rate High Potential Incident 4.7 Frequency Per million hours worked 2.0 1.63 3.9 1.5 4.0 1.05 1.0 Per million hours worked 0.63…
Global oil supply and demand world is swimming in oil, but supply:demand will be in balance by 2017 Quarterly Oil Supply and Demand 100 99 Forecasts Production exceeded demand by 2 mmbbl/d in 98 97 early 2016 96 mbopd 95 94…
Wide range of oil & LNG price forecasts, all with significant volatility Real Oil Price Forecasts Base oil price forecast range remains low 140 130 120 2016: US40 - 44/bbl 110 100 90 2017: US50 - 58/bbl 80 US/bbl 70 60 50…
Industry reaction to changed price dynamics Investment in new oil projects decimated. Since 4Q14, US370 billion (30%) of global capex cut over 2016-2017, US620 billion (22%) cut out to 2020 42 E&P companies filing for bankruptcy…
8 Unit production costs reduced to US10.08/boe in 2015, more to come Organisation efficiency and effectiveness: Closed Brisbane office, reduced MENA office, reduced footprints in field operations, re-set organisation and streamlined…
PNG LNG Project performing well above expectations Annualised production in 1Q16 at record rate of 8.0 MTPA (16% above nameplate): Very high facilities uptime from LNG trains and HGCP plus strong productivity from wells Evaluation…
2016 Production Outlook 2016 production forecast of Net Production (mmboe)1,2 29.25 27.5 29.5 30 27.5 29.5 mmboe PNG LNG (T1 + T2) Hides GTE Juha North Hides GTE Papua New Guinea 25 SE Mananda Hides Juha Kutubu 3 Hides Gobe…
Potential PNG LNG expansion, underpinned by Pnyang and existing gas fields Potential PNG LNG Project expansion includes: High-value production optimisation/debottlenecking Pnyang Potential third LNG train (4 MTPA) Delivery of…
Papua LNG potential next LNG development in PNG Positive appraisal results with further appraisal well, Papua New Guinea CPF Hides Antelope 7, under consideration for drilling in 2H16 Kutubu Elk/Antelope Port Moresby…
Lessons from other projects Curtis Island PNG can learn from other global LNG developments and expansions Value destruction has been typical in many LNG developments: Governments and shareholders the major losers Maximising capital…
Maximising value of next phase of LNG development in PNG Low oil price provides impetus to maximise value of PNG LNG Project expansion and proposed Papua LNG Project through cooperation and integration Co-location of LNG plant sites…
Time is right to drive greater cooperation and potential integration of PNGs LNG projects Examples of potential areas of cost Focus in 2016 is on resource confirmation and definition of development plans savings Existing Contractor…
LNG industry: Undergoing fundamental change Current oversupply through commissioning of major projects in Australia, US 700 600 Gas prices globally have 500 normalised, Asian spot LNG now 400 mmtpa 300 trading in…
LNG long term growth story remains intact Medium and long term demand Global LNG Demand vs Contracted Supply growth in Asia remains intact: Expiry of existing long-term contracts Window opening aligns with timeframes for potential…
LNG projects from PNG very competitive (WoodMac) PNG LNG well placed compared to recently commissioned Australian projects. Production optimisation adding material value OSH analysis demonstrates PNG LNG train 3 has robust economics…
Significant remaining exploration upside in PNG Exploration approach in 2016 is to reduce costs, focus on core areas and build long-term growth options International activities pared back to focus on PNG Nine new PNG licence…
Summary Strong production, with excellent performance from PNG LNG Project Robust cash flows with low breakeven Steady progress on potential PNG LNG Project expansion and Papua LNG Project. Both globally competitive and commercially…
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