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Bernstein US Roadshow – Oil Search Limited

Oil Search Limited · Apr 27, 2016 · 27 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. Bernstein US Roadshow – Oil Search Limited – slide 1
  2. Bernstein US Roadshow – Oil Search Limited – slide 2
    ? Established in Papua New Guinea (PNG) in 1929 ? 29% interest in world-class PNG LNG Project, operated by ExxonMobil, and ~60% interest in all PNG?s producing oil fields, operated by OSH ? Pursuing two major LNG growth…
  3. Bernstein US Roadshow – Oil Search Limited – slide 3
    Overview ? Strong production from high quality, low cost quality assets with low sustaining capital requirements: ? PNG LNG Project performing well above expectations ? OSH generating positive cash flows even at current oil prices: ?…
  4. Bernstein US Roadshow – Oil Search Limited – slide 4
    PNG LNG Project ? performing well above expectations ? Annualised production rate of 7.4 MTPA in 2015 vs nameplate capacity of 6.9 MTPA, reflecting success of production optimisation activities: ? 101 LNG cargoes sold, comprising 78…
  5. Bernstein US Roadshow – Oil Search Limited – slide 5
    Stable contribution from operated oil and gas fields 5 ? 2015 net operated production of 7.0 mmboe: ? Similar to 2014 production of 7.1 mmboe ? Excellent outcome given maturity of fields ? Strong start to 2016, with 1Q16…
  6. Bernstein US Roadshow – Oil Search Limited – slide 6
    Potential value upside from accelerating gas supply from OSH-operated AG fields to PNG LNG ? Significant value opportunity identified from accelerating gas blowdown of OSH-operated Associated Gas (AG) fields to PNG LNG ? Potential…
  7. Bernstein US Roadshow – Oil Search Limited – slide 7
    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 7 1 LNG sales…
  8. Bernstein US Roadshow – Oil Search Limited – slide 8
    Gas growth to drive value Bernstein Roadshow, US/Canada - April 2016 8 8 ? Gas commercialisation activities in Highlands and Gulf Province made significant progress in 2015: ? PNG LNG Project: production optimisation,…
  9. Bernstein US Roadshow – Oil Search Limited – slide 9
    Potential PNG LNG expansion, underpinned by P?nyang and existing gas fields ? Potential PNG LNG Project expansion includes: ? High-value production optimisation/debottlenecking: ? ~ 1+ MTPA above nameplate already achieved ?…
  10. Bernstein US Roadshow – Oil Search Limited – slide 10
    10 Muruk 1 (PPL 402): High potential exploration ? Muruk 1 targeted to spud in 4Q16: ? Operated by OSH in co-venture with ExxonMobil ? Rig site preparation delayed due to bad weather, revised spud date aligned to coincide with dry…
  11. Bernstein US Roadshow – Oil Search Limited – slide 11
    Papua LNG ? potential next LNG development in PNG ? Significant progress made in 2015: ? Total SA assumed operatorship of Elk-Antelope (PRL 15) in 3Q15, ramping up in-country presence ? Locations of key infrastructure sites selected…
  12. Bernstein US Roadshow – Oil Search Limited – slide 12
    Encouraging PRL15 appraisal results to date ? Positive appraisal results to date compared to OSH?s current resource booking of 5.3 tcf, with potential for resource increase: ? Antelope 4 ST1 & 5 extended high quality carbonate…
  13. Bernstein US Roadshow – Oil Search Limited – slide 13
    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…
  14. Bernstein US Roadshow – Oil Search Limited – slide 14
    ? Focus in 2016 is on resource confirmation and definition of development plans: ? Timing is right to consider how projects can work together ? Strong case for more cooperation, where it makes sense for all parties. Includes potential…
  15. Bernstein US Roadshow – Oil Search Limited – slide 15
    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 ? Demand expected to surpass contracted…
  16. Bernstein US Roadshow – Oil Search Limited – slide 16
    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…
  17. Bernstein US Roadshow – Oil Search Limited – slide 17
    ? Exploration approach in light of low oil and gas prices is to reduce costs, focus on core areas and build long-term growth options. Generating opportunities: ? Renegotiation of drilling, seismic contract rates ? Fit-for-purpose…
  18. Bernstein US Roadshow – Oil Search Limited – slide 18
    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 Bernstein Roadshow, US/Canada…
  19. Bernstein US Roadshow – Oil Search Limited – slide 19
    0 10 20 30 40 50 60 70 80 90 100 110 120 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 US$/bbl Brent Oil Price Forecasts (Nominal) Woodmac (Feb 2016)# FACTS Base (March 2016) Broker consensus (Feb…
  20. Bernstein US Roadshow – Oil Search Limited – slide 20
    PNG and OSH remain well positioned ? PNG: ? Production of oil, condensate and LNG highly competitive ? PNG LNG recognised as world-class and reliable project, performing well above nameplate Significant positive impact on perception…
  21. Bernstein US Roadshow – Oil Search Limited – slide 21
    Helping preserve stable operating environment in PNG ? Operating and political stability essential for long-term sustainability ? Landowner and community expectations have not changed with fall in oil and gas prices ? Budget stresses…
  22. Bernstein US Roadshow – Oil Search Limited – slide 22
    Summary ?Strong production, with excellent performance from PNG LNG Project ?Robust cash flows with low breakeven ?Steady progress on potential PNG LNG Project expansion and Papua LNG Project. Both globally competitive and…
  23. Bernstein US Roadshow – Oil Search Limited – slide 23
    Appendix 1: Key metrics 202.5 175.8 205.7 353.2 -39.4 -100 0 100 200 300 400 2011 2012 2013 2014 2015 Net Profit After Tax (US$m) 4 4 4 14 10 5 0 10 15 2011 2012 2013 2014 2015 DPS (US cents) 6.7 6.4 6.7 19.3 29.3…
  24. Bernstein US Roadshow – Oil Search Limited – slide 24
    Appendix 2: 2015 Highlights 2015 2014 Total production (mmboe) 29.25 19.27 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 Total dividend (US cents) 10.0 14.0…
  25. Bernstein US Roadshow – Oil Search Limited – slide 25
    Appendix 3: Financial position 25 ? Strong liquidity position at 31 March 2016 of US$1.66 billion: ? US$914m of cash (incl. US$419m of PNG LNG escrowed cash) and US$748m available corporate revolving facilities ? Total debt of…
  26. Bernstein US Roadshow – Oil Search Limited – slide 26
    Appendix 4: 2016 Investment Outlook Bernstein Roadshow, US/Canada - April 2016 26 2016 Capital Cost Guidance (US$315 ? 400 million) ? Exploration & Evaluation: US$210 ? 250 million (largely discretionary) ? Development: US$50 ? 70…
  27. Bernstein US Roadshow – Oil Search Limited – slide 27
    Appendix 5: 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…

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