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2016 Full Year Results February 2017 – Oil Search Limited

Oil Search Limited · Feb 17, 2017 · 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 Full Year Results February 2017 – Oil Search Limited – slide 1
  2. 2016 Full Year Results February 2017 – Oil Search Limited – slide 2
    2016 Full Year Results Agenda 2016 Highlights Peter Botten Financial Overview Stephen Gardiner PNG Production Julian Fowles Gas Development Ian Munro Exploration/Appraisal Keiran Wulff Outlook & Summary Peter Botten 2016 Full Year…
  3. 2016 Full Year Results February 2017 – Oil Search Limited – slide 3
    2016 Operational Highlights 2016 Full Year Results ? 21 February 2017 ? Strong operating result delivered: ? Record oil and gas production: 30.24 mmboe ? 3% higher than 2015 ? Underpinned by excellent production performance from PNG…
  4. 2016 Full Year Results February 2017 – Oil Search Limited – slide 4
    2016 Financial Highlights ? Core profit of US$106.7m: ? Achieved despite 33% lower realised LNG and gas prices and 12% drop in realised oil and condensate price ? Statutory NPAT US$89.8m, including profit from IOC break-fee, offset…
  5. 2016 Full Year Results February 2017 – Oil Search Limited – slide 5
    Fourth consecutive year of improved safety performance 2016 Full Year Results ? 21 February 2017 0.59 0.49 0.00 0.26 0.00 0.25 0.50 0.75 2013 2014 2015 2016 Per million hours worked Total Recordable Incident Rate Lost Time…
  6. 2016 Full Year Results February 2017 – Oil Search Limited – slide 6
    2016 Results Agenda 2016 Highlights Peter Botten Financial Overview Stephen Gardiner PNG Production Julian Fowles Gas Development Ian Munro Exploration/Appraisal Keiran Wulff Outlook & Summary Peter Botten 2016 Full Year Results ?…
  7. 2016 Full Year Results February 2017 – Oil Search Limited – slide 7
    2016 Highlights and Financial Performance ? 6% increase in sales volume offset by lower average realised prices, reducing revenue by 22% ? Operating cash flow and earnings solid despite soft oil and LNG market conditions ? liquids…
  8. 2016 Full Year Results February 2017 – Oil Search Limited – slide 8
    Financial metrics are robust 2016 Full Year Results ? 21 February 2017 0 500 1000 1500 Opening Cash Operating Investing Financing Closing Cash Cash flow Chart Operating cash flow of US$18.15/boe Balance sheet solid, liquidity…
  9. 2016 Full Year Results February 2017 – Oil Search Limited – slide 9
    Unit production costs reduced to US$8.50/boe US$m 2016 2015 Production costs: - PNG LNG - PNG Oil and Gas 150.6 106.5 149.9 144.9 257.1 294.8 US$/boe 8.50 10.08 Royalties and levies 5.4 12.4 Gas purchases 14.7 20.9 Inventory…
  10. 2016 Full Year Results February 2017 – Oil Search Limited – slide 10
    2017 Guidance 2016 Full Year Results ? 21 February 2017 0 250 500 750 1000 1250 1500 1750 2000 2013 2014 2015 2016 2017 Guidance US$m 2017 Capital Cost Guidance (US$360 ? 460 million) Other PP&E Production Development…
  11. 2016 Full Year Results February 2017 – Oil Search Limited – slide 11
    2016 Results Agenda 2016 Highlights Peter Botten Financial Overview Stephen Gardiner PNG Production Julian Fowles Gas Development Ian Munro Exploration/Appraisal Keiran Wulff Outlook & Summary Peter Botten 2016 Full Year Results ?…
  12. 2016 Full Year Results February 2017 – Oil Search Limited – slide 12
    Highest ever full year production ? FY16 production of 30.24 mmboe, 3% higher than 2015 and all-time record for OSH: ? Outstanding performance by PNG LNG Project: ? 23.4 mmboe (101.8 bcf LNG plus 3.45 mmboe liquids). Annualised…
  13. 2016 Full Year Results February 2017 – Oil Search Limited – slide 13
    2017 Production Outlook ? 2017 production forecast: 28.5 ? 30.5 mmboe ? OSH-operated: 5.5 ? 6.5 mmboe ? Includes 2.8 ? 3.1 bcf (net) of SE Gobe gas sales (OSH ? 22.34%) exported to PNG LNG ? Specific focus on production optimisation…
  14. 2016 Full Year Results February 2017 – Oil Search Limited – slide 14
    At end Dec 2016 Oil and condensate (mmbbl) % Change Gas (bscf) % change 1P Reserves 62.3 8% 2,151 49% 2P Reserves 75.7 13% 2,425 11% 2C Resources 48.3 15% 3,709 3% Total 2P & 2C 124.0 14% 6,134 6% 2016 Full Year Results ?…
  15. 2016 Full Year Results February 2017 – Oil Search Limited – slide 15
    2016 Results Agenda 2016 Highlights Peter Botten Financial Overview Stephen Gardiner PNG Production Julian Fowles Gas Development Ian Munro Exploration/Appraisal Keiran Wulff Outlook & Summary Peter Botten 2016 Full Year Results ?…
  16. 2016 Full Year Results February 2017 – Oil Search Limited – slide 16
    Material increase in PNG LNG reserves ? NSAI recertification of PNG LNG fields has resulted in 50% increase in OSH?s PNG LNG Project 1P gas reserves ? Implies gross increase of ~2.8 tcf 1P (~815 bcf OSH net) in future sales gas.…
  17. 2016 Full Year Results February 2017 – Oil Search Limited – slide 17
    Material increase in PRL 15 resources 2016 Full Year Results ? 21 February 2017 No volumes carried for Antelope 7 Antelope Deep Antelope Poorer quality seismic imaging PRL 15 ANTELOPE ELK 0 10Km ? Increase in OSH 2C…
  18. 2016 Full Year Results February 2017 – Oil Search Limited – slide 18
    Muruk gas discovery adds to existing undeveloped resources ? OSH-operated Muruk discovery located ~21km from nearest producing PNG LNG infrastructure: ? Due to proximity to Hides, could result in competitive development costs…
  19. 2016 Full Year Results February 2017 – Oil Search Limited – slide 19
    Cooperative LNG expansion ? Elk-Antelope and P?nyang can supply two additional 4+ MTPA trains constructed together at existing PNG LNG site ? Formal discussions on LNG expansion to commence following completion of ExxonMobil…
  20. 2016 Full Year Results February 2017 – Oil Search Limited – slide 20
    Long term LNG market remains strong ? LNG spot price has risen from ~US$4/mmbtu in 1H16 to >US$9/mmbtu in Dec 2016, driven by seasonal and supply issues ? Long term LNG market fundamentals remain strong. Buyers continuing to enter…
  21. 2016 Full Year Results February 2017 – Oil Search Limited – slide 21
    Commercialisation activities in 2017 2016 Full Year Results ? 21 February 2017 2017 Work streams to progress timely co-operative development Elk-Antelope Completion of Antelope 7ST1 ExxonMobil entry to PRL 15 P?nyang P?nyang South…
  22. 2016 Full Year Results February 2017 – Oil Search Limited – slide 22
    2016 Results Agenda 2016 Highlights Peter Botten Financial Overview Stephen Gardiner PNG Production Julian Fowles Gas Development Ian Munro Exploration/Appraisal Keiran Wulff Outlook & Summary Peter Botten 2016 Full Year Results ?…
  23. 2016 Full Year Results February 2017 – Oil Search Limited – slide 23
    2016 Exploration strategy and outcome ? PNG-wide prospectivity review completed focusing on long term strategy: ? 60% of PNG?s resource yet to find (ie >7bn boe) ? >90% of yet to find expected to be gas ? Materially expanding PNG…
  24. 2016 Full Year Results February 2017 – Oil Search Limited – slide 24
    Muruk gas discovery (OSH 37.5% and operator) 2016 Full Year Results ? 21 February 2017 ? Early results from Muruk very encouraging, strong JV alignment for early appraisal ? Muruk 1 & sidetracks in 2017: ? Muruk tested large…
  25. 2016 Full Year Results February 2017 – Oil Search Limited – slide 25
    Appraisal of material upside in existing Foreland fields ? Appraisal to define 2C resource and near field exploration opportunities (Kimu North): ? 2016 seismic acquisition upgraded resource potential ? 2017/18 wells targeting ~1 tcf…
  26. 2016 Full Year Results February 2017 – Oil Search Limited – slide 26
    Three year exploration focus in PNG 2016 Full Year Results ? 21 February 2017 ? Optimal combination of appraisal and high quality exploration, supporting gas expansion and material new growth opportunities ? Coordinated programmes to…
  27. 2016 Full Year Results February 2017 – Oil Search Limited – slide 27
    2016 Results Agenda 2016 Highlights Peter Botten Financial Overview Stephen Gardiner PNG Production Julian Fowles Gas Development Ian Munro Exploration/Appraisal Keiran Wulff Outlook & Summary Peter Botten 2016 Full Year Results ?…
  28. 2016 Full Year Results February 2017 – Oil Search Limited – slide 28
    Key events in 2017 ? Completion of ExxonMobil entry to PRL 15 (Elk-Antelope) planned 1Q17 ? Comprehensive discussions on cooperation and project development scope. Licence commitments a factor ? Further appraisal of Muruk and…
  29. 2016 Full Year Results February 2017 – Oil Search Limited – slide 29
    Summary - unprecedented platform for growth ? 2016 Strategy Refresh highlighted potential to deliver top quartile returns for next 5 ? 7 years ? Delivery of PNG LNG expansion and development of Elk-Antelope core to highreturning…
  30. 2016 Full Year Results February 2017 – Oil Search Limited – slide 30
  31. 2016 Full Year Results February 2017 – Oil Search Limited – slide 31
    Appendix 1: Recent TSR performance reflects global oil price weakness 6.3 0.4 20.8 -50.0 -70.7 -45.7 -12.3 0.4 112.0 -80 -40 0 40 80 120 % TSR Median TSR ASX200 Median TSR ASX200 Energy OSH TSR 1 YEAR 5 YEAR 10 YEAR…
  32. 2016 Full Year Results February 2017 – Oil Search Limited – slide 32
    Appendix 2: Operating Margins 72 72 78 73 69 114 111 98 51 45 0 20 40 60 80 100 120 65 70 75 80 85 90 95 100 2012 2013 2014 2015 2016 US$/boe % EBITDAX Margin EBITDAX Margin Oil & Condensate Price ? Average…
  33. 2016 Full Year Results February 2017 – Oil Search Limited – slide 33
    Appendix 3: Cash Flows ? Healthy operating cash flows despite weak oil price environment: ? Operating cash flow of US$18.15/boe ? Includes borrowing costs of US$194.0 million ? Investment spend driven by US$142.9 million spent on…

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