Skip to main content Alaska North Slope Transaction – Oil Search Limited Investor Presentation | Shale Experts
Loading...
Pm

Alaska North Slope Transaction – Oil Search Limited

Oil Search Limited · Dec 14, 2017 · 57 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. Alaska North Slope Transaction – Oil Search Limited – slide 1
    Colville River, Alaska North Slope ALASKA NORTH SLOPE: A STRATEGIC EXPANSION OIL SEARCH OPPORTUNITY NORTH SLOPE ALASKA FOR OIL SEARCH A New Path for Growth 14 December 2017 OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH…
  2. Alaska North Slope Transaction – Oil Search Limited – slide 2
    PRESENTATION OUTLINE INTRODUCTION Alaska Barrow (USA) Canada Deadhorse Strategy & rationale North Slope ALASKA - AOG PERSPECTIVE USA ACQUISITION METRICS TAPS & ASSET SUMMARY Dalton Alaska North Slope - history and geological…
  3. Alaska North Slope Transaction – Oil Search Limited – slide 3
    ALASKA NORTH SLOPE INTRODUCTION PETER BOTTEN MANAGING DIRECTOR OIL SEARCH ALASKA STRATEGY SEMINAR - DECEMBER 2017 PAGE 3
  4. Alaska North Slope Transaction – Oil Search Limited – slide 4
    OSH STRATEGY AND RATIONALE OSH HAS WORLD CLASS GAS PORTFOLIO IN PNG Strong resource base 10tcf resource now dedicated to LNG expansion and development Key elements of two train expansion being delivered Appraisal and exploration…
  5. Alaska North Slope Transaction – Oil Search Limited – slide 5
    OSH STRATEGY AND RATIONALE Pnyang Muruk STRATEGIC IMPERATIVE TO ALIGN INTERESTS FOR CONTINUED EXPANSION Resources in NW Highlands: NW Highlands Hides-Muruk-Pnyang-Elk-Antelope Elk-Antelope Onshore Gulf Offshore Gulf Gulf /…
  6. Alaska North Slope Transaction – Oil Search Limited – slide 6
    PNG : A WORLD CLASS GAS PROVINCE 5bnboe discovered to date , YTF 7bnboe Discovered hydrocarbon volumes in millions of barrels of oil YTF = OSH estimates benchmarked against USGS and others Discoveries 12 Developed 30…
  7. Alaska North Slope Transaction – Oil Search Limited – slide 7
    STRATEGIC RATIONALE ALASKA ACQUISITION ALASKA BRINGS SUSTAINED DEVELOPMENT, PREDICTABILITY AND CONTROL Driven by: Quality Tier 1 oil resource with significant upside in development and exploration Compelling entry price at right…
  8. Alaska North Slope Transaction – Oil Search Limited – slide 8
    O PNG AND ALASKA Creates a world class, focused oil and gas portfolio with material exploration upside OSH Forecast Net Production OSH Production & Exploration Acreage OSH Operated OSH Non Operated Pikka Oil base 25.5% Million…
  9. Alaska North Slope Transaction – Oil Search Limited – slide 9
    ACQUISITION IS IN LINE WITH STATED STRATEGY 2014 Annual Report 2015 Annual Report November 2016 Investor Field Trip August 2017 Company Update OIL SEARCH ALASKA STRATEGY SEMINAR - DECEMBER 2017 PAGE 9
  10. Alaska North Slope Transaction – Oil Search Limited – slide 10
    ALASKA NORTH SLOPE AOG PERSPECTIVE BILL ARMSTRONG PRESIDENT, ARMSTRONG OIL AND GAS OIL SEARCH ALASKA STRATEGY SEMINAR - DECEMBER 2017 PAGE 10
  11. Alaska North Slope Transaction – Oil Search Limited – slide 11
    ALASKA NORTH SLOPE Established oil province with mega discoveries NPR-A ANWR Endicott peaks at 110 MBOPD Kuparuk River peaks at 320 MBOPD Pikka Unit OSH Nikaitchuq North Star Pt McIntyre peaks at 170 MBOPD 25.5% W.I (229)…
  12. Alaska North Slope Transaction – Oil Search Limited – slide 12
    ARMSTRONG OIL AND GAS (AOG) A history of success in Alaska AOG founded by Bill Armstrong in 1985 Oooguruk & Nikaitchuq - ENI Active in Alaska since 2001: Matured Oooguruk & Nikaitchuq prospects, then on-sold to ENI (2007) Developed…
  13. Alaska North Slope Transaction – Oil Search Limited – slide 13
    WHY OIL SEARCH Combination of relationship skills, approach and openness of sharing analysis Strong relationship developed between OSH & AOG AOG considered OSHs community relations capability critical to success AOG recognised…
  14. Alaska North Slope Transaction – Oil Search Limited – slide 14
    ALASKA NORTH SLOPE ACQUISITION METRICS KEIRAN WULFF EGM, EXPLORATION AND NEW VENTURES OIL OIL SEARCH SEARCH ALASKA ALASKA STRATEGYSEMINAR STRATEGY SEMINAR- -DECEMBER DECEMBER2017 2017 PAGE 14
  15. Alaska North Slope Transaction – Oil Search Limited – slide 15
    HOW DID WE IDENTIFY ALASKA HOW DID WE IDENTIFY THE OPPORTUNITY Material volumes with early Screening of international opportunities against PNG portfolio: production SCREENING CRITERIA 150 opportunities screened since 2012,…
  16. Alaska North Slope Transaction – Oil Search Limited – slide 16
    ACQUISITION OVERVIEW 1. Acquisition of half of AOGs working interests in all North Slope blocks for US400m Low risk Nanushuk development with material appraisal Pikka Unit OSH Nikaitchuq North Star upside (OSH acquisition value…
  17. Alaska North Slope Transaction – Oil Search Limited – slide 17
    SUMMARY OF INTERESTS ACQUIRED Phase Lease Category Pikka Unit - 38.25 % 12.75 % 49 % Horseshoe - 56.25 % 18.75 % 25 % Pre-transaction Exploration - 56.25 % 18.75 % 25 % Hue Shale - 100 % - - Pikka Unit 25.5 % 19.125 % 6.375 % 49…
  18. Alaska North Slope Transaction – Oil Search Limited – slide 18
    KEY ACQUISITION METRICS Highly attractive and competitive entry price POTENTIAL DISCOVERED RESOURCES PRECEDENT TRANSACTION MULTIPLES (US/BBL)(2) Acquisition cost to OSH of US3.1/bbl based on OSHs 5.5 estimate of discovered resource…
  19. Alaska North Slope Transaction – Oil Search Limited – slide 19
    ALASKA COMPLEMENTS PNG PORTFOLIO Oil, quicker to market, rapid appraisal and control Papua New Guinea (Papuan Basin) Alaska (North Slope) 5 billion boe discovered1 Proven Reserve 37 billion boe discovered1 7 billion boe2…
  20. Alaska North Slope Transaction – Oil Search Limited – slide 20
    ALASKA NORTH SLOPE ASSET SUMMARY KEIRAN WULFF EGM, EXPLORATION AND NEW VENTURES OIL SEARCH ALASKA STRATEGY SEMINAR - DECEMBER 2017 PAGE 20
  21. Alaska North Slope Transaction – Oil Search Limited – slide 21
    CHRONOLOGY AOG A CATALYST FOR ACTIVITY 3D seismic combined with active exploration by Armstrong & Repsol drove delineation of Nanushuk reservoir Nanushuk Chronology of key events and activity Horseshoe Discovery COP Willow…
  22. Alaska North Slope Transaction – Oil Search Limited – slide 22
    NANUSHUK EXTENDS 70 KILOMETRES Confirmed by 2017 Horseshoe well, COP drilling in 2018 Existing well Nanushuk 12 wells and 7 sidetracks drilled to date in -3800 Field 2018 OSH appraisal Pikka / Horseshoe area Oil gradient: 0.374…
  23. Alaska North Slope Transaction – Oil Search Limited – slide 23
    NANUSHUK RESERVOIR IDENTIFICATION How was it missed 3D seismic delineates key zones High quality 3D seismic now over entire fairway Increasing amplitude of received sound waves over main facies A Nanushuk reservoir with Advanced…
  24. Alaska North Slope Transaction – Oil Search Limited – slide 24
    PIKKA NANUSHUK DISCOVERY Significance only beginning to be understood (2013 2017) Qannik Field Nanushuk 2006 Pikka Nanushuk Satellite overlying the Alpine Field 2013 Discovery Well 65 Sand Pikka (2013) - Horseshoe (2017) Nanushuk…
  25. Alaska North Slope Transaction – Oil Search Limited – slide 25
    DETAILED SEQUENCE STRATIGRAPHY AND INTEGRATED RESERVOIR MODEL Excellent data set underpins reserve analysis Pikka Unit area N Nanushuk 3 deposition (100 mya) Slope Reservoir Model o Nanushuk Fairway covers 200 sq km across…
  26. Alaska North Slope Transaction – Oil Search Limited – slide 26
    NANUSHUK FIELD PROGRADING SHELF MARGIN Field will be well constrained by drilling and 3D seismic ConocoPhillips (COP) 2017/18 wells (Putu & Stony Hill) testing field extent on COP leases AOG pre-traded Horseshoe 1 well for Putu 1…
  27. Alaska North Slope Transaction – Oil Search Limited – slide 27
    ITS NOT ONLY IN THE NANUSHUK Alpine and other proven oil accumulations Pikka Satellites -being defined by 3D seismic & tied to well results Pikka Well Analogue Alpine C Pre-acquisition net Alpine C Nov 17 estimate from pay…
  28. Alaska North Slope Transaction – Oil Search Limited – slide 28
    OVER 1 BILLION BBLS EXPLORATION UPSIDE Targets mapped on 3D seismic covering area Oil Search acreage Armstrong/Repsol wells drilled FIELDS Pikka Unit Horseshoe Block 3D seismic coverage Tarn, Meltwater Pikka Kuparuk…
  29. Alaska North Slope Transaction – Oil Search Limited – slide 29
    RESOURCE GROWTH POTENTIAL Major oil field adjacent to infrastructure with potential to grow materially through targeted appraisal and exploration Resource growth potential Oil Search acquisition volume Prospective & contingent…
  30. Alaska North Slope Transaction – Oil Search Limited – slide 30
    ACCESS TO EXISTING INFRASTRUCTURE Extensive existing infrastructure with ullage and very supportive and stable State government Nanushuk discovery liesDeadhorse between supply base & Alpine OOOGURUK Kuparuk River fields PIKKA…
  31. Alaska North Slope Transaction – Oil Search Limited – slide 31
    DEVELOPMENT PLAN ACQUISITION CASE Phase 1 focused solely on the Pikka unit OSH acquisition case: 8 kilometres Utilised AOG/Repsol development plan 400 mmbbl Nanushuk & 100 mmbbl Alpine C and other satellites 80,000-120,000 barrels…
  32. Alaska North Slope Transaction – Oil Search Limited – slide 32
    DEVELOPMENT PLAN INFRASTRUCTURE Phase 1 Plan advanced, EIS under review National Environmental Policy Act (NEPA) process has been initiated by the US Army Corps of Engineers (USACE): Drill Site 1 Environmental impact statement…
  33. Alaska North Slope Transaction – Oil Search Limited – slide 33
    PIKKA DEVELOPMENT Well design proven technology; room to optimise Well cost based on a 39 days duration: Major opportunities to drive down the costs Longer wells are planned to step out 26,000ft (7,800m) with horizontals 6,000ft…
  34. Alaska North Slope Transaction – Oil Search Limited – slide 34
    MATERIAL EXPANSION SCENARIOS ARE POSSIBLE Driven by appraisal, cooperation & exploration Phase 1 acquisition case Pikka Unit only: Full potential of 1.2 bnbbls (Pikka + 500 mmbbl recoverable Horseshoe + Pikka Nth) based on OSH…
  35. Alaska North Slope Transaction – Oil Search Limited – slide 35
    NANUSHUK VOLUMETRICS OSH acquisition case estimate 60% of Armstrong and Repsol most likely recoverable resource Operator static model OSH modelling Pikka Unit Qugruk 8 Armstrong most likely OSH Acquisition Case Key difference…
  36. Alaska North Slope Transaction – Oil Search Limited – slide 36
    PIKKA PHASE 1 DEVELOPMENT OPTIMISATION Substantial opportunities exist to enhance recovery, reduce costs and infrastructure footprint Pikka Phase 1 Pikka Phase 1 Opportunity Detail acquisition case increased recovery Increase throughput…
  37. Alaska North Slope Transaction – Oil Search Limited – slide 37
    PIKKA PHASE 1 DEVELOPMENT BREAKEVEN PRICE Compared to undeveloped Global Projects Pikka Unit Phase 1 Development compared to new Global Projects 100 break even oil price Pre FID 90 80 Pikka Unit Phase 1 US30/bbl Pikka Unit Phase 1 -…
  38. Alaska North Slope Transaction – Oil Search Limited – slide 38
    INDICATIVE TIMETABLE TO FIRST OIL Appraisal programme will define final configuration & timing of the Nanushuk development 2018 2019 2020 2021 2022 2023 2024 Appraisal FEED Development Production 2017/18: COP appraisal drilling Dev…
  39. Alaska North Slope Transaction – Oil Search Limited – slide 39
    PIKKA DEVELOPMENT: KEY STAKEHOLDERS Stakeholder engagement is a key focus and has already commenced Kuukpik Corporation & the Village Arctic Slope Regional Corporation State of Alaska of Nuiqsut (ASRC) Surface land owner with strong…
  40. Alaska North Slope Transaction – Oil Search Limited – slide 40
    COMMUNITY ALIGNMENT : ITS PART OF OUR DNA OSH uniquely positioned and committed Meetings with some key community organisations have already commenced Workshops reviewing issues, challenges and opportunities scheduled OSH reviewing…
  41. Alaska North Slope Transaction – Oil Search Limited – slide 41
    ENVIRONMENT Alaska North Slope in summer Alaska North Slope in winter Most exploration and appraisal operations are undertaken during the winter to mitigate damage to the Tundra The average temperature on the North Slope +15…
  42. Alaska North Slope Transaction – Oil Search Limited – slide 42
    ALASKAN TEAM TO BE AUTONOMOUS No impact on PNG activities, no impact on managements commitment to PNG ANCHORAGE ALASKA Senior OSH management team initially focused on: Transition to operator (likely to occur 1Q18) Drive culture &…
  43. Alaska North Slope Transaction – Oil Search Limited – slide 43
    KEY EVENTS IN ALASKA 2017/2018 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 14 December CFIUS approval Contingent Investor field trip Preparation for 4 + Pikka unit Alaskan early 1Q resource Contracting major Pikka Nanushuk appraisal Strategy 2…
  44. Alaska North Slope Transaction – Oil Search Limited – slide 44
    PNG UPDATE PETER BOTTEN MANAGING DIRECTOR OIL SEARCH ALASKA STRATEGY SEMINAR - DECEMBER 2017 PAGE 44
  45. Alaska North Slope Transaction – Oil Search Limited – slide 45
    PNG LNG PROJECT Performance well above expectations Outstanding performance since coming onstream in mid-2014: Hides Angore Average production rate of 8.2 MTPA in 1H17, 8.6 Juha MTPA in 3Q17 following compressor upgrades Kutubu…
  46. Alaska North Slope Transaction – Oil Search Limited – slide 46
    MARKETING OF UP TO 1.3 MTPA PROPOSALS UNDER EVALUATION Additional 1.3 MTPA of medium term duration LNG EXISTING MARKETS FOR CONTRACTED volumes being marketed by ExxonMobil on behalf of PNG LNG VOLUMES LNG Project participants…
  47. Alaska North Slope Transaction – Oil Search Limited – slide 47
    LNG EXPANSION MOVING FORWARD On-trend prospects Key issues being actively progressed Muruk Final engineering report to be provided to co- Hides venturers before Christmas: Juha Kutubu Elk-Antelope (6.5tcf 2C, Detailed options…
  48. Alaska North Slope Transaction – Oil Search Limited – slide 48
    FINANCIAL OVERVIEW CHELSEA MCGREGOR GROUP TREASURER OIL SEARCH ALASKA STRATEGY SEMINAR - DECEMBER 2017 PAGE 48
  49. Alaska North Slope Transaction – Oil Search Limited – slide 49
    STRONG FINANCIAL POSITION LNG expansion and Alaska expected to be funded from existing balance sheet ASSET BASE Strong free cash flow from PNG LNG and operated oil assets Capex programme for exploration and evaluation largely…
  50. Alaska North Slope Transaction – Oil Search Limited – slide 50
    STRONG CASH FLOWS FROM PRODUCING ASSETS Sufficient to underpin development funding PNG LNG PROJECT CASH FLOWS Sources of PNG LNG Debt Healthy debt service cover ratio (DSCR) 1.25x required under lender covenants for distributions…
  51. Alaska North Slope Transaction – Oil Search Limited – slide 51
    BALANCE SHEET STRENGTH Able to support both projects LNG EXPANSION DEBT ASSUMPTIONS OSH share of development costs for 20182023, before project debt funding, estimated to be US2.6 - 3.5 billion 60% debt/40% equity OSHs equity…
  52. Alaska North Slope Transaction – Oil Search Limited – slide 52
    TAX ASSUMPTIONS FOR ALASKA Globally competitive tax regime ALASKA Alaska North Slope Ref Illustrative US Cash Tax Calculation Government take expected to be 42% Revenue A 100.0 US tax reforms have potential NPV benefit of up to…
  53. Alaska North Slope Transaction – Oil Search Limited – slide 53
    CONSOLIDATED FINANCIAL POSITION Key financial metrics within lender covenants Consolidated project financed debt forecast to peak at US3.3 - OSH - Consolidated PF Debt 4.1 billion in 2023 Assumes US850 million of corporate facilities…
  54. Alaska North Slope Transaction – Oil Search Limited – slide 54
    CASH FLOW PRIORITIES HAVE NOT CHANGED OSH focused on strict capital prioritisation DEVELOPMENT PHASE UP TO 2023 OSH share of equity contributions for both LNG expansion Free cash flows and Alaska development to be funded from PNG LNG…
  55. Alaska North Slope Transaction – Oil Search Limited – slide 55
    SUMMARY PETER BOTTEN MANAGING DIRECTOR OIL SEARCH ALASKA STRATEGY SEMINAR - DECEMBER 2017 PAGE 55
  56. Alaska North Slope Transaction – Oil Search Limited – slide 56
    SUMMARY A measured & focused acquisition with material growth Combined with world class PNG assets, Alaska provides OSH with unprecedented platform for growth: Highly complementary to OSHs low-cost, Tier 1 PNG portfolio Acquired at a…
  57. Alaska North Slope Transaction – Oil Search Limited – slide 57
    Q&A OIL SEARCH ALASKA STRATEGY SEMINAR - DECEMBER 2017 PAGE 57

From the store

Browse maps, data & reports in the Shale Experts store