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Credit Suisse Asian Investment Conference – Oil Search Limited

Oil Search Limited · Mar 28, 2018 · 32 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. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 1
    OIL SEARCH COMPANY UPDATE Credit Suisse Asian Investment Conference March 2018 OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH POMSoX: OSH US ADR: OISHY www.oilsearch.com
  2. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 2
    OIL SEARCH PNG LICENCE INTERESTS Established in PNG in 1929 29% interest in PNG LNG Project, operated by ExxonMobil, 60% interest in PNGs producing oil fields, operated by Oil Search Pursuing major LNG growth opportunities in PNG…
  3. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 3
    PRODUCTION HISTORY HALF YEARLY PRODUCTION (MMBOE) 18 PNG LNG OSH-operated 15.35 15.50 14.93 14.89 14.81 15 14.32 13.91 12 11.28 11.37 12.03 12.47 9 10.33 10.94 11.97 6 5.37 1.87 3 3.50 3.58 3.38* 3.65* * 3.52*…
  4. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 4
    PNG LNG PROJECT - STRONG PERFORMANCE IN 2017 PNG LNG gross production Produced 8.3 MT (gross) of LNG in 2017: (MT) 5% higher than 2016, 20% above nameplate +5% +7% 8.3 Record rate of 8.9 MTPA in October 7.9 Reflected strong…
  5. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 5
    OPERATED PRODUCTION OSH operated production (mmboe) 8 7.03 6.83 5.88 6 4 2 0 2015 2016 2017 Kutubu oil Moran oil Gobe Unit oil Hides GTE SE Gobe gas to PNG LNG In 2017, operated oil fields, Hides GTE and SE Gobe third…
  6. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 6
    HIGHLANDS EARTHQUAKE Magnitude 7.5 earthquake struck the PNG Highlands on 26 February at 03:44 (PNG local time) with numerous aftershocks No fatalities or serious injuries to OSH staff or contractors. However, injuries and deaths in…
  7. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 7
    HIGHLANDS EARTHQUAKE IMPACT ON PNG LNG Hides Gas Conditioning Plant major processing equipment not significantly impacted, though some damage to foundation supports and various pieces of equipment Pipeline undamaged Wells safely…
  8. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 8
    HIGHLANDS EARTHQUAKE IMPACT ON OSH OPERATIONS Liquids export line and offshore facilities undamaged Gobe Production Facility minimal impact, expected to recommence production in mid March Rehabilitation work underway on Ridge and…
  9. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 9
    ASSOCIATED GAS EXPANSION (AGX) OPPORTUNITY Formerly known as Associated Gas Acceleration (AGA) project Original scope (2015/2016) to accelerate volume of gas from Kutubu, Agogo and Moran fields to support higher PNG LNG…
  10. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 10
    PNG LNG PROJECT MARKETING UPDATE Up to an additional 1.3 MTPA LNG volumes PNG LNG Contractual Commitments being marketed by PNG LNG Project Towards end 2017/early 2018, market Up to Contracted Volumes (MTPA) conditions…
  11. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 11
    STEADY GROWTH IN 2P AND 2C RESERVES AND RESOURCES Oil and OIL SEARCH 2P + 2C GROWTH At end % Gas % condensate Dec 2017 Change (bscf) change (mmbbl) 1,500 +3% 1P Reserves 59.1 5% 2,041 5% +20% +4% -3% 1,250 2P Reserves 73.0 3%…
  12. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 12
    2018 PLANNED ACTIVITIES Safe resumption of production following earthquake Target improvements across all safety metrics PNG LNG: Modification to Hides Gas Conditioning Plant and tie-in work for Angore A1 and A2 wells, subject to…
  13. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 13
    LNG EXPANSION PREFERRED DEVELOPMENT CONCEPT AGREED Sources of gas for LNG expansion Broad alignment between key parties on preferred downstream development concept: Hides Elk-Antelope 8 MTPA of new capacity Juha Kutubu (6.5 tcf…
  14. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 14
    PNYANG SOUTH 2 ST1 CONFIRMS EXTENSION OF FIELD TO SOUTH-EAST Pnyang South 2 ST1 appraisal reached total depth of 2,725 metres in Jan-18 Well encountered good-quality, gas- bearing Toro and Digimu sands: Confirmed extension of…
  15. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 15
    KEY WORK STREAMS IN 2018 PRIOR TO FEED ENTRY DECISION Commercial PNG LNG access agreement Upstream governance agreements Fiscal Negotiate gas agreements with PNG Government Technical Complete upstream and downstream pre-FEED…
  16. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 16
    TARGETING LNG EXPANSION FEED ENTRY IN 2H18 2018 Complete Pnyang South-2 Present LNG expansion to appraisal well Government Complete integration studies and Complete Gas Agreement commencement of commercial discussions with…
  17. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 17
    ASIAN LNG DEMAND UNDERPINS GLOBAL GROWTH, LNG EXPANSION FROM PNG WELL POSITIONED Global LNG demand grew 11% in 2017; expected to grow by Global LNG supply demand balance more than 6% pa over next five years Chinese LNG imports up…
  18. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 18
    PNG EXPLORATION MULTIPLE PLAYS TO SUPPORT FURTHER LNG GROWTH Muruk PNG licence portfolio enhanced in 2017: Five new licences granted, five farm- ins, four farm-downs NW Foldbelt Elk- Focused on four potential LNG-scale Antelope…
  19. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 19
    KEY PNG EXPLORATION ACTIVITIES IN 2018 SW Muruk NE Muruk 2 appraisal: 11km step-out to test resource upside Well will confirm scale of discovery Timing subject to well pad completion post A earthquake B Kimu and Barikewa Foreland…
  20. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 20
    ALASKA NORTH SLOPE ACQUISITION COMPLETED US400m acquisition completed Feb 2018 Nikaitchuq (229 mmbbbl) Milne Point Option provides significant (416 mmbbl) additional value opportunity: Alpine Kuparuk River Prudhoe Bay…
  21. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 21
    MULTIPLE OPPORTUNITIES TO ADD VALUE DEVELOPMENT, APPRAISAL, EXPLORATION Material oil upside potential: Acquisition based on 500 mmbbl JV partners suggest 1 bnbbl ConocoPhillips drilling two wells on trend and adjacent to Nanushuk…
  22. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 22
    SOLID FINANCIAL METRICS CASH FLOW WATERFALL (USM) LIQUIDITY (USM) 844 (267) (424) 1500 Cash (USm) Corporate Facilities Available (USm) 1,000 1,015 1000 863 750 Non Non 500 500 Escrow Escrow 250 Escrow Escrow 0 0 Opening…
  23. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 23
    2017 FINANCIAL OVERVIEW Net profit of US302.1m, up 236% on 2016 YEAR END 31 DECEMBER 2017 2016 Stable unit production costs of US8.67/boe Net profit after tax (USm) 302.1 89.8 and competitive operating margin of 73% Operating cash…
  24. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 24
    BALANCE SHEET CAN SUPPORT LNG EXPANSION AND ALASKA DEVELOPMENT LNG EXPANSION DEBT ASSUMPTIONS OSH share of development costs for 20182023, before project debt funding, indicatively estimated to be US2.6 - 3.5 billion 60% debt/40%…
  25. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 25
    CONSOLIDATED FINANCIAL POSITION KEY FINANCIAL METRICS WITHIN LENDER COVENANTS OSH - Consolidated PF Debt Indicative consolidated project financed debt forecast to peak at US3.3 - 4.1 billion in c. 2023 Assumes US850 million of…
  26. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 26
    CASH FLOW PRIORITIES REMAIN UNCHANGED DEVELOPMENT PHASE UP TO 2023 Free cash flows OSH share of equity contributions for both LNG expansion and Alaska development to be funded from After scheduled debt servicing, sustaining capital…
  27. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 27
    2018 FULL YEAR GUIDANCE Updated guidance to be provided once OSH has more clarity on the progress of repair works, both at the PNG LNG Project facilities and in its own operations Will include revised production guidance and likely…
  28. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 28
    HIGHLANDS EARTHQUAKE OSH RELIEF EFFORTS Communities significantly impacted: Many deaths, destruction to homes, schools, roads, bridges, loss of basic necessities OSH has committed OSH relief efforts: to donate up to PGK 16…
  29. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 29
    HIGHLANDS EARTHQUAKE OSH RELIEF EFFORTS OSH COMPANY UPDATE MARCH 2018 PAGE 30
  30. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 30
    OTHER FOCUS AREAS Payments of royalties and equity entitlements to PNG LNG Project landowners: Government has paid benefits to landowners around PNG LNG plant site and Hides Still significant payments outstanding matter of urgency…
  31. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 31
    KEY PRIORITIES FOR 2018 Resume production from OSH operations and PNG LNG Project safely following Highlands earthquake Achieve critical milestones for PNG LNG expansion and Papua LNG FEED entry decision in 2H18 Progress AGX…
  32. Credit Suisse Asian Investment Conference – Oil Search Limited – slide 32
    OIL SEARCH COMPANY UPDATE Credit Suisse Asian Investment Conference March 2018 OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH POMSoX: OSH US ADR: OISHY www.oilsearch.com

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