OIL SEARCH COMPANY UPDATE MACQUARIE AUSTRALIA CONFERENCE May 2018 OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH POMSoX: OSH US ADR: OISHY www.oilsearch.com
OIL SEARCH OVERVIEW 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 in…
SIGNIFICANT PROGRESS MADE ON VALUE-CREATING INITIATIVES LNG Expansion and Development in PNG: Optimal, three train development concept agreed: One PNG LNG expansion train, two Papua LNG trains Bottom quartile costs, simplified…
PRODUCTION HISTORY OIL SEARCH NET PRODUCTION (MMBOE)1,2 35 30.25 30.31 30 29.25 23 - 26 25 20 19.28 15 10 6.74 5 0 2013 2014 2015 * 2016 2017 2018F OSH-operated PNG LNG 1. LNG sales products at outlet of plant,…
HIGHLANDS EARTHQUAKE SUMMARY Magnitude 7.5 earthquake struck the PNG Highlands on 26 February at 03:44 (PNG local time) with numerous aftershocks No serious injuries to OSH staff or contractors. However, many injuries and deaths in…
PNG LNG PROJECT RECOMMENCED PRODUCTION IN MID-APRIL LNG production resumed in mid-April, ahead of operators previously estimated 8 week timeframe: Both LNG trains at Plant site operational LNG exports have resumed Operator…
PROGRESSIVE RESUMPTION OF OSH- OPERATED PRODUCTION OSH-operated Central Processing Facility resumed operations in late March: Oil production being reinstated progressively from Kutubu complex fields Production from Gobe Processing…
HIGHLANDS EARTHQUAKE INSURANCE OSH-operated and PNG LNG production facilities insured for earthquake-related property damage Initial estimate of US150 250 million for damage to insured OSH-operated assets: OSH net share of…
2018 REVISED GUIDANCE1 Production (mmboe) Previous Guidance Current Guidance Oil Search-operated PNG oil and gas2,3 4.5 - 5.5 2.7 4.0 Total PNG LNG Project2 24.0 - 25.0 20 22 Total production 28.5 30.5 23 26 Operating Costs Production…
PNG LNG PROJECT MARKETING UPDATE Up to an additional 1.3 MTPA LNG volumes PNG LNG sales being marketed by PNG LNG Project Towards end 2017/early 2018, market Up to conditions tightened for spot/strip sales, 1.3 MTPA stronger terms…
ALIGNMENT ON PREFERRED LNG EXPANSION DOWNSTREAM DEVELOPMENT CONCEPT Alignment reached on optimal downstream development concept: Three 2.7 MTPA trains, two supported Hides by Papua LNG (Elk-Antelope), one by Juha Elk-Antelope…
EXPANSION UNDERWRITTEN BY STRONG RESOURCE POSITION Recertification of Pnyang field by NSAI completed in 1Q18: Incorporated results of Pnyang South 2 well Resulted in tripling of gross 1C certified resource to 3.51 tcf, 2C increased…
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…
LNG EXPANSION FROM PNG WELL POSITIONED FOR GROWTH IN GLOBAL LNG DEMAND Global LNG demand grew 11% in 2017; expected to grow by Global LNG supply demand balance more than 6% pa over next five years China targeting increase in natural…
OPTIMISATION OF PNG ACTIVITIES TO SUPPORT NEXT PHASE OF DEVELOPMENT Major review of gas commercialisation options underway, focused on optimising development beyond next three trains: Substantial discovered resource with material…
KEY PNG EXPLORATION ACTIVITIES IN 2018 Muruk Muruk 2 appraisal: 11km step-out to test resource upside NW Foldbelt Expected to spud 4Q18 Elk- Antelope Kimu 2 and Barikewa 3 Foreland appraisal: Test resource and firm up Kimu…
ALASKA NORTH SLOPE ACQUISITION COMPLETED US400m acquisition completed February 2018 Operatorship assumed March 2018 127.5 mmbbl of net 2C oil resource (500 mmbbl gross) assigned to Pikka Unit: Upside to 1 bnbbl US450m…
OSH BUILDING ANCHORAGE-BASED INTEGRATED TEAM Building integrated Anchorage- based team: Comprising operations, subsurface, development and support personnel Significant interest from highly qualified candidates, attracted to…
MULTIPLE OPPORTUNITIES TO ADD VALUE Material oil upside potential: Existing well Nanushuk and Acquisition based on 500 mmbbl 2018 Conoco appraisal Alpine Fairway JV partners suggest 1 bnbbl Pikka Unit Putu 2 and Stony Hill 1…
BALANCE SHEET CAN SUPPORT LNG EXPANSION AND ALASKA Current liquidity US1.5bn. Includes US850m of CASH FLOW PRIORITIES REMAIN corporate facilities, to be drawn as necessary UNCHANGED Post earthquake, cash flows benefiting from higher…
LNG EXPANSION AND ALASKA DEVELOPMENT ASSUMPTIONS LNG EXPANSION OSH share of development costs for 20182023, before project debt funding, US2.6 - 3.5 billion (including capitalised interest and financing fees) 60% debt/40% equity…
CONSOLIDATED FINANCIAL POSITION DEVELOPMENT PHASE UP TO 2023 OSH share of equity contributions for both LNG expansion OSH - Consolidated PF Debt and Alaska development to be funded from PNG LNG free cash flow, cash and corporate…
HIGHLANDS EARTHQUAKE OSH RELIEF EFFORTS Communities significantly impacted: Many deaths, destruction to homes, schools, roads, bridges, loss of At least PGK 16 million basic necessities (US5million) in cash OSH relief efforts: and…
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…
INAUGURAL CLIMATE CHANGE RESILIENCE REPORT RELEASED MAR-18 CLIMATE SCENARIO ANALYSIS OUTCOMES Indicated long-term resilience and value generation under a range of decarbonisation scenarios, including a 2C outcome. Under a 2C…
KEY PRIORITIES FOR 2018 Safe ramp up of production from OSH operations and PNG LNG Project following Highlands earthquake Achieve critical milestones for PNG LNG expansion and Papua LNG: FEED entry decision in 2H18, subject to…
OIL SEARCH COMPANY UPDATE MACQUARIE AUSTRALIA CONFERENCE May 2018 OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH POMSoX: OSH US ADR: OISHY www.oilsearch.com
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