2018 FIRST HALF RESULTS August 2018 OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH POMSoX: OSH US ADR: OISHY www.oilsearch.com
AGENDA PRESENTATION PETER BOTTEN MANAGING DIRECTOR STEPHEN GARDINER CHIEF FINANCIAL OFFICER JULIAN FOWLES EGM PNG BUSINESS UNIT IAN MUNRO EGM GAS, MARKETING & EXPLORATION 2018 FIRST HALF RESULTS 21 AUGUST 2018 PAGE 3
2018 FIRST HALF HIGHLIGHTS Total production of 10.24 mmboe: 31% lower than 1H17 due to 7.5 mag earthquake in February OSH involved in major recovery effort, with activities ongoing Net profit after tax of US79.2 million, DPS of 2 US…
2018 FIRST HALF HIGHLIGHTS CONT. Successful appraisal in PNG forelands (Kimu 2, Barikewa 3), plus expansion of exploration portfolio in onshore Gulf Material upside in oil fields identified Alaska: Recent drilling from ConocoPhillips…
SAFETY AND ENVIRONMENTAL PERFORMANCE TOTAL RECORDABLE INCIDENT RATE (TRIR) No major injuries to OSH staff and contractors due to earthquake and 3 2.7 aftershocks 2.6 Per million hours 2.5 2.0 1.9 However, TRIR increased to 2.7…
2018 FIRST HALF FINANCIAL OVERVIEW Net profit after tax of US79.2m, 39% 1H18 1H17 lower than 1H17, reflecting impact of PNG Highlands earthquake on production and Sales volume (mmboe) 9.8 14.2 costs Net Profit after tax (USm) 79.2…
2018 FIRST HALF FINANCIAL PERFORMANCE NET PROFIT AFTER TAX (USM) Solid first half profit despite production shut-in from PNG Highlands earthquake, assisted by continued rise in oil and LNG prices Key financial measures impacted…
UNIT PRODUCTION COST OF US14.04/BOE IMPACT OF PNG HIGHLANDS EARTHQUAKE USM 1H 2018 1H 2017 UNIT PRODUCTION COST (US/BOE) 14 Production costs: 14.04 PNG LNG 85.5 67.2 12 PNG Oil and Gas 58.3 59.0 10.08 10 8.67 143.8 126.2 8.50 8…
FINANCIAL METRICS REMAIN SOLID CASH FLOW WATERFALL (USM) Positive operating cash flow, despite 1500 earthquake impact on sales volumes, 215 (564) buoyed by strong oil and gas prices 1,015 1000 1,015 Liquidity position remains sound…
BALANCE SHEET CAPACITY TO SUPPORT GROWTH PROJECTS Extensive modelling supports OSHs ability to fund LNG and CASH FLOW PRIORITIES REMAIN Alaska North Slope developments: UNCHANGED Based on more conservative oil price medium-term…
2018 FULL YEAR FINANCIAL GUIDANCE Capital costs 2018 Guidance1 Production 2018 Guidance2 Exploration & Evaluation US270 330m Oil Search operated 3.0 4.0 mmboe3,4 Development US40 50m PNG LNG Project 21.0 22.0 mmboe3 Production US25…
2018 FULL YEAR PRODUCTION GUIDANCE 2018 FY production guidance upgraded: OIL SEARCH NET PRODUCTION (MMBOE)1,2 Production 2018 Guidance1 35 OSH-operated 2,3 30.25 30.31 Oil Search-operated 3 4 mmboe PNG LNG 29.25 30 24 26 2 PNG…
1H18 PRODUCTION STRONG RECOVERY POST EARTHQUAKE 1H18 production of 10.24 mmboe, 31% lower than NET PRODUCTION (MMBOE) 1H17, reflecting temporary shutdown of operations due to February earthquake 16 15.50 15.35 14.93 14.89 14.81 PNG…
MID-TERM SALES AGREEMENTS SIGNED WITH PETROCHINA AND BP Three-year SPA signed with PetroChina for PNG LNG CONTRACTUAL COMMITMENTS 0.45 MTPA of LNG. Supply commencing Non July 18 Escrow Five-year SPA signed with BP: 0.45 MTPA…
DISCUSSIONS ADVANCING ON DEVELOPMENT OF NEW LNG CAPACITY Alignment reached on optimal downstream development concept: Hides Three 2.7 MTPA trains, 8 MTPA total Juha capacity, two supported by Papua LNG Kutubu Elk-Antelope…
RECERTIFICATION RESULTS IN MAJOR INCREASE IN PNYANG RESOURCE 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…
SUBSTANTIAL GROWTH IN GLOBAL LNG DEMAND GLOBAL SUPPLY AND DEMAND Global LNG demand grew 11% in 2017 and 7% higher in 1H18 than 550 in 1H17 LNG demand growth expected to be 500 4.5% p.a. to 2030 New supply required from…
POTENTIAL GLOBAL LNG SUPPLY SHORTFALL COMMENCING IN EARLY 2020S LNG LIQUEFACTION CAPACITYCapacity LNG Liquefaction BY FID by YEAR FID Year Significant fall in amount of new LNG capacity sanctioned: 30 Only 8.8 MTPA sanctioned…
OIL SEARCH EQUITY MARKETING PROGRESSING TO PLAN Very positive response received from Tier 1 CONTRACT EXPIRATIONS BY YEAR Buyers to OSH equity marketing from new LNG capacity in PNG 15 Buyers seeking LNG source diversification from…
OIL FIELD AND ASSOCIATED GAS OPPORTUNITIES Liquids Associated Gas Expansion (AGX) Significant low risk opportunities identified to Work progressing on AGX opportunity extend production life of oil fields Comprises accelerating gas…
PNG EXPLORATION AND APPRAISAL TO SUPPORT NEXT PHASE OF DEVELOPMENT Successful appraisal in PNG Forelands: Kimu 2 and Barikewa 3 intersected gas in high quality target reservoirs Evaluation of well results underway to define resource…
ALASKA 2018 BUSINESS PRIORITIES: BUILDING THE FOUNDATIONS Building team, agreeing programmes, setting priorities, deliverables and accountabilities Building integrated and empowered team in Anchorage (currently 50 employees, expect…
MATERIAL, BALANCED PORTFOLIO WITH FOUR STAGES OF GROWTH Pikka Unit 80-120,000 b/d at 500 25.5% W.I with mmbbl with significant Short Term option for Pikka Unit upside potential additional equity Oooguruk Nanushuk Key…
2018/19 WORK PROGRAMME FOCUSED ON MATURING PIKKA RESOURCE ESTIMATES OBJECTIVES Drill two appraisal wells to constrain continuity of Nanushuk Approximate extent of Nanushuk reservoir reservoir of Pikka Unit: Pikka B and Pikka C…
PNG HIGHLANDS EARTHQUAKE ONGOING COMMITMENT TO RELIEF AND LONG-TERM RECOVERY 7.5 magnitude earthquake in late February 2018 one in 100 year event OSH and OSH Foundation played critical First Responder role: UN estimates OSH…
PNG LNG ECONOMIC BENEFITS DISTRIBUTION US200m of landowner benefits held in trust, waiting for confirmation of final landowner identification in certain licences Government making strong progress on identification and verification of…
OTHER PNG INITIATIVES Construction of 58MW power station in Port Moresby, due onstream early 2019 Final fit-out of APEC Haus prior to APEC FEED decision on Biomass project Development of Papua New Guinean workforce and support of…
POSITIVE RESPONSE TO INAUGURAL CLIMATE CHANGE RESILIENCE REPORT In March 2018, OSH released its 2017 Climate Change Resilience Report: One of the first ASX-listed companies to report in accordance with TCFD guidelines Report…
SUMMARY Strong recovery following devastating earthquake in PNG in February Positive production outlook for 2H18, with profitability supported by higher oil and LNG prices Three train development concept represents excellent…
APPENDIX 2018 FIRST HALF RESULTS OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH POMSoX: OSH US ADR: OISHY www.oilsearch.com
2018 FIRST HALF FINANCIAL PERFORMANCE USm 1H 2018 1H 2017 Sales volume (mmboe) 9.77 14.18 Revenue 557.8 676.2 Production costs (143.8) (126.2) Other operating costs (55.0) (55.0) Other income 4.7 5.6 1 EBITDAX 363.7 500.5…
BUILDING CAPABILITY IN ALASKA INVESTING IN LOCAL TALENT 70% Alaskan Citizens 9% Native Alaskans STRONG ALASKAN & INTERNATIONAL CAPABILITY 335+ years of US oil and gas experience 240+ years of Alaska North Slope experience…
2018 FIRST HALF RESULTS August 2018 OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH POMSoX: OSH US ADR: OISHY www.oilsearch.com
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