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October 2018 Alaska Investor Review – Oil Search Limited

Oil Search Limited · Oct 8, 2018 · 61 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. October 2018 Alaska Investor Review – Oil Search Limited – slide 1
    OIL SEARCH ALASKA INVESTOR REVIEW October 8th 2018 OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH POMSoX: OSH US ADR: OISHY www.oilsearch.com
  2. October 2018 Alaska Investor Review – Oil Search Limited – slide 2
    DISCUSSION OUTLINE OIL SEARCH ALASKA INVESTOR REVIEW Welcome Oil Searchs Alaska Strategy Preparing to Deliver Overview of North Slope Assets Pikka Unit Development Utqiagvik Deadhorse Exploration & Growth North Slope…
  3. October 2018 Alaska Investor Review – Oil Search Limited – slide 3
    OIL SEARCHS ALASKA STRATEGY & INTRODUCTION MR PETER BOTTEN CBE MANAGING DIRECTOR OSH OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 4
  4. October 2018 Alaska Investor Review – Oil Search Limited – slide 4
    ALASKAS FIT INTO OSHS LONG TERM STRATEGY ALASKA DELIVERS MATERIAL OPTIONS FOR GROWTH AND SUPPORTS THE COMPANYS LONG TERM VISION OF DELIVERING TOP QUARTILE RETURNS TO SHAREHOLDERS Pikka Unit Nanushuk New General Exploration &…
  5. October 2018 Alaska Investor Review – Oil Search Limited – slide 5
    PRODUCTION FORECAST TO DOUBLE BY 2025 DEVELOPMENTS FROM EXISTING DISCOVERIES OSH Production Growth to 2025 80 Production, millions of barrels of oil equivalent 70 15 67 60 12 50 13 40 30 30 3 20 10 0 2017…
  6. October 2018 Alaska Investor Review – Oil Search Limited – slide 6
    ALASKA A BALANCED PORTFOLIO WITH FOUR PHASES OF GROWTH ALASKAN LEASES LOOKING INCREASINGLY POSITIVE SINCE ACQUISITION (OIL PRICE, RESOURCE ESTIMATES, CONOCOPHILLIPS DRILLING, FEDERAL TAX REFORM) 2 rig 2 well program 2019…
  7. October 2018 Alaska Investor Review – Oil Search Limited – slide 7
    WHAT HAS HAPPENED SINCE TAKING OVER GREATER KNOWLEDGE OF THE ASSET AND MACRO FACTORS HAVE COMBINED TO SUBSTANTIALLY UPLIFT THE POTENTIAL VALUE OF THE ALASKAN ASSETS INCREASED CONFIDENCE IN PIKKA NANUSHUK RESOURCES MATERIALLY ABOVE…
  8. October 2018 Alaska Investor Review – Oil Search Limited – slide 8
    PRIORITISING ACTIVITY TO MAXIMISE VALUE FOR ALL STAKEHOLDERS1 INTEGRATED TEAM, CONSOLIDATION OF DATA & OPTIMISED RESERVOIR MODELS HAVE LED TO BETTER UNDERSTANDING OF THE PORTFOLIOS POTENTIAL, STILL UNDER DEVELOPMENT 2000 Gross…
  9. October 2018 Alaska Investor Review – Oil Search Limited – slide 9
    PNG & ALASKA ACREAGE AND RESOURCE WORLD CLASS OIL & GAS PORTFOLIO WITH MATERIAL EXPLORATION UPSIDE IN THE CORE AREAS ADJACENT TO INFRASTRUCTURE OSH Production & Exploration OSH Forecast Net Production Acreage OSH Operated OSH…
  10. October 2018 Alaska Investor Review – Oil Search Limited – slide 10
    ALASKA COMPLEMENTS PNG PORTFOLIO EXCELLENT BALANCE OF OIL & GAS WITH SIMILAR GEOLOGY IN PROVEN PROLIFIC BASINS WITH MATERIAL UPSIDE FROM EXISTING AND NEW DISCOVERIES Papua New Guinea (Papuan Basin) Alaska (North Slope) 5 billion boe…
  11. October 2018 Alaska Investor Review – Oil Search Limited – slide 11
    PREPARING TO DELIVER DR KEIRAN WULFF PRESIDENT OSAL OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 12
  12. October 2018 Alaska Investor Review – Oil Search Limited – slide 12
    ALASKA 2018 BUSINESS PRIORITIES BUILDING THE FOUNDATION FOR LONG TERM SUCCESS US400M ACQUISITION COMPLETED FEB 2018 Operatorship assumed March 2018 BUILDING EXPERIENCED AND EMPOWERED TEAM IN ANCHORAGE Currently 60 employees, (+ 20…
  13. October 2018 Alaska Investor Review – Oil Search Limited – slide 13
    OSAL CAPABILITY BUILD VERY SUCCESSFUL IN SECURING WORLD CLASS TEAM WITH STRONG ALASKAN EXPERIENCE INVESTING IN LOCAL TALENT 70% Alaskan Citizens EGM & President Wulff 9% Native Alaskans RAPIDLY SECURING CAPABILITY SVP External…
  14. October 2018 Alaska Investor Review – Oil Search Limited – slide 14
    OVERVIEW OF NORTH SLOPE ASSETS DR KEIRAN WULFF PRESIDENT OSAL MR BRUCE DINGEMAN EXECUTIVE VICE PRESIDENT OSAL OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 15
  15. October 2018 Alaska Investor Review – Oil Search Limited – slide 15
    ALASKA NORTH SLOPE ESTABLISHED OIL PROVINCE WITH MEGA DISCOVERIES Source: ConocoPhillips, July 2018 SMITH BAY NANUSHUK (Pikka) Narwhal above KUPARUK PRUDHOE BAY ALPINE PT THOMSON WILLOW OIL SEARCH ALASKA INVESTOR…
  16. October 2018 Alaska Investor Review – Oil Search Limited – slide 16
    ACCESS TO EXISTING INFRASTRUCTURE EXTENSIVE EXISTING INFRASTRUCTURE WITH ULLAGE AND VERY SUPPORTIVE AND STABLE STATE GOVERNMENT ESTABLISHED INFRASTRUCTURE: Deadhorse supply base Deadhorse is major supply base for Alaska North Slope.…
  17. October 2018 Alaska Investor Review – Oil Search Limited – slide 17
    ALASKA NORTH SLOPE ESTABLISHED OIL PROVINCE WITH MEGA DISCOVERIES & INFRASTRUCTURE* Nikaitchuq Pikka Unit (0.2bn bbl) OSH North Star 25.5% W.I Oooguruk Milne Point (0.2bn bbl) (0.2bn bbl) (0.2bn bbl) Point McIntyre (0.5bn bbl)…
  18. October 2018 Alaska Investor Review – Oil Search Limited – slide 18
    PIKKA UNIT DEVELOPMENT MR BRUCE DINGEMAN EVP OPERATIONS AND DEVELOPMENT MR RICHARD DARDENNE SVP DEVELOPMENT MR STEVE ROBINSON SVP DRILLING OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 19
  19. October 2018 Alaska Investor Review – Oil Search Limited – slide 19
    PATHWAY TO DEVELOPMENT INITIAL FOCUS ON PIKKA, HORSESHOE AREA TO FOLLOW Pikka Nanushuk Chronology of events and activity Putu, Stony Hill appraisal Nanushuk Q4 Nanushuk discoveries Horseshoe Q6 Willow Discovery Q2 Q1/1ST…
  20. October 2018 Alaska Investor Review – Oil Search Limited – slide 20
    APPRAISAL DRILLING CAMPAIGN CONSTRAIN CONTINUITY OF THE RESERVOIR OF PIKKA UNIT (PIKKA B & C) ADD 1C AROUND DS3 AND CONSTRAIN / ADD 2C RESOURCES IN PIKKA UNIT Prognosed Prognosed ft MD Lithology Formation Tops ft MD Lithology…
  21. October 2018 Alaska Investor Review – Oil Search Limited – slide 21
    DEVELOPMENT FOCUS AREAS DELIVERING THE PIKKA DEVELOPMENT Goals Key Actions No injuries Work to a Safety Management Plan Safe No harm to the environment Build and leverage safety committees Full compliance Establish land use…
  22. October 2018 Alaska Investor Review – Oil Search Limited – slide 22
    INDICATIVE TIMETABLE TO FIRST OIL APPRAISAL PROGRAMME WILL DEFINE FINAL CONFIGURATION OF THE PIKKA DEVELOPMENT 2018 2019 2020 2021 2022 2023 2024 Development Appraisal FEED Production (permitted base case) 2017/18:…
  23. October 2018 Alaska Investor Review – Oil Search Limited – slide 23
    PIKKA DEVELOPMENT PLAN EIS PLAN WELL ADVANCED WITH US ARMY CORP OF ENGINEERS (USACE) AND ANTICIPATE RECORD OF DECISION IN 2Q 2019 ENVIRONMENTAL IMPACT STATEMENT (EIS) PROCESS WELL UNDERWAY OSAL submitted comments on optimisation Drill…
  24. October 2018 Alaska Investor Review – Oil Search Limited – slide 24
    PIKKA DEVELOPMENT KEY QUANTITY ESTIMATES DEVELOPING STRATEGIC CONTRACTING STRATEGY AND ESTABLISHING LONG TERM LOCAL PARTNERSHIPS ACROSS ALL AREAS CIVIL FACILITIES 26 miles of gravel roads 10 - 12 sealift modules / skids 70 acres of…
  25. October 2018 Alaska Investor Review – Oil Search Limited – slide 25
    SUMMARY - DEVELOPMENT EXECUTING PERMITTING AND PRE-FEED AND PREPARING TO DELIVER THE PIKKA DEVELOPMENT Focused on safe, compliant and reliable delivery Using industry-standard stage gate approach to manage project engineering &…
  26. October 2018 Alaska Investor Review – Oil Search Limited – slide 26
    DRILLING & COMPLETIONS FOCUS AREAS FOUR FOCUS AREAS WILL BE KEY FOR SUCCESSFUL PROGRAMME DELIVERY Goals Key Actions Bridge contractor SMS to OSAL No injuries Safe OSAL inspects and assures No harm to the environment Emphasis…
  27. October 2018 Alaska Investor Review – Oil Search Limited – slide 27
    2018/19 DRILLING PROGRAM SECURED TWO HIGH QUALITY MODULAR RIGS FOR ON-ICE WORK OPERATIONS READINESS IS WELL-ADVANCED FOR A TWO RIG PROGRAM, SUBJECT TO FINAL APPROVALS Capability & Resources Drilling Complete Completion & Testing 80% -…
  28. October 2018 Alaska Investor Review – Oil Search Limited – slide 28
    PIKKA WELL DESIGN APPLYING PROVEN DRILLING AND COMPLETIONS TECHNOLOGY Extended reach drilling (ERD) within industry limits 5,000+ foot horizontal section & Multi-Stage Fracs Optimized Fracture Placement Zonal Isolation Between Stages…
  29. October 2018 Alaska Investor Review – Oil Search Limited – slide 29
    MATERIAL POTENTIAL FOR DRILLING COST REDUCTIONS IMPROVEMENTS COME THROUGH LEARNINGS, TECHNOLOGY AND SCALE per ft Analog Learning Curve Study EAGLEFORD SHALE STUDY 1,800 Study conducted after drilling 20 wells (400,000 total…
  30. October 2018 Alaska Investor Review – Oil Search Limited – slide 30
    SUMMARY DRILLING & COMPLETIONS EXECUTING APPRAISAL DRILLING PROGRAMME AND PREPARING TO DELIVER DEVELOPMENT DRILLING & COMPLETIONS Focused on safe, compliant and reliable delivery Executing 2018/19 appraisal drilling programme…
  31. October 2018 Alaska Investor Review – Oil Search Limited – slide 31
    EXPLORATION & GROWTH DR KEIRAN WULFF PRESIDENT OSAL DR SAM ALGAR GM EXPLORATION OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 32
  32. October 2018 Alaska Investor Review – Oil Search Limited – slide 32
    MATERIAL EXPLORATION UPSIDE IN PROVEN PLAYS PORTFOLIO BEING DEVELOPED TO SUPPORT SUSTAINED EXPLORATION PROGRAMME CURRENTLY IDENTIFIED 1BILLON BARREL UNRISKED RESOURCE POTENTIAL Evaluation and high-grading of preferred exploration…
  33. October 2018 Alaska Investor Review – Oil Search Limited – slide 33
    EXTENSIVE 2D, 3D & WELL DATA ALLOWS COMPREHENSIVE UNDERSTANDING OF THE AREA Almost complete 3D seismic coverage of existing acreage (6,800 km2) 3D acquisition planned for 2020 to infill gaps 3D reprocessing underway to further…
  34. October 2018 Alaska Investor Review – Oil Search Limited – slide 34
    MULTIPLE UNDRILLED NANUSHUK PROSPECTS Putu (Narwhal) Seismic Amplitude 3D seismic proven to directly show Nanushuk oil (Conoco Phillips, July 2018) reservoir in Pikka / Horseshoe / Narwhal Multiple analogous seismic anomalies in 3D on…
  35. October 2018 Alaska Investor Review – Oil Search Limited – slide 35
    MULTIPLE UNDRILLED NANUSHUK PROSPECTS Putu (Narwhal) Seismic Amplitude 3D seismic proven to directly show Nanushuk oil (Conoco Phillips, July 2018) reservoir in Pikka / Horseshoe / Narwhal Multiple analogous seismic anomalies in 3D on…
  36. October 2018 Alaska Investor Review – Oil Search Limited – slide 36
    INDICATIVE 5-YEAR EXPLORATION ACTIVITY PLAN LOW RISK HORSESHOE EXPLORATION & APPRAISAL, GRIZZLY AND OTHER NEW EXPLORATION HAS THE POTENTIAL TO DRIVE MATERIAL RESOURCE GROWTH LONGER TERM 2018 2019 2020 2021 2022 2023 2024…
  37. October 2018 Alaska Investor Review – Oil Search Limited – slide 37
    COMMUNITY & REGULATORY ENGAGEMENT MS CINDY BAILEY SVP EXTERNAL AFFAIRS MR KYLE PARKER SVP LEGAL & CHIEF COUNSEL OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 38
  38. October 2018 Alaska Investor Review – Oil Search Limited – slide 38
    ACTIVE COMMUNITY ENGAGEMENT TO UNDERSTAND ISSUES & OPPORTUNITIES FOCUSED ON BUILDING LONG-TERM RELATIONSHIPS ACTIVE COMMUNITY ENGAGEMENT Paused Pikka development planning to better understand and resolve concerns related to culture,…
  39. October 2018 Alaska Investor Review – Oil Search Limited – slide 39
    EARLY FOCUS ON ALIGNING COMMUNITY WITH OSAL ACTIVITIES LISTENING, LEARNING, UNDERSTANDING, CONSULTING & ALIGNING BUILDING A THOROUGH COMMUNITY ENGAGEMENT PROGRAMME TO ENSURE ALIGNMENT BY: Negotiating land use agreements based on…
  40. October 2018 Alaska Investor Review – Oil Search Limited – slide 40
    GOVERNMENT & REGULATORY ACTIVE ENGAGEMENT WITH STATE AND FEDERAL REGULATORS DRIVING ALIGNMENT (WORKSHOPS, INFORMAL & FORMAL MEETINGS AND BRIEFINGS) US Federal Agencies State of Alaska Agencies Local Government Agency USACE DNR EIS,…
  41. October 2018 Alaska Investor Review – Oil Search Limited – slide 41
    PERMITTING PROCESS WELL UNDERWAY TEAM CONTINUING PROCESS STARTED WITH 2015 USACE PERMIT APPLICATION MAJOR PERMITTING PROCESS STARTED WITH 404-10 APPLICATION TO USACE Single CPF with three drill pads (Drill Sites 1, 2 & 3) 404-10…
  42. October 2018 Alaska Investor Review – Oil Search Limited – slide 42
    PROJECT ECONOMICS DR KEIRAN WULFF PRESIDENT OSAL OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 43
  43. October 2018 Alaska Investor Review – Oil Search Limited – slide 43
    ALASKAN FISCAL TERMS US FEDERAL TAX REFORMS HAVE REDUCED TOTAL GOVERNMENT TAKE TO MORE REASONABLE LEVELS Alaska North Slope Ref Illustrative US Cash Tax Calculation Revenue A 100.0 State royalty ((A)x 16.7%) B (16.7) Pri va te roya l ty…
  44. October 2018 Alaska Investor Review – Oil Search Limited – slide 44
    PIKKA DEVELOPMENT BREAKEVEN PRICE COMPARES FAVOURABLY TO UNDEVELOPED GLOBAL PROJECTS Pikka Unit Development compared to Global Projects break even oil price Pre FID 100 90 Pikka breakeven reduced with higher resources Pikka…
  45. October 2018 Alaska Investor Review – Oil Search Limited – slide 45
    PIKKA DEVELOPMENT PERMITTED SCOPE OTHER DISCOVERED RESOURCES (HORSESHOE, NORTH) PROVIDE OPTIONS FOR BACKFILL/EXPANSION KEY Acquisition Case 2C Gross Resources 900 Represents permitted development case only Does not include…
  46. October 2018 Alaska Investor Review – Oil Search Limited – slide 46
    PRIORITISING ACTIVITY TO MAXIMISE VALUE FOR ALL STAKEHOLDERS1 INTEGRATED TEAM, CONSOLIDATION OF DATA & OPTIMISED RESERVOIR MODELS HAVE LED TO BETTER UNDERSTANDING OF THE PORTFOLIOS POTENTIAL, STILL UNDER DEVELOPMENT 2000 Gross…
  47. October 2018 Alaska Investor Review – Oil Search Limited – slide 47
    ECONOMIC CASE SUMMARY INDICATIVE PIKKA DEVELOPMENT WITH PERMITTED BACKFILL* Permitted Scope Pikka Nan 2/3 Alpine C Other Satellites (2018) (DS 2&3) (DS1) (DS2) Startup 2023 2024 - 2028 2024 - 2028 Total Volume (mmbbl)** 620 54…
  48. October 2018 Alaska Investor Review – Oil Search Limited – slide 48
    CREATING VALUE THROUGH THE AOG OPTION DR KEIRAN WULFF PRESIDENT OSAL OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 49
  49. October 2018 Alaska Investor Review – Oil Search Limited – slide 49
    AOG OPTION & PLANNED ON-SALE INTRODUCE THIRD PARTIES TO CAPTURE VALUE, DIVERSIFY RISK & SECURE A JV ALIGNED TO DELIVER FULL VALUE FROM THE ASSETS BACKGROUND OSH has an option to acquire the 25.5-37.5% balance of the key Alaska assets…
  50. October 2018 Alaska Investor Review – Oil Search Limited – slide 50
    CREATING VALUE THROUGH THE AOG OPTION POTENTIAL FOR OSH TO INCREASE EQUITY IN WORLD CLASS ASSETS & CREATE VALUE BY LINKING OPTION TO A PARTIAL DIVESTMENT Phase Lease Category Pikka Unit - 38.25 % 12.75 % 49 % Horseshoe - 56.25 %…
  51. October 2018 Alaska Investor Review – Oil Search Limited – slide 51
    PROCESS AND TIMELINE PRIORITIES DELIVER FULL VALUE DEAL STRUCTURE TO RECOGNISE THE LIKELY RESOURCE/VALUE GROWTH COMPLETE OPTION AND ON-SALE AT THE SAME TIME SECURE QUALITY BUYER/S SUPPORTIVE OF OPTIMAL DEVELOPMENT PLUS EXPANSION…
  52. October 2018 Alaska Investor Review – Oil Search Limited – slide 52
    FUNDING OVERVIEW MR PETER BOTTEN CBE MANAGING DIRECTOR OSH OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 53
  53. October 2018 Alaska Investor Review – Oil Search Limited – slide 53
    STRONG FINANCIAL POSITION LNG EXPANSION AND ALASKAN DEVELOPMENT 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…
  54. October 2018 Alaska Investor Review – Oil Search Limited – slide 54
    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 US3 billion. Numbers will be updated during FEED Recent…
  55. October 2018 Alaska Investor Review – Oil Search Limited – slide 55
    CONSOLIDATED FINANCIAL POSITION KEY FINANCIAL METRICS WITHIN LENDER COVENANTS Consolidated project financed debt forecast to peak at US4.5 billion in 2023 Assumes US850 million of corporate facilities will be maintained and drawn…
  56. October 2018 Alaska Investor Review – Oil Search Limited – slide 56
    CONCLUSIONS MR PETER BOTTEN CBE MANAGING DIRECTOR OSH OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 57
  57. October 2018 Alaska Investor Review – Oil Search Limited – slide 57
    BUILDING A SUSTAINABLE & MATERIAL ALASKA BUSINESS ALASKA BALANCES OSH PORTFOLIO WITH FOCUS ON NEAR TERM DEVELOPMENT WITH OPPORTUNITY TO CONTINUALLY GROW AND BOOK RESERVES THROUGH APPRAISAL AND EXPLORATION 2018 2019 2020 2021 2022…
  58. October 2018 Alaska Investor Review – Oil Search Limited – slide 58
    CONCLUSIONS OIL SEARCH HAS A PORTFOLIO TO DELIVER THE COMPANYS VISION PNG LNG, PAPUA LNG AND ALASKA OIL PROVIDES OSH WITH UNPRECEDENTED PLATFORM FOR GROWTH Highly complementary to OSHs low-cost, Tier 1 PNG portfolio Balance of gas and…
  59. October 2018 Alaska Investor Review – Oil Search Limited – slide 59
    WORLD CLASS PORTFOLIO WITH SECURE GROWTH OSH HAS ESTABLISHED A BALANCE OF MATERIAL OIL & GAS ASSETS WITH A COMBINATION OF WORLD CLASS OPERATORS AND OSH CONTROL OSH HAS WORLD CLASS GAS PORTFOLIO IN PNG Foundation LNG project performing…
  60. October 2018 Alaska Investor Review – Oil Search Limited – slide 60
    Q&A OIL SEARCH ALASKA INVESTOR REVIEW OCTOBER 2018 PAGE 61
  61. October 2018 Alaska Investor Review – Oil Search Limited – slide 61
    GLOSSARY ADEC Alaska Department of Environmental conservation FEED Front End Engineering & Design AOG Armstrong Oil & Gas FID Final Investment Decision AOGCC Alaska Oil and gas Conservation Commission KPI Key Performance Indicator…

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