2018 FULL YEAR RESULTS February 2019 OIL SEARCH LIMITED ARBN 055 079 868 ASX: OSH POMSoX: OSH US ADR: OISHY www.oilsearch.com
2018 HIGHLIGHTS 2018 was one of the most challenging years in OSHs history: 1H dominated by Highlands earthquake in February and subsequent activities to restore operations and deliver relief to impacted communities 2H strong…
2018 HIGHLIGHTS (CONT.) Good progress on LNG development in PNG: Papua LNG and downstream pre-FEED studies matured and Memorandum of Understanding signed between Papua LNG and PNG Government in November Muruk 2 reached target Toro…
IMPROVED SAFETY AND ENVIRONMENTAL PERFORMANCE TOTAL RECORDABLE INCIDENT RATE (TRIR) TRIR of 1.6 per million hours worked: 3 No injuries to OSH staff and 2.6 contractors due to earthquake and Per million hours 2.5 2.0 1.9…
FINANCIAL PERFORMANCE AND CAPITAL MANAGEMENT The many exciting investment opportunities in PNG were centre-stage for the 21 visiting members at the Asia-Pacific Economic Cooperation (APEC) Forum in November 2018 2018 FULL YEAR…
2018 FINANCIAL PERFORMANCE NET PROFIT AFTER TAX, 2017 - 2018 (USM) Net profit after tax (NPAT) of US341.2m, 13% higher than 2017: 54.5 Revenue up 6% on higher realised prices, 450 offset by 17% lower product sales due to 89.8…
UNIT OPERATING COSTS IMPACTED BY EARTHQUAKE REPAIRS, LOWER PRODUCTION UNIT PRODUCTION COST (US/BOE) USM 2018 2017 14 Production costs: PNG LNG 171.0 142.2 12 11.51 Earthquake deferred PNG Oil and Gas 119.0 120.6 10.08 production…
POSITIVE OPERATING CASH FLOW DESPITE EARTHQUAKE CASH FLOW WATERFALL, 2017 - 2018 (USM) 2,000 855 (811) Positive operating cash flow, despite earthquake impact on sales volumes, 1,500 buoyed by strong oil and gas prices US415m…
FUNDING AVAILABLE FOR LNG EXPANSION AND ALASKA Dependent on oil prices, expect to generate annual INDICATIVE GEARING (%) AND INTEREST COVER (X) operating cash flow of US1bn over 20192024 OSH total share of development costs from 2019…
2019 FULL YEAR GUIDANCE Capital costs 2019 Guidance Production 2019 Guidance 1,2 Exploration & Evaluation US235 285m Oil Search-operated 4.0 5.5 mmboe Development US145 170m PNG LNG Project 24.0 26.0 mmboe1 Production US95 115m…
PRODUCTION The Central Processing Facility in the PNG Highlands resumed operations four weeks after the February 2018 earthquake 2018 FULL YEAR RESULTS 19 FEBRUARY 2019 PAGE 12
2018 PRODUCTION STRONG RECOVERY IN 2H18 2018 production of 25.2 mmboe, 17% lower than NET PRODUCTION (MMBOE) 2017, reflecting temporary shutdown of operations due to February earthquake 16 15.50 15.35 14.93 14.89 14.81 14.97 PNG LNG…
RESERVES AND RESOURCES Oil and OIL SEARCH 2P + 2C GROWTH At end % Gas % condensate Dec 2018 Change (bscf) change (mmbbl) +15% 1,600 1P Reserves 54.1 8% 1,937 5% +3% -3% +4% 2P Reserves 68.0 7% 2,209 5% 1,200 2C Resources…
PNG OIL FIELD OPPORTUNITIES Commenced oil field optimisation programme in Jan-19 with workover of IDT 21. To be followed by workovers of Moran 4, 9 M4 and M9 wells Moran X, O, Q, P Moran X and UDT S wells to be drilled in 2H19…
2019 PRODUCTION OUTLOOK Production 2019 Guidance1 OIL SEARCH NET PRODUCTION (MMBOE)1,2 2,3 35 OSH-operated Oil Search-operated 4.0 5.5 mmboe 28.0 31.5 PNG LNG 30.31 30.25 PNG LNG Project . 29.25 30 LNG 106 113 bcf Power 0.7…
GAS DEVELOPMENT AND PNG EXPLORATION In 2018, Oil Searchs first all-female geoscientist team completed a field trip to the seismic operations in Gobe 2018 FULL YEAR RESULTS 19 FEBRUARY 2019 PAGE 17
DEVELOPMENT OF NEW LNG CAPACITY IN PNG Good progress made in 2018 on pre-FEED downstream studies for new LNG capacity (3 x 2.7 MTPA trains): Downstream concept agreed, with two new trains dedicated to, and owned by, Papua LNG and…
PROPOSED CONFIGURATION AT PNG LNG PLANT SITE LNG Export Condensate/ Naphtha Export PNG LNG Onshore Boundary LNG LNG LNG Utilities, power generation Train 1 Train 2 Train 3 Train 4 Train 5 New Utilities,…
AGREEMENTS BEING FINALISED Memorandum of Understanding signed between Papua LNG and Government in November 2018, setting key terms and conditions for Gas Agreement: Equitable split of value between State and Developers Fiscal…
LNG DEVELOPMENT TIMELINE 2019 - 2024 Licencing and Approvals Gas Agreements Construction: Early Works Tendering - Complete infrastructure - Complete site clearing PNG LNG Commence - Construction camps Access Early Works: FIDs…
SUBSTANTIAL GROWTH IN GLOBAL LNG DEMAND 550 Global LNG demand grew 6% in 2018 to 320MT 500 4.5% pa global LNG demand growth SUPPLY SHORTFALL forecast increased to 2030: 450 Driven by government policies, with 400 NE Asia…
STRONG MARKET INTEREST IN OIL SEARCH EQUITY VOLUMES Renewed global interest from buyers for term CONTRACT EXPIRATIONS BY YEAR supply to fill supply-demand gap from early to 15 mid-2020s Buyers seeking LNG source diversification 10…
PNG PORTFOLIO HAS MULTI-TCF POTENTIAL Strategic studies completed on prioritising exploration/appraisal activities to ensure optimal use of capital In NW Foldbelt, will continue to pursue opportunities for PNG LNG backfill and…
MURUK 2 UPDATE Muruk 2 appraisal well operations ongoing Success at Muruk will provide field phasing optionality Provisional results indicate objective Toro reservoir likely to be hydrocarbon bearing Further seismic acquisition being…
ALASKA A PNG delegation travelled to Deadhorse, Alaska including: Chris Haiveta (Governor, Gulf Province), Larry Andagali (Managing Director, Trans Wonderland), Mark Sakai (Chairman, Trans Wonderland and Director, Petroleum Resources…
OIL SEARCH ALASKA FULLY ESTABLISHED AND OPERATIONAL Alaska acquisition completed in Feb-18, operatorship assumed in Mar-18 Highly experienced team in Anchorage (300 years of combined North Slope experience), including senior personnel…
UPDATE ON 2018/19 DRILLING PROGRAMME Two-well appraisal programme (Pikka B and Pikka C). Objectives include: Approximate extent of Nanushuk reservoir Pikka B/B ST1: Add 1C resource around DS 3. Flow test planned, to establish…
WELL DESIGN FOR PIKKA B/B ST1 AND PIKKA C/C ST1 Continuous core Frac stimulated production test Pikka B/BST1 WNW ESE Pikka B ST1 Deviated Pikka B Trajectory Vertical Trajectory Top Nanushuk Nanushuk 3 5,047 8,635 MD MD…
PIKKA UNIT DEVELOPMENT TIMELINE 2019 2020 2021 2022 2023 2024 Development Appraisal FEED Production (permitted base case) Two-rig appraisal programme Pikka B & C 15 producers/injector pairs drilled from two drill 120,000 bbl/d…
EXPANDED LEASE POSITION PROVIDES MATERIAL EXPLORATION UPSIDE Expanded portfolio position with recent acquisition of interests in leases covering more than 215,000 acres Material exploration upside: Aiming to drill up to three wells…
OUTLOOK FOR 2019 Perpetua Oseia, winner of the 2018 PNG Apprentice of the Year at the annual National Trade Testing Board (NATTB) awards 2018 FULL YEAR RESULTS 19 FEBRUARY 2019 PAGE 32
STRATEGIC OBJECTIVES FOR 2019 Progress high-value projects to FEED: Enter into aligned FEED for Papua LNG and PNG LNG/Pnyang expansion, including FEED for OSH-operated AGX project Enter into FEED on Pikka Unit development in…
MAINTAINING OPERATING STABILITY THROUGH SOCIAL INITIATIVES Ongoing social programmes, directly and through Oil Search Foundation, including: Continued earthquake relief (public health, infrastructure) Support of Hela Provincial…
SUMMARY Strong production outlook: 2019 Production at or above 2018 earthquake levels Progress being made on PNG LNG Expansion and Papua LNG: On target to sign PRL15 Gas Agreement by end 1Q19 Gas Agreement for PNG LNG Expansion…
SUMMARY (CONT.) Positive results from Alaska appraisal: Potential for resource additions Moving to FEED on Pikka Unit development Advanced discussions on Armstrong Oil Option and equity divestment Non Optimisation of oil operations…
APPENDIX 1: 2018 FINANCIAL PERFORMANCE USm 2018 2017 % Change Sales volume (mmboe) 25.02 30.04 -17% Revenue 1,535.8 1,446.0 +6% Production costs (290.0) (262.8) +10% Other operating costs (145.4) (141.1) +3% Other income 9.6…
APPENDIX 3: 7.5 MTPA OF PNG LNG PRODUCTION CONTRACTED 7.5 MTPA of PNG LNG production PNG LNG CONTRACTUAL COMMITMENTS contracted under long and mid-term agreements: Tranche Escrow3 under negotiation 6.6 MTPA under 20-year contracts…
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