Oil Search Exploration Update 15 th PNG Mining and Petroleum Conference Sam Algar – GM Exploration 5 December 2018 OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | POMSoX: OSH | US ADR: OISHY www.oilsearch.com
ACKNOWLEDGEMENT & DISCLAIMER Oil Search acknowledges the support of the PNG Department of Petroleum and the support and contributions of all of our Joint Venture partners While every effort is made to provide accurate and complete information, Oil Search Limited does not warrant that the information in this presentation is free from errors or omissions or is suitable for its intended use. Subject to any terms implied by law which cannot be excluded, Oil Search accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect) incurred by you as a result of any error, omission or misrepresentation in information in this presentation. All information in this presentation is subject to change without notice. This presentation may contain forward-looking statements which are subject to particular risks associated with the oil and gas industry. Oil Search Limited believes there are reasonable grounds for the expectations on which the statements are based. However, actual outcomes could differ materially due to a range of factors including oil and gas prices, demand for oil, currency fluctuations, drilling results, field performance, the timing of well work-overs and field development, reserves depletion, progress on gas commercialisation and fiscal and other government issues and approvals. PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 2
COMMITTED TO CONTINUED INVESTMENT IN PNG PNG has enormous exploration Muruk potential NW Highlands OSH 2015 Studies - 30Tcf Yet To Find P’nyang Elk- Acreage growth in 2016-2018 aimed at Antelope ensuring YTF becomes FOUND Eastern Foldbelt Gulf / Forelands Testing proven and new plays Exploration around current, planned and potential LNG hubs Commitment to developing PNG Offshore Papuan Gulf : nationals and working with all JV Shallow and deep water partners PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 3
OIL SEARCH: MOST ACTIVE PNG EXPLORER TURNING YTF INTO FOUND 2018 Activity: – Two successful operated appraisal wells – Two further appraisal wells operated on behalf of ExxonMobil – Acquired ~380 km of seismic – Farmed-in to four licences in the Onshore Gulf/Eastern Foldbelt 2019 Activity: – At least two wells and continuous seismic acquisition Entry into Alaska not impacting our laser focus on PNG PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 4
KIMU 2 Kimu gas discovery made in 1999 Initially thought to be sub-commercial Low-relief structure in hanging wall of an extensional fault in the Foreland; Early Cretaceous, Alene Sandstone Creative thinking of OSH geologists identified potential for field to be much larger than originally thought 2016 seismic programme confirmed potential for upside Kimu 2 spud in 2Q18 PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 5
KIMU 2 – SUCCESSFUL 2018 GAS APPRAISAL Kimu 2 – Gas Discovery – Successfully penetrated and cored high quality gas filled Alene reservoir – ~37m of core (96% recovery) – Full log suite – Extended production test – Approx four day flow/2 day build-up. Flowed at 34.5mmscf/day through a 64/64” choke Results confirm the post 2016 seismic pre-drill volumes Working with partner (Kumul) to develop commercialisation options PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 6
BARIKEWA 3 Barikewa gas discovery made in 1958 (gas discovery) and appraised in 1981 (dry hole) Late Jurassic/Early Cretaceous Hedinia and Toro Reservoirs Late inversion anticline in foreland SW of the main foldbelt Sparse seismic and surface geology Highly karstified terrain with road constructed for well support SW SW NE NE Barikewa 3 Darai Ieru Toro Hedinia PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 7
BARIKEWA 3 – SUCCESSFUL 2018 APPRAISAL Barikewa 3 – Gas Discovery – Gas encountered in high quality Toro and Hedinia – Full log suite acquired – Production test conducted on Toro – 35.5mmscf/day over a 75 hour flow period through a 68/64” choke – ~20% nitrogen confirmed Results confirm pre-drill mapping and resource volumes Working with Partners (Kumul & Santos) to develop commercialisation options PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 8
2018 SEISMIC ACQUISITION 380km 2D seismic acquired in two programmes The wire mesh glasses are a breakthrough for bridging – Eastern Foldbelt – 16 lines, 332km of data acquired on behalf of ExxonMobil and Total – Material improvement on previous data due to new acquisition techniques – Gobe area – Four lines, 50km of data as Operator – Completing mid-December – NW Foldbelt – Deferred until 2019 due to Feb-18 earthquake Continual improvements in safety, operations and seismic acquisition equipment and parameters PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 9
EASTERN FOLDBELT PROGRAMME 11 months of work to acquire 16 lines Ladders vs. Bridges Wire mesh glasses do not fog up in Drill crew on line 1 (332km) of heli-supported, jungle, 2D hot conditions of bridging seismic. At peak: – 750 people in the field – 32 field crews/camps – Six helicopters – 1.3 million litres of jet A1 fuel 332km of bridging – One million hand-cut treads nailed down – A typical Fly Camp 70 tonnes of nails Drilling and recording – >12,000 shots fired – 29 tonnes of dynamite used HSES – 2.2 million manhours without an LTI PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 10
MURUK 2 APPRAISAL PROGRAMME Spudded on 10 November 2018 OSH drilling well on behalf of ExxonMobil-operated PDL 9 joint venture ~11km step-out from Muruk 1 discovery well Base case: ~80 day well with expected total depth ~3,500m Objective is to narrow 1-3 tcf potential in Muruk discovery to SW NE support development Muruk 2 Success case: Extended Well Test to prove up connected hydrocarbon volume Additional 2D seismic planned for later in 2019 after drilling of Muruk 2 to further constrain Muruk and adjacent prospects and leads PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 11
NEW TECHNOLOGY Historically structural geology and seismic were the key tools in PNG onshore exploration – defining structural traps Recent use of LIDAR (Laser Imaging Detecting And Ranging) is helping to constrain subsurface structural models Increasingly, the importance of hydrocarbon charge timing and migration is recognised as being important to define chance and volume of gas, or oil, filling a structure Oil Search has joined a consortium with IFP to start to use Kronos, a powerful structural and geochemical software tool designed specifically for fold and thrust belts Kronos Example LIDAR Example PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 12
PORT MORESBY TECHNICAL TEAM An exploration technical team has been formed in Port Moresby with seven national staff Graduate members are undergoing intensive training and exposure to field operations The team is responsible for evaluating a number of exploration blocks with support from the Sydney technical team First all-female geoscientist team to go into the field. Oil Search employee awarded 2018 PNG Apprentice of the Year PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 13
SUMMARY Oil Search is the most active explorer of PNG With our partners and support from the Government, we are doing the work necessary to find the hydrocarbons PNG needs to power its future Oil Search will continue this work in 2019 and beyond In the process, we will develop PNG nationals so that they can be the leaders of the future PNG 15 TH MINING & PETROLEUM CONFERENCE | PAGE 14
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