Oil Search Update June 2014 Oil Search Limited ARBN 055 079 868
Oil Search Licence Interests, PNG P’nyang Juha North PNG LNG Project Hides PPL260 Gas Fields PRL3 Juha Angore PNG LNG Project 260 PDL8 Moran Facilities PDL9 Proposed Juha PDL1 PPL277 Facility Agogo Non PNG LNG PDL6 PDL5 PDL7 233 Hides Gas Gas/Oil Fields PPL219 Kutubu APDL11 Conditioning Plant 233 & Komo Airfield Gobe Main PPL339 PDL2 Mananda 6,7 PRL14 PPL277 339 SE Mananda PDL4 PDL3 339 PRL09 Kimu Elk/Antelope PRL08 339 SE Gobe PRL15 Oil Field 339 Barikewa PPL339 PRL10 Uramu Gas Field 339 339 Oil Pipeline Kumul Terminal PPL234 PNG LNG Gas Pipeline PPL385 Proposed PNG LNG Hagana PPL244 Gas Pipeline Flinders OSH Facility PNG LNG LNG Facility Project Facility Port Moresby Major Road 2
Corporate Transformation Underway Oil Search is in excellent position to build further value for shareholders. Platform of unprecedented strength: » PNG LNG Project sales commenced in May 2014. Transforms OSH into significant LNG exporter with steady 20+ year cash flow stream, sufficient to fund both growth opportunities and pay materially higher dividends » Highlands and PRL 15 LNG expansion opportunities being matured. Potential involvement in two, possibly three, additional high returning LNG trains by end of decade: – Possibility of more than doubling production over next 5 – 7 years, off 2015 base » Taza oil discovery in Kurdistan being appraised, positive results to date » Balance sheet strengthened by recent placement to PNG Government and SPP » Strategic Review underway. Will set direction for next five years 3
Core Strategies Have Delivered Steady Long-Term Share Price Appreciation Manage transition PNG LNG production to PNG LNG Project PNG LNG FID and sales PRL 15 10 commence acquisition 9 8 Acquisition of Share Price (A$) ChevronTexaco’s 7 PNG assets. 6 Assume Operatorship 5 4 3 2 1 - Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 4
5 PNG LNG Project
Project Update » PNG LNG Project Train 1 commenced production in April, Train 2 in May, both ahead of schedule » Ramp up to full capacity (6.9 MTPA) in progress » LNG shipments to Asian markets commenced late May, with first cargos being sold on spot market, prior to start of long term contract sales » Project expected to be delivered within November 2012 budget of US$19 billion » Hides liquids being blended with oil field production and sold as Kutubu Blend 6
PNG LNG – first shipment delivered to TEPCO, Japan Spirit of Hela 7
8 Feb 2014 PNG LNG Plant site Feb 2011
9 Nov 2013 Jun 2011 Jetty
Offshore and Onshore Pipelines Offshore Pipeline Laying Highlands pipeline Pipeline rehabilitation, March 2014 Pipeline rehabilitation, March 2014 Pipeline burial 10
Associated Gas (CPF) Nov 2010 PNG LNG Project Facility Major Road Feb 2013 11
Komo Airfield Dec 2010 First Antonov 124, May 2013 Nov 2013 12
Hides Gas Conditioning Plant Dec 2010 Mar 2014 Aug 2012 13
14 Rig 703 Rig 702 Drilling
Gas Growth Strategy » Oil Search looking to Juha North Hides (24.4%) PPL260 leverage existing LNG P’nyang PRL3 Angore Juha (38.5%) infrastructure and skills 260 PDL8 Moran PDL9 Proposed Juha developed by foundation PDL1 PPL277 Facility Agogo PDL6 PDL5 PDL7 PNG LNG Project 233 Hides Gas PPL219 Kutubu APDL11 Conditioning Plant 233 » Upside in 1P reserves at & Komo Airfield Gobe Main PPL339 PDL2 Hides plus substantial PRL14 PPL277 339 PDL4 discovered undeveloped gas PDL3 339 PRL09 Kimu (60.7%) Elk/Antelope (22.8%) resources PRL08 339 SE Gobe (25.6%) PRL15 » Oil Search well positioned to 339 Barikewa (45.1%) PPL339 PRL10 realise value from future Uramu (100%) phases of development, as 339 339 Kumul Terminal significant resource and PPL234 infrastructure owner and PPL385 Hagana (40%) PPL244 proven operator Flinders (40%) Undeveloped Gas Fields » PNG remains an attractive investment location LNG Facility Port Moresby 15
Hides Drilling Hides 5 Hides G Hides 1 Hides 2 Hides 3 Hides 4 PDL 1/7 – Hides Field 8 New Production Wells Ieru Hides GTE Hides Nogoli Hides Plant Camp 5 Hides Well Toro PDL 8 – Angore Field Pad G 2 New Wells Koi-Iange 5km PWD Well » Six production wells at three wellpads (B,C and D) complete Hides Gas Komo Conditioning » Drilling ongoing: two wells at wellpad G (NW Hides) Airfield Plant and PWD well. Will help constrain gas volume in Hides field » Hides 5 planned to explore Koi-Iange reservoir (~700m below Toro), with drilling scheduled to commence in 4Q14 16
P’nyang - PRL 3 » Key resource to support potential growth from PNG LNG: – Total 2C recoverable gas resources in P’nyang field of 2.5 tcf » Concept selection work well advanced – engineering, environmental and social mapping » Development work to continue through to submission of PDL application in early 2015 PRL 3 WI % ExxonMobil affiliates 49.0 (operator Esso PNG P’nyang Ltd) Oil Search 38.5 JX Nippon 12.5 17
Elk/Antelope - PRL 15 P’nyang Juha North » 22.8% gross interest in PRL 15, PNG LNG Project Hides PPL260 Gas Fields containing Elk/Antelope gas PRL3 Juha Angore 260 PNG LNG Project fields Proposed Juha PDL8 Moran Facility Facilities PDL9 PDL1 PPL277 » Up to three appraisal wells to Agogo Hides Gas PDL6 PDL5 Non PNG LNG PDL7 233 Conditioning Plant PPL219 be drilled, to prove up sufficient Gas/Oil Fields Kutubu & Komo Airfield APDL11 Triceratops 233 gas resources to support LNG Mananda 6,7 Gobe Main PPL339 PDL2 development. First well PRL14 SE Mananda PPL277 Kimu 339 PDL4 expected to spud in 3Q14 PDL3 339 PRL09 Elk/Antelope » Substantial exploration and SE Gobe PRL08 339 PRL15 appraisal upside in PRL 15 Barikewa 339 PPL339 PRL10 » Dispute resolution process Uramu 339 339 underway relating to sale of Kumul Terminal PPL234 interest in PRL 15 from InterOil to Total SA. Negotiations to PPL385 Hagana PPL244 achieve commercial resolution Flinders ongoing LNG Facility Port Moresby 5km Source: InterOil 18
Strong production from PNG oil fields PPL260 » Reservoir performance from Juha North PDL9 key oil fields remains strong PDL1 PRL Juha 11 PRL PDL7 PDL8 PPL277 11 Angore » Continued success of Hides PDL7 PPL233 development drilling and field Mananda 5,6 & 7 PDL6 PDL5 PPL233 Moran management activities SE Mananda PPL219 » Commissioning gas delivered Agogo Kutubu PDL2 from Kutubu to PNG LNG Plant (September) and HGCP Oil Field Gas Field (December) PDL 4 Gobe Main Oil Pipeline PRL 14 PNG LNG » PNG LNG Hides liquids being SE Gobe PDL PDL Cobra Gas Pipeline 3 4 Proposed PNG LNG Iehi blended with oil field production Gas Pipeline PRL9 and sold as Kutubu Blend OSH Facility PRL8 Barikewa PNG LNG Kimu Project Facility 19 1 9
Production Outlook » Total production guidance for 2014 Net Production (mmboe) increased from 14.5 – 17.5 mmboe to 30 PNG LNG (T1+T2) (1,3) 17 – 20 mmboe, due to Hides GTE (3) SE Mananda commencement of LNG production 25 Gobe from Train 1 (April) and Train 2 (May) Moran (2) Kutubu (2) ahead of schedule 20 17 – 20 » Production from oil fields of 6.4 – 6.9 15 mmboe (unchanged), up slightly from 2013 10 6.74 6.4 – 6.9 6.69 6.38 » In first full year (2015), PNG LNG will 5 add ~21 mmboe net to Oil Search production 0 2011 2012 2013 2014F 2015F 1 LNG sales products at outlet of plant, post fuel and flare 2 Oil forecast assumes planned new development wells beyond 2013 3 Gas:oil conversion rate used in 2014/15: 5,100 scf = 1 barrel of oil equivalent (prior years 6,000 scf/boe) 20
Oil Discovery at Taza, Kurdistan: Appraisal Underway TURKEY TURKEY Caspian Tawke Sea 37°N KURDISTAN REGION Shaikan OF IRAQ Erbil Office IRAN Sulimaniyah Office KURDISTAN SYRIA Taza PSC IRAN 36°N Taq Taq JORDAN IRAQ Chemchemal Miran West Kirkuk IRAQ Persian Gulf SAUDI ARABIA Jambur Kor Mor Taza PSC Red Hamrin Sea Chia Surkh 21
Oil Discovery at Taza, Kurdistan: Appraisal Underway » Taza 2 appraisal well has found oil in Jeribe, Dhiban and Euphrates Formations. Presently drilling towards deeper Shiranish Formation, not Kor Mor Jambur penetrated by Taza 1 Taza 2 » Taza 3, to appraise southern part of field, planned to spud in 3Q14, plus two more wells and 3D Taza 5 Proposed Taza 4 Proposed Taza seismic Taza 1ST2 » Plan to install Early Production Facility (EPF) on SE Jambur Taza 3 Proposed one well in 2015 Lead » 3D seismic acquisition underway, including over SE Jambur lead » New export pipeline through Kurdistan to Turkey operational. Operations have not been impacted Pulkhana by recent unrest in Iraq NOTE: Proposed well locations subject to change 22
Positioning for Next Phase of Growth » Major Strategic Review underway to set objectives and programmes for Oil Search over next five years » Review will analyse: – Asset values and ways to capture full value – Balance of asset portfolio to deliver growth projects and capital management initiatives – Company structure, cost base and operating model – Development of our people and organisation, to deliver continued top quartile returns » Results to be communicated to shareholders in 3Q14 23
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