UK Oil and Gas Investor Forum Bank of America Merrill Lynch April 2012 1 1 Oil Search Profile Established in Papua New Guinea (PNG) in 1929 Operates all of PNG’s producing oil and gas fields. Current gross production ~33,500 boepd, net share ~18,500 boepd At December 2011, proven reserves were 330 mmboe, proven and probable 553 mmboe plus 318 mmboe 2C resources, taking 2P reserves and 2C resources to 870 mmboe PNG Government is largest shareholder with 15% . In early 2009, Govt issued exchangeable bonds over shares to IPIC of Abu Dhabi 29% interest in PNG LNG Project, world scale LNG project operated by ExxonMobil. Project in construction, first LNG sales expected 2014 Exploration interests in PNG and Middle East/North Africa Market capitalisation ~US$9 billion. Listed on ASX (Share Code OSH) and POMSOX, plus ADR programme (Share Code OISHY) 2
Key Oil and Gas Fields, PNG Madang Angore Oil Field PPL2 6 0 Gas Field P’nyang Porgora PRL3 W abag Gold Mine Prospect Juha 2 6 0 Hides Oil Pipeline Trapia PDL8 Proposed Proposed Juha PDL9 PRL1 1 Mt. Hagan PDL1 Gas Pipeline Facility Moran PPL2 7 7 Kundiaw a OSH Facility 6 °S PRL0 2 PDL6 Kiunga PDL7 PPL2 3 3 PDL5 LNG Facility Mendi Agogo 2 3 3 Hides Major Road PPL2 1 9 Moro Airport Conditioning Plant PPL2 3 9 & Kom o Airstrip Kutubu PDL2 PPL2 7 7 PPL3 3 9 Mananda 5 APPL3 8 6 PRL1 4 SE Mananda Gobe/ SE Gobe Lae PDL4 3 3 8 3 3 9 PDL3 3 3 9 7 °S 2 4 0 PRL0 9 3 3 8 2 4 0 Elk/ Antelope Barikew a PRL0 8 3 3 8 Kim u PPL2 4 0 3 3 9 Kopi W harf PNG LNG Project PPL3 3 8 Gas Resources 3 3 9 Uram u PPL3 3 9 Kopi Scraper PNG LNG Project 1 0 0 km PRL1 0 Station New Facilities Kerem a 3 3 9 3 3 9 PPL3 1 2 8 °S Non PNG LNG Kum ul Term inal Gas Resources PPL2 7 6 PPL2 3 4 Exploration Gas Resources APPL3 8 5 PPL2 4 4 Flinders LNG Facility 9 °S Daru PRL0 1 Pandora Port Moresby 3 1 4 1 °E 1 4 2 °E 1 4 3 °E 1 4 4 °E 1 4 5 °E 1 4 6 °E 1 4 7 °E OSH Strategies to Create Value Optimise current oil and gas production: Through improved efficiencies and pursuit of near field opportunities Maximise value of PNG LNG Project (T1 & T2): By utilising in-country knowledge to assist Operator Develop LNG and other gas expansion opportunities: Build gas resources for both PNG LNG expansion and standalone LNG project/s Measured programme of other growth options: Optimise exploration portfolio Ensure Oil Search’s Sustainability: Operate business in transparent and sustainable manner to ensure long term operating stability and enhance ‘social licence to operate’ 4
PNG LNG Project Overview Hides W abag Oil Field Wells Gas Field Prospect Juha Facility Mt. Hagan Oil Pipeline Hides Gas Conditioning Plant Proposed 6 °S Kundiaw a Gas Pipeline Goroka Mendi Komo Airfield OSH Facility LNG Facility Kutubu CPF Major Road Gobe PF Lae 7 °S Kopi Wharf Onshore pipeline and Infrastructure Offshore pipeline 8 °S Kerem a Kum ul Term inal 1 0 0 km 9 °S Daru LNG Facility Port Moresby 1 4 3 °E 1 4 4 °E 1 4 5 °E 1 4 5 °E 1 4 6 °E 1 4 7 °E 5 PNG LNG Project Overview 6.6 MTPA, 2 train development, operated by ExxonMobil Over its 30-year life, PNG LNG expected to produce over 9 tcf of gas and 200+ million barrels of associated liquids Initial Equities: ExxonMobil - 33.2% Oil Search - 29.0% National Petroleum Company of PNG (PNG Government) -16.8% Santos - 13.5% Nippon Oil - 4.7% MRDC (PNG Landowners) - 2.8% Fully contracted to Asian buyers, with continuing strong market interest Sinopec (China) ~2.0 MTPA TEPCO (Japan) ~ 1.8 MTPA Osaka Gas (Japan) ~1.5 MTPA CPC (Taiwan) ~ 1.2 MTPA 6
PNG LNG Project Overview Main EPC contractors: LNG Plant: Chiyoda/JGC Offshore Pipeline Saipem Hides Gas Plant CBI/Clough JV Onshore Pipeline Spiecapag Infrastructure McConnell Dowell/CCC JV Early Works Clough/Curtain JV Associated Gas (OSH only) Jacobs (formerly Aker Solutions) Different labour environment to Australian LNG projects Two years into four-year construction period. First LNG sales expected 2014, capital cost US$15.7 billion 7 Timetable • Continued early w orks • Com plete AG • Detailed design • Continue onshore • Order long leads and pipe lay place purchase orders • Com plete offshore • Open supply routes pipe lay First Gas from • Contractor m obilisation • Start Hides plant Train 1 , • Com m ence AG installation then Train 2 construction 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 • Ongoing procurem ent Financial and m obilisation • Com plete pipe lay Close • Airfield construction • Ongoing drilling • Drilling m obilisation • Com plete Hides plant • Start offshore pipeline • Com m ission LNG plant construction w ith Kutubu gas • Onshore line clearing and laying • Start LNG equipm ent installation 8 8
Focus items for 2012 Completion of Komo Airfield construction Structural steel erection, mechanical construction of major equipment at HGCP Continued construction at LNG Plant site including commencement of topside jetty works and tank hydrostatic testing Mechanical completion of offshore pipeline and Kopi / Kutubu sections of onshore pipeline Completion of AG CPF and Gobe plant modifications and PL2 Kumul refurbishment projects, including ready-to-supply commissioning gas status Commencement of development drilling Continued focus on working with government and local communities, maximising opportunities for local content 9 PNG LNG Project Plant Site near Port Moresby 1 0
PNG LNG Plant Site February 2 0 1 1 February 2 0 1 2 1 1 PNG LNG Project – Offshore Pipeline SEMAC I – Offshore pipelay vessel 1 2
PNG LNG Project Onshore Pipeline Pipe w elding team Pipeline route clearing Pipe stringing Pipe burial 1 3 PNG LNG Project – Upstream Hides Gas Conditioning Plant Kom o Airfield and Hides w ell pad access road 1 4
AG and PL 2 Life Extension Projects New Control Room at CPF - com m enced operations in January 2 0 1 2 New CALM Buoy being low ered into position – first offtake March 2 0 1 2 TEG Dehydration Unit installation 1 5 1 5 Growth Activities OSH has embarked on largest drilling programme ever undertaken. Will continue through 2012 into 2013 Multi-tcf risked potential for gas and several hundred millions of barrels of oil potential For gas, pursuing two pronged strategy, focused on converting proven and probable to proven contractable reserves, plus new exploration: PNG LNG Expansion Gulf Area LNG For oil and gas: Continuing near-field exploration in PNG Pursuing high-graded exploration outside PNG Programme has potential to underwrite continued gas commercialisation and ongoing oil production Angore anticline, PNG Highlands 1 6 1 6
P’nyang South 1 Appraisal well successfully discovered gas in southern fault block Sidetrack currently underway to establish gas:water contact and extent of discovery PRL 3: ExxonMobil 49% , Oil Search 38.5% , JX Holdings 12.5% 2011 Hides Seismic Juha Acquisition P’nyang 6 °S Moran Angore South P’nyang 1X Kutubu P’nyang 2X Agogo SE Gobe P’nyang South 1 8 °S 1 0 0 km 1 4 2 °E 1 4 4 °E 1 7 Trapia 1 1 0 km Juha Hides Trapia PPL 277 P’nyang South 6 °S Moran Angore Kutubu SE Agogo Gobe PPL 277 8 °S 1 0 0 km 1 4 2 °E 1 4 4 °E Trapia exploration well scheduled to follow P’nyang South PRL 11: Oil Search 52.5% , ExxonMobil 47.5% Series of prospects in area with multi-tcf potential 2D seismic programme in 2012/13 to further mature prospects Recent acquisition of adjacent licence, PPL 277, 50:50 with ExxonMobil 1 8
PDL 1, PDL 7 and PDL 8 Hides and Angore Fields Hides development drilling programme: Scheduled to commence PDL 1 – Hides Field in mid 2012, with GWC 1 0 New W ells GTE PL 1 Hides GTE Plant Drilling 2 0 1 2 + well planned for early in drilling sequence Hides Nogoli Cam p GWC well has potential to increase overall Hides resource volume significantly Drilling timing adjusted to PDL 8 – Angore Field accommodate Project 2 New W ells critical path optimisation PDL 1 ExxonMobil 36.81% Oil Search 16.66% Santos 24.03% PDL 7 – South Hides 20.50% PNG Govt Gas Resources Gigira Ltd.(L/O) 2.00% Hides Gas Conditioning Plant Construction 2 0 1 2 / 1 3 PDL 7 ExxonMobil 36.81% Oil Search 40.69% PNG Govt 20.50% Kom o Airstrip Gas Resources Hides No.4 Ltd.(L/O) 2.00% PDL 8 ExxonMobil 36.812% Oil Search 40.69% PNG Govt 20.50% 1 0 km Gas Resources Angore Ltd. (L/O) 2.00% 1 9 Further Resources from Oil Fields Reserves and deliverability review 6 °S Moran underway for oil and gas in existing oil Kutubu SE Mananda fields Agogo Gobe Will provide optimal production management plan post commencement of gas production for PNG LNG Number of recent discoveries, identification of areas for potential new 8 °S 1 0 0 km reserves and success in gas conservation 1 4 4 °E 1 4 2 °E ahead of original prognosis CPF, APF, GPF Flare History 7 0 will provide further Daily Average ( m m scf/ d) resources for PNG LNG 6 0 5 0 Potential upside for both gas and ongoing oil 4 0 production 3 0 2 0 1 0 PNG LNG Project Sanction Forecast 0 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 F 2 0
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