OIL SEARCH LIMITED - Changing Face of Oil Search
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OIL SEARCH LIMITED
1
Changing Face of Oil Search
PNG LNG Project over 85% complete (end April),
material 20+ year cash flow stream approaching
LNG expansion opportunities being matured, with new
resources available
New gas play confirmed in Gulf of Papua, with gas
discovery at Flinders and further wells to come
Oil discovery at Mananda 6, testing underway. Results to
date encouraging for trend, detailed development
optimisation studies taking place
Taza oil discovery in Kurdistan moving to appraisal
phase, with extended well test being planned
Active drilling and development programme still to come
through 2013 and 2014
2
Core Strategies Have Delivered Steady
Share Price Appreciation – More to Come
Share price (A$) PNG LNG FID
8 Acquisition of Chevron Manage transition to
PNG LNG Project
Texaco’s PNG assets
Assume Operatorship
7 Merger of Oil
Search & Orogen
6
5
4
3
2
1
0
Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13
2 January 2003 – 10 June 2013
3
Operating Safely Is Our First Priority
Total Recordable Injury Frequency Rate Data for 2012
per Million Hours Worked (All Reported Data)
Brambles
Wesfarmers
Qantas
Bendigo and Adelaide Bank
Asciano
CSR
Boral
Ridley Corp.
Stockland
Treasury Wine Est.
AWE
Leighton
OZ Minerals
Iluka Resources
SP AusNet
Fortescue Metals
Fletcher Building
James Hardie
Transfield
Origin Energy
Boart Longyear
UGL
Incitec Pivot
AGL Energy
Downer EDI
Monadelphous
Lynas Corp.
Transurban
Santos
BHP Billiton
Woodside
Newcrest
Amcor
Nufarm
Caltex
Oil Search Jun YE
Orica Dec YE
ResMed
PanAust
Mar/Sep YE
WorleyParsons
0 5 10 15 20 25 30 35 40 45
Source: Company data, Citi Investment Research and Analysis
Note: TRIFR – Total Recordable Injury Frequency Rate per million hours worked
4
Key Oil and Gas Fields, PNG
Madang
PPL260 Angore
P’nyang PRL3 Porgora Wabag
Gold Mine
Juha 260 Hides
PDL8
Proposed Juha PDL9 PRL11
Facility PDL1 Mt. Hagen
PPL277 Moran
6°S Kundiawa
PRL02 PDL6 Goroka
Kiunga PDL7 233 PDL5
Mendi
233 Agogo
Hides Gas
PPL219
Conditioning Plant Moro Airport
& Komo Airfield
PDL2
Kutubu Gobe Main PPL339
Mananda 5 PRL14 PPL277
Mananda 6 Lae
338 339
PDL4
7°S
SE Mananda PDL3 339
PRL09 338
Barikewa Elk/Antelope
PRL08 338
Kimu 339 Oil Field
Kopi Wharf
SE Gobe PPL338
Gas Field
339
Kopi Uramu
Scraper
PPL339
Prospect
PRL10
Station
Oil Pipeline
PPL312 Kerema
PNG LNG Project
339 339
8°S
Kumul Terminal PNG LNG
Gas Resources PPL276 Gas Pipeline
PPL234
PNG LNG Project OSH Facility
New Facilities
PPL385
PPL244 Hagana PNG LNG
Project Facility
Non PNG LNG Flinders
Kidukidu LNG Facility
Gas Resources Major Road
9°S
Exploration Daru 100km
Gas Resources
Port Moresby
141°E 142°E 143°E 144°E 145°E 146°E 147°E
5
PNG LNG Project Overview
*Existing Facilities
Over 85% complete Juha
Gas Field Juha Production Facility
250 Mcfd
Project remains on track for 60km x 14”
gas line
60km x 8”
liquids line
first LNG sales in 2014
Hides
Gas Field Hides Gas Conditioning Plant
960 Mcfd
Angore
Have passed peak for logistics Gas Field
109 km x 8”
condensate line
and workforce
Agogo/Moran*
Revised budget of US$19.0 bn 292 km x 32” gas Kutubu*
pipeline onshore
Gobe*
Existing 270 km x 20”
crude oil export line
LNG Facility
6.9 MTPA
407 km x 34” subsea gas pipeline
Gulf of Papua Port Moresby
6
PNG LNG Plant Site
Preparations underway for
receipt of commissioning
gas
LNG Facility
PNG LNG Trains 1&2
Storage tank Jetty
7
PNG LNG Offshore and Onshore
Pipelines
Offshore pipelay Offshore pipeline completed
and hydrotested
Onshore
Onshore pipeline clearing, Pipeline
laying and welding underway
Offshore
between Kutubu and Hides Pipeline
Pipeline Transportation
8
Associated Gas/PL 2 Life
Extension
Associated Gas (oil fields) readying
for supply of commissioning gas in
2013
Kutubu
Kumul
TEG Dehydration Unit commissioning at CPF
Kumul Marine Terminal
New CALM Buoy at Kumul
9
PNG LNG Project - Upstream
Hides Gas Conditioning Plant (HGCP)
HGCP
April 2013
HGCP foundations completed and erection of structural steel substantially complete
10
PNG LNG Project - Drilling
Hides GTE Plant
PDL 1/7 – Hides Field
8 New Production Wells
Hides Nogoli Camp
PDL 8 – Angore Field
2 New Wells
Hides Gas Conditioning Plant
10km Komo Airfield
Two new build rigs (Rigs 702 and 703) both
operational
Rig 702 at well pad B – development well B1
complete, B2 drilling ahead
Rig 703 at well pad C – top hole section of both
wells complete, drilling ahead on C1
Access roads and wellpad construction complete
11
PNG LNG Project
Timetable Unchanged
» Continued early works » Continue onshore
» Detailed design pipe lay
» Order long leads and » Complete offshore pipe
place purchase orders lay
» Open supply routes » Start Hides plant
» Contractor mobilisation installation First Gas from
» Commence AG » Start Hides drilling Train 1,
construction » Complete key AG items then Train 2
2010 2011 2012 2013 2014
Financial » Ongoing procurement » Complete pipe lay
Close and mobilisation » Ongoing drilling
» Airfield construction » Construction of
» Drilling mobilisation HGCP
» Start offshore » Commission LNG
pipeline plant with Kutubu
construction gas
» Onshore line clearing
and laying
» Start LNG equipment
installation
12
Gas Growth - PNG Highlands
PPL260 PNG LNG Project
Gas Resources
Comprehensive exploration
PRL3
Hides Non PNG LNG Gas and appraisal in PNG
Juha North Resources
Highlands, to fully understand
Wabag
260
P’nyang
Juha PDL9
PDL8 PRL11
Angore
gas resource picture
PDL1 Mt. Hagen
Moran
6°S
Hides Gas
PRL02
PPL233
PDL6 PDL5 Significant progress in 2012
with discovery of gas at
PDL7
Mendi
Conditioning Plant PPL233
& Komo Airfield
PPL219
Agogo PDL2 Kutubu
PPL277
Gobe Main P’nyang South
SE Gobe
PDL4
PRL14
PPL277 Drilling ongoing at Hides
7°S
PDL3
PRL09
Iehi/Cobra
338
Seismic underway at P’nyang
Kimu
PRL08
Barikewa and Juha North
338
100km
8°S
Kumul Terminal
142°E 143°E 144°E
13
P’nyang Gas Field
PRL 3 JV (OSH 38.5%, ExxonMobil 49.0%, JX Nippon 12.5%) concept selection studies expected to
be finalised in 2013
Oil Search estimates total 2C gas resources in P’nyang field of 2.5 – 3.0 tcf
Additional seismic in PRL 3 underway, to support potential development
To maintain PRL 3, production development licence application must be submitted to PNG
Government in 2015
Juha
5km 100km
Hides
Angore
P’nyang
6°S
Moran
Kutubu
Agogo
Gobe
8°S
142°E 144°E
14
InterOil – ExxonMobil Proposed
Development of PRL 15
PPL339 InterOil and JV partner, Pacific LNG
Group, have entered exclusive
negotiations with ExxonMobil on
PPL277
development of PRL 15
338 339 PRL 15 comprises Elk and Antelope fields
Triceratops
in PNG Gulf Province
7°S
338
339
Any agreement is subject to Government
PRL 15 approval
338 Elk / Antelope
339 Items under consideration include:
InterOil and Pacific LNG selling ExxonMobil
PPL338
interest in PRL 15 sufficient to supply gas to
339
develop additional LNG train at Konebada
(PNG LNG) site
PRL10
ExxonMobil will fund drilling of additional
delineation wells in Elk and Antelope fields,
PPL339 followed by recertification of resource
PPL312 Kerema
8°S
50km
Kumul Terminal
145°E 146°E
15
Gulf of Papua
Flinders 1 gas discovery
Gas discovered in Flinders 1 in PPL 244 7°S Triceratpps
Elk/Antelope
100km
(OSH 40%, Total 40%, Nippon 20%), first 2D Seismic
2011 Lines
well in new OSH-operated offshore PNG
Gulf programme Uramu
Kerema
8°S
Kumul Terminal
5-10 metre gas column at top of thick, 2012 3D
Seismic
2011 3D
Region
high net:gross, Pliocene age turbidite Seismic
Regions
sandstone package, with substantial Flinders
updip potential 9°S
LNG Facility
Results de-risk key uncertainties of 144°E 145°E 146°E Port Moresby
offshore Gulf play: Flinders 1 Hagana 1
Good quality reservoir
Pleistocene
Hydrocarbon charge present
Pliocene Hagana
Miocene
Flinders
Jurassic & Cretaceous
Pasca
Triassic & older 50km
Ridge
16
Offshore Gulf Forward Programme
Flinders result will be used to
recalibrate seismic data and update
Gulf prospect portfolio, with over 30
opportunities identified across multiple
play types
Hagana Second well, Hagana 1 in PPL 244,
Prospect
recently commenced drilling. Stacked
Kidukidu
objectives, mean prospective resource
Prospect Flinders 1.1 tcf
Gas Discovery
Kidukidu 1 Hagana 1 Possible third well, Kidukidu, in PPL
244/PPL 385. Mean prospective
Pleistocene
resource of 1.3 tcf
Pliocene
Miocene
Jurassic & Cretaceous
Pasca
Triassic & older 50km
Ridge
17
Onshore Gulf of Papua
PPL339 Seismic programme in
2D Seismic PPL 338 underway as part
2013 Lines
of Oil Search farm-in
option, covering potential
PPL277
338 339 extension of Triceratops
Triceratops discovery
7°S
339
338
Elk/Antelope Follows acquisition of
338 gravity gradiometry data
339
Subject to results of
seismic, OSH will decide
PPL338
339
whether to take up
PRL10 equity and drill well
PPL339
PPL312
8°S
50km
Kumul Terminal
145°E 146°E
18
Adding Value to PNG’s Oil Fields
Since Oil Search assumed operatorship of all PNG’s producing oil fields in 2003:
Reserves increased by 100 million barrels to 550 million barrels (+22%)
Kutubu previously expected to shut down by 2011-12. Life of oil fields extended by 30+ years
80,000
Kutubu SEG Wedge Usano Agogo
Moran Kutubu Moran
70,000 Moran
60,000
Oil Rate (bopd)
50,000
40,000
Oil Search
30,000 takes over
operatorship
20,000
10,000 Decline under Oil Search
previous operator Added Value
operatorship
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
19
Production Outlook (ex-PNG LNG)
Net Production (mmboe)
Active workover and development 9
8.12
7.66 6.7-
Forecast
Hides GTE
drilling programme planned for 2013 8
7
6.69 6.38 6.2 SE Mananda
and 2014, designed to minimise 6
5
production decline profile 4
3
2
Expect 2013 production to be similar 1
0
to 2012. Guidance range of 6.2 – 6.7 2009 2010 2011 2012 2013 2014
mmboe. Production out to first LNG (Forecast)
in 2014 also expected to remain PRL PDL9
02
PPL260
Juha North
largely flat
PDL1 PRL Angore
11
PDL PDL8 PRL PPL277
7 11
6°S
PDL6 PDL5
Juha PDL7
PPL233
Focus on getting ready to deliver Mananda 6
PPL219 PPL233
commissioning gas from Associated SE Mananda
Gas fields into PNG LNG Project
PDL2
Cobra
PDL
4
Delivery of commissioning gas will
PRL
14
PDL PDL
3 4
not impact production performance 7°S
PRL08
Iehi PRL09
Kimu
Barikewa
143°E 144°E
20Mananda 6 Oil Discovery
PPL 219, PNG
Mananda 6 appraisal well, located ~10km from SE Mananda in PPL 219 (OSH 71.25%, JX Nippon
28.75%) discovered gross oil column of ~18 metres in Toro A and ~40 metres in Imburu A and
Digimu sandstones
Preliminary indications suggest series of compartments along Mananda Ridge, with potential for
significant resources
Test on Digimu underway to determine flow rates and possible presence of gas cap
Subject to final testing and evaluation, aim to apply for development licence 2H13, FID 2014,
with field to be tied-in to SE Mananda facilities. First oil targeted for 2015/16
Mananda 6
NE
Mananda 5
Darai
Mananda 6
Ieru
SW
5km
21
MENA Exploration
Existing Middle East/North Africa licences focused on exploration opportunities that have material oil
potential
Long term strategy is to leverage existing strong relationships and skills base to develop international
portfolio. Pace dependent on availability of suitable value-add opportunities, PNG capital commitments
22Taza 1 Oil Discovery,
Taza PSC, Kurdistan
Oil discovered in Taza 1 well (OSH 60%, Total 20%, KRG 20% back-in), with continuous shows over 250 metre
section, covering three reservoir intervals – Jeribe, Dhiban and Euphrates
Test of 150 metre open hole section below Jeribe underway. Flow rates of >4,000 bbls of fluid per day achieved,
including 1,100 bbls per day of oil. Subsequent test flowed 800 bopd oil, 400 bpd water, trending to zero water
Pre-drill estimate of potential resource unchanged at 250-500 mmbbls
Follow-up drilling programme in 2H13, to further appraise Jeribe, Dhiban and Euphrates Formations and drill
Cretaceous Shiranish and possible deeper targets
Jambur
Oil discovery 1953 by IOC.
Taza 1
Reserves in excess of 1BBL
Export via Kirkuk
Euphrates & Qamchuqa Kor Mor
300mscfd gas/condensate to
Local power stations
Oil Discovery by
Kurdamir
IOC 1956. Tested max
2180bopd from Euphrates
Taza Gas condensate discovery
And 700bopd Shiranish Kirkuk & Jaddala Shiranish
Chia Surkh
Shakal
Oil discovery. Tested Tested 11,950 bopd Open hole test of lower zone
from Oligo-Miocene
2700bopd from Jaddala
of Taza 1 well, Kurdistan
Sarqala Euphrates
Gas/Oil discovery
9000bopd from Jeribe
Qamar
Oil Discovery by
IOC 1980 Tested 3km
2000bopd from Jeribe
23
Strong Financial Position
Strong balance sheet, able to fund
Cash (US$m) remaining equity share of PNG LNG
1,289 1,265 Project as well as active exploration and
1,047
development programme
536 488 US$3.06 billion drawn down under PNG
LNG project finance facility
PNG LNG 2012 cost increase :
08 09 10 11 12
To be funded 70:30, debt:equity.
Discussions progressing well to secure
Corporate Facility (US$m) US$1.5bn supplemental debt available
500
under existing project finance agreement
435
363 Large component of exploration spend
304 is discretionary, ability to reduce if
247
necessary
Capacity to raise additional debt funding
at corporate level, should need arise
08 09 10 11 12
24Outlook
Progressive delivery of PNG LNG, in line with schedule and revised budget.
Value steadily increases as cashflows get nearer
Progress on LNG expansion plans, underpinned by P’nyang resource,
augmented by other Highlands gas
Potential third party gas could result in further LNG expansion
Ongoing drilling in Gulf of Papua to follow up Flinders discovery
Test of Mananda oil discovery and possible FID in 2014
Appraisal of Taza oil discovery
2013 &14 oil production expected to be similar to 2012, with natural
decline mitigated by active workover and drilling programme
25
Production Outlook (excl. possible LNG
expansion, Mananda)
Net Production (mmboe)
30
PNG LNG (T1+T2)
Base oil production
25 Hides GTE
SE Mananda
SE Gobe
20 Gobe Main
Moran
Kutubu
15
10 8.12
7.66
6.69 6.38 6.2-6.7
5
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
(Forecast)
26OIL SEARCH LIMITED
27
Appendix 1. Investment Outlook
2,500 US$m
2013 Guidance
US$1.93-2.0bn
Other PP&E
2,000 Production
1,861 US$20 – 30m
PNG LNG US$150 – 170m
Exploration & Evaluation
1,568
1,500 1,364
US1,500 – 1,600m
1,000
586
451
500
US$260 – 300m
0
2008 2009 2010 2011 2012 2013F
28DISCLAIMER
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
Limited 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 also contains 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.
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