OIL SEARCH Oil Search Limited
ARBN 055 079 868
ASX: OSH | POMSoX: OSH US | ADR: OISHY
www.oilsearch.com
Tunis ErbilSulaymaniyah
TUNISIA IRAQ
Dubai
PAPUA NEW GUINEA
Kutubu Ridge Camp
Port Moresby (Head Office)
AUSTRALIA
Brisbane Sydney
» Established in Papua New Guinea (PNG) in 1929
» 29% interest in world class PNG LNG Project, operated by ExxonMobil, and
~60% interest in all PNG's producing oil fields, operated by OSH
» Pursuing two major LNG growth opportunities - potential PNG LNG expansion and Papua LNG Project. Both among most competitive LNG projects globally
» Material gas exploration upside in PNG
» Oil exploration interests in Middle East/North Africa
» Market capitalisation ~A$11bn (~US$8bn)
» Listed on ASX (Share Code: OSH) and POMSOX, plus US ADR programme (Share Code: OISHY)
» Strong production from quality assets:
PNG LNG Project performing above expectations
Oil assets performing well
» Solid balance sheet with liquidity of ~US$1.6bn
» LNG growth projects advancing:
PNG LNG production optimisation/debottlenecking underway
P'nyang drilling in 2016 planned to underwrite potential Train 3
Papua LNG Project expected to advance to FEED in 2016
Major near-field exploration programme planned for 2016+
» Business Optimisation Programme aimed at streamlining organisation:
Focus on costs and prioritisation of capital
Significant reduction in opex and increase in efficiencies
» WPL one-for-four takeover proposal rejected by OSH Board:
Opportunistic
Grossly undervalues existing assets/growth
Few synergies
Would change investment profile
OSH not stressed and able to fully fund growth projects
P'nyang
Proposed Juha Facility
Hides Gas Conditioning Plant
& Komo Airfield
Juha
Kimu
PPL260
Juha North
Kutubu
SE Gobe Barikewa
Hides
Angore
Moran Agogo
Elk/Antelope
Gobe Main
PNG LNG Project Gas Fields
PNG LNG Project Facilities
Non PNG LNG
Gas/Oil Fields
Papua New Guinea
Hides
Kutubu
Port Moresby
OSH Operated OSH Interest Oil Pipeline Oil Facility
Oil Field Gas Pipeline Gas Facility Gas Field
Condensate Pipeline
Uramu
Hagana
Flinders
LNG Plant
Morgan Stanley UK Conference - September/October 2015
PNG LNG Project - producing consistently above nameplate capacity» 52 LNG cargoes exported in 1H15, >125 cargoes loaded to date since Project start-up in 2014
» Annualised production in 1H15 of ~7.1 MTPA, compared to nameplate capacity of 6.9 MTPA:
- Supported by strong upstream deliverability (including OSH- operated gas supply) and LNG plant reliability
» Project has established excellent reputation as a reliable gas supplier
» Current focus is on production optimisation / debottlenecking:
CHINA
Qingdao LNG Terminal
TAIWAN
Yung-An LNG Terminal
Senboku LNG
Terminal
JAPAN
Futtsu LNG Terminal
- Already delivering substantial incremental value, with further upside potential
» Final components of foundation development (Angore drilling, tie-in of Hides F1) expected to be completed in 2015
Located close to Asian LNG markets
PNG
» Full contractual volumes being taken, with contract ramp-up underway to plateau of 6.6 MTPA in 2Q16
» Good demand for spot volumes, >85% of spot cargoes have been sold to contract customers
» PNG LNG product well received by market, reflecting:
High heating value gas - well suited to Asian reticulation network
Proximity to Asian LNG markets
Diversification source
30 Long-term contracts
25 Spot and medium-term 20
LNG cargoes sold since PNG LNG start-up
15
10
5
0
2Q14 3Q14 4Q14 1Q15 2Q15
» 2015 production guidance increased to 27 - 29 mmboe, comprising:
Net Production (mmboe)
30
27 - 29
6.3 - 6.9 mmboe from operated oil fields and Hides GTE* 25
21 - 22 mmboe from PNG LNG Project
» 2H15 focus items : 20
Ongoing oil production optimisation initiatives, with focus on process safety, reliability and well integrity 15
Continued delivery of Kutubu, Gobe Main and SE Gobe (third-party) gas to PNG LNG Project,
operation of liquids export system via Kumul Marine 10
Terminal
Support operator in maximising PNG LNG 5
production opportunities through optimisation / debottlenecking
0
PNG LNG (T1 + T2)
Hides GTE SE Mananda Gobe
Moran Kutubu
6.69 6.386.74
19.27
21 - 22
6.3 - 6.9
* Includes SE Gobe gas sales
2011 2012 2013 2014 2015F
1 LNG sales products at outlet of plant, post fuel, flare and shrinkage 2 Oil forecast assumes successful development drilling in 2015
3 Gas:oil conversion rate used in 2014 & 2015: 5,100 scf = 1 barrel of oil equivalent (prior years 6,000 scf/boe)
» OSH holds material positions in NW Hub (P'nyang field) and Gulf Hub (Elk-Antelope field), likely sources of gas for next phase of development
» Both PNG LNG expansion and Papua LNG Project in lowest quartile for costs globally
P'nyang
Juha
Hides
Angore
Moran
Agogo
Kutubu
OSH Operated OSH Interest Oil Pipeline Oil Field
Gas Pipeline Gas Field
NW HUB PNG LNG FIELDS
and remain economically attractive
Mananda SE Mananda
Gobe Main
GULF
» Delivery of near-term trains is common objective for industry, Government and communities
» OSH well positioned to play key role to ensure optimum development
» Multiple exploration opportunities remain to
Kimu
SE Gobe
Barikewa
Uramu
Gulf of Papua
Elk-Antelope
Hagana Flinders
HUB
supply further gas
PNG LNG facility
P'nyang
» MoU signed in January 2015 by ExxonMobil (as operator of PNG LNG and PRL 3) and PNG Government sets schedule to develop P'nyang gas field, to underpin:
Papua New Guinea
Hides
Kutubu
Port Moresby
Strickland
Juha
Muruk
Hides
Angore
PNG LNG Project expansion (high value debottlenecking and potential third LNG train)
Delivery of domestic power to PNG
» PDL application under review from Government
» Commencement of delivery of up to 25MW of interruptible electricity from PNG LNG plant to PNG Power in Port Moresby in July supported Pacific Games and satisfied key commitment of MoU
PRL 3 | WI % |
ExxonMobil affiliates (operator Esso PNG P'nyang Ltd) | 49.0 |
Oil Search | 38.5 |
JX Nippon | 12.5 |
» PNG LNG expansion identified by ExxonMobil as 'very well positioned to compete' globally*
- Supported by successful delivery and performance of foundation Project, competitive cost structure, stable and transparent fiscal terms
* ExxonMobil 2Q 2015 earnings conference call
P'nyang 2X P'nyang 1X P'nyang South 2
PPL 421 PPL 294/APPL 507
PPL 269 PRL 3
P'nyang 2X P'nyang 1X
P'nyang South 1
P'nyang South 2
PPL 464 PPL395
0 4 Km
» Preparatory work underway for P'nyang South 2 appraisal well:
Location in SE of structure agreed by PRL 3 JV
Assuming successful appraisal, OSH expects material increase in current OSH 1C and 2C resources
To be drilled 1H 2016, using OSH's Rig 103 (following completion of PRL 15 appraisal programme)
» Once PDL awarded, P'nyang will be integrated into PNG LNG Foundation Project and included in subsequent redetermination process
CPF
Papua New Guinea
Hides
» Potential second world-scale LNG development in PNG
» Significant progress achieved in 1H15:
0 80 Km
Kutubu
Elk/Antelope
Port Moresby
Locations of key infrastructure sites agreed by PRL 15 JV and supported by Government
Commencement of financing - financial, tax and legal advisors appointed
Transfer of operatorship to Total SA effective 1 August 2015.
Port Moresby
PNG LNG Plant
Proposed Papua LNG Plant Site
Pipeline Route
PNG LNG
Facility
Plant Location
Total personnel progressively being mobilised to Port Moresby
» Selection of final development concept after completion of appraisal programme and resource evaluation:
LNG plant location provides opportunity for capital savings
» Entry to Basis of Design, including decision on one or two trains, in 1H16 followed by FEED in 2H16:
Potential for early works in 2017
» Development can provide material benefits for Gulf communities
PRL 15 | WI % |
Total | 40.1 |
InterOil | 36.5 |
Oil Search | 22.8 |
Minorities | 0.5 |
Source: Google Earth
Elk-Antelope appraisal programme to be completed 2H15, certification 2Q16» Results of appraisal programme to date have been at upper end of OSH's expectations:
- Antelope 4 extended good quality reservoir to south
Antelope 5
0 4 Km
Antelope 6
Antelope 4 ST1 Antelope South*
Antelope 5 testing confirmed substantial resource base, excellent reservoir quality and deliverability and pressure communication between A5 and A1
» 2H15 appraisal programme:
Antelope 4 ST1 sidetrack spudded in late August using OSH Rig 103.
Encountered reservoir 36 metres above prognosis, expected to reach TD shortly
Antelope 6 site preparation on eastern flank well advanced, expected to spud 4Q15
Interference testing planned post Antelope 4 ST1 completion
» Elk-Antelope field has sufficient resources to underpin one 5 MTPA LNG train (basis for entry into PRL 15) with ~5 tcf 2P, or depending on outcome of appraisal, potentially two PNG LNG-sized trains requiring >7 tcf 2P
» Resource base >7 tcf would deliver higher returning LNG project (PNG LNG 'look-alike') and trigger certification payments (US$0.775/mcf for volumes >7 tcf based on average of two certifiers - Gaffney Cline and NSAI)
- OSH certification process due for completion mid 2Q16
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