PNG Energy conference

7/30/2019 PNG Energy conference

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O I L S E A R C H L I M I T E DO I L S E A R C H L I M I T E D

PNG Oil ProductionA Cont inued Great Value Driver

PNG Mining & Petroleum Investment ConferenceDecember 2012


Safety Performance

2

Total Recordable Injury Frequency Rate of 3.20 in 1H12, unacceptablePerformance has improved signifi cant ly in 2H12

0

1

2

3

4

5

6

7

8

9

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

T

RI

/

1,

000,

000

Hours

Aus t ra l ian Com pan ies(APPEA)

I n t e r n a t i o n a lCompan ies

(OGP)

1.761.68

1.751.851.96

1.16

6.0

5.2

Oil Search


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AustralianBenchmarking

Total Recordable Injury Frequency Rate Data for 2011per Million Hours Worked (All Reported Data)

3

F letcher Bu i ld ing

Bramb les

Treasury Wine Est .

OZ Minerals

Downer EDI

Un i ted Group

Or ig in

I n c i t ec P iv o t

Boar t Longyear

Contact Energy

James Hardie

Stock land

Transf ie ld

Newcres t

AW E

BHP Bi l l i ton

Amcor

Santos

Or ica

Woods ide

Oi l Search

Source: Company data, Cit i Investment Research and Analysis.Note: TRIFR Total Recordable Injury Frequency Rate per 1 mill ion hours worked

0 5 10 15 20 25 30 35 40 45 50

CSR

Qantas

Wesfa rmers

Wor leyParsons

Caltex

PanAust

AGL Energy

Monade lphous

Hast ie Group

FY11Dec YE

Aust ralian Safety Benchmarking

3

O I L S E A R C H L I M I T E DO I L S E A R C H L I M I T E D4

Ensuring a Sustainable Future

Oil Search considers that ensuring a sustainable future for the Company andthe social and physical environment around our operations is paramount

Our PNG Oil Operat ions have been cert if ied as compliant wi th ISO 14001standard for envi ronmental management since 2009 We have recent lysuccessfully passed our first recertification audit

We are currently f inalising approval of a number of proj ects in t heEuropean Carbon Emissions Reduction (CER) market Carbon Credits

We are working closely with our host communities and the PNG Governmenton ensuring equity and t ransparency in t he community benefi ts dist ribut ionprocesses

Oil Search cont inues to engage wi th project area communit ies to managepotent ial environmental impacts and provide them wi th opt ions for asustainable future


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Our Production Environment

2

34

OWC ~2830mTVDCD

Remote, mountainous terrain Unreliable seismic Complex geology

5


Oil Production Performance

Since assuming Operatorship in 2003 Oil Search has dril led 35 developmentand near-f ield wells without a dry hole

This in t urn has added great ly t o; t he wealth of PNG, t he revenues of t hecommunity, the growth of the Company and the value delivered to all OilLicencees


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Gas Conservation Performance

7


How Has This Been Achieved?

Everyone focuses on the things that are most important to them

PNG Oil Production is very important to Oil Search It is our sole source ofrevenue and the engine t hat has fuelled the Company s stellar growth overthe past ten years

From 2002 we focused on pull ing together the best team of subsurfaceengineers and geoscient ists available They have been the archit ects ofthe success

This has been coupled wi th a great f ield product ion & maintenance teamand a wor ld class dril li ng team PNG is one of the wor ld s most challengingenvironments in both t hese areas!

This great ski ll base combined wit h high levels of commit ment and a lot ofplain hard work has made this outstanding achievement a reali ty

We expect PNG oil production to remain f lat at ~30,000 Bbls/day unt il end2014

88


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T i me

Prod

uction

Achieving Predictabil ity in Product ion

11


W e l l d o w n t i m e f o r

i n c re m e n t a l w o rk

P l an n e d f a c i l i t y d o w n t i m e

UMD a l lowance

T ime

Production

Schedule

T ime

Key Components of the Forecast

N ew Op p o r t u n i t y

I n i t i a l R a t e

D e cl i n e (% )

T ime

Production Pla teau

Base Dec l ine

Produc t ion Defer ra ls

T ime

Production

Product ion Forecast

4 2 4I t e ra t i o n 1

W ell A W el l B W ell C

3 4 4

3

I t e ra t i o n 2

W el l D

2

T ime

Production

P90 Ra tes

P5 0 Ra te s P1 0 Ra tes

I n c re a s i n g u n c e r t a i n t y

- Excel- VBA

- @Risk

12


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UMD Events Allowance

10.0% 80.0% 10.0%

1.20% 5.63%

0

5

10

15

20

25

UMD allowance distribution

Pert(0,0.0265,0.092)

Minimum 0%

Maximum 9.20%

Mean 3.30%

Mode 2.65%

Median 3.15%

10% 1.20%

90% 5.63%

Forecast UMD A l lowance:

MEAN = 3.3%

MODE or "most

likely" = 2.7%

P10 = 1.2% P90 = 5.6%

P50 = 3.2%

year forecast2004 -2.5%

2005 -6.5%

2006 -9.2%

2007 -2.3%

2008 -1.4%

2009 -2.8%

2010 0.0%

2011 -1.5%

min 0.0%

mean -3.3%

max -9.2%

Historical UMD events

Forecast UMD allowance

13


Results and Business Integration

Prior to probabil ist ic modell ing, actual product ion was nearly 10% belowforecast for 3 consecutive years

Since implement ing probabil istic modell ing, the forecast ing has beensignif icant ly more accurate wi th actual product ion being within 4% for 3years

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Focus for the Future

World class safety performance is always at the top of t he li st

Delivering our work programme to keep production flat through to First Gasis a key prior it y

The transit ioning of our PNG product ion operations from an oil business to areliable gas producer is focus it em for 2013 and beyond:

Separate team established to steward this process

Many agreements and protocols being developed wit h t he PNG LNGProject

Management systems and operating procedures being updated andupgraded

Continue to pursue incremental barrels and near-f ield opportunit ies

Fine tuning the associated gas deplet ion st rategy to ensure that l iquidproduction and total value is maximised through the long term

Ensuring we have the capacity within the PNG operations teams to supportthe broader opportunit ies emerging for the Company We want to exportPapua New Guinean expert ise to t he wor ld!

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Oil Appraisal - Mananda 6

Mananda 6 appraisal wel l i s located ~5km south east and ~140m up-dip f romthe Mananda 5 discovery

Cont ingent upon the result s of Mananda 6, a down dip side t rack could bedril led to const rain f luid contacts

Cont ingent upon the results of Mananda 6 and any associated side t racks,Mananda 7 could be dri lled from the Mananda 6 well pad

Appraisal wel l, Mananda 6, planned to spud1Q13

16

SE MANANDA

MORAN

AGOGO

Mananda 5

2012

Seismic

Mananda 6Proposed Location

5 k m

16


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Questions

Disclaimer

DISCLAIMER

While every eff ort is made to provide accurate and complete information, Oil Search Limit ed doesnot warr ant that t he informat ion in t his presentati on is fr ee from err ors or omissions or is suit ablefor it s int ended 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 t hispresentation. All information in t his presentation is subject to change wit hout notice.

This presentation also contains forward-looking statements which are subject to particular risksassociated wit h t he oil and gas indust ry. Oil Search Limit ed believes there are reasonable groundsfor the expectations on which the statements are based. However actual outcomes could differmaterially due to a range of factors including oil and gas prices, demand for oil, currencyfluctuations, dri lli ng result s, f ield performance, the timing of well work-overs and fielddevelopment, reserves deplet ion, progress on gas commercialisat ion and f iscal and othergovernment issues and approvals.

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PNG Energy conference