2019 FULL YEAR RESULTS 25 February 2020 OIL SEARCH LIMITED | - - PowerPoint PPT Presentation

OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | PNGX: OSH | US ADR: OISHY

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OIL SEARCH 2019 FULL YEAR RESULTS

25 February 2020

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

• missions 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,

• mission 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.

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 2

DISCLAIMER

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 3

EMERGENCY EVACUATION

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 4

AGENDA

Result Agenda Speaker 2019 Highlights Keiran Wulff Safety Performance Keiran Wulff Social Responsibility Keiran Wulff Financial Overview & Performance Stephen Gardiner Production Keiran Wulff Gas Development and PNG Exploration Keiran Wulff Alaska Bruce Dingeman Strategic Review Keiran Wulff Summary Keiran Wulff

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 5

2019 OPERATIONAL AND FINANCIAL HIGHLIGHTS

27.9 mmboe

produced in 2019

4.5 US¢/share

final dividend, taking full year dividend to 9.5 US¢/share, 46% payout ratio

US$12.48/boe

unit production cost (including upstream, pipeline and liquefaction costs)

96%

increase in 2P + 2C liquids reserves and resources, driven by Alaska

US$35.5 million

spent on Oil Search’s sustainable development programmes in PNG and Alaska during 2019

US$312.4 million

NPAT in 2019

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 6

SAFETY FOCUS

◊ 2019 TRIR increased due to incidents associated with remote seismic and marine operations within PNG ◊ Initiatives underway to improve safety processes ◊ One Tier 1 and four Tier 2 Process Safety events in PNG ◊ No Process Safety incidents in Alaska INITIATIVES UNDERWAY TO REFOCUS EFFORTS ON SAFETY

IOPG: Global Oil and Gas Industry Trade Association Tier 1: Hydrocarbon release >500kg during 1-hour period Tier 2: Hydrocarbon release between 50 – 500kg during 1-hour period

2.6 2.5 2.0 1.9 1.5 1.9 1.6 1.7 1.7 1.6 1.5 1.2 1.0 1.0 1.0

• 0.5

1.0 1.5 2.0 2.5 3.0 2012 2013 2014 2015 2016 2017 2018 2019

Total Recordable Incident Rate (per million hours worked)

OSH IOPG

• 2

4 6 8 10 12 14 2012 2013 2014 2015 2016 2017 2018 2019

Tier 1 and 2 Process Safety Events

Tier 1 Tier 2

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 7

RESERVES AND RESOURCES

◊ 2P and 2C oil reserves and resources rose 96% to 497 mmbbl, while 2P and 2C oil and gas reserves and resources increased 17% to 1,682 million barrels of oil equivalent1 (mmboe) ◊ 243.6 mmbbl increase in Alaska 2C resource: ♦ +116.1 mmbbl following technical work, including the 2019 appraisal wells, confirmed by independent auditor, Ryder Scott ♦ +127.5 mmbbl related to exercise of the Armstrong/GMT option ◊ 37.1 bcf (+21%) and 0.7 mmbbl (+41%) increase in Muruk net 2C gas and liquids resource to 211.1 bcf and 2.4 mmbbl, respectively ◊ Based on 2019 production of 27.9 mmboe, 1P reserves life of 15 years, 2P reserves life of 17 years and 2P reserves and 2C resources life of 60 years ◊ Solid platform for growth, with significant further potential 96% INCREASE IN 2P RESERVE AND 2C LIQUIDS RESOURCES, DRIVEN BY ALASKA

End 2019 Reserves and Resources Liquids (mmbbl) Change (%) Gas (bcf) Change (%) Total1 (mmboe) Change (%) 1P Reserves 53.9 (0%) 1,874.1 (3%) 421 (3%) 2P Reserves 67.1 (1%) 2,101.9 (5%) 479 (4%) 2C Resource 430.0 132% 4,635.1 2% 1,202 28% Total 2P + 2C 497.1 96% 6,737.0 (0%) 1,682 17% 1,682 (27) 1,442 141 128

• 200

400 600 800 1,000 1,200 1,400 1,600 1,800 End 2018 Production Discov, Extens, Rev Acqu/Div End 2019 mmboe

2P + 2C Reserves and Resources

1PNG LNG gas volumes converted at 1 mmboe = 5.1 bcf, all other gas volumes converted at 1 mmboe = 6 bcf

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 8

STREAMLINED AND REFRESHED MANAGEMENT TEAM

Keiran Wulff

Managing Director Michael Drew EVP Corporate & General Counsel Bart Lismont EVP Technology & Value Assurance Beth White EVP & President PNG Bruce Dingeman EVP & President Alaska Stephen Gardiner Chief Financial Officer Diego Fettweis Acting EVP Commercial & Strategy

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 9

OPERATING RESPONSIBLY IN ALASKA AND PNG

◊ Operating sustainably has been part of Oil Search’s vision for the past decade ◊ Have been a major socio-economic contributor in PNG for many years and continue to provide multiple services in health, education, power and infrastructure across PNG, both directly and through the Oil Search Foundation ◊ Same corporate ethos has been extended to Alaska, with major focus on working closely with the community to understand their needs and help deliver sustainable solutions ◊ Growing focus globally on climate change. Presents challenges but also opportunities, including gas as a transition fuel, Biomass project, etc ◊ Climate change and energy transition will be a key element of 2020 Strategic Review ◊ Current business is robust – 2018 Climate Change Resilience Report indicates long term resilience of Oil Search’s portfolio, including in a 2°C world. Physical risk study completed in 2019, to be incorporated into future project decisions ◊ Efforts to operate sustainably have been recognised globally: ♦ DJSI, FTSE4Good, STOXX Global ESG Leader, Vigeo World 120, Ethibel EXCELLENCE, Sustainability Yearbook 2020, etc CORE FOCUS FOR OIL SEARCH

OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | PNGX: OSH | US ADR: OISHY

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FINANCIAL PERFORMANCE

“Net profit after tax was US$312.4 million, 8% lower that in 2018, largely due to the fall in global energy prices” (Peter Botten, Oil Search 2019 Full Year Results, 25 February 2020)

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 11

FINANCIAL PERFORMANCE

◊ NPAT of US$312.4 million, down 8% on the prior year ◊ Revenue increased 3% with production increasing (+11%) following the 2018 earthquake, offset by lower realised liquids pricing (-11%) and LNG and gas prices (-5%) ◊ Higher production costs (+20%), depreciation and amortisation (+27%), largely driven by increased production, and an increase in net finance charges (+10%) ◊ Effective tax rate of 30.4%, compared to 32.8% in 2018, primarily driven by lower profit impacting oil field additional profits tax ◊ Other increases include higher recoveries from JVs on capitalised assets, including IFRS 16 Leases, and insurance recoveries relating to prior year work, offset by impairment of licences relinquished in the year ◊ 2019 final dividend of 4.5 US cents per share, taking full year dividend to 9.5 US cents per share (46% payout ratio) WATERFALL NET PROFIT AFTER TAX, 2018 – 2019 (US$M)

242 312 (59) (88) (21)

• 341

49 20 30 40

• 50

100 150 200 250 300 350 400 450 US$m

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 12

PRODUCTION COSTS

◊ Higher production costs in FY19 reflect: ♦ PNG LNG: higher shared costs, including impact of

• ffshore liquids loading facility repairs

♦ PNG Oil and Gas: ongoing earthquake remediation work and deferment of in-field activities from 2018 ♦ No insurance receipt offsets for PNG Oil and Gas- related spend in FY19 ♦ PNG LNG earthquake remediation offset by insurance proceeds, with excess proceeds relating to prior year work taken to Other Income ◊ Higher royalties and gas purchases primarily attributable to increased production volumes ◊ Inventory movements reflect higher year end liftings ◊ Other costs of production impacted by higher pre-FEED and study costs relating to PNG expansion ◊ Unit PNG LNG production costs fell 7% to US$7.20 per boe

(US$m) 2018 2019 Production costs (by unit) PNG LNG 171.0 179.9 PNG Oil & Gas 119.0 168.8 Total production costs 290.0 348.7 Royalties & levies 13.2 15.1 Gas purchases 16.9 22.9 Inventory movements 0.5 5.3 Other costs of production 5.7 15.5 Total cost of production 326.3 407.5

10.41 9.98 2.07 1.53 12.48 11.51 FY19 FY18

Unit Production Cost (US$/boe)

Normalised Workovers/Earthquake/CALM Buoy

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 13

CASH/LIQUIDITY POSITION

◊ 2019 year end liquidity position of US$1.15 billion, comprising US$396.2 million in cash and US$755.7 million in undrawn credit facilities ◊ Net debt position of US$2.98 billion: ♦ US$2.94 billion relating to the PNG LNG facility ♦ US$440 million drawn on corporate facilities, to fund the exercise of the Armstrong/GMT Alaskan option in 3Q19 ♦ Offset by cash and cash equivalents ◊ Cash balance at 31 December 2019: ♦ US$396.2 million in cash, down 34% on end 2018 ♦ Continue to generate strong free cash flow from

• perations

♦ US$450 million one-off outlay in exercising the Armstrong/GMT option ◊ Targeting sell-down of up to 15% of Alaskan interests in 2H20, which will bolster liquidity position CASH BALANCE REFLECTS EXERCISE OF ALASKAN OPTION

910 863 1,015 601 396 748 750 850 900 756

• 200

400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2015 2016 2017 2018 2019 Cash (US$m) Corporate Facilities Available (US$m)

Cash flow waterfall (US$m) Liquidity position (US$m)

396 (363) (450) (143) 601 752

• 200

400 600 800 1,000 1,200 1,400 1,600 Year End 2018 Operations Investing (excl. Alaska Option) Alaska Option Financing Year End 2019 US$m

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 14

2020 FULL YEAR GUIDANCE

Operating Costs Low High Production costs (US$ per boe) 11.00 12.00 Other operating costs1 (US$m) 130 150 Depreciation & amortisation2 (US$ per boe) 12.00 13.00 Capital Costs (US$m) Low High Production 120 140 Development – oil & gas3 PNG 70 90 Alaska 120 140 Total development – oil & gas 190 230 Exploration & evaluation PNG 120 130 Alaska 220 240 Total exploration & evaluation 340 370 Other plant and equipment 55 65 Power 5 40 Total 710 845

◊ Production guidance unchanged from 4Q19 report ◊ Unit production cost guidance also unchanged, with per boe costs expected to be lower than 2019, driven by higher production and lower work programmes, including earthquake remediation work ◊ Exploration and evaluation costs include pre-FEED and FEED spend, but exclude any Alaska Pikka divestment proceeds ◊ E&E and development capital costs are dependent on progress made on the Alaska Pikka and PNG LNG expansion projects, Including the timing of required JV approvals

Production (mmboe) Low High Oil Search-operated 3 5 PNG LNG Project 24 25 Total Production 27.5 29.5

1 Other operating costs includes gas purchase costs, royalties and levies, selling and distribution costs, rig operating costs,

power expense and corporate administration costs (including business development), expenditure related to inventory movements and other expenses.

2 Relates to oil and gas assets that are depreciated on a unit of production basis and excludes assets that are depreciated on

a straight line basis (including right-of-use assets capitalised under IFRS 16 Leases).

3 Excludes any capitalised borrowing costs

OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | PNGX: OSH | US ADR: OISHY

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PRODUCTION

“PNG LNG Project produced 8.5 MT (gross) during 2019, the highest annual production since the Project commenced operations in 2014.” (Peter Botten, Oil Search 4Q19 results, 28 January 2020)

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 16

2019 PRODUCTION

◊ 2019 production of 27.9 mmboe was 11% higher than 2018, which was impacted by the PNG earthquake ◊ PNG LNG Project contributed 25.0 mmboe: ♦ 8.5 MT annual gross production, highest since Project came onstream in 2014 ♦ Peaked at annualised rate of 9.0 MTPA in July, prior to curtailment of volumes due to offshore loading buoy issue during 3Q ◊ Oil Search-operated production contributed 3.0 mmboe: ♦ Kutubu and Moran fields shut in late 3Q/early 4Q due to the loading buoy issue ♦ Production from workovers and infill drilling in Moran and Kutubu fields commenced in late 2019, expected to lift volumes from 1Q20 RECORD FULL YEAR PRODUCTION FROM PNG LNG

3.9 7.4 7.9 8.4 7.5 8.5

• 1.0

2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 2014 2015 2016 2017 2018 2019

MT

19.2 29.0 30.1 30.3 25.2 27.9

• 5.0

10.0 15.0 20.0 25.0 30.0 35.0 2014 2015 2016 2017 2018 2019 mmboe LNG Condensate Crude Gas

Oil Search production (by product) PNG LNG gross production

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 17

OIL SEARCH-OPERATED FIELDS

◊ Successfully completed workovers and two development wells in the Kutubu and Moran fields: ♦ Moran workovers (M4 gas injector well & M9 production well) completed in 2H19 ♦ Moran development well M15 ST2 commenced production in January 2020 at encouraging rates ♦ Kutubu development well and UDT 15 commenced production in January 2020, also at good rates ◊ Kutubu development well IDT 26 to spud March, targeting the Iagifu reservoir in I3X/8X Block ◊ Coil tubing programme planned in 2H20, targeting cost effective, incremental production in Moran and Agogo INFIELD DRILLING AND WORKOVER SUCCESS TO BOOST PRODUCTION IN 2020

Moran 4, 9 IDT 21 UDT 15 Moran 15ST2 Gobe Footwall IDT 26

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 18

2020 PRODUCTION OUTLOOK

◊ Oil Search-operated production continues to recover from the 2018 earthquake: ♦ Targeting ~15,000 bopd by end 2020, subject to development well, coil tubing programme and access and repairs at NW Moran ♦ Rates supported by 2019 drilling programme and 2020 development well IDT 26 ♦ Coil tubing programme planned for 2H20 ♦ Safe and reliable production at all plants underpinned by a focus on operational excellence ◊ PNG LNG production: ♦ Targeting gross production of 8.3 – 8.5 MT ♦ Scheduled reduced production for ~45 days due to L3 turbine maintenance to Train 1 in 2Q20 ♦ Similar L3 turbine maintenance to be conducted on Train 2 in 2021 PRODUCTION EXPECTED TO BE SIMILAR TO 2019 DESPITE 2Q20 MAINTENANCE AT PNG LNG

Production (mmboe)1 Low High Oil Search-operated 3 5 PNG LNG Project LNG (bcf) 108 110 Power (bcf) 1 2 Liquids (mmbbls) 2.9 3.2 Total PNG LNG Project 24 25 Total Oil Search Production Forecast 27.5 29.5

1Numbers may not add due to rounding

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GAS DEVELOPMENT AND PNG EXPLORATION

“I’m convinced that… the PNG Government and Exxon will file an agreement.” (Patrick Pouyanné, TOTAL 4Q 2019 Earnings Call, 6 February 2020)

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 20

LNG EXPANSION IN PNG DELAYED

◊ ExxonMobil and State Negotiating Team unable to agree an appropriate split of value and benefits for the P’nyang Gas Agreement: ♦ Suspension of formal talks on 31 January 2020 ◊ OSH respects the PNG Government’s right to set fiscal terms for resources developments in PNG ◊ Project proponents, including ExxonMobil and Total, continue to support the integrated three-train expansion project, which is the most efficient way to develop both P’nyang and Papua LNG ◊ Seeking ongoing dialogue with the PNG Government to find a fair and equitable solution for the P’nyang Gas Agreement ◊ Completion of the P’nyang Gas Agreement will allow the JV to progress to the FEED phase for the LNG expansion project ◊ Focused on exploring all options to reach a mutually acceptable agreement on P’nyang before giving serious consideration to

• ther development alternatives

◊ P’nyang and Papua JVs will meet in coming weeks to work on a formal go-forward plan for expansion PAPUA LNG AND P’NYANG JVS SUPPORT EXISTING DEVELOPMENT PLAN

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 21

PROGRESSING LNG EXPANSION

✓ Successfully executed Papua LNG Gas Agreement in April ✓ PNG Government reviewed and validated Papua LNG Gas Agreement in September ✓ Majority of legislative changes passed by PNG Parliament in October ✓ Progressed several key commercial agreements supporting LNG expansion and integration in preparation for FEED ✓ P’nyang Gas Agreement negotiations re-commenced in 4Q19 ✓ Continued project definition studies on the P’nyang upstream project ✓ AGX development concept selected and recommended to the PNG LNG Operator for approval by the Joint Venture ✓ AGX basic engineering progressed in preparation for award of FEED contracts FINALISATION OF P’NYANG REMAINS THE KEY HURDLE TO COMMENCEMENT OF FEED PHASE

2019 Achievements 2020 Targets

❑ Recommence dialogue with the PNG Government and reach agreement on terms for the P’nyang Gas Agreement ❑ If appropriate terms are agreed, move into FEED phase on the three train expansion ❑ Continue negotiations on National Content Plan ❑ Complete required legislative changes

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 22

MARKETING OF OIL SEARCH VOLUMES

◊ OSH unique offering of LNG due to: ♦ High heating value ➢ Niche in Japanese and Korean domestic gas networks, which are suited to richer LNG ➢ Globally the average heating value is declining due to majority of new projects being leaner ♦ Proximity to key demand centre in Asia ➢

• Approx. 8 day laden voyage to North Asia

RICH LNG FROM PNG WELL POSITIONED IN A LEANER GLOBAL LNG MARKET

Source: OSH interpretation of IHS Markit

6% 6% 19% 23% 67% 55% 53% 27% 19% 17%

• 25%

50% 75% 100% 2015 2020 2025

Volume Share

Very Lean <1,000 Btu/scf Lean 1,000-1,050 Btu/scf Rich 1,050-1,100 Btu/scf Very Rich >1,100 Btu/scf

1,096 1,081 1,078

Weighted Average High Heating value in Btu/scf

PNG LNG US LNG Btu/scf year Existing PNG Under Construction

Heating Value and Project / Train Size (MTPA) vs. First LNG (Year) Global LNG quality (Btu/scf)

Source: FGE

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 23

PNG EXPLORATION PORTFOLIO

◊ Significant potential in Oil Search’s PNG exploration portfolio ◊ Already sufficient discovered gas to underpin PNG LNG Project and LNG expansion opportunities ◊ Subject to available capital, exploration strategy will prioritise activities with potential to underpin additional LNG trains, add material near-term backfill gas or potential for new standalone

• il fields

◊ Limited licence commitments allows capital prioritisation, with focus on highest value projects in close proximity to existing and potential future infrastructure ◊ Exploration spend in near-term expected to be limited to commitments, pending the PNG Government review of Oil and Gas Act legislation ◊ Core focus for 2020 is on maturing the Eastern Foldbelt following the acquisition of >500 kilometres of 2D seismic since 2017 MATERIAL EXPLORATION UPSIDE, BUT SPEND SUBJECT TO CAPITAL PRIORITISATION

120 148 278 360 64 387 617 549 353 704 792 511 53 90 382 219

• 100

200 300 400 500 600 700 800

km OSH Operated Other Operated

Oil Search is the only operator to conduct seismic activity in PNG over the last four years

Eastern Foldbelt

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ALASKA OVERVIEW

“Mitquq 1’s positive results and slick execution can only boost confidence that Oil Search is becoming a reliable operator in the region.” (Wood Mackenzie, February 2020)

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 25

ALASKA HIGHLIGHTS

◊ Quality Alaskan-based team and field performance: ♦ Successful 2018/19 Pikka Unit appraisal programme ♦ 2019/20 - two rig programme and 40 km of gravel road and pads ♦ Excellent safety performance and environmental focus ◊ Certified 46% increase in gross 2C contingent resource in approved Pikka Unit to 728 mmbbls, excluding satellite fields and Horseshoe ◊ Landmark Land Usage Agreement with Community Landowner ◊ Major regulatory approvals and agreements: ♦ Armstrong/GMT option exercised and Repsol alignment ♦ Record of Decision from the US Army Corp of Engineers (USACE) North Slope Borough master plan and re-zoning approvals ♦ State approvals for 2019/20 exploration and civils ◊ Maximising co-operation: ♦ Data exchanges ♦ Community initiatives and Alaskan & Native Corporation contracting and support ◊ FEED activities underway, with FID targeted for 2H20 ◊ Commenced divestment process with positive initial responses SUCCESSFULLY PROGRESSING PIKKA DEVELOPMENT & CONFIRMING EXPLORATION VALUE

LUA Signing Ceremony Nabors 105 rig at Pikka C 2019 Summer Works

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 26

PIKKA UNIT DEVELOPMENT

ENGINEERING FEED ACTIVITIES COMMENCED AND TARGETING FID IN 2H20

NOP Pad Mine Site F

◊ Targeting recovery of ~728 million barrels of oil within the Nanushuk 3 and Alpine C reservoirs ◊ Pikka Unit development includes: ♦ Early production system (EPS) targeting up to ~30,000 bopd from late 2022, with wells from ND-B wellpad ♦ Full field development (FFD) targeting ~135,000 bopd from 2025 from three wellpads ♦ Mitquq exploration success provides potential additional high value barrels via tie-back to the Nanushuk Processing Facility (NPF)

3.7 mi 2.8 mi 7. 9 mi 21.9 mi

ND-A ND-B ND-C

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 27

2019/20 WINTER FIELD OPERATIONS - INFRASTRUCTURE

PREPARING FOR EARLY PRODUCTION SYSTEM AND FULL FIELD DEVELOPMENT

NOP Pad Mine Site F

Civil Works

Stirrup Mitquq

CPF NDB NDA NDC

◊ Commenced civil works (Season 1 of 2) ◊ Building key infrastructure for both EPS and FFD ◊ 2019/20 activities will also support the 2021 drilling programme ◊ >800 personnel on slope at peak, including Alaskan & Native Corp contractors ◊ Season 1 scope (in order of priority): ♦ Road and bridge to ND-B and pad (40 kilometres of gravel roads and pads) ♦ Operations and processing centre pads ♦ Additional gravel scope to ND-A, if weather permits

Loaded B-70 heading to ND-B Pad

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 28

2019/20 WINTER FIELD OPERATIONS - EXPLORATION

◊ Spudded 25 Dec 2019 ◊ Mitquq 1 results: ♦ Nanushuk 9: 55 metres net oil and 5 metres net gas pay ♦ Alpine C: 10 metres net oil and 6 metres net gas pay ◊ Mitquq 1 ST1 results: ♦ Encountered same Nanushuk reservoir ♦ Flow test planned for Nanushuk 9 reservoir ◊ No oil:water contact penetrated ◊ Located <10 kilometres from proposed CPF

TARGETING EARLY TIE-BACK OPPORTUNITIES AND DE-RISKING RESOURCE BASE

Mitquq 1 & ST1 Stirrup 1

◊ Spudded 27 Jan 2020 ◊ Intersected the Nanushuk 0 reservoir with oil shows ◊ Coring and logging being evaluated ◊ Preparations underway to conduct a flow test

Nabors 7ES rigged up on Mitquq Ice Pad Core #1 ready for processing in the pipe shed Loaded B-70 heading to ND-B Pad

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 29

MITQUQ IMPLICATIONS

PROVEN RESERVOIRS AND EMERGING PLAY FAIRWAY

NOP Pad Mine Site F

◊ Alaska North Slope “super-basin” contains three world-class oil-prone rocks with >18 billion barrels of oil produced to date1 ◊ World class “yet-to-find” in existing and emerging play fairways (>6 billion in Nanushuk2). Exceptional portfolio depth across Oil Search acreage with Nanushuk “play-master” position ◊ Results from Mitquq further enhance prospectivity along trend between Mitquq and Pikka ◊ New 2,969 km2 reprocessing and merge of 15 3D seismic data sets: ♦ Multiple prospects close to proposed & existing facilities ♦ Subject to test, Mitquq has potential to provide additional high value volumes for the NPF

1 Source: http://www.tax.alaska.gov/sourcesbook/AlaskaProduction.pdf 2 Source: United States Geological Survey (USGS) https://pubs.usgs.gov/fs/2017/3088/fs20173088.pdf

Milne Point Kuparuk River Alpine Willow (discovery)

Nanushuk and Alpine Fairway

Exploration Pikka Unit Prospects

3D Seismic Inv entory

Stirrup Mitquq Discovery

A A’ A A’

Nanushuk Fairway

OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | PNGX: OSH | US ADR: OISHY

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STRATEGIC REVIEW

“With the clock ticking, finalising a deal on Oil Search’s behalf will likely fall to Wulff, Botten’s successor, who is mapping out a broader strategy for the company and how it will look to develop in the coming years.” (Perry Williams, The Australian, 25 January 2020)

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 31

HOW WE SEE THE WORLD

◊ PNG citizens comprise >80% of PNG workforce ◊ Recent landmark Land Use Agreement signed in Alaska that supports a sustainable future and cultural preservation ◊ Top quartile of Carbon Tracker’s climate-resilient oil and gas companies ◊ Energy transition has a clear direction of travel but a highly uncertain pace, creating

• pportunities and challenges

◊ The socio-political landscape is evolving ◊ Companies are facing greater societal expectations than ever before ◊ Oil Search is already well positioned to grow and evolve ◊ World class producing assets in PNG with LNG expansion ◊ Material Alaskan oil assets close to infrastructure with low breakeven and development costs and major growth potential ◊ Sound operating cash flow and liquidity position, underpinned by disciplined capital allocation Oil Search is in a

robust position today

and has an outstanding

platform to deliver further shareholder value

Oil Search has an

industry-leading reputation

for socially responsible

• peration

The

world is changing

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 32

POSITIONING FOR THE FUTURE

◊ Distract from Oil Search’s focus on safe and reliable operations and delivering key growth projects in PNG and Alaska ◊ Change our focus on lowest quartile cost projects and responsible capital management ◊ Compromise on Oil Search’s DNA

• f socially, environmentally

responsible operation and open, transparent, stakeholder engagement ◊ Strategic review will be completed and presented to market in 2H20 ◊ Re-evaluate Oil Search’s long-term vision, strategic focus and path for delivering superior shareholder returns ◊ Establish how we evolve with PNG and proactively manage risk to deliver the PNG assets’ potential ◊ Ensure sustainable, environmentally responsible, profitable operations and flawless project execution ◊ Consider Oil Search's position in the global energy business and how it will respond to technology changes and ESG considerations Oil Search has commenced a

Company-wide strategic review

The review will The review will not

Strategy update

OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | PNGX: OSH | US ADR: OISHY

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SUMMARY

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 34

OIL SEARCH IN 2020

Delivering our Alaskan Pikka Unit Development optimally Vision to be a model for social & environmental responsibility Capital management & prioritisation Strategic review to set long term direction

◊ Incorporating expanding resource base & facilities opportunities to optimise capital spend ◊ Optimise equity, FID decision in 2H20 ◊ Comprehensive strategic review underway with results to be released in 2H20 ◊ Delivering full value, capital management, investment allocation, OSH positioning in the energy future, funding and optimising operating models ◊ Dedicated teams developing material and measurable initiatives to minimise our footprint & emissions ◊ Creating long term local business development & supporting local community wellbeing ◊ Progressing Pikka Unit Development towards Final Investment Decision in 2H20 ◊ Focusing on early commercialisation opportunities in PNG and Alaska

Commercialising & advancing LNG expansion

◊ Focused on a positive outcome for all parties ◊ Targeting optimal three-train LNG expansion, welcome ongoing dialogue with PNG Government

OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | PNGX: OSH | US ADR: OISHY

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APPENDICES

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 36

FINANCIAL OVERVIEW

P&L SUMMARY

(US$ million) 2018 2019 Change (%) Production (mmboe) 25.21 27.95 11% Sales (mmboe) 25.02 27.79 11% Average realised oil & condensate price (US$/boe) 70.65 62.86 (11%) Average realised LNG & gas price (US$/mmBtu) 10.06 9.58 (5%) Revenue 1,535.8 1,584.8 3% Production cost (290.0) (348.7) 20% Other operating costs (145.4) (157.4) 8% Other income 9.6 67.2 600% EBITDAX1 1,110.0 1,145.9 3% Exploration expensed (66.7) (47.2) (29%) Depreciation & amortisation (326.1) (413.7) 27% Impairment

• (5.9)

na Net finance costs (209.9) (231.0) 10% Share of net profits from investments in JV

• 0.6

na Profit before tax 507.4 448.7 (12%) Tax (166.2) (136.3) (18%) Net profit after tax 341.2 312.4 (8%)

1EBITDAX (earnings before interest, tax, depreciation/amortisation, non-core activities, impairment and exploration) is a non-IFRS

measure that is presented to provide a more meaningful understanding of the performance of Oil Search’s operations. The non- IRFS financial information is derived from the financial statements, which have been subject to review by the Group’s auditor.

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 37

Impact on P&L Impact on Cash Flow Statement Impact on Opening Balance Sheet 1 January 2019

◊ US$10.7 million negative impact on NPAT, driven by: ♦ Depreciation of right-of-use assets, US$29.1 million; ♦ Interest expense on lease liabilities, US$20.3 million; Offset by ♦ Cost recoveries (other income) relating to right-of-use-assets, US$27.2 million; ♦ Operating lease rentals (selling and distribution costs), US$11.5 million ◊ EBITDAX increase of US$38.7 million ◊ Zero net impact on overall cash flow ◊ Lower operating cash outflow offset by higher financing cash outflow ◊ Assets ♦ Recognition of right-of-use assets, US$230.2 million ◊ Liabilities ♦ Recognition of lease liabilities, US$282.2 million ◊ Equity ♦ Reduction in opening retained earnings, US$23.2 million

IFRS 16 (LEASES) – FINANCIAL IMPACT

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 38

RESERVES AND RESOURCES1,2

AT 31 DECEMBER 2019

Licence/Field OSH Interest Proven Reserves (1P) Proven & Probable Reserves (2P) Total Oil/Condensate3 (mmbbls) Total Gas4 (bcf) Total Oil/Condensate3 (mmbbls) Total Gas4 (bcf) PDL 2 (Kutubu) 60.0% 9.9

• 15.2
• PDL 2/5/6 (Moran Unit)

49.5% 6.0

• 9.5
• PDL 4 (Gobe)

10.0% 0.0

• 0.0
• PDL 3/4 (SE Gobe)5

22.3%

• PDL 1 (Hides GTE)6

16.7%

• 1.7
• 2.2

Oil Fields & Hides GTE Reserves 15.9 1.7 24.8 2.2 PNG LNG Project Reserves5 29.0% 38.0 1,872.4 42.3 2,099.7 Total Reserves 53.9 1,874.1 67.1 2,101.9 Licence/Field 1C Contingent Resource 2C Contingent Resource PNG LNG Project Fields 29.0%

• 1.8

125.2 Other PNG7 various

• 57.1

4,509.8 Alaska8,9 51%

• 371.1
• Total Resources
• 430.0

4,635.1

Please refer to notes on the following page

OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 39

RESERVES & RESOURCES NOTES

1) Numbers may not add due to rounding. 2) Kutubu and Moran oil fields proved Reserves (1P) and proved and probable (2P) Reserves are as certified by independent auditor Netherland, Sewell & Associates, Inc. (NSAI) in 2017. 1P and 2P PNG LNG Project Reserves are based on Contingent Resources as per draft recertification report in 2019 by independent auditor, NSAI. Gobe Main and SE Gobe 1P and 2P Reserves are based on Oil Search 2019 technical estimates. All Reserves estimations use Oil Search’s corporate assumptions to calculate economic limit. 3) Crude oil, and separator and plant condensates. 4) For the PNG LNG Project, shrinkage has been applied to raw gas for the field condensate, plant liquids recovery, and fuel and flare. 5) Although technical volumes remain accessible, SE Gobe is not expected to be cashflow positive from 2020 using current Oil Search corporate economic

• assumptions. All SE Gobe Reserves have been moved to Contingent Resources, contingent on a change in economic or commercial assumptions.

6) PNG LNG Project Reserves comprise the Kutubu, Moran, Gobe Main, SE Hedinia, Hides, Angore and Juha fields. Minor volumes associated with proposed domestic gas sales have been included as part of PNG LNG reserves. In addition, third party wet gas sales to the project at the Gobe plant outlet (inclusive of plant condensate) have been included for SE Gobe in 1P and 2P Reserves at the post-sales agreement field interest of 22.34%. SE Gobe estimates for gas are based on Oil Search 2019 technical estimates. 7) Hides Reserves associated with the GTE Project under existing contract. Production volumes shown in this Reserves report are based on Oil Search’s entitlement in PDL 1 (16.67%). 8) Other gas, oil and condensate Resources comprise the Company's other PNG fields including Elk-Antelope, SE Mananda, Juha North, P'nyang, Kimu, Uramu, Barikewa, Iehi, Cobra, Mananda, Flinders, and Muruk and may also include Resources beyond the current economic limit of producing oil and gas

• fields. These gas Resources may include fuel, flare, and shrinkage depending on the choice of reference point.

9) Alaskan gas, oil, and condensate Resources comprise the Company’s working interest share in Alaskan assets, incorporating the Nanushuk and satellite reservoirs in the Pikka Unit, certified by Ryder Scott. 10) Targeting a planned sell-down of up to 15% interest in the project during 2020