7 6 th Annual Meeting 4 May 2 0 0 7 1 Achievem ents in 2 0 0 6 - PowerPoint PPT Presentation

O I L S E A R C H L I M I T E D 7 6 th Annual Meeting 4 May 2 0 0 7 1

Achievem ents in 2 0 0 6 2

2 0 0 6 Achievem ents � Record profit of US$ 4 1 2 .0 m , including US$ 2 5 8 .4 m net profit from sale of assets to AGL � Core net profit of US$ 2 0 7 .5 m , a 4 % increase on 2 0 0 5 � Shareholders rew arded by final dividend of 4 US cents per share, m aking 8 US cents per share for the year, a 1 4 % increase on 2 0 0 5 dividend 3

2 0 0 6 Achievem ents � Gross PNG production increased by 5 % . Oil Search net production dow n 1 6 % due to AGL asset sale � Record oil price achieved ( over US$ 6 7 / bbl) resulting from strong dem and for PNG light sw eet crude � Stable cost profile despite continued industry cost pressures 4

Oil Search Net Production 4 0 ,0 0 0 Kutubu Moran Gobe Main SE Gobe Hides Nabrajah SEM 3 5 ,0 0 0 + 1 0 % + 1 0 % Post Post Forecast Forecast AGL AGL + 6 % + 6 % 3 0 ,0 0 0 + 2 5 % sale + 2 5 % sale 2 5 ,0 0 0 + 2 3 % + 2 3 % stb/ d 2 0 ,0 0 0 1 5 ,0 0 0 1 0 ,0 0 0 5 ,0 0 0 0 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 7 2 0 0 6 � Production in 2 0 0 7 forecast to increase to betw een 1 0 .5 and 1 1 .0 m m boe 5

W orld Class HSES Perform ance Total Recordable I ncidents ( TRI s) 1 9 9 8 – 2 0 0 6 1 4 OGP APPEA OSH 12.7 1 2 TRI / 1 ,0 0 0 ,0 0 0 Hours 10.6 10.7 9.4 Australian Com panies 1 0 9.8 8.3 9.3 9.1 8.5 7.8 8 8.2 7.3 7.0 6.8 6 5.8 5.2 4.7 I nternational Com panies 4 3.1 4.0 2.4 2 2.3 1.7 Oil Search 0 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 6

Share Price Perform ance OSH Relative Share Price Perform ance ( last 3 years) 5 .0 0 Share price ( rebased to OSH) 4 .5 0 4 .0 0 OSH 3 .5 0 3 .0 0 W PL ASX2 0 0 Energy AW E 2 .5 0 ROC W TI 2 .0 0 STO 1 .5 0 1 .0 0 0 .5 0 Nov-0 4 May-0 5 Nov-0 5 May-0 6 Nov-0 6 May-0 7 May-0 4 7

Financial Results 8

Net Profit After Tax 2 4 0 4 0 3 6 .8 3 6 .8 2 2 0 Net Profit 3 5 EPS* 2 0 0 2 0 7 .5 2 0 7 .5 3 0 1 8 0 2 0 0 .2 2 0 0 .2 1 6 0 2 5 US cents 1 4 0 US$ ’m 1 2 0 2 0 1 0 0 1 7 .9 1 7 .9 1 0 7 .3 1 0 7 .3 1 5 8 0 8 5 .7 8 5 .7 6 0 1 0 9 .6 9 .6 4 0 4 7 .0 4 7 .0 7 .7 7 .7 5 2 0 4 .5 4 .5 0 0 2 0 0 4 2 0 0 2 2 0 0 3 2 0 0 5 2 0 0 6 � Net profit, excluding significant item s, up 4 % on prior year * Basic EPS includes significant item s 9

2 0 0 6 Full Year Perform ance 2 0 0 5 2 0 0 6 Oil Sales ( m m bbl) 1 0 .8 4 9 .1 7 Realised oil price ( US$ / bbl) 5 8 .0 6 6 7 .2 2 ( US$ ’m ) Revenue 6 6 4 .0 6 4 4 .5 3 % Operating Expenses 1 0 9 .7 1 0 3 .8 EBI TDAX 5 5 4 .3 5 4 0 .8 2 % NPAT ( core) 2 0 0 .2 2 0 7 .5 4 % NPAT incl. significant item s 2 0 0 .2 4 1 2 .0 * � Record core NPAT driven by a 1 6 % increase in realised oil prices, and despite low er production * I ncludes profit of US$ 2 5 8 .4 m illion on sale of licence interests to AGL and net im pairm ent losses of $ US5 3 .9 m illion 1 0

2 0 0 6 Profit Drivers 4 5 0 4 1 2 4 1 2 2 0 4 2 0 4 4 0 0 3 5 0 3 0 0 8 5 8 5 2 5 0 US$ ’m 8 8 1 5 1 5 8 8 2 4 2 4 2 0 0 ( 9) ( 9) ( 9 7) ( 9 7) ( 1 0) ( 1 0) 1 5 0 Core Core 2 0 0 2 0 0 2 0 8 2 0 8 1 0 0 5 0 0 s s E r 5 e t n x t 6 s e n c e f o a 0 0 f e & h a s i l T i 0 i 0 r a r t c r t m P 2 e E 2 S a O a i s f t e T l i l n i i n t i O t O I I g r o i S m A 1 1

Cash Operating Expenses PNG Oil Field 2 0 0 5 2 0 0 6 Costs per Barrel US$ US$ ’m US$ ’m 7 Kum ul Kum ul $ 0 .4 5 $ 0 .4 5 Field Costs Tariffs Tariffs $ 0 .8 2 $ 0 .8 2 6 Tariffs Tariffs - Oil: PNG 7 4 .6 5 7 .6 $ 1 .5 5 $ 1 .5 5 - Oil: MENA 3 .1 1 2 .4 Other Field Other Field 5 Costs $ 1 .6 9 Costs $ 1 .6 9 - Hides 4 .0 6 .5 Other Field Other Field Costs $ 1 .1 3 Costs $ 1 .1 3 Other Prod’n 4 Opex 3 - Oil 1 7 .1 1 3 .5 Core Core Core Core - Hides 0 .2 0 .3 Field Field Field Field 2 Costs Costs Costs Costs $ 3 .8 6 $ 3 .8 6 $ 4 .1 8 $ 4 .1 8 Net Corp Costs 9 .6 1 1 .9 1 FX Losses 1 .1 0 .9 0 Total 1 0 9 .7 1 0 3 .8 2 0 0 5 2 0 0 6 � 8 % increase in core field costs per barrel 1 2

Operating Cash Flow s � Operating cashflow 7 5 0 included US$ 1 8 0 m of tax 9 2 9 2 paid, a 2 2 % increase on 6 2 5 ( 2 26 ) ( 2 26 ) the prior year 5 0 0 � I nvesting inflow s US$ ’m included AGL sale 3 9 9 3 9 9 3 7 5 proceeds of US$ 3 7 1 m , offset by outflow s of 2 5 0 US$ 1 4 3 m on developm ent 4 7 8 4 7 8 and US$ 1 2 2 m on 1 2 5 exploration and gas 2 1 2 2 1 2 � Financing outflow s 0 g g g g g included US$ 1 0 1 m of n n n n n h i i * i i i s n t t c s h s a o e n s a dividends and US$ 1 2 6 m e r l C p a a C e v O C n p n i O F of debt repaym ents I 1 3

Treasury Review 5 0 0 Cash Debt Gearing Gearing % 4 0 0 4 0 3 0 3 0 0 US$ ’m 2 0 2 0 0 1 0 1 0 0 0 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 � US$ 4 7 8 m illion in cash at year end including JV balances , no debt � Current cash position of ~ US$ 4 5 0 m illion follow ing paym ent of 2 0 0 6 final dividend � Liquidity of US$ 6 2 0 m illion, including undraw n com m itted bank lines � No oil hedging currently in place 1 4

2 0 0 7 Capital Outlook 2 0 0 6 2 0 0 7 US$ ’m Actual Outlook I nvesting : Exploration 1 2 2 1 9 0 Developm ent 1 4 4 1 2 6 Corporate 1 6 7 0 Financing : Dividends 1 0 1 4 5 * Debt Repaym ent 1 2 6 - * 2 0 0 6 final dividend only 1 5

Strategy for Grow th � Deliver Value � Substantial rem aining potential in PNG oil fields � Further developm ent in Yem en & Egypt � Cost controls and im proved profitability � Extract Value � Com m ercialise OSH’s 1 billion boe gas and liquids resource � Multi phase developm ents � Strong environm ent for gas sales, prices � Create Value � Acceleration of exploration activity in PNG and Middle East and North Africa � Mix of low risk m oderate im pact, higher risk high im pact program m e � Pursue acquisition opportunities 1 6

Strategy for Grow th � Objective is to m ore than double Com pany value by 2 0 1 0 1 7

VALUE DELI VERY 1 8

PNG Oil Production Highlights SE Mananda Moran 2 0 0 6 : Came onstream in Mar 2 0 0 6 : Production increased by 18% 06. Daily production at 4,000 Three new wells came onstream bopd by year end 2 0 0 7 -9 : Development drilling, 1-3 wells 2 0 0 7 -2 0 0 9 : Continue field management Gobe/ SE Gobe Kutubu 2 0 0 6 : Production increased by 2 0 0 6 : Natural decline led to 19% 2% . SEG12 came online decrease in production. Kutubu’s 300 2 0 0 7 -9 : workovers and millionth barrel delivered in Aug 06 development drilling, 1-2 wells 2 0 0 7 - 2 0 0 9 : Development drilling- Usano 3-7 wells, Kutubu 2-8 wells, Agogo 1-4 wells 1 9

PNG Oil Production Outlook 8 0 ,0 0 0 OSH Assum es Field Operatorship 7 0 ,0 0 0 6 0 ,0 0 0 Oil Production ( stb/ d) Aspiration 5 0 ,0 0 0 I ncrem ental Developm ent 4 0 ,0 0 0 3 0 ,0 0 0 2 0 ,0 0 0 Decline before Oil Search 1 0 ,0 0 0 Historical Production Forecast Base Production 0 Jan-2 0 0 0 Jan-2 0 0 1 Jan-2 0 0 2 Jan-2 0 0 3 Jan-2 0 0 4 Jan-2 0 0 5 Jan-2 0 0 6 Jan-2 0 0 7 Jan-2 0 0 8 Jan-2 0 0 9 Jan-2 0 1 0 Jan-2 0 1 1 Jan-2 0 1 2 Jan-2 0 1 3 Jan-2 0 1 4 Jan-2 0 1 5 � Expect to continue to invest in PNG fields, targeting to m aintain gross production around 5 0 ,0 0 0 bopd through to 2 0 0 9 � Requires investm ent of approx US$ 1 0 0 m pa net to OSH 2 0

Yem en - Nabrajah � Nabrajah gross production currently averaging 7 ,8 0 0 bopd � Nab 1 3 appraisal w ell underw ay. � Potential for future basem ent w ells being evaluated, pending results from interpretation of 3 D seism ic and G&G studies. 8 ,0 0 0 PRODUCTION FORECAST Nab-14 (Qishn) 6 ,0 0 0 Nab-12 (Qishn) Nab-5 (Naifa) 4 ,0 0 0 bopd Nab-1 to Nab-7 (Qishn) 2 ,0 0 0 0 7 7 7 8 8 8 9 9 0 0 7 8 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 - - - - - - - - - - - - - - - - n r l t n r l t n l t n r l t u u r u u c c c c a p a p p p J J a J a J O O O O J A J A A A J J 2 1

Egypt – Area A � Area ‘A’ - com prises 2 developm ent leases ( 5 sm all Um m El Yusr Exploration oil fields) and four exploration leases Kareem , Yusr, Kheir � Focus on increasing & Shukheir Developm ent production, to assist funding exploration: � 5 developm ent drill W adi Dara Exploration candidates identified, first 6 ,00 0 3 000 2 0 0 8 Budget Production Forecast tw o w ells com pleted 5 ,00 0 2 500 Gross Production bopd Oil Search Share bopd 4 ,00 0 2 000 � Exploration focused on deeper Developm ent W ells 3 ,00 0 1 500 Baseline Plus 5 0 0 targets below and adjacent to W / O , R / C & P u m p 2 ,00 0 O p t i 1 000 m i s a t i o n existing fields – first tw o Existing Production exploration w ells successful in 1 ,00 0 5 00 secondary objective and being 0 0 Jan-0 7 Jan-0 8 Jan-0 9 Jan-1 0 Jul-0 7 Jul-0 8 Jul-0 9 Jul-1 0 tied in 2 2

VALUE EXTRACTI ON 2 3