Oil Search Exploration Update 15 th PNG Mining and Petroleum - - PowerPoint PPT Presentation

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Oil Search Exploration Update

15th PNG Mining and Petroleum Conference Sam Algar – GM Exploration

5 December 2018

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ACKNOWLEDGEMENT & DISCLAIMER

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 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 may contain 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
• il, 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 acknowledges the support of the PNG Department of Petroleum and the support and contributions of all of our Joint Venture partners

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 PNG has enormous exploration potential  OSH 2015 Studies - 30Tcf Yet To Find  Acreage growth in 2016-2018 aimed at ensuring YTF becomes FOUND  Testing proven and new plays  Exploration around current, planned and potential LNG hubs  Commitment to developing PNG nationals and working with all JV partners

COMMITTED TO CONTINUED INVESTMENT IN PNG

Eastern Foldbelt

Muruk

Elk- Antelope NW Highlands

Offshore Papuan Gulf :

Shallow and deep water Gulf / Forelands

P’nyang

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 2018 Activity: – Two successful operated appraisal wells – Two further appraisal wells operated on behalf of ExxonMobil – Acquired ~380 km of seismic – Farmed-in to four licences in the Onshore Gulf/Eastern Foldbelt  2019 Activity: – At least two wells and continuous seismic acquisition  Entry into Alaska not impacting our laser focus on PNG

OIL SEARCH: MOST ACTIVE PNG EXPLORER

TURNING YTF INTO FOUND

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KIMU 2

 Kimu gas discovery made in 1999  Initially thought to be sub-commercial  Low-relief structure in hanging wall of an extensional fault in the Foreland; Early Cretaceous, Alene Sandstone  Creative thinking of OSH geologists identified potential for field to be much larger than originally thought  2016 seismic programme confirmed potential for upside  Kimu 2 spud in 2Q18

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KIMU 2 – SUCCESSFUL 2018 GAS APPRAISAL

 Kimu 2 – Gas Discovery

– Successfully penetrated and cored high quality gas filled Alene reservoir – ~37m of core (96% recovery) – Full log suite – Extended production test – Approx four day flow/2 day build-up. Flowed at 34.5mmscf/day through a 64/64” choke

 Results confirm the post 2016 seismic pre-drill volumes  Working with partner (Kumul) to develop commercialisation options

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BARIKEWA 3

 Barikewa gas discovery made in 1958 (gas discovery) and appraised in 1981 (dry hole)  Late Jurassic/Early Cretaceous Hedinia and Toro Reservoirs  Late inversion anticline in foreland SW of the main foldbelt  Sparse seismic and surface geology  Highly karstified terrain with road constructed for well support

Barikewa 3

Darai Ieru Toro Hedinia NE NE SW SW

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BARIKEWA 3 – SUCCESSFUL 2018 APPRAISAL

 Barikewa 3 – Gas Discovery

– Gas encountered in high quality Toro and Hedinia – Full log suite acquired – Production test conducted on Toro – 35.5mmscf/day over a 75 hour flow period through a 68/64” choke – ~20% nitrogen confirmed

 Results confirm pre-drill mapping and resource volumes  Working with Partners (Kumul & Santos) to develop commercialisation options

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2018 SEISMIC ACQUISITION

 380km 2D seismic acquired in two programmes

– Eastern Foldbelt – 16 lines, 332km of data acquired on behalf of ExxonMobil and Total – Material improvement on previous data due to new acquisition techniques – Gobe area – Four lines, 50km of data as Operator – Completing mid-December – NW Foldbelt – Deferred until 2019 due to Feb-18 earthquake

 Continual improvements in safety, operations and seismic acquisition equipment and parameters

The wire mesh glasses are a breakthrough for bridging

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EASTERN FOLDBELT PROGRAMME

 11 months of work to acquire 16 lines (332km) of heli-supported, jungle, 2D seismic.  At peak:

– 750 people in the field – 32 field crews/camps – Six helicopters – 1.3 million litres of jet A1 fuel

 332km of bridging

– One million hand-cut treads nailed down – 70 tonnes of nails

 Drilling and recording

– >12,000 shots fired – 29 tonnes of dynamite used

 HSES

– 2.2 million manhours without an LTI Ladders vs. Bridges Drill crew on line 1 A typical Fly Camp Wire mesh glasses do not fog up in hot conditions of bridging

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MURUK 2 APPRAISAL PROGRAMME

Spudded on 10 November 2018 OSH drilling well on behalf of ExxonMobil-operated PDL 9 joint venture ~11km step-out from Muruk 1 discovery well Base case: ~80 day well with expected total depth ~3,500m Objective is to narrow 1-3 tcf potential in Muruk discovery to support development Success case: Extended Well Test to prove up connected hydrocarbon volume Additional 2D seismic planned for later in 2019 after drilling

• f Muruk 2 to further constrain Muruk and adjacent

prospects and leads

Muruk 2 SW NE

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NEW TECHNOLOGY

 Historically structural geology and seismic were the key tools in PNG onshore exploration – defining structural traps  Recent use of LIDAR (Laser Imaging Detecting And Ranging) is helping to constrain subsurface structural models  Increasingly, the importance of hydrocarbon charge timing and migration is recognised as being important to define chance and volume of gas, or oil, filling a structure  Oil Search has joined a consortium with IFP to start to use Kronos, a powerful structural and geochemical software tool designed specifically for fold and thrust belts

LIDAR Example Kronos Example

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PORT MORESBY TECHNICAL TEAM

 An exploration technical team has been formed in Port Moresby with seven national staff  Graduate members are undergoing intensive training and exposure to field operations  The team is responsible for evaluating a number of exploration blocks with support from the Sydney technical team  First all-female geoscientist team to go into the field.  Oil Search employee awarded 2018 PNG Apprentice of the Year

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 Oil Search is the most active explorer of PNG  With our partners and support from the Government, we are doing the work necessary to find the hydrocarbons PNG needs to power its future  Oil Search will continue this work in 2019 and beyond  In the process, we will develop PNG nationals so that they can be the leaders

• f the future

SUMMARY