STRATEGY ON TRACK Oil Search 2013 Annual Meeting 2013 Annual Meeting Agenda Overview 2012 Results PNG LNG Project Update Gas Expansion Opportunities Production/Near Field MENA Oil Exploration Commitment to PNG Summary 2
Overview 3 Strategies for Growth Optimise performance of existing producing PNG oil fields Support ExxonMobil in delivering PNG LNG Project on schedule Aggregate gas resources in PNG Highlands to underpin LNG expansion Establish gas resources in Gulf of Papua for potential standalone LNG project Evaluate and pursue international growth opportunities Optimise capital and financial structure Operate safely and sustainably 4
Core Strategies Deliver Consistent Share Price Appreciation Share price (A$) PNG LNG FID 8 Acquisition of Chevron Manage transition to Texaco’s PNG assets PNG LNG Project Assume Operatorship 7 Merger of Oil Search & Orogen 6 5 4 3 2 1 0 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 January 2003 – April 2013 5 TSR performance Oil Search ranked 14th in S&P/ASX 200 for TSR over five years to 31 December 2012 60 52.2 40 16.5 15.6 20 12.8 0 % TSR -3.6 -5.9 -20 -23.1 -23.6 -40 -34.7 -60 1 Year 3 Year 5 Year OSH TSR Median TSR ASX 200 Median TSR ASX 200 Energy Source: Orientcap 6
Committed to Achieving World Class Safety Performance 9 Total Recordable Injury Frequency Rate of 2.64 for 2012 8 Australian Companies (APPEA) 7 TRI / 1,000,000 Hours 6.0 6 5.2 5 4.7 International Companies 4 (OGP) 3 2.64* 1.96 1.85 2 1.75 1.76 1.68 Oil Search 1 1.16 *PNG Asset TRIFR: 2.71 MENA Asset TRIFR: 5.83 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 7 Changing Face of Oil Search Delivery of PNG LNG Trains 1 & 2 approaches: Project over 80% complete, increasing confidence in delivering on schedule and within revised budget Start of substantial long term (20 years+) cash flow stream getting closer Resource underpinning for further growth. Progressive results delivery to end 2014: Comprehensive exploration and appraisal programme underway in PNG Highlands, Gulf of Papua and oil fields Overseas, focusing on material oil (Taza discovery) Preparing for LNG production and beyond: Oil operations review and sustainability Understand growth potential in core PNG areas Understanding the upside value of our assets Resource base to underpin further growth 8
2012 Results 9 2012 Performance Production of 6.38 mmbboe Production (mmboe) 9.8 within guidance range 8.6 8.1 7.7 6.7 6.4 Good result given maturity of oil fields and unplanned and planned shut-downs during year 07 08 09 10 11 12 Strong underlying field Oil Price (US$/bbl) performance 116 114 100 78 Realised oil price marginally 76 65 lower than in 2011 No hedging in place 07 08 09 10 11 12 10
2012 Performance Net Profit after tax of NPAT (US$m) 313.4 US$175.8 million 202.5 185.6 175.8 Key drivers included lower 137.9 133.7 sales volumes and oil prices Higher exploration expense, 07 08 09 10 11 12 reflecting increased levels of exploration and evaluation DPS (US cents) 8 8 activity Total dividend of 4 US cents 4 4 4 4 (8.4 toea), unchanged from 2011 07 08 09 10 11 12 11 2012 Profit Drivers US$m 250 (8.3) 202.5 (83.4) 54.5 200 (53.0) (4.0) 65.6 175.8 Other Revenue 150 1.9 Profit on Asset Sales /Impairment Cash OPEX/BD DD&A 2012 NPAT 2011 NPAT Exploration Tax 100 50 0 Higher cash expenses reflects gas purchase costs, adverse FX movements and one-off items Exploration expenses include write-off of drilling costs of Trapia and IDT-25 Koi Iange test and higher geological and geophysical, general and admin costs Pre-tax profit from sale of assets relating to Block 3, Gulf farm-out and sale of 10% of PPL 260 Impairment expense of US$23.8m relating to PRL 1 – Pandora 12
Cost Management Actively working to control US$/boe 35 costs Costs associated with Kumul 30 US$6.00 Gas purchase Gas purchase Marine Terminal oil sheen costs costs 25 incident, flood damage, foreign exchange and higher inflation US$0.62 20 added ~US$3/boe US$24.82 US$20.16 15 Higher gas purchase costs reflect new Hides GTE 10 contract, more than offset by higher gas revenue 5 2011 2012 13 Strong Financial Position Strong balance sheet, able to fund Cash (US$m) remaining equity share of PNG LNG 1,289 1,265 Project as well as active exploration 1,047 and development programme 536 488 US$3.06 billion drawn down under PNG LNG project finance facility 08 09 10 11 12 PNG LNG 2012 cost increase : To be funded 70:30, debt:equity. Corporate Facility (US$m) Discussions progressing well to secure 500 US$1.5bn supplemental debt available 435 under existing project finance 363 304 agreement 247 OSH has ample capacity to fund its equity share of additional costs (~US$300m) 08 09 10 11 12 14
Investment Outlook 2,500 US$m 2013 Guidance US$1.93-2.0bn Other PP&E 2,000 Production 1,861 US$20 – 30m PNG LNG US$150 – 170m Exploration & Evaluation 1,568 1,500 1,364 US1,500 – 1,600m 1,000 586 451 500 US$260 – 300m 0 2008 2009 2010 2011 2012 2013F 15 PNG LNG Project Update 16
PNG LNG Project Overview More than 80% complete *Existing Facilities Juha Juha Production Facility Gas Field 250 Mcfd Operator has confirmed Project 60km x 14 ” 60km x 8” gas line remains on track for first LNG sales liquids line Hides Gas Field Hides Gas Conditioning Plant in 2014 960 Mcfd Angore Gas Field Have passed peak for logistics and 109 km x 8” condensate line workforce Agogo/Moran* Capital cost increased to US$19.0 Kutubu* 292 km x 32” gas billion last year, comfortable that pipeline onshore Gobe* Operator can deliver within revised Existing 270 km x 20” budget crude oil export line LNG Facility Capacity of LNG Plant increased to 6.9 MTPA 6.9 MTPA 407 km x 34” subsea gas pipeline Despite cost increase, Project Gulf of Papua Port Moresby remains economically robust 17 PNG LNG Project Angore Hides Juha Juha Facility Moran 6 ° S Hides Gas Conditioning Plant Komo Airfield Kutubu Agogo Gobe Main 7 ° S Onshore pipeline and Infrastructure Oil Pipeline 8 ° S PNG LNG Kumul Terminal Gas Pipeline OSH Facility PNG LNG Project Facility Offshore pipeline LNG Facility 9 ° S 100km Port Moresby 141 ° E 142 ° E 143 ° E 144 ° E 145 ° E 146 ° E 147 ° E 18
PNG LNG Plant Site LNG Facility PNG LNG plant site, March 2013 Engineering and procurement substantially complete. Preparations underway to ready plant for receipt of commissioning gas 19 PNG LNG Plant Site LNG Facility Export Jetty 20
PNG LNG Plant Site Storage tanks LNG Facility 21 PNG LNG Offshore Pipeline Offshore Pipeline Offshore pipelay – SEMAC I Offshore pipelay – SEMAC I Offshore pipeline completed in 2012 22
PNG LNG Onshore Pipeline Highlands section pipeline Onshore Pipeline Pipeline burial Onshore pipeline welding 258km of onshore pipeline welded at end March 2013, with 197km of pipeline hydrotested 23 Associated Gas/PL 2 Life Extension TEG Dehydration Unit installation Kutubu Kutubu Kumul Upgrade of Kumul Marine Terminal New CALM Buoy at Kumul Completed Phase 1 of PL 2 Liquids Export Life Extension Project Associated Gas (oil fields) well advanced and readying for supply of commissioning gas in 2013 24
PNG LNG Project - Upstream Hides Gas Conditioning Plant (HGCP) HGCP Mar 2013 Mar 2013 Apr 2013 Completed HGCP foundations and erection of structural steel substantially complete 25 PNG LNG Project - Upstream Komo Airfield South Terminal North Komo Airfield Dec 2012 First Landing of Antonov 124 May 2013 Construction of Komo Airfield complete 26
PNG LNG Project - Drilling PDL 1/7 – Hides Field Hides GTE Plant 8 New Production Wells Drilling 2012+ Hides Nogoli Camp PDL 8 – Angore Field 2 New Wells Hides Gas Conditioning Plant Komo Airfield 10km PNG LNG development drilling programme commenced in July 2012 with Rig 702 at well pad B Access roads and wellpad construction nearly complete Second rig, Rig 703 commenced drilling at well pad C in April 2013 27 PNG LNG Project Timetable Unchanged » Continued early works » Continue onshore » Detailed design pipe lay » Order long leads and place » Complete offshore pipe purchase orders lay » Open supply routes » Start Hides plant First Gas from » Contractor mobilisation installation Train 1, » Commence AG » Start Hides drilling then Train 2 construction » Complete key AG items 2010 2011 2012 2013 2014 » Complete pipe lay Financial » Ongoing procurement Close » Ongoing drilling and mobilisation » Construction of » Airfield construction HGCP » Drilling mobilisation » Commission LNG » Start offshore pipeline plant with Kutubu construction gas » Onshore line clearing and laying » Start LNG equipment installation 28
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