Oil Search Exploration Update · 2018-12-05 · gas industry. Oil Search Limited believes there are reasonable grounds for the expectations on which the statements are based. However,

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Oil Search Exploration Update

15th PNG Mining and Petroleum Conference

Sam Algar – GM Exploration

5 December 2018

PNG 15TH MINING & PETROLEUM CONFERENCE | PAGE 2

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

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 acknowledges the support of the PNG Department of Petroleum and the

support and contributions of all of our Joint Venture partners


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


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


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


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


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

NESW


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


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


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. BridgesDrill crew on line 1

A typical Fly Camp

Wire mesh glasses do not fog up in

hot conditions of bridging


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

of Muruk 2 to further constrain Muruk and adjacent

prospects and leads

Muruk 2SW NE


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


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


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

of the future

SUMMARY

Documents

Oil Search Exploration Update · 2018-12-05 · gas industry. Oil Search Limited believes there are reasonable grounds for the expectations on which the statements are based. However,