Oil Search : 2019 Full Year Results Presentation

OIL SEARCH 2019

FULL YEAR RESULTS

25 February 2020

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

www.oilsearch.com

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 Limited 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 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

EMERGENCY EVACUATION

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

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 4

2019 OPERATIONAL AND FINANCIAL HIGHLIGHTS

US$312.4 million		27.9 mmboe
NPAT in 2019		produced in 2019

96%		US$12.48/boe
increase in 2P + 2C liquids		unit production cost
reserves and resources,		(including upstream, pipeline
driven by Alaska		and liquefaction costs)

4.5 US¢/share

final dividend, taking full year

dividend to 9.5 US¢/share,

46% payout ratio

US$35.5 million

spent on Oil Search's

sustainable development programmes in PNG and Alaska during 2019

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

SAFETY FOCUS

INITIATIVES UNDERWAY TO REFOCUS EFFORTS ON SAFETY

◊ 2019 TRIR increased due to incidents associated	◊ One Tier 1 and four Tier 2 Process Safety events in
with remote seismic and marine operations within	PNG
PNG	◊ No Process Safety incidents in Alaska
◊ Initiatives underway to improve safety processes
Total Recordable Incident Rate (per million	Tier 1 and 2 Process Safety Events
hours worked)	14

3.0
	2.6	2.5
2.5
			2.0	1.9		1.9
2.0
							1.7
							1.6
					1.5
1.5	1.7	1.6
		1.5
1.0				1.2
					1.0	1.0	1.0
0.5
-
	2012	2013	2014	2015	2016	2017	2018	2019
				OSH	IOPG

12

10

8

6

4

2

-

2012

2013

2014

2015

2016

2017

2018

2019

Tier 1 Tier 2

IOPG: Global Oil and Gas Industry Trade Association
Tier 1: Hydrocarbon release >500kg during 1-hour period	OIL SEARCH 2019 FULL YEAR RESULTS | 25 FEBRUARY 2020 PAGE 6
Tier 2: Hydrocarbon release between 50 - 500kg during 1-hour period

RESERVES AND RESOURCES

96% INCREASE IN 2P RESERVE AND 2C LIQUIDS RESOURCES, DRIVEN BY ALASKA

• 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

End 2019	Liquids	Change	Gas	Change	Total1	Change
Reserves and
(mmbbl)	(%)	(bcf)	(%)	(mmboe)	(%)
Resources
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%

2P + 2C Reserves and Resources

mmboe
1,800
1,600			128
1,400		141
(27)
1,200
1,000
800				1,682
1,442
600
400
200
-
End 2018	Production	Discov, Extens, Rev	Acqu/Div	End 2019

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 7

STREAMLINED AND REFRESHED

MANAGEMENT TEAM

Keiran Wulff

Managing Director

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

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

OPERATING RESPONSIBLY IN

ALASKA AND PNG

CORE FOCUS FOR OIL SEARCH

• 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

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

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

www.oilsearch.com

FINANCIAL PERFORMANCE

WATERFALL NET PROFIT AFTER TAX, 2018 - 2019 (US$M)

• 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)

US$m
450
400	49
350
	(59)		40
300		-
	20	30
250
	(88)		(21)
200
150	341		312
100			242
50
-

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

PRODUCTION COSTS

(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

Unit Production Cost (US$/boe)

12.48

11.51

◊ Higher production costs in FY19 reflect:

♦ PNG LNG: higher shared costs, including impact of

offshore 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

1.53

2.07

9.98

10.41

FY18		FY19
Normalised		Workovers/Earthquake/CALM Buoy

◊ 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

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

CASH/LIQUIDITY POSITION

CASH BALANCE REFLECTS EXERCISE OF ALASKAN OPTION

Cash flow waterfall (US$m)

• 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 operations
  • 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

US$m
1,600
1,400
1,200						(363)
1,000					752
800							(450)
600								(143)
400
	601
200								396
-
Year End	Operations Investing	Alaska	Financing Year End
2018				(excl.	Option	2019
						Alaska
						Option)

Liquidity position (US$m)

2,000
1,800
1,600
1,400					850
748
1,200	750
1,000							900
800								756
600					1,015
400	910	863
		601
200							396
-
2015	2016	2017	2018	2019
			Cash (US$m)		Corporate Facilities Available (US$m)

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

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	12.00	13.00
boe)

• 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

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

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

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

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

www.oilsearch.com

2019 PRODUCTION

RECORD FULL YEAR PRODUCTION FROM PNG LNG

◊ 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

Oil Search production (by product)

mmboe
35.0			29.0	30.1	30.3			27.9
30.0
								25.2
25.0
20.0		19.2
15.0
10.0
5.0
-
	2014	2015	2016	2017	2018	2019
				LNG		Condensate		Crude		Gas

PNG LNG gross production

MT

10.0
9.0		7.9	8.4	8.5
8.0	7.4		7.5

to lift volumes from 1Q20

7.0

6.0

5.0

4.0

3.0

3.9

2.0

1.0

-

2014

2015

2016

2017

2018

2019

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

OIL SEARCH-OPERATED FIELDS

INFIELD DRILLING AND WORKOVER SUCCESS TO BOOST PRODUCTION IN 2020

• 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

UDT 15

Moran 4, 9

Moran 15ST2

IDT 26

IDT 21

Gobe Footw all

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

2020 PRODUCTION OUTLOOK

PRODUCTION EXPECTED TO BE SIMILAR TO 2019 DESPITE 2Q20 MAINTENANCE AT PNG LNG

• 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:

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	27.5	29.5
Forecast

• 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

1Numbers may not add due to rounding

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

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

www.oilsearch.com

LNG EXPANSION IN PNG DELAYED

PAPUA LNG AND P'NYANG JVS SUPPORT EXISTING DEVELOPMENT PLAN

• 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 other development alternatives
• P'nyang and Papua JVs will meet in coming weeks to work on a formal go-forward plan for expansion

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

PROGRESSING LNG EXPANSION

FINALISATION OF P'NYANG REMAINS THE KEY HURDLE TO COMMENCEMENT OF FEED PHASE

2019 Achievements	2020 Targets

• 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

• 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 21

MARKETING OF OIL SEARCH VOLUMES

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

Heating Value and Project / Train Size (MTPA) vs.

First LNG (Year)

Btu/scf

PNG LNG

US LNG

year

Existing

PNG

Under Construction

Source: OSH interpretation of IHS Markit

Global LNG quality (Btu/scf)

Weighted Average High Heating value in Btu/scf

	100%	1,096	1,081	1,078
		27%	19%	17%
Share	75%
					55%	53%
Volume	50%
		67%
	25%
						19%	23%
	-					6%	6%
	2015	2020	2025
					Very Lean <1,000 Btu/scf			Lean 1,000-1,050 Btu/scf
Source: FGE				Rich 1,050-1,100 Btu/scf			Very Rich >1,100 Btu/scf

• 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

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

PNG EXPLORATION PORTFOLIO

MATERIAL EXPLORATION UPSIDE, BUT SPEND SUBJECT TO CAPITAL PRIORITISATION

• 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

Eastern

Foldbelt

activities with potential to underpin additional LNG trains, add material near-term backfill gas or potential for new standalone oil 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

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

km						792
800
					704
700				617
600				549		511
500			387				382
400		360		353
	278
300						219
200	120	148	64				90
100					53
-

OSH Operated		Other Operated

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

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

www.oilsearch.com

ALASKA HIGHLIGHTS

SUCCESSFULLY PROGRESSING PIKKA DEVELOPMENT & CONFIRMING EXPLORATION VALUE

• 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

LUA Signing Ceremony

Nabors 105 rig at Pikka C

2019 Summer Works

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

PIKKA UNIT DEVELOPMENT

ENGINEERING FEED ACTIVITIES COMMENCED AND TARGETING FID IN 2H20

3.7 mi

2.8 mi

7.	21.9 mi
9
mi

ND-A

ND-B

ND-C

• Targeting recovery of ~728 million barrels of oil within the Nanushuk 3 and Alpine C reservoirs
• Pikka Unit development includes:

NOP Pad

♦ 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)

Mine Site F

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

2019/20 WINTER FIELD OPERATIONS - INFRASTRUCTURE

PREPARING FOR EARLY PRODUCTION SYSTEM AND FULL FIELD DEVELOPMENT

• 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

NOP Pad

Mine Site F

	NDA
NDB	Mitquq
	CPF

NDC

Civil Works

Stirrup

Loaded B-70 heading to ND-B Pad

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

2019/20 WINTER FIELD OPERATIONS - EXPLORATION

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

Mitquq 1 & ST1

• 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

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 28

MITQUQ IMPLICATIONS

PROVEN RESERVOIRS AND EMERGING PLAY FAIRWAY

• Alaska North Slope "super-basin" contains three world-classoil-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

A

NOP Pad

Nanushuk

Fairway

Alpine

A

Willow

(discovery) 3D Seismic

Inv entory

Stirrup

	Milne Point
A'
	Mitquq
		Discovery
	Kuparuk River

Exploration

Pikka Unit

Prospects

A'

1 Source: http://www.tax.alaska.gov/sourcesbook/AlaskaProductionMine Site F

.pdf

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

2 Source: United States Geological Survey (USGS) https://pubs.usgs.gov/fs/2017/3088/fs20173088.pdf

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

www.oilsearch.com

HOW WE SEE THE WORLD

Oil Search is in a	Oil Search has an	The
robust position today	industry-leading reputation	world is
and has an outstanding	for socially responsible	changing
platform to deliver further	operation
shareholder value

• 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

◊ PNG citizens comprise >80% of	◊ Energy transition has a clear
PNG workforce	direction of travel but a highly
◊ Recent landmark Land Use	uncertain pace, creating
opportunities and challenges
Agreement signed in Alaska that
supports a sustainable future	◊ The socio-political landscape
and cultural preservation	is evolving
◊ Top quartile of Carbon Tracker's	◊ Companies are facing greater
climate-resilient oil and	societal expectations than
gas companies	ever before
	◊ Oil Search is already well
	positioned to grow and evolve

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

POSITIONING FOR THE FUTURE

Oil Search has commenced a

Company-wide strategic review

The review will	The review will not	Strategy update

◊ 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

Distract from Oil Search's focus on ◊	Strategic review will be
safe and reliable operations and	completed and presented to
delivering key growth projects in	market in 2H20
PNG and Alaska
Change our focus on lowest
quartile cost projects and
responsible capital management
Compromise on Oil Search's DNA
of socially, environmentally
responsible operation and open,
transparent, stakeholder
engagement

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

SUMMARY

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

www.oilsearch.com

OIL SEARCH IN 2020

Commercialising & advancing LNG expansion

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

Delivering our Alaskan Pikka Unit Development optimally

• Incorporating expanding resource base & facilities opportunities to optimise capital spend
• Optimise equity, FID decision in 2H20

Vision to be a model for social & environmental responsibility

• Dedicated teams developing material and measurable initiatives to minimise our footprint & emissions
• Creating long term local business development & supporting local community wellbeing

Capital management & prioritisation

• Progressing Pikka Unit Development towards Final Investment Decision in 2H20
• Focusing on early commercialisation opportunities in PNG and Alaska

Strategic review to set long term direction

• 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

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

APPENDICES

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

www.oilsearch.com

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

IFRS 16 (LEASES) - FINANCIAL

IMPACT

		◊ 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;
	Impact on P&L		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
	Impact on
	Cash Flow Statement	◊	Lower operating cash outflow offset by higher financing cash outflow
		◊	Assets
			♦ Recognition of right-of-use assets, US$230.2 million
	Impact on	◊	Liabilities
	Opening Balance Sheet
		♦ Recognition of lease liabilities, US$282.2 million
	1 January 2019
		◊	Equity

♦ Reduction in opening retained earnings, US$23.2 million

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

RESERVES AND RESOURCES1,2

AT 31 DECEMBER 2019

Licence/Field	OSH Interest	Proven Reserves (1P)	Proven & Probable Reserves (2P)
		Total	Total Gas4	Total	Total Gas4
		Oil/Condensate3		Oil/Condensate3
		(mmbbls)	(bcf)	(mmbbls)	(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 38

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

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