PNG Oil Production A Continued Great Value Driver

PNG Mining & Petroleum Investment Conference

December 2012

O I L S EAR C H LI M ITE D

Safety Performance
Total Recordable Injury Frequency Rate of 3.20 in 1H12, unacceptable Performance has improved significantly in 2H12
9 8 7 TRI / 1,000,000 Hours 6 5 4 3 2 1 0
2

Australian Companies (APPEA)

6.0 5.2

International Companies (OGP)

1.85 1.76

1.75

1.96 1.68

Oil Search
1.16

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

O I L S EAR C H LI M ITE D

Australian Safety Benchmarking

Total Recordable Injury Frequency Rate Data for 2011
per Million Hours Worked (All Reported Data)
Wesfarmers Qantas CSR OZ Minerals Treasury Wine Est. Brambles Boart Longyear Fletcher Building Hastie Group United Group Monadelphous James Hardie Downer EDI Incitec Pivot Transfield Origin Contact Energy Stockland AGL Energy BHP Billiton Woodside Amcor Newcrest Santos AWE PanAust Caltex Orica WorleyParsons

Australian Benchmarking

Oil Search

FY11 Dec YE

10

15

20

25

30

35

40

45

50

Source: Company data, Citi Investment Research and Analysis. Note: TRIFR Total Recordable Injury Frequency Rate per 1 million hours worked 3

O I L S EAR C H LI M ITE D 3

Ensuring a Sustainable Future

Oil Search considers that ensuring a sustainable future for the Company and the social and physical environment around our operations is paramount Our PNG Oil Operations have been certified as compliant with ISO 14001 standard for environmental management since 2009 We have recently successfully passed our first recertification audit We are currently finalising approval of a number of projects in the European Carbon Emissions Reduction (CER) market Carbon Credits We are working closely with our host communities and the PNG Government on ensuring equity and transparency in the community benefits distribution processes Oil Search continues to engage with project area communities to manage potential environmental impacts and provide them with options for a sustainable future

O I L S EAR C H LI M ITE D

Our Production Environment

2 4 3

OWC ~2830mTVDCD

Remote, mountainous terrain

Unreliable seismic

Complex geology

O I L S EAR C H LI M ITE D

Oil Production Performance

Since assuming Operatorship in 2003 Oil Search has drilled 35 development and near-field wells without a dry hole This in turn has added greatly to; the wealth of PNG, the revenues of the community, the growth of the Company and the value delivered to all Oil Licencees

O I L S EAR C H LI M ITE D

Gas Conservation Performance

O I L S EAR C H LI M ITE D

How Has This Been Achieved?

Everyone focuses on the things that are most important to them PNG Oil Production is very important to Oil Search It is our sole source of revenue and the engine that has fuelled the Companys stellar growth over the past ten years From 2002 we focused on pulling together the best team of subsurface engineers and geoscientists available They have been the architects of the success This has been coupled with a great field production & maintenance team and a world class drilling team PNG is one of the worlds most challenging environments in both these areas! This great skill base combined with high levels of commitment and a lot of plain hard work has made this outstanding achievement a reality We expect PNG oil production to remain flat at ~30,000 Bbls/day until end 2014
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O I L S EAR C H LI M ITE D

Hedinia 10 and Agogo 6

Complex and invisible - highly successful near-field exploration to date

Kutubu oil field

Agogo oil field

ST2 ST1

ST3

Sub-thrust forelimb

Sub-thrust forelimb

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O I L S EAR C H LI M ITE D 9

2012/13 Development & Near-Field Appraisal Drilling Activity

PPL260 PRL PDL9 02 PDL1

Hides
PRL 11 PDL8

Angore
PRL 11 PDL6 PDL5 PPL233

PPL277

Juha
6S

PDL 7 PDL7

Moran:
PPL233

Mananda 5 SE Mananda

PPL219

2012 : 1 well 2013 : 1 well, 1 workover

Agogo:
2012 : 1 well, 2 workovers 2013 : 1-2 wells
PDL2

Kutubu:
2012 : 3 workovers 2013 : 1 well, 3 workovers

Usano:
Oil Field Gas Field Prospect Oil Pipeline PNG LNG Gas Pipeline OSH Facility PNG LNG Project Facility Major Road 40km PRL08

Gobe Main:
2013 : 1-2 workovers
PDL 4

2012 : 1 workover 2013 : 1 well

SE Gobe:
2012 : 2 well interventions 2013 : 1-2 workovers
7S

PRL 14 PDL PDL 4 3

Cobra Iehi

PRL09

Barikewa

Kimu

10 10

143E

144E O I L S EAR C H LI M ITE D

Achieving Predictability in Production

Production Time
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O I L S EAR C H LI M ITE D

Key Components of the Forecast

Base Decline New Opportunity
Initial Rate Decline (%) Production Production Time Plateau

Time

Production Forecast - Excel - VBA - @Risk

P50 Rates P90 Rates P10 Rates

Production

Time

Increasing uncertainty

Production Deferrals
UMD allowance
Well A

Schedule
Well B Well C Well D

4
Iteration 1 Production Well downtime for incremental work Planned facility downtime Time

3
Iteration 2 Time

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O I L S EAR C H LI M ITE D

UMD Events Allowance

UMD allowance distribution
1.20% 25 10.0% 80.0% 5.63% 10.0%
Forecast UMD Allowance: MEAN = 3.3%

20
MODE or "most likely" = 2.7%

Historical UMD events year forecast

2004 2005 2006 2007 2008 2009 2010 2011 min mean max -2.5% -6.5% Pert(0,0.0265,0.092) -9.2% Minimum -2.3% 0% Maximum 9.20% -1.4% Mean 3.30% -2.8% Mode 2.65% Median 3.15% 0.0% 10% 1.20% -1.5% 90% 5.63% 0.0% -3.3% -9.2%

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P50 = 3.2%

10

Forecast UMD allowance

5
P10 = 1.2% P90 = 5.6%

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O I L S EAR C H LI M ITE D

Results and Business Integration

Prior to probabilistic modelling, actual production was nearly 10% below forecast for 3 consecutive years Since implementing probabilistic modelling, the forecasting has been significantly more accurate with actual production being within 4% for 3 years

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O I L S EAR C H LI M ITE D

Focus for the Future

World class safety performance is always at the top of the list Delivering our work programme to keep production flat through to First Gas is a key priority The transitioning of our PNG production operations from an oil business to a reliable gas producer is focus item for 2013 and beyond: Separate team established to steward this process Many agreements and protocols being developed with the PNG LNG Project Management systems and operating procedures being updated and upgraded Continue to pursue incremental barrels and near-field opportunities Fine tuning the associated gas depletion strategy to ensure that liquid production and total value is maximised through the long term Ensuring we have the capacity within the PNG operations teams to support the broader opportunities emerging for the Company We want to export Papua New Guinean expertise to the world!

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O I L S EAR C H LI M ITE D

Oil Appraisal - Mananda 6

Mananda 6 appraisal well is located ~5km south east and ~140m up-dip from the Mananda 5 discovery Contingent upon the results of Mananda 6, a down dip side track could be drilled to constrain fluid contacts Contingent upon the results of Mananda 6 and any associated side tracks, Mananda 7 could be drilled from the Mananda 6 well pad Appraisal well, Mananda 6, planned to spud1Q13

Mananda 5

Mananda 6
Proposed Location

MORAN

2012 Seismic

SE MANANDA

5km AGOGO

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O I L S E A R C H L I M I T E 16 D

Questions

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O I L S EAR C H LI M ITE D

Disclaimer
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.

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