[Abrupt Start]
...and may I wish you a very warm welcome to Oil Search's Results Presentation for the 2014 Fiscal Year. Standing
here 12 months ago, it was not difficult to see that 2014 was going to be a very big year for the company. We had set
ambitious targets for safety, for production, for costs and for earnings. We had the PNG LNG project in its final stages
of construction and we're about to enter the commissioning phase.
We just announced the acquisition of the Pac LNG group of companies, which allowed us to enter the Elk/Antelope
joint venture as a joint venture partner. And we flagged at this meeting a major strategy review reflecting the changing
status and profile of the company, the results of which were announced later in the year in October.
(2)
We also, as Chairman said, purchased a significant interest in the Elk/Antelope fields, and that obviously provides a
very strong resource base to support another LNG development and we are moving forward with the appraisal of that
resource and looking at how that resource can be tied in to a plant in PNG.
(3&4)
Turning to the investment outlook for this year. Our full year capital expenditure forecast is going to range around
somewhere around US$600 million mark. That's certainly the lowest spend we've seen since FID for the LNG project
in 2009. LNG construction spend does tail off this year, following the acquisition of Antelope drilling and the
construction of LNG office facilities in Port Moresby.
Our exploration spend in 2015, we anticipate to be similar to the 2014 spend if you exclude the large outlay for the
PRL 15 licenses and that includes ongoing drilling for the Antelope appraisal wells, site prep for the P'nyang drilling,
and ongoing appraisal drilling and testing in the Taza block in Kurdistan.
(5)
Our net 2C contingent gas resources have increased by 54% following the booking of just over 1.2 tcf at Elk/Antelope
reflecting our acquisition in PRL 15 early last year. There's also an addition from the Finders discovery drilled in the
Gulf of Papua. Overall, our reserve statement confirms that we've got long life assets and they are underpinned by
quality reserves and resources.
(6&7)
Thank you, Paul, for that good news story and good morning, ladies and gentlemen. As you've heard this morning, Oil
Search's development focus remains the delivery of high returning LNG projects in PNG. The success of the PNG LNG
project and the cash flows it will generate together with the disciplined approach to our investment that Stephen has
highlighted will ensure that funds are available to underpin the next phase of Oil Search's growth.
The discovered but undeveloped resource base in PNG, primarily P'nyang and Elk/Antelope fields, can supply at least
two new LNG trains. With moderate drillbit success through 2015, we can possibly be involved in three trains.
Oil Search, as you're aware, is uniquely positioned in PNG. We hold a material interest in each of those resources that
are expected to deliver new LNG to the market early in the next decade. The developments can meet the forecast
mid-term supply shortage as less competitive LNG projects are either deferred or shelved indefinitely. The P'nyang and
Elk/Antelope developments have been rigorously stress-tested in the current price environment and both expansion and
greenfield alternatives are economically attractive.
(8-12)
In the Gulf Hub, Antelope 4 and Antelope 5 are currently drilling. Provisionally, they have encountered top reservoir. It
is expected that a further appraisal well, Antelope 6, will be spudded before mid-year to define the eastern flank of the
field.
Resource certification will follow this drilling program and confirm is it a one or two train development in the Gulf.
Additionally, the Antelope Deep or Antelope South prospect will target a sizable accumulation just at the south of the
main field.
(13,14,&15)
Moving onto PRL 15, in the Gulf Hub, the recently announced result of the arbitration process denied Oil Search a
preemptive right. A majority decision ruled that Total were a party to the JOA, but they've had no rights in the JOA or
in the PRL 15 license. However, we are working cooperatively to resolve this matter through open dialogue with our
joint venture partners.
On the technical front, we are close, as I mentioned, to obtaining reservoir information on Antelope 5 and Antelope 6.
Provisional top reservoir picks by operator are between 30 meters and 50 meters high to Oil Search's mapping, but it's
still early days and we need to confirm reservoir and reservoir quality through further drilling and logging.
Antelope 6 is likely to complete the appraisal program and will target an area to the east to firm up support structure
and phases as we move away from existing take points. Our joint venture Concept Select decision is targeted later in
2015 as is an Oil Search certification of the resources in Elk/Antelope.
