O I L S E a R C H L I M I T

O I L S E A R C H L I M I T E D Oil Search Asian Roadshow

May 2008

1 Oil Search Location Map

Operating Environment

3 Profile

¬ Established in Papua New Guinea (PNG) in 1929

¬ Operates all of PNG’s producing oil and gas fields. Current gross production ~46,000 boepd, net share ~24,000 boepd

¬ As operator, responsible for generating 22% of PNG’s export revenue and 16% of its GDP in 2007

¬ PNG’s largest investor and taxpayer

¬ PNG Government is largest shareholder at 17.6%

¬ 950 mmboe undeveloped gas and liquids resource. ~60% of resource is dedicated to PNG LNG, proposed world scale LNG project, remainder still to be commercialised

¬ Range of material exploration interests in PNG and Middle East/North Africa

Share Price Out-Performance

Aug 2006 : APC withdraws from April 07: Signs Cost Sharing 6.00 Australian leg of PNGGP Pipeline Agreement for LNG project

5.00 July 2005: Announcement of AGL GSA and PNGGP equity sale

4.00

Oct 2004 : PNGGP enters FEED 3.00

July 2003: Acquisition of 2.00 Chevron’s PNG Interests

1.00

Share Price (rebased to OSH) 0 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08

OSH ASX 200 ASX 200 Energy WTI

5 Total Shareholder Returns (TSR)

Ranked No.5 TSR Performer amongst current ASX 100 for 5 year period to Dec 2007 (53%pa on an annualised basis)

70%

60% 53%

50%

40%

CAGR 30%

20%

10%

0% CSL Orica Oxiana Rio Tinto OneSteel Oil Search BHP Billiton BHP Sims Group David Jones ASX Limited ASX Allco Finance United Group United WorleyParsons QBE Insurance QBE Paladin Energy Computershare Caltex Australia Bluescope Steel Newcrest Mining Newcrest Fortescue Metals Macquarie Group Macquarie Leighton Holdings Macquarie Airports Macquarie Woodside Petroleum Woodside Macquarie Communica. Macquarie

6 Source:Source: Merrill IRESS Lynch

World Class Safety Performance Total Recordable Incidents (TRIs) 1998 – 2007

14 OSH OGP APPEA 12.7 12 10.6 9.8 10.7 Australian Companies 10 9.4 8.5 9.1 9.3 8.3 8 7.8 8.2 7.0 7.3 6.8 6.3 6 5.8 5.2 4.7 4 International Companies 4.0 3.1 2.9 TRI / 1,000,000 Hours 2.05 2 Oil Search 1.7 2.4 2.3

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

7 Setting a New Course

¬Strategic Review recently completed ¬Highlighted value potential and actions required to transform Company value ¬Review has set strategy for next five years: ¬Continue to deliver top quartile returns ¬Transform Company by making it a significant LNG producer ¬Provide the fundamentals for continued organic growth through second phase gas development, material exploration success ¬Further build financial strength OSH has the fundamentals to continue to deliver superior returns to shareholders

Key Conclusions of Review

Existing portfolio can deliver superior TSR “Delivering PNG LNG is the Highest Priority” ¬ Substantial unrealised value exists within Oil Search’s current asset portfolio, capable of generating superior shareholder returns over next five years and as r G beyond he Ot ¬ Delivery of PNG LNG alone can

Value deliver 15% plus annual TSR growth PNG LNG ¬ Further value growth can be delivered through commercialisation of other gas resources.

Oil & Other ¬ Value of PNG gas will increasingly dominate the portfolio over time

Dec '07 Dec '08 Dec '09 Dec '10 Dec '11 Dec '12 Dec '13

9 Key Conclusions of Review

Gas Commercialisation the Key to Growth ¬ PNG LNG will dominate ¬ A robust economic project ranking well relative to other possible developments ¬ ExxonMobil led, with strong alignment and commitment ¬ OSH’s experience in operating in PNG will add value ¬ Significant value can also be derived from remaining undedicated discovered gas resource

Key Conclusions of Review

Optimise Cash Generation from Oil Fields ¬ PNG oil is essential part of Oil Search’s business - provides cash flow required to fund LNG development ¬ Easy wins from PNG oil fields have largely been captured, but Life of Field studies have shown that substantial upside potential still remains ¬ Target – to maintain gross PNG production at between 40,000 – 50,000 bopd until 2011 ¬ A number of initiatives have been identified to enhance cash flow generation progressively from 2008 and beyond

11 Key Conclusions of Review

Re-focus MENA ¬Oil Search successfully built up diversified, value accretive portfolio in MENA, but some assets were sub-material ¬Recommendation to refocus on assets with material value potential relative to growing value of gas portfolio ¬Recent sale of assets to Kuwait Energy delivered value and further cash to support other growth initiatives ¬Remaining MENA portfolio and equity levels to be pro-actively managed on an on-going basis

Key Conclusions of Review

Exploration an Important Contributor to Growth ¬ Independent review of portfolio highlights potential for material oil and gas contribution ¬ PNG Highlands potential will be tested. Offshore areas have material gas potential ¬ MENA portfolio management concentrating on material prospects ¬ Strong competition for capital with comprehensive ranking process ¬ Programme of active licence equity management to optimise equity, risk and capital expenses. A trading mentality

13 Key Conclusions of Review

Management of Cash to Fund LNG ¬ Financial position is strong (net cash of $320 million post recent tax payment) ¬ Funding of PNG LNG capex (OSH share ~US$3bn) will consume large proportion of operating cash flow over next 5 years, impacting availability of funds for other activities ¬ Discretionary expenditure will require close management ¬ Hedging and other levers available ¬ Active capital prioritisation across portfolio of opportunities

Key Conclusions of Review

Other ¬ Stakeholder Management ¬ OSH can add value and mitigate risk by active stakeholder management in PNG − Government and bureaucracy − Partnership with Government instrumentalities − Landowner and community management ¬ These relationships are especially important in delivering gas commercialisation

¬ Organisation to optimise strategy delivery ¬ Organisation being modified to align to specific strategy initiatives - “Fit for Purpose”

15 Delivery of Strategy

¬Focus is now on delivery of Strategy ¬Achieve superior value growth performance versus peer group over the next five years by: ¬ Ensuring a positive Final Investment decision for the PNG LNG Project ¬ Optimising PNG operating performances to sustain production and cash flows up to, and beyond, first gas ¬ Post asset sale, actively managing the remaining MENA portfolio ¬ Positioning OSH with material growth opportunities post LNG Project FID - delivery of second phase gas developments and material exploration

PNG LNG Project

A Company Transformer

17 Primary focus - PNG LNG

¬PNG LNG Project is Oil Search’s primary focus

¬This development will represent PNG’s cornerstone gas development and will underpin Oil Search’s production and profits for 30+ years

¬PNG LNG will commercialise over 500 mmboe of Oil Search’s 2P gas resources

¬Initial development will add ~ 18 mmboe to annual net production, more than tripling current production

PNG LNG Project

The PNG LNG Project will comprise: ¬ Upstream infrastructure including production wells, processing facilities and pipeline network linking to the export pipeline ¬ Gas export pipeline from PNG Highlands to LNG plant near Port Moresby ¬ Liquefaction plant, export loading and support facilities located in Portion 152 near Port Moresby

19 The Environment is right for LNG ¬ Burgeoning demand for LNG from Asia Pacific region, as well as globally ¬ Tight supply: demand equation. Large number of potential new projects in the region, only a few will reach commerciality in 2013/14 window ¬ Supply conditions, combined with environmental factors, have resulted in rising LNG prices ¬ Strong and increasing market interest for participation ¬ AGL sale a window to project value ¬ New corporate developments at premium prices (BG & Origin, QGC)

Asia-Pacific LNG Markets are Robust

250 ¬ Regional market fundamentals mmtpa are robust ¬ Steady expansion from 200 existing markets (Japan, Korea, Taiwan) Market ¬ Growth from emerging 150 opportunity markets of India & China and new markets such as Singapore, Thailand 100 ¬ Some of the growth likely to be filled by roll-overs etc but 50 significant non-contracted volume ¬ A number of “Possible” 0 projects looking to fill remaining demand gap 2016 2018 2020 2006 2008 2010 2012 2014 ¬ Not all projects will GSPA HOA MOU proceed Option Rollover Demand ¬ Early commitment important

21 Source: WoodMac LNG Pricing

LNG ($/mmbtu) 20

15 Crude Oil Parity

NWS Recent Contracting

5 Traditional Contracting

0 10 20 30 40 50 60 70 80 90 100 JCC ($/b)

22 Source: FACTS Global Energy

Recent AsiaPac LNG deals

¬ Sept 07 - Woodside to Petrochina, 2 - 3 mmtpa, 15 - 20 years, key terms with supply ex Browse

¬ Sept 07 - Shell to Petrochina, 1 mmtpa, 20 years, binding HOA ex Gorgon

¬ Nov 07 - Woodside to CPC, 2 - 3 mmtpa, 15 - 20 years, key terms ex Browse

¬ April 08 - Shell/Qatar Gas IIII to Petrochina, 3 mmtpa, 25 years from 2011, SPA

¬ April 08 - Qatar Gas II to CNOOC, 2 mmtpa, 25 years from 2009

¬ Pricing confidential but Qatari contracts thought to be at crude oil parity, other contracts considered to be at small (3 – 5 cents) discount to parity

23 PNG’s Competitive Advantage ¬ Large number of potential new projects in this region (NW Australia, CSM) ¬ “Screening economics indicate the PNG LNG Project is robust…and stacks up favourably against other projects in the region” WoodMac/Deutsche Bank, March 2008 ¬ Quality and location of resource makes PNG very competitive in project line up for a 2013 – 2014 start up. Advantages include: ¬ Fully aligned Joint Venture ¬ Substantial conventional, certified gas reserve base, high liquids content, minimal impurities ¬ Onshore, with existing infrastructure base (Kutubu & liquids pipeline) ¬ Excellent location for Asian markets ¬ Competitive labour costs relative to Australia ¬ Favourable fiscal regime with strong Government support

PNG LNG Project - Milestones Reached ¬ Commercial alignment (JOA) amongst the Project Owners ¬ Joint Operating Agreement executed in March ¬ Initial funding interests pre-Government back-in (Oil Search 34%) ¬ Unitisation and redetermination procedures agreed ¬ Actionable finance plan agreed ¬ Marketing Representative Agreement signed for joint marketing of 6.3 mmtpa, led by ExxonMobil ¬ Endorsed marketing plan, Project rolled-out to buyers at GasTech in Bangkok in March, strong interest received ¬ Pre-FEED work and updated capital costs complete with first phase capex (2008 – 2014) expected to be between US$10 – 11bn (real 2007) PROJECT IS FEED-READY

25 PNG LNG Capex Estimate

EM Project Execution Performance ¬ ExxonMobil historically has delivered projects on time and Actual vs. Funded (%) 125 on budget Cost Schedule ¬ First phase capex (2008 – 2014) expected to be between US$10 – 100 11bn (real 2007) ¬ Subsequent capex is several years out (additional Hides 75 drilling, Juha development and potential LPG extraction if

50 required) ¬ Juha timing depends on Hides and Angore outcomes and 25 performance ¬ Further updates to capex estimates from EPC bids 0 Average 2003-07 2007 ¬ Further optimisation will occur during dual FEED

26 Source: ExxonMobil Analyst Briefing 5th March, 2008.

Project Interest Determination

PNG LNG Interest 36% JV Partners Share of FEED Oil Search PNG LNG Interest costs 34% ExxonMobil 41.6%

Oil Search 34.1% 32%

Santos 17.7% 30% OSH expected post AGL 3.6% Government back-in final project interest Nippon 1.8% 28%

MRDC / State 1.2% 26% FEED Interest

¬ Methodology agreed for Project Interest determination ¬ Initial Project Interests will be established at FID, taking into account FEED work and actual LNG revenue streams ¬ Periodic re-determination and equalisation processes established ¬ Government has the right to back-in (22.5%) to Hides, Angore and Juha licences ¬ Resulting State participation in PNG LNG Project post back-in,

27 approximately 19% Delivering PNG LNG

¬ Imminent events: ¬ Execution of Gas Agreement (Prime Minister announced agreement of fiscal terms in last week of April) ¬ Commencement of FEED ¬ FEED deliverables: ¬ Securing market off-take (2008/09) ¬ Securing debt and state equity funding (IM 4Q08, Financial Close end 09/early 2010) ¬ Award of EPC contracts (2009) ¬ Executing agreements on benefit sharing (1H09), environmental plans (3Q09) ¬ Final Investment Decision (end 2009) ¬ Target first LNG cargo - end 2013/early 2014

Oil Search’s Role

¬Oil Search will support operator ExxonMobil utilising its long in-country experience and skills. Key areas for Oil Search are: ¬Delivering Oil Search’s component of the upstream FEED ¬Optimising delivery of gas to LNG Project from oil fields ¬Supporting ExxonMobil on: − Landowner Benefits Sharing Agreement − Business Development opportunities − Training and localisation − Providing in-country project management skills ¬Financing: − Coordinating key parts of the project debt finance process with ExxonMobil − Securing OSH equity funding. Includes refinancing and internal cost management ¬Government and landowner relationships

29 PNG LNG Financing

¬Debt: ¬Joint debt financing approach, led by a Finance Committee co-ordinated by ExxonMobil. Soc Gen appointed financial advisor. ¬OSH share of project finance around US$3 billion, nominal, including fees, capitalised interest, completion guarantees etc ¬Equity: ¬OSH’s equity contribution expected to be US$1.0-US$1.3 billion ¬Based on current modelling (using conservative oil prices), OSH can meet equity requirements without coming to the market. Funded from existing cash (US$320m), MENA sale proceeds (US$200m), corporate borrowing from refinancing (US$400m) and oil cash flows between 2008 – 2013. ¬Will utilise hedging, if required, to protect cash flow and optimise borrowings

LNG Project Schedule

2007 2008 2009 2010 2011 2012 2013 2014

Pre-FEED

FEED Program & EPC Contracting Entry EPC bids

PNG Government Approvals Gas Agreement Environmental, Benefits Sharing Benefits Sharing Agreement

IMFID Close Project Financing & Marketing HOA’s / SPA’s Detailed Engineering First Design & Procurement Cargo LNG Construction / Commissioning Train 1 Train 2 *Schedule is Indicative only

31 Economic Importance of PNG LNG ¬ACIL Tasman Report 6 February 2008 ¬ “Affects economy of PNG and its balance of trade situation profoundly” ¬ GDP will more than double (K8.65bn (2006) to K18.2bn average during production phase) ¬ Oil & Gas exports increase 4 fold (Average LNG and liquids value estimated K11.4bn/yr) ¬ Up to 7,500 jobs in initial phase, 20% by nationals; 850 full time positions, developing national workforce over time ¬ Huge cash flows to Government – national and provincial - and landowners through tax, royalties, levies and equity participation (direct cash payments of US$31.7bn / K114bn to PNG Gov’nt / Landowners over 30 years ¬ Multiplier effects additional

PNG Oil Operations

33 Oil Operations – Providing Cash for Growth ¬Since Oil Search took over operatorship of PNG oil fields in 2003, fields have produced ~45 mmbbl in excess of previous operator’s expectations and field life extended

¬Aim is to optimise PNG oil cash generation over the next 5 years to support PNG LNG Project funding requirements

¬Existing oilfields are mature (decline rate of 15-20%) but with appropriate investment, expect to mitigate decline curve for 2-3 more years

¬PNG production is highly profitable, but there are cost pressures - initiatives underway to address

¬Need to balance work programmes, production outcomes and efficiency measures while maintaining safety performance and reputation as a competent Operator

PNG Fields

35 2008 PNG Development Focus Areas

Moran: 2 development wells & 1 workover

Agogo: Kutubu: 2 workovers 4 workovers

Usano: 4 development wells

PNG Gross Oil Production

80,000 Oil Search Added over P50 Hides P50 2008 P50 takeover 45mmstb Base GTE Programme Contingent 70,000 operatorship compared Resources- to Chevron LOF

60,000

50,000

40,000

30,000 Oil Rate (bopd)

20,000

10,000

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

PNG Oil Actuals Base Hides GTE Fcst 2008 Program Life of Field Hides GTE Actuals Decline Before OSL

37 Note: Forecasts under review PNG Net Production (Life Of Field)

10,000

9,000

8,000

7,000

6,000

5,000 (Mstb) 4,000

NET Production Hides GTE 3,000 SEM SE Gobe 2,000 Gobe Main 1,000 Moran Kutubu 0 2008* 2009 2010 2011 2012

Activities 6 wells 6 wells 4 wells 1 well 7 workovers 2 sidetracks 1 sidetrack 1 sidetrack

Approximate Net 140 90 60 20 20 Capex (US$M)

38 Note: Forecasts under review

Cost Control - Capex

¬Need to reduce capex through drilling performance improvements, drilling cost reductions, new technologies and optimised rig strategy ¬Initiatives: ¬ Rigorous cost control of contracts, materials and logistics ¬ Improvements in contractor performance culture ¬ New technology: − Rig 103 and 104 with leapfrog capability − Hydraulic workover unit to provide lower cost workover and “incremental” drilling capability ¬ Rig strategy: − Requirement for 2 rigs per year − Actively working with other Operators in PNG − Rig 103 and 104 preferred option: − Efficiency gains − Standardisation benefits − Flexibility

39 Cost control - Opex

¬Cost inflation of 9 – PNG Controllable Costs / Barrel 10%, higher in 8 specific areas 7 Other Marine Telecommunications Catering Services ¬Focus areas for cost Services & Fees 6 Fuels, Chemicals, reduction: Materials & Supplies ¬Organisational changes 5 Transportation ¬Rationalisation of 4 Contractor base US$/bbl ¬Work programmes 3 focussed on production 2 optimisation and Labour reliability 1 ¬Highly competitive cost base 0

Additional Growth Opportunities

41 Gas Growth Opportunities

¬PNG LNG Project sets the stage for additional gas-based growth opportunities. OSH seeking to: ¬Increase contractible gas for threshold developments ¬Plan infrastructure for gas hubs and corridors ¬Capture high value market opportunities in parallel with further resource definition ¬Match available supply to gas market opportunities

¬New opportunities need to be considered in a framework of being material for a US$5bn+ company

Gas Resources

Juha Hides PNG has substantial Northern Hub discovered undedicated P’nyang Elevala gas resources Angore Western Corridor Stage II Central ¬Company has ~2 tcf of Foldbelt Western Eastern Corridor discovered gas outside Hub Stage I Douglas PNG LNG Iehi Elk Kimu ¬PNG has a further est. 3- Barikewa

4 tcf of discovered gas Uramu resources spread across Foreland many fields and owners Shelf

Offshore Hub

PPL234

Flinders

Pandora

43 Gas Growth Opportunities

¬Highest value use for gas is for PNG LNG Project debottlenecking (+10-15% above nameplate capacity), expansion and/or developing other LNG plants: ¬ Significant field, pipeline and plant synergies can potentially be obtained

¬Domestic gas commercialisation opportunities can also offer attractive returns and potentially earlier delivery ¬ Petrochemicals – methanol/DME ¬ Hides Gas To Electricity for Porgera ¬ Power generation and other smaller projects catering to the needs of local communities & industry

Delivering Gas Growth

¬Focus for OSH: ¬ Build on existing gas portfolio by acquiring/ consolidating interests in key fields ¬ Undertake further exploration & appraisal in 5 hubs: − Eastern Forelands (eg Barikewa) − Western Corridor (Stage 1 and Stage 2 - Kimu, Elevala, Douglas) − Northern Hub − Offshore Gulf of Papua ¬ Seismic & studies 2008 ¬ Active drilling 2009+ ¬ Align with Government & others on infrastructure and domestic gas development needs

45 Exploration

PNG Exploration

¬ Portfolio optimisation ¬Data room being prepared for farm down of some exploration exposures in PNG ¬ Seeking to build on gas portfolio (already outlined) ¬ Oil exploration ¬High grade remaining prospects in close proximity to infrastructure ¬Consider deeper Jurassic plays ¬ Frontier “paradigm changers” ¬In the past, PNG exploration focused on few plays ¬Potential to open up new areas with selective, albeit high risk, drilling − Large hinterland structures reliant on younger reservoirs − Offshore fans and toe thrusts − Foreland extensional fault blocks ¬ Current wells: NW Paua, Cobra (drilling), Wasuma (1Q09)

47 PNG Exploration

NW Paua

Wasuma

Cobra

NW Paua

PPL219 PPL233 PPL 233 WI % NW PAUA Oil Search 52.5 PDL6 PDL5 Esso Highlands 47.5% Moran Paua ¬ Highly prospective structure SE Mananda adjacent to Moran PPL219 APF ¬ Stacked Toro and Digimu reservoirs PPL219 Agogo Moro Lake ¬ Mean recoverable reserves 30 - 90 10km PDL2 Kutubu mmstb with upside potential of >100 mmstb ¬ Chance of success 1 in 6 ¬ Constrained by Paua 1X well (1996) and seismic acquired in 2005 ¬ Oil Search operating on behalf of Esso ¬ Currently preparing to drill ahead to primary objective

49 Cobra

PDL4 PPL219 PPL 190 WI % Gobe Main Oil Search 62.6 SE Murray Petroleum 26.5 Gobe Wasuma COBRA Cue PNG Ltd 10.9 ¬ Near-field exploration opportunity PDL3 PDL4 adjacent to the SE Gobe oil field ¬ Cobra 1a will test the Iagifu sandstone PPL190 10km in a seismically defined footwall anticline (‘Sub-thrust Play’) NW SE ¬ Mean recoverable reserves 40 mmstb, upside to 75 mmstb ¬ Chance of success 1 in 6 ¬ Success at Cobra will open up a significant new play fairway ¬ Cobra 1a spudded March 2008 SE Gobe

Cobra

Wasuma

PDL4 PPL219 PPL219 WI % Gobe Main Oil Search 91.25 SE Merlin Petroleum 8.75% Gobe Wasuma COBRA ¬ Near field exploration opportunity adjacent to the SE Gobe oil field PDL3 PDL4 ¬ Iagifu sandstone primary objective - proven reservoir at Gobe PPL190 10km ¬ Seismically defined structure - one of the last un-drilled ‘simple’ Hangingwall anticlines within the SW NE main Foldbelt trend Mean recoverable reserves 35 Wasuma ¬ SE Gobe mmstb with upside potential to 100 mmstb ¬ Chance of success 1 in 5 ¬ Well site construction commenced. Drilling scheduled for Q408 – 1Q09

51 MENA Exploration

¬ Sale of MENA assets to Kuwait Energy recently announced for US$200 million & WC ¬ Allows OSH to re-focus on MENA assets that have potential to make a material contribution eg Libya Area 18, Yemen Blocks 3 & 7, Kurdistan ¬ Pre-drill POS can be reduced to >20% through technology or quality of acreage ¬ Continue to seek material opportunities in world class petroleum systems ¬ Actively maintain and build on core regional relationships ¬ Key strategic advantage of OSH is ability to operate at a local level ¬ Manageable budget yet material opportunities

MENA Exploration

Le Kef

Bina Bawi Tajerouine Kurdistan

Area 18

Dubai Office

Block 7

Sana’a Office

Block 3

53 Area 18 – Offshore Libya

Area 18 WI %

Oil Search 30

Petrobras 70 (Operator)

¬ Area 18 is located in Pelagian Basin, offshore Libya ¬ Pelagian Basin contains 11% (7 bn boe) of Libya’s total recoverable reserves, considered under-explored ¬ Area 18 is located on trend to productive Pelagian Basin fields ¬ Exploration targets: ¬Two proven and productive plays – the Eocene and Cretaceous carbonate oil plays ¬Unproven clastic gas play in the Jurassic and Triassic section. This play is productive in the Sirte basin to the southeast ¬ Caliph Prospect defined by recently acquired 3D seismic data and will target all three plays ¬ Other prospects and leads in the permit are defined on 2D seismic

Caliph Prospect

Eocene Play Cretaceous Play

Jurassic- Triassic Play

¬ Eocene-Cretaceous carbonate play is a combination structural-stratigraphic trap. Operator estimate of potential recoverable oil reserves - +250 mmbbl in Eocene, +180 mmbbl in Cretaceous ¬ Jurassic-Triassic clastic play is a tilted fault block trap. Operator estimate of potential recoverable gas reserves - +300 mmboe in Jurassic, +750 mmboe in Triassic

55 Financial Overview

Financial Performance 2003 - 2007

US$m 800

EBITDAX 718.6 700 664 644.5

600 598.2 554.3 544.8 Revenue 500 Operating Cash Flow 416.3 399 400 357.7 350.8 330 326.8 300 239.1 276.7 200.2 207.5 200 191.3 107.3 140.8 100 85.7 Core Net Profit 0 2003 2004 2005 2006 2007

57 Performance in 2007

¬ Total production of 9.78 mmboe, just 4% lower than in 2006 despite PNG oil field maturity ¬ Realised oil price of US$77.78/bbl, 16% above 2006 ¬ Record revenue of US$718.8 million, up 12% on 2006 ¬ Record EBITDAX of US$598.2 million, up 10% on 2006 ¬ Net profit after tax (before significant items) of US$140.8 million, down 32% on 2006 ¬ Impacted by higher exploration expense, higher non-cash items and higher effective tax rate ¬ First NPAT fall in 5 years ¬ Final dividend for 2007 of four US cents/share was paid in March, making eight US cents/share for the year (23 toea/share), the same as in 2006

2007 Core Profit Drivers

US$m 97 300 14

(37) (11) (7) 200 (33) 27

207 100 (117) 141

6 7 0 0 les tion Tax 20 a . Exp. 20 pre FX Oil Price Oil S sh Opex a Expl Other Rev.C FX Impact Amortisa ¬ Cash opex impacted by global industry cost pressures and resurgent Australian dollar, fuel costs ¬ US$65.2 million (40%) of total 2007 exploration expense incurred in MENA with no associated tax benefit. Primary driver of effective tax rate of 56%

59 Treasury Review

¬US$344 million in cash at year end, no debt ¬Current cash position of US$320 million (post tax payment) ¬Work underway to refinance corporate facility increasing funding commitment to ~US$400 million and group liquidity to in excess of US$900 million (after receipt of MENA sale proceeds) ¬No oil hedging currently in place

Oil Refinance

¬Targeting US$400m 5 year revolving facility ¬Borrowing base facility marketed on a club basis (not underwritten), targeting strong group of relationship banks established over past 20 years. ¬Facility should be largely insulated from current “credit crunch”, avoids current pressure points (corporate lending, underwriting positions and “new” customers) ¬Facility is for general corporate purposes but key objective will be to utilise to cover a portion of PNG LNG development costs

61 Outlook

Oil Search The Next 5 Years ¬The Company at a cross roads ¬ Potential to multiply value by delivering PNG LNG and other Gas Opportunities ¬Three distinct phases over the next 5 years ¬ Phase I – PNG LNG to FID 2008-09 Cash conservation, positioning ¬ Phase II – PNG LNG construction 2010-13 Cash consumption, progressive delivery ¬ Phase III – First Gas and Beyond 2013- The legacy asset arrives

Shifting focus of priorities over period

63 The Immediate Focus

¬Phase I – PNG LNG to FID 2008-2009 ¬ Support for Operator ¬ Oil Search specific value delivery − Oil operations synergies, oil fields gas FEED − Government and landowner management − Financing − Reorganisation to deliver ¬ Positioning for further growth − Other gas developments, lay the foundations − Measured exploration, with active trading ¬ Cash conservation – Strong competition for capital

The Medium Term

¬Phase II – PNG LNG Construction 2010-2013 ¬ Massive impact on PNG ¬ Oil Search specific value delivery − Oil fields gas construction − Manage stakeholders/landowners − Mitigate impacts on oil business ¬ Further growth − Mature other gas options for 2013 delivery − Measured exploration – some value delivery − Prepare for legacy asset contribution – A New Direction? ¬ Major Cash Consumption

65 The Long Term

¬Phase III – First Gas and Beyond 2013 – ¬ Further growth opportunities − Debottlenecking − New train development − Other gas developments off new infrastructure

¬ Major cash generation – Legacy Asset Delivery – A New Oil Search

The Focus in 2008-2009

¬Reorganising management and teams for specific value delivery ¬ PNG LNG Delivery Group − JV support − Oil operations synergies and interface − Associated gas FEED and construction − In-country landowner management ¬ PNG LNG Financing Group − Debt and equity financing co-ordination ¬ Gas New Business Group − Concentrate on new gas developments ¬ Corporate reorganisation to “Fit for Purpose” Group based on new priorities

67 Summary

¬ Latent value in existing portfolio of assets is sufficient to deliver superior value to shareholders over the next 5 years ¬ Opportunities are well defined ¬ Challenges can be managed ¬ Company is well positioned to deliver

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