DOWNLOAD ANNUAL REPORT 2014 ENTER ANNUAL REPORT 2014 HOME DOWNLOAD 2014 highlights Our vision Our values Our six strategies Chairman and Managing Director’s review Senior executive team Sustain and optimise our oil and gas assets Commercialise gas in PNG TRANSFORMATION Pursue high-value exploration opportunities COMPLETE Contribute to a stable operating environment The US$19 billion PNG LNG Project came onstream in 2014 and has transformed Oil Search into a r Enhance organisational capability gas producer with a long-term LNG revenue stream. It has also established an excellent platform for LNG expansion in PNG. With Optimise capital management 2014 reserves and resources Oil Search is well placed to continue to deliver top quartile returns to shareholders, even in a lower oil and gas price environment. License interests PL AY Corporate governance Financial report contents Directors’ report Financial statements Shareholder Information Ten-year summary Glossary Corporate directory NEXT HOME CONTENTS DOWNLOAD 2014 HIGHLIGHTS 992 992 992 992 992 992 19.27 19.27 19.27 19.27 19.27 19.27 1,877 1,877 1,877 1,877 1,877 1,877 14 14 14 14 14 14 1,861 1,861 1,861 1,861 1,861 1,861 353 353 353 353 353 353 2.64 2.64 2.64 2.64 2.64 2.64 1,673 1,673 1,673 1,673 1,673 1,673 2.47 2.47 2.47 2.47 2.47 2.47 404 404 404 404 404 404 1,610 1,610 1,610 1,610 1,610 1,610 1,568 1,568 1,568 1,568 1,568 1,568 1,568 1,568 1,568 1,568 1,568 1,568 4 cents 1,560 1,560 1,560 1,560 1,560 1,560 special 1,363 1,363 1,363 1,363 1,363 1,363 1.97 1.97 1.97 1.97 1.97 1.97 oil Search 1.96 1.96 1.96 1.96 1.96 1.96 10 cents 1,294 1,294 1,294 1,294 1,294 1,294 median ASX ordinary 1.85 1.85 1.85 1.85 1.85 1.85 200 energy 206 206 206 206 206 206 203 203 203 203 203 203 988 988 988 988 988 988 186 186 186 186 186 186 176 176 176 176 176 176 147 147 147 147 147 147 386 386 386 386 386 386 766 766 766 766 766 766 7.66 7.66 7.66 7.66 7.66 7.66 367 367 367 367 367 367 733 733 733 733 733 733 725 725 725 725 725 725 347 347 347 347 347 347 6.74 6.74 6.74 6.74 6.74 6.74 6.69 6.69 6.69 6.69 6.69 6.69 6.38 6.38 6.38 6.38 6.38 6.38 584 584 584 584 584 584 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 510 510 510 510 510 510 32 32 32 32 32 32 28 28 28 28 28 28 196 196 196 196 196 196 (2) (2) (27) (2) (27) (27) (2) (2) (2) (27) (27) (27) (9) (9) (9) (9) (9) (9) (52) (52) (52) (52) (52) (52) 101010111111 12 12 12131313141414101010 111111 12 12 12 131313 141414101010111111 12 12 12131313141414101010 111111 122yr 12 122yr2yr131313 141414 1yr1yr2yr1yr2yr2yr5yr5yr5yr10yr10yr10yr 1yr1yr1yr 5yr5yr5yr 10yr10yr10yr 101010111111 12 12 12131313141414101010 111111 12 12 12 131313 141414 101010111111 12 12 12131313141414101010 111111 12 12 12 131313 141414 101010111111 12 12 12131313141414101010 111111 12 12 12 131313 141414 101010111111 12 12 12131313141414101010 111111 12 12 12 131313 141414 101010111111 12 12 12131313141414101010 111111 12 12 12 131313 141414 101010111111 12 12 12131313141414101010 111111 12 12 12 131313 141414 TOTAL PRODUCTiOn nET PROfiT Af TER TAX TOTAL sHAREHOLDER REvEnUE fROM OPERATinG CAsHfLOW DiviDEnDs PER s HARE (mmboe) inclUDing S ignificAnt itemS RETURn OPERATiOns (US$ million) (US cent S) (US$ million) to 31 DecembeR 2014 (US$ million) (%) 186% 72% 404% 110% 171% 250% (10 YR tSR) FINANCIAL PERFORMANCE Year to 31 December 2014 992 992 992 2013 % cHAnge 19.27 19.27 19.27 1,877 1,877 1,877 14 14 14 total production mmboe 19.27 6.74 186% 1,861 1,861 1,861 353 353 353 total sales mmboe 17.76 6.73 164% 2.64 2.64 2.64 1,673 1,673 1,673 2.47 2.47 2.47 404 404 404 1,610 1,610 1,610 1,568 1,568 1,568 Average realised oil and condensate price US$/bbl 97.79 110.57 (12%) 1,568 1,568 1,568 1,560 1,560 1,560 Average realised lng and gas price US$/mmbtu 13.94 13.01 7% 1,363 1,363 1,363 1.97 1.97 1.97 Revenue from operations US$m 1,610.4 766.3 110% 1.96 1.96 1.96 1,294 1,294 1,294 ebitDAX(1) US$m 1,257.0 552.6 127% 1.85 1.85 1.85 Depreciation and amortisation US$m (252.7) (50.2) 403% 206 206 206 203 203 203 988 988 988 186 186 186 exploration costs expensed US$m (109.1) (107.4) 2% 176 176 176 ebit US$m 895.2 394.8 127% 147 147 147 386 386 386 766 766 766 7.66 7.66 7.66 367 367 367 733 733 733 725 725 725 347 347 347 6.74 6.74 6.74 6.69 6.69 6.69 net interest income / (expense) US$m (129.6) (15.2) 753% 6.38 6.38 6.38 584 584 584 4 4 4 impairment loss US$m (180.6) – 4 n.m. 4 4 4 4 4 4 4 4 510 510 510 32 32 32 tax US$m (231.8) (174.1) 33% 28 28 28 196 196 196 (2) (2) (27) (2) (2) (27) (27) (9) (9) (9) (52) (52) (52) net profit after tax US$m 353.2 205.7 72% impairment (net of tax) US$m 129.6 – n.m. core profit(1) US$m 482.8 205.7 135% basic ePS(2) Usc/share 23.8 15.4 56% 2yr 2yr2yr 1yr 1yr5yr1yr 5yr10yr5yr 10yr10yr 10 111010 12 111113 12 12141313 1414 10 111010 12 111113 12 12141313 1414 Dividends per share10 111010 12 111113 12 12141313 1414 Usc/share10 111010 12 111113 12 121414.01313 1414 4.0 10 250%111010 12 111113 12 12141313 1414 10 111010 12 111113 12 12141313 1414 10 111010 12 111113 12 12141313 1414 10 111010 12 111113 12 12141313 1414 operating cash flow US$m 992.3 366.8 171% net cash / (debt) US$m (3,452.0) (3,814.8) (10%) TOTAL invEsTMEnT TOTAL Li QUiDiTY TOTAL RECORDABLE EXPEnDiTURE (US$ million) inCiDEnTs (1) ebitDAX (earnings before interest, tax, depreciation/amortisation, impairment and exploration) and core profit (net profit (US$ million) (PeR million HoURS WoRKeD) after tax before significant items) are a non-ifRS measures that are presented to provide a more meaningful understanding of the performance of oil Search’s operations. the non-ifRS financial information is unaudited but is derived from the financial statements which have been subject to audit by the company’s auditor. (2) including significant items. 12% 206% 20% 2 Oil Search Annual Report 2014 3 PREV NEXT HOME CONTENTS DOWNLOAD OuR VISION OuR VAL u ES TO g ENERATE TOp quARTILE RETu RNS F O R INTEGRITy RESPECT S h AREh OLd ERS T h ROugh E xcELLENcE PASSION CARING RESPONSIbLE IN SOcIALLy RESp ONSIb LE OIL ANd g AS E xpLORATION DIVERSITy ExCELLENCE ANd p ROducTION 4 Oil Search Annual Report 2014 5 PREV NEXT HOME CONTENTS DOWNLOAD OuR SI x S TRATEg IES SUSTAIN AND COMMERCIALISE PURSUE HIGH-VALUE CONTRIbUTE TO ENHANCE OPTIMISE CAPITAL OPTIMISE OUR OIL GAS IN PNG ExPLORATION A STAbLE OPERATING ORGANISATIONAL MANAGEMENT AND GAS ASSETS OPPORTUNITIES ENVIRONMENT CAPAbILITy PLAy 6 Oil Search Annual Report 2014 7 PREV NEXT HOME CONTENTS DOWNLOAD chAIRMAN AN d MANAg INg d IREc TOR’S REVIEW Dear Shareholder, 2014 was one of the most significant in oil Search’s 86-year history. At the beginning of 2014, we set ourselves a range of ambitious targets, for safety, production, costs and earnings. these targets were largely achieved and, in many cases, exceeded. much of the strong performance in 2014 was a result of the completion of construction and the successful commissioning of the Png lng Project, ahead of schedule and within the revised budget. We would like to congratulate the operator, exxonmobil SAFETy RECORD PRODUCTION AND DIVIDENDS MORE THAN TRIPLED PROFITAbILITy ACHIEVED IN 2014 Png limited, on the smooth and efficient in 2014, oil Search recorded a With the start of long-term cash total Recordable injury Rate (tRiR) oil Search produced 19.3 million flows from the ngP lng Project, delivery of this world-scale lng project. of 1.97 per million hours worked, barrels of oil equivalent in 2014, the company’s dividend policy an improvement relative to the nearly three times higher than in was reassessed as part of the 2014 2014 was also the year when we made tRiR of 2.47 per million hours in 2013 and a record for the company. Strategic Review. the board has 2013 and 2.64 in 2012. However, this reflected both the start-up of decided to adopt a proportional substantial progress on our next phase most regrettably, in october, a the Png lng Project in the first half dividend payout ratio (where of lng growth in Png.