1

Oil Search UK

Roadshow

June 2008

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

2

Oil SearchLocation Map

2

3

Operating Environment

4

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 Government is largest shareholder at 17.6%

PNG’s largest investor and taxpayer

73.5 mmboe 2P reserves plus 950 mmboe undeveloped 2P gas and liquids resource. ~60% of resource is dedicated to PNG LNG, world scale LNG project, remainder still to be commercialised

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

Market capitalisation ~ US$6 billion. Listed on ASX (Share Code OSH) and POMSOX, plus ADR programme (Share Code OISHY)

5

Share Price Out-Performance

Sh

are

Pri

ce (

reb

ase

d t

o O

SH

)

OSH ASX 200 ASX 200 Energy WTI

0

1.00

2.00

3.00

4.00

5.00

Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08

7.00

6.00

July 2003: Acquisition of Chevron’s PNG Interests

Oct 2004 : PNGGP enters FEED

May 08 : Signs Gas Agreement, enters FEED for PNG LNG project

July 2005: Announcement of AGL GSA and PNGGP equity sale

Aug 2006 : APC withdraws from Australian leg of PNGGP Pipeline

April 07: Signs Cost Sharing Agreement for LNG project

6

Total Shareholder Returns (TSR)

Source: IRESS

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

53%

0%

10%

20%

30%

40%

50%

60%

70%

Fort

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e M

etal

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Pal

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Pars

ons

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ralia

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ana

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old

ings

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imited

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id J

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nsu

rance

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illiton

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7

World Class Safety Performance

Total Recordable Incidents (TRIs) 1998 – 2007

APPEAOSH OGP

TR

I /

1,0

00

,00

0 H

ou

rs

1998 1999 2000 2001 2002 2003 2004 20050

2

4

6

8

10

12

14

2007

Oil Search

Australian Companies

8.5

10.69.8 10.7

5.8

1.7

4.7

2.4 2.32.05

12.7

9.1 9.37.8

7.0 7.3

5.2

6.8

4.0 3.12.9

9.4

8.2

8.3

2006

International Companies

6.3

8

Setting a New Course

Major Strategic Review recently completed

Key Conclusion: Substantial unrealised value exists within Oil Search’s current asset portfolio, capable of generating superior shareholder returns over next five years and beyond

Delivery of PNG LNG alone can deliver 15% plus annual TSR growth (based on US$70/bbl oil price scenario)

Further value growth can be delivered through commercialisation of other gas resources and exploration success

Value of PNG gas will increasingly dominate portfolio over time

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

Existing portfolio can deliver superior TSR

Oil & Other

PNG LNG

Other Gas

(existing)

Valu

e

9

Delivery of Strategy

Review has set a strategy for next five years that will enable Oil Search to continue to deliver top quartile returns by unlocking value

Focus is now on delivery of strategy:Ensure a positive Final Investment decision for the PNG LNG Project, which will transform Oil Search into a significant LNG producerPosition Company for second phase gas development based on existing uncommercialised and new gas resourcesOptimise PNG oil field operating performances to sustain production and cash flows up to, and beyond, first gasPost asset sale, actively manage the remaining MENA portfolioPursue material exploration opportunities in PNG and MENA

Active stakeholder management in PNGModify organisation to optimise strategy delivery

10

PNG LNG Project

A CompanyTransformer

11

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 ~ 530 mmboe of Oil Search’s 2P gas resources

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

Strong market interest for participation

AGL sale a window to project value

New corporate developments at premium prices (BG & Origin, QGC, Santos and Petronas)

12

PNG LNG Project

Integrated development of Hides, Angore and Juha gas fields plus associated gas from the Kutubu, Agogo, Gobe and Moran oil fields

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, 20 km from Port Moresby

13

PNG LNG Project

Kutubu

Juha

Angore

SE Gobe

Gobe Main

HidesMoran

Agogo

14

Asia-Pacific LNG Markets are Robust

Regional market fundamentals are robust

Steady expansion from existing markets (Japan, Korea, Taiwan)

Growth from emerging markets of India & China and new markets such as Singapore, Thailand

Some of the growth likely to be filled by roll-overs etc but significant non-contracted volume

A number of potential new projects in the region looking to fill remaining demand gap

Only a few will reach commerciality in 2013/14 window

Early commitment important

Source: Wood Mackenzie

0

50

100

150

200

250

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

mmtpa

GSPA HOA MOU

Option Rollover Demand

Market opportunity

15

LNG Pricing

Source: FACTS Global Energy

0

5

10

15

20LNG ($/mmbtu)

10 20 30 40 50 60 70JCC ($/b)

80 90 100

Traditional Contracting

Crude Oil Parity

NWS 2007 Contracting

Supply conditions, combined with environmental factors, have resulted in LNG prices moving closer to oil price parity

16

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

17

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 2008Quality and location of resource makes PNG very competitive in project line up for a 2013 – 2014 start up. Advantages include:

Fully aligned Joint VentureSubstantial conventional, certified gas reserve base, high liquids content, minimal impuritiesOnshore, with existing infrastructure base (Kutubu & liquids pipeline)Excellent location for Asian marketsCompetitive labour costs relative to AustraliaFavourable fiscal regime with strong Government support

18

PNG LNG Project -Milestones Reached

Commercial alignment (JOA) amongst the Project OwnersJoint Operating Agreement executed in March 2008

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 estimate of capital costs indicate first phase capex (2008 – 2014) of between US$10 – 11bn (real 2007)

19

PNG LNG Project -Milestones Reached (cont)

Gas Agreement signed May 2008Outlines fiscal terms and legal obligations under which Project will operate over its life

The terms include 30% tax rate and Additional Profits Tax (APT) which applies once a certain

threshold level of return has been achieved

Sets terms and mechanism for State equity participation in the Project

Front End Engineering and Design (FEED) commenced in May 2008. Expected to take ~16 months to complete

20

PNG LNG Capex Estimate

ExxonMobil historically has delivered projects on time and on budget First phase capex (2008 – 2014) expected to be between US$10 –11bn (real 2007)Subsequent capex is several years out (additional Hides drilling, Juha development and potential LPG extraction if required) Juha timing depends on Hides and Angore outcomes and performance Further updates to capex estimates from EPC bids (mid 09)Further optimisation will occur during dual FEED

Source: ExxonMobil Analyst Briefing 5th March, 2008.

EM Project Execution Performance

Actual vs. Funded (%)

25

Average 2003-07 2007

50

75

100

125

0

Cost Schedule

21

Project Interest Determination

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, approximately 19%

1.4%

1.8%

3.6%

17.7%

34.0%

41.5%

Share of FEED costs

MRDC / State

Nippon

AGL

Santos

Oil Search

ExxonMobil

JV Partners Oil Search PNG LNG Interest

26%

28%

30%

32%

34%

36%

FEED Interest

PNG LNG Interest

OSH expected post Government back-in final project interest

22

Delivering PNG LNG

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 (FID) expected to be taken in late 2009Targeted first LNG cargo - end 2013/early 2014

23

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 FEEDOptimising delivery of gas to LNG Project from oil fieldsSupporting ExxonMobil/PNG Government on:

Landowner Benefits Sharing AgreementBusiness Development opportunitiesTraining and localisationProviding 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

24

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 billionBased on current modelling (using conservative oil prices), OSH can meet equity requirements without coming to the market. Funded from existing cash (US$385m), 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

25

LNG Project Schedule

2007

FEED Program &EPC Contracting

PNG GovernmentApprovals

Benefits SharingAgreement

Project Financing& Marketing

Detailed EngineeringDesign & Procurement

Construction /Commissioning

2008 2009 2010 2011 2012 2013 2014

Pre-FEED

FirstCargoLNG

*Schedule is Indicative only

Train 1 Train 2

FIDIM Close

Gas Agreement

Entry

Environmental, Benefits Sharing

EPC bids

HOA’s / SPA’s

26

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 timeHuge 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 yearsMultiplier effects additional

27

PNG Oil Operations

28

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

29

PNG Oil Fields

Usano

Kutubu

SE ManandaMoran

SE Gobe

Gobe Main

30

2008 PNG Development Focus Areas

Usano:4 development wells

Kutubu:4 workovers

Agogo:2 workovers

Moran:2 development wells

& 1 workover

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PNG Gross Oil Production

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

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

Oil

Rat

e (b

op

d)

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

Oil Searchtakeover

operatorship

Added over45mmstbcompared

to Chevron

P50ContingentResources-

LOF

P50 2008Programme

HidesGTE

P50Base

Note: Forecasts under review

32

PNG Net Production (Life Of Field)

20206090140Approximate Net Capex (US$M)

1 sidetrack1 well

1 sidetrack

4 wells6 wells

2 sidetracks

6 wells

7 workovers

Activities

Kutubu

Moran

Gobe Main

SE Gobe

SEM

Hides GTE

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2008* 2009 2010 2011 2012

NET Production (Mstb)

Note: Forecasts under review

33

Cost Control - Capex

Need to reduce capex through drilling performance improvements, drilling cost reductions, new technologies and optimised rig strategyInitiatives:

Rigorous cost control of contracts, materials and logisticsImprovements in contractor performance cultureNew technology:− Rig 103 and 104 with leapfrog capability− Hydraulic workover unit to provide lower cost workover

and “incremental” drilling capabilityRig 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

34

Cost control - Opex

Cost inflation of 9 –10%, higher in specific areas

Focus areas for cost reduction:

Organisational changes

Rationalisation of Contractor base

Work programmes focussed on production optimisation and reliability

Highly competitive cost base

PNG Controllable Costs / Barrel

0

1

2

3

4

5

6

7

8

US

$/

bb

l

OtherMarine

TelecommunicationsCatering Services

Services & FeesFuels, Chemicals,Materials & Supplies

Transportation

Labour

35

Additional Growth

Opportunities

36

PNG Gas Resource Base

~ 1/3rd of PNG gas reserves are held in the Hides field PNG LNG Project accounts for approximately half of PNG’s discovered gas resourceOSH has ~2 tcf net of discovered gas not dedicated to PNG LNG

Stanley0.1%

Barikew a4%

Pasca1%

Angore7%Juha

6%

P`nyang10%

Pandora A7%

Kutubu Area8.3%

Hides (Technical Reserve)

30%

Kimu4.8%

Elevala3%

Douglas3%

Elk3%

Ketu2.3%

Uramu2%

Gobe Area2%

Moran1%

Kuru1%

Koko0.1%

Bw ata0.3%

SE Mananda0.1%

Iehi1%

Pandora B2%

Hides (Technical Reserve) Kutubu Area AngoreJuha P`nyang Pandora AKimu Barikew a ElkDouglas Elevala KetuPandora B Uramu Gobe AreaMoran Kuru PascaIehi Bw ata KokoSE Mananda Stanley

Technical Reserves

0

1000

2000

3000

4000

5000

6000

Hid

es (

Tec

hnic

al R

eser

ve)

P`n

yang

Kut

ubu

Are

a

Pan

dora

A

Ang

ore

Juha

Kim

u

Bar

ikew

a Elk

Dou

glas

Ele

vala

Ket

u

Pan

dora

B

Ura

mu

Gob

e A

rea

Mor

an

Kur

u

Pas

ca Iehi

Bw

ata

To

tal G

as

Re

serv

es

(bcf

)

PNG LNG Project (key fields)

PNG LNG Project

Technical Gas ~ 17,000 bcfTechnical Gas ~ 17,000 bcf

PNG LNG Project

PNG discovered gas reserves by field (Source: Wood Mackenzie Path Finder)

37

Location of Gas Resources

Angore

Barikewa

Uramu

Pandora

Juha

P’nyang

KimuIehi Elk

Hides

Flinders

PPL234

Elevala

Douglas

ForelandShelf

OffshoreHub

WesternCorridorStage I

OffshoreHub

EasternHub

NorthernHub

WesternCorridorStage II Central

Foldbelt

38

Gas Growth Opportunities

PNG LNG Project sets the stage for additional gas-based growth opportunities. OSH seeking to:

Increase contractible gas Plan infrastructure for gas hubs and corridorsCapture high value market opportunities in parallel with further resource definitionMatch available supply to gas market opportunities

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

39

Gas Growth Opportunities

PNG LNG Project debottlenecking (+10-15% above nameplate capacity) Additional LNG trains or plants

Significant field, pipeline and plant synergies may be obtainedNew infrastructure opening new regions

Other gas commercialisation opportunities can also offer attractive returns, diversification and timely delivery. These range from large export oriented projects to domestic micro projects, including:

Methanol and ammonia derivativesGas to liquids (GtL)Compressed Natural Gas (CNG)Gas for use in mine operations eg extending mine life at Porgera

Power generation and other smaller projects catering to the needs of local communities & industry

40

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 & P’nyang)Northern HubOffshore Gulf of Papua

Seismic & studies 2008Active drilling 2009+Align with Government & others on infrastructure and gas development needs

41

Exploration

42

PNG Exploration

Portfolio optimisationData room 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 infrastructureFollow up Footwall plays if encouragement from current Cobra wellConsider deeper Jurassic plays

Frontier “paradigm changers”In the past, PNG exploration focused on few playsPotential to open up new areas with selective, albeit high risk, drilling

Large hinterland structures with possible proven and also younger untested reservoirs

Innovative seismic acquisition ongoing in this playOffshore fans and toe thrusts

Current wells: NW Paua, Cobra (drilling), Wasuma (1Q09)

43

PNG Exploration

NW Paua

Cobra

Wasuma

44

APFMoro

SE Mananda

Moran

Paua

LakeKutubu

Agogo

NW PAUA

PDL2

PPL233

PPL219

PDL5

10km

PPL219

PPL219

PDL6

Highly prospective structure adjacent to MoranStacked Toro and Digimu reservoirsMean pre-drill reserves 30 - 90 mmstb with upside potential of >100 mmstbConstrained by Paua 1X well (1996) and seismic acquired in 2005Oil Search operating on behalf of EssoGood oil shows and high gas recordedDigimu reservoir thinner than hopedInitial logs confirm some hydrocarbons in ToroUpside reserves still >50mmstbCurrently finalising acquisition of logs

NW Paua

47.5%Esso Highlands

52.5Oil Search

WI %PPL 233

45

COBRA

PPL219

PPL190

PDL4

PDL4PDL3

10km

Gobe Main

SE Gobe Wasuma

Near-field exploration opportunity adjacent to the SE Gobe oil fieldCobra 1a will test the Iagifu sandstone in a seismically defined footwall anticline (‘Sub-thrust Play’)Mean recoverable reserves 40 mmstb, upside to 75 mmstbChance of success 1 in 6Success at Cobra will open up a significant new play fairwayCurrently drilling approx 400m above target

NW SE

Cobra

26.5Murray Petroleum

10.9Cue PNG Ltd

62.6Oil Search

WI %PPL 190

Cobra

SE Gobe

46

Near field exploration opportunity adjacent to the SE Gobe oil fieldIagifu sandstone primary objective -proven reservoir at GobeSeismically defined structure - one of the last un-drilled ‘simple’Hangingwall anticlines within the main Foldbelt trendMay also have deeper target FootwallMean recoverable reserves 35 mmstb with upside potential to 100 mmstbChance of success 1 in 5Well site construction commenced. Drilling scheduled for Q408 – 1Q09

Wasuma

WASUMA

PPL219

PPL190

PDL4

PDL4PDL3

10km

Gobe Main

SE Gobe Wasuma

SE GobeWasuma

NESW

8.75%Merlin Petroleum

91.25Oil Search

WI %PPL219

47

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

48

MENA Exploration

Sana’a Office

Dubai Office

Block 3

Block 7

Tajerouine

Le Kef

Area 18

Bina Bawi

Shakal

49

Area 18 located in Pelagian Basin, offshore Libya, which contains 11% (7 bn boe) of Libya’s total recoverable reserves, considered under-exploredArea 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. Operator estimate of potential recoverable oil reserves - +250 mmbbl in Eocene, +180 mmbbl in Cretaceous, potential recoverable gas reserves - +300 mmboe in Jurassic, +750 mmboe in TriassicOther prospects and leads in the permit are defined on 2D seismic

Area 18 – Offshore Libya

70Petrobras(Operator)

30Oil Search

WI %Area 18

50

FinancialOverview

51

Financial Performance 2003 - 2007

Revenue OperatingCash Flow

CoreNet Profit

US$m

350.8

416.3

664 644.5

718.6

239.1

330

554.3 544.8598.2

191.3

276.7

357.7

399

326.8

85.7

107.3

200.2 207.5

140.8

0

100

200

300

400

500

600

700

800

2003 2004 2005 2006 2007

EBITDAX

52

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

Dividend for 2007 of eight US cents/share, the same as in 2006

53

2007 Core Profit Drivers

Cash opex impacted by global industry cost pressures and resurgent Australian dollar, fuel costsUS$65.2 million (40%) of total 2007 exploration expense incurredin MENA with no associated tax benefit. Primary driver of effective tax rate of 56%

0

100

200

300

2006

Amor

tisat

ion

US$m

2727

(117)(117)

(33)(33)

(11)(11)

1414

141141

(37)(37)

9797

207207

Oil Pric

e

Oil Sa

les

Other

Rev

.

Cash

Opex

pre

FX

Expl

. Exp

.Ta

x

2007

(7)(7)

FX Im

pact

54

Treasury Review

US$344 million in cash at year end, no debt

Current cash position of US$385 million

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

55

Oil Refinance

Targeting US$400m 5 year revolving facilityBorrowing 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

56

Outlook

57

Oil SearchThe 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 yearsPhase I – PNG LNG to FID 2008-09

Cash conservation, positioning

Phase II – PNG LNG construction 2010-13Cash consumption, progressive delivery

Phase III – First Gas and Beyond 2013-onwardsThe legacy asset arrives

Shifting focus of priorities over time

58

The Focus in 2008-2009

Reorganising management and teams for specific value delivery

PNG LNG Delivery GroupJV support

Oil operations synergies and interface

Associated gas FEED and construction

In-country landowner management

PNG LNG Financing GroupDebt and equity financing co-ordination

Gas New Business GroupConcentrate on new gas developments

Corporate reorganisation to “Fit for Purpose” Group based on new priorities

59

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

60

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