1

Oil Search Asian

Roadshow

May 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’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

5

Share Price Out-Performance

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

OSH ASX 200 ASX 200 Energy

July 2003: Acquisition of Chevron’s PNG Interests

Oct 2004 : PNGGP enters FEED

July 2005: Announcement of AGL GSA and PNGGP equity sale

April 07: Signs Cost Sharing Agreement for LNG project

Aug 2006 : APC withdraws from Australian leg of PNGGP Pipeline

Sh

are

Pri

ce (

reb

ase

d t

o O

SH

)

WTI

6.00

6

Total Shareholder Returns (TSR)

Source: Merrill LynchSource: 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%

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7

World Class Safety Performance

Total Recordable Incidents (TRIs) 1998 – 2007

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

APPEAOSH OGP

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

Strategic Review recently completedHighlighted 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

9

Key Conclusions of Review

Existing portfolio can deliver superior TSRSubstantial 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

Further value growth can be delivered through commercialisation of other gas resources.

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

“Delivering PNG LNG is the Highest Priority”

Oil & Other

PNG LNG

Other Gas

Valu

e

10

Gas Commercialisation the Key to GrowthPNG 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

11

Optimise Cash Generation from Oil FieldsPNG 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

Key Conclusions of Review

12

Re-focus MENAOil 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

13

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

Key Conclusions of Review

14

Management of Cash to Fund LNGFinancial 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

15

OtherStakeholder 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”

Key Conclusions of Review

16

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

17

PNG LNG Project

A CompanyTransformer

18

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

19

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

20

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)

21

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 “Possible”projects looking to fill remaining demand gap

Not all projects will proceed

Early commitment important

Source: WoodMac

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

22

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 Recent Contracting

23

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

24

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

25

PNG LNG Project -Milestones Reached

Commercial alignment (JOA) amongst the Project OwnersJoint 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

26

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 bidsFurther 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

27

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%

1.2%

1.8%

3.6%

17.7%

34.1%

41.6%

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

28

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

29

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 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

30

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$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

31

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

32

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

33

PNG Oil Operations

34

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

35

PNG Fields

36

2008 PNG Development Focus Areas

Usano:4 development wells

Kutubu:4 workovers

Agogo:2 workovers

Moran:2 development wells

& 1 workover

37

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

38

PNG Net Production (Life Of Field)

20206090140Approximate Net Capex (US$M)

1 sidetrack

1 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 P

rod

uct

ion

(M

stb

)

Note: Forecasts under review

39

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

40

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

41

Additional Growth

Opportunities

42

Gas Growth Opportunities

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

Increase contractible gas for threshold developmentsPlan 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

43

Gas Resources

PNG has substantial discovered undedicated

gas resources

Company has ~2 tcf of discovered gas outside PNG LNGPNG has a further est. 3-4 tcf of discovered gas resources spread across many fields and owners

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

44

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/DMEHides Gas To Electricity for Porgera

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

45

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

46

Exploration

47

PNG Exploration

Portfolio optimisationData 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 infrastructureConsider 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 reliant on younger reservoirs− Offshore fans and toe thrusts− Foreland extensional fault blocks

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

48

PNG Exploration

NW Paua

Cobra

Wasuma

49

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 recoverable reserves 30 - 90 mmstb with upside potential of >100 mmstbChance of success 1 in 6Constrained by Paua 1X well (1996) and seismic acquired in 2005Oil Search operating on behalf of EssoCurrently preparing to drill ahead to primary objective

NW Paua

47.5%Esso Highlands

52.5Oil Search

WI %PPL 233

50

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 fairwayCobra 1a spudded March 2008

NW SE

Cobra

26.5Murray Petroleum

10.9Cue PNG Ltd

62.6Oil Search

WI %PPL 190

Cobra

SE Gobe

51

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 trendMean recoverable reserves 35 mmstb with upside potential to 100 mmstbChance of success 1 in 5Well site construction commenced. Drilling scheduled for Q408 – 1Q09

Wasuma

COBRA

PPL219

PPL190

PDL4

PDL4PDL3

10km

Gobe Main

SE Gobe Wasuma

SE GobeWasuma

NESW

8.75%Merlin Petroleum

91.25Oil Search

WI %PPL219

52

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

53

MENA Exploration

Sana’a Office

Dubai Office

Block 3

Block 7

Tajerouine

Le Kef

Area 18

Bina Bawi

Kurdistan

54

Area 18 is located in Pelagian Basin, offshore LibyaPelagian Basin 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 playsOther prospects and leads in the permit are defined on 2D seismic

Area 18 – Offshore Libya

70Petrobras(Operator)

30Oil Search

WI %Area 18

55

Caliph Prospect

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

EocenePlayCretaceousPlay

Jurassic-TriassicPlay

56

FinancialOverview

57

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

58

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

59

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

60

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

61

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

62

Outlook

63

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 2008-09Cash conservation, positioningPhase II – PNG LNG construction 2010-13Cash consumption, progressive deliveryPhase III – First Gas and Beyond 2013-The legacy asset arrives

Shifting focus of priorities over period

64

The Immediate Focus

Phase I – PNG LNG to FID 2008-2009Support 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

65

The Medium Term

Phase II – PNG LNG Construction 2010-2013Massive 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

66

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

67

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

68

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

69

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