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February 2008

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

2007 Full Year Results

A new dawn for Oil Search

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2007 Full Year Results Agenda

2007 Performance Summary Peter Botten

Financial Overview Nigel Hartley

Strategy Review Update Peter Botten

PNG LNG Project Update Peter Botten

Operations Review Phil Bainbridge

Outlook Peter Botten

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2007 Performance Summary

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2007 Performance Metrics

Record revenue of US$718.8 million, +12% on 2006

Slightly lower production (-4%) more than offset by 16% increase in oil price

Record EBITDAX of US$598.2 million, +10% on 2006

Costs affected by industry pressures and exchange rates

Net profit after tax (before significant items) of US$140.8 million, -32% on 2006

First NPAT fall in 5 years

Impacted by higher exploration expense, higher non-cash items and higher effective tax rate

Oil Search Board has declared a final dividend for 2007 of four US cents/share, making eight US cents/share for the year, the same as in 2006

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Safety performancecontinues to improve

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

10.6 9.8 10.7

5.8

1.7

4.7

2.4 2.312.05

12.7

9.1 9.37.8

7 7.3

5.2

6.8

4.0 3.052.92

9.4

8.2

8.3

2006

International Companies

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Indexed Share Price Performance

1.58

5.08

OSH

STO

WPL

ASX200Energy

WTI

2.08

2.58

3.08

3.58

4.08

4.58

Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08

Sh

are

pri

ce (

reb

ase

d t

o O

SH

)

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ASX 200 Peer Ranking

232% 66 86% 67 10% 96 AWE

136% 96 77% 76 (2%)136 ROC

164% 87 80% 71 47% 30 Santos

340% 48 166% 46 36% 42 Woodside

736% 26 184% 41 48% 29 Oil Search

TSRRankTSRRankTSRRank

5 yearsto 31 Dec 07

3 yearsto 31 Dec 07

1 yearto 31 Dec 07

Source: IRESS

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Financial Overview

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2007 Full Year Performance

Oil Sales (mmbbl)Realised oil price (US$/bbl)(US$’m)RevenueCash ExpensesEBITDAXExploration ExpenseNPAT

2006

8.7177.78

718.8(121.3)

598.2(163.3)140.8*

2007

10%

9.1867.18

644.5(103.8)

544.8(46.8)207.5*

* In 2006, excludes profit of US$258.4 million on sale of licence interests to AGL and net impairment losses of US$53.9 million. In 2007, excludes net impairment losses of US$3.6 million

Cash operating earnings before exploration expense and tax 10% higher, driven by stronger oil prices

Exploration expense up US$116.5 million on 2006, reflecting significant increase in exploration programme

32%

12%

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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

eOil

Sale

sOth

er R

ev.

Cash

Opex

pr

e FX

Expl

. Exp

.

Tax

2007

(7)(7)

FX I

mpa

ct

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Cash Earnings Growth

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

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Treasury Review

US$344 million in cash at year end, no debtCurrent cash position of ~US$410 million, following receipt of proceeds from cargoes lifted in DecemberUS$100 million tranche of corporate facility expired at year-end. Remaining undrawn bank lines of US$42 millionIntention to refinance corporate facility in 1H08, increasing funding commitment to ~US$400 million and group liquidity to in excess of US$700 millionScoping study of financing options for the PNG LNG Project identified large potential pools of funding capacity across bank, debt capital market and export credit agency productsNo oil hedging currently in place

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2008 Capital Outlook

US$’m 2007Actual

2008*Outlook

*Subject to amendment following completion of strategic review

**2007 final dividend only

Investing :ExplorationGas (incl. PNG LNG)Development/ProductionCorporate (inc rigs)

Financing :Dividends

202209576

90

14075

16020

45**

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Other 2008 Drivers

2008 effective tax rate dependent on MENA exploration success

Further upward pressure on capital costs and increased development capital expenditure will translate into higher amortisation/site restoration rates (~10% increase on 2007 rates)

2008 operating cashflow likely to include US$20 million final payment for 2006 tax year (no P&L impact)

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Strategic Review Update

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Strategic Review Update

2002/2003 Strategic Review laid foundations for major Company growth. Work helped deliver top quartile returns over 2003 – 20072007 Strategic Review, designed to define corporate objectives for next five years, nearing completion Strategy discussion with market scheduled for mid March. Initial findings:

PNG LNG will be a key NPV driver. Focus is to ensure timely development and maximise value of discovered gas resources, oil fields and infrastructure to ensure maximum value potential is achieved PNG oil fields – review has identified and quantified significant opportunities within existing fields. Focus on implementation of initiatives and optimising performanceOptimisation of PNG and MENA licence portfolios. Focus on assets that have potential to add materially to OSH as value of gas portfolio increases. Need for portfolio managementEnsure OSH has right expertise and cost base to deliver

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PNG LNG Project Update

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Existing gas fields, gas

exploration and appraisal opportunities

Barikewa

Uramu

Pandora

Juha

Iehi

Hides

Moran

Kutubu

Gobe

Flinders

Kimu

Angore

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PNG LNG – ExxonMobil Operated

Kopi

Kutubu & Agogo

Gobe

Hides & Angore

Juha

Port Moresby

75km

Hides-Kopi pipeline

250 mmscfd (nominal)

960 mmscfd Conditioning Plant

66 km 14-inch gas line

8-inch condensate line

~400km subsea gas line to LNG Plant at

Konebada, Port Moresby

LNG Facility - 6.3MTA Capacity

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Oil Field Gas Facilities for LNG

Port Moresby

Gobe Main

Moran

20km

Kutubu

Agogo

SE Gobe

LNG Project Gas Pipeline

Existing Oil Pipelines

GOBE GAS PRODUCTION

KUTUBU GAS PRODUCTION

AGOGO/MORAN GAS PRODUCTION

Gas Dehydration

Gas Dehydration

Gas Dehydration

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PNG LNG Project Update

Significant progress through 2007 on the ExxonMobil-led 6.3 mmtpa PNG LNG project

FEED Entry – status report:Pre-FEED technical studies completed. Current preference is 6.3 mmtpa LNG plant, located near Port Moresby. Both ConocoPhillips Optimized Cascade and APCI C3/MR processes likely to be considered during FEED

Bottom-up rebuild of expected capital costs and peer review process nearing completion

Coordinated Development and Operating Agreement (CDOA), covering gas supply arrangements, unitisation principles and voting, in final documentation stage

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PNG LNG Project Update

FEED Entry – status report continued: Marketing Representation Agreement signed. Owners will market LNG jointly for the initial 6.3 mmtpa development, with Operator, ExxonMobil, as marketing representative. Marketing to officially commence post FEED decision

Licence renewal terms under discussion, and expected to be resolved for FEED entry

Progress on Fiscal Agreement slower than expected but still targeting to make FEED decision by end 1Q08

Total commitment and alignment by Project partners (with ExxonMobil as operator) and the PNG Government to close remaining issues

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PNG LNG Project Update

Objectives during FEED:2008

Execute downstream (LNG plant) FEED contractInitiate and progress marketingIssue Information Memorandum to banks, lenders

2009Complete Upstream/Downstream FEED activitiesCommit to long lead time items and early infrastructureSecure Sales & Purchase AgreementsComplete financing plan

Final Investment Decision expected in 2H09First LNG sales late 2013/early 2014

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Operations Review

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2007 Performance

Safety:Excellent year in PNG and Egypt

Production:9.78mmboe, within revised forecast range

PNG Costs:Field costs per barrel increased from US$5.87/bbl to US$6.96/bbldue to ongoing industry cost pressures and exchange rate movements over lower production base

PNG Drilling:

Transition continues with two new rigs commissioned and operating

Reserves and resources2P reserves down 10% to 73.5 mmboe, reflecting 2007 production offset by minor reserves additions in PNG and MENA. 2P resources (gas and assoc liquids) largely unchanged with audit to take place in mid-2008. Total 2P reserves & resources of 1,025.5mmboe

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2007 Performance

Exploration:Disappointing year in both PNG and MENA:

PNG:Juha 5 confirmed gas water contact. Juha 4 discovered new field area, Juha North. 2P volumes remain unchanged but did not realise anticipated upsideKutubu 2x, Korobosea and Arakubi unsuccessful. Arakubi is a potential water injector well with possible oil in deeper reservoirs to be tested

MENA: Discoveries in East Ras Qattara. Shahd and Ghardbrought onstream end 2007, testing reservoir potential, Rana waiting for Govt approvalsExploration unsuccessful in Area A and Yemen (Blocks 15, 49 and 35)

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2008 Look Forward

Production outlook for 2008 of 9.0 – 9.5 mmboe

PNG production subject to results of:

Drilling campaign at Usano (5 wells) and Moran (3 wells), workover campaign (5 in Kutubu and 1 in Moran)

Field uptime availability and ongoing reservoir management

MENA focus remains on Area A, Nabrajah and ERQ

Increased focus on costs and capital efficiency

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2008 Look Forward

Exploration PNG:

Material wells NW Paua (PPL 233) and Cobra (PPL 190) currently drilling

Potential for Wasuma (PPL 219) in 2008 or possibly early 2009

MENA:

Shahd SE, re-drill of Salma in ERQ (timing to be determined), 3D seismic and then potential further exploration or appraisal

3D seismic in Yemen Block 3 (current)

Caliph well in Libya (3Q08)

Portfolio optimisation expected. Valuable assets but changing materiality will drive new focus

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Outlook

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Outlook

Production outlook for 2008 of 9.0 – 9.5 mmboe

Exploration spend 35–40% lower than in 2007 at US$130 – 140 million, development spend of US$180 million and U$75 million on gas inc LNG FEED. Funded from cash flows and existing cash position

FEED decision on PNG LNG expected soon. Post FEED objectives for 2008 include marketing activities, execution of FEED contract

Detailed review of outcome of 2007 Strategic Review planned for mid March

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Summary

PNG LNG Project and commercialising remaining gas will drive Company value. Rising NPV over time, as cash flows get closer and project de-risks

Core PNG oil business remains robust, with stable production and cost outlook, provides cash flows to support LNG and other development options

Exploration activities wound back from 2007 high levels, but material prospects still to be drilled in both PNG and MENA

Strategic focus on organic and acquisition growth options, to provide diversification and build production pre and post gas

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