PNG Foldbelt Exploration - SEAPEX

OIL SEARCH LIMITED | ARBN 055 079 868 | ASX: OSH | POMSoX: OSH | US ADR: OISHY

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PNG Foldbelt ExplorationSEC2019

April 2019

Luke [email protected]

SEAPEX CONFERENCE | APRIL 2019 | PAGE 2

ACKNOWLEDGEMENT & DISCLAIMER

While every effort is made to provide accurate and complete information, Oil Search Limited does not warrant that the

information in this presentation is free from errors or omissions or is suitable for its intended use. Subject to any terms

implied by law which cannot be excluded, Oil Search accepts no responsibility for any loss, damage, cost or expense

(whether direct or indirect) incurred by you as a result of any error, omission or misrepresentation in information in this

presentation. All information in this presentation is subject to change without notice.

This presentation may contain forward-looking statements which are subject to particular risks associated with the oil and

gas industry. Oil Search Limited believes there are reasonable grounds for the expectations on which the statements are

based. However, actual outcomes could differ materially due to a range of factors including oil and gas prices, demand for

oil, currency fluctuations, drilling results, field performance, the timing of well work-overs and field development, reserves

depletion, progress on gas commercialisation and fiscal and other government issues and approvals.

Oil Search acknowledges the support of the PNG Department of Petroleum and the

support and contributions of all of our Joint Venture partners


OIL SEARCH OVERVIEW

❖ Established in PNG in 1929

❖ 29% interest in PNG LNG Project (operated

by ExxonMobil)

❖ ~ 60% interest in, and operator of, all PNG’s

producing oil fields

❖ Pursuing major LNG growth opportunities in

PNG in partnership with ExxonMobil and

Total

❖ 25.5% interest in major oil resource in Alaska

North Slope, USA, with significant appraisal

and exploration upside

❖ Market capitalisation ~A$12bn (~US$9bn)

❖ Listed on ASX (Share Code: OSH) and

POMSoX, plus US ADR programme (Share

Code: OISHY)

Nogoli Camp, Hides Gas Field

Pikka B well located on the Alaska North Slope


PNG EXPLORATION OVERVIEW

Eastern Foldbelt

Elk-Antelope

Western Foldbelt

Offshore Papuan Gulf :

Shallow and Deep Water

Foreland

P’nyang

❖ PNG has material exploration potential

❖ Actively testing proven and new plays

❖ 3 wells and > US$300 million gross

exploration expenditure in 2018

❖ Exploration focus around current, planned

and potential LNG hubs

❖ This talk is about new structural plays

and exploration techniques in the

Western Foldbelt

Hides


WESTERN FOLDBELT BACKGROUND

❖ The Papuan Basin formed on

the northern Australian margin

from the Triassic to present;

robust source, reservoir and

seal

R

CR






seal

❖ Key risk in Western Foldbelt

is trap

❖ The PNG foldbelt resulted from

arc-continent collision at the

northern Australian margin from

the Late Miocene (~5 Ma) to

present

❖ Still active as shown by the

2018 7.5 magnitude

earthquake

R

CR

Suture







seal

❖ Key risk in Western Foldbelt

is trap

❖ The PNG foldbelt resulted from

arc-continent collision at the

northern Australian margin from

the Late Miocene (~5 Ma) to

present

❖ Still active as shown by the

2018 7.5 magnitude

earthquake

R

CR D

D

D

Mechanically

strong

D = Detachment

1-1.5 km thick

1-1.5 km thick

0.1 km thick

Mechanically

weak



Strickland River

❖ Extreme terrain and limited

access:

▪ Elevations up to 3,600 m

▪ Dense rainforest cover

▪ Large areas of severe karst

topography

▪ Very limited ground access

▪ Weather-limited operational

window

❖ Poor sub-surface imaging and

complex structure:

▪ Scattering of seismic energy

by karst topography

▪ Highly faulted and folded

geometries



Strickland RiverMuller Ranges


access:




topography



window


complex structure:


by karst topography


geometries



Strickland RiverMuller RangesJuha Seismic Camp


access:




topography



window


complex structure:


by karst topography


geometries





access:




topography



window


complex structure:


by karst topography


geometries Hedinia Anticline





access:




topography



window


complex structure:


by karst topography


geometries Hedinia AnticlineHedinia Forelimb Discovery



Muruk Discovery (2017)


❖ A tale of persistence and technology

PNG ONSHORE EXPLORATION HISTORY

Sub-thrust anticline (?)

Triangle zone

Kuru Discovery (1956)

Field mapping; aerial photography;

drilling accessible anticlines

Iagifu, Hedinia, Hides, Angore &

P’nyang Discoveries (1986-1990)

Juha Discovery (1983)

Heavy lift helicopters; early seismic, MT and

grav/mag; SAR; satellite imagery; Sr dating

Surface anticline

Carbonate reef

Elk/Antelope Discoveries (2006-2008)

Improving seismic,MT and grav/mag; LiDAR; structural modelling

Agogo, Hedinia forelimb Discoveries (2010-2011)


Triangle zone



NW Highlands, PNG

Seismic Line

Gas Field

Muruk Prospect

(surface syncline)

MURUK CASE STUDY: BACKGROUND

❖ Muruk Prospect located along trend of giant Hides Gas Field and up-dip

of Juha Gas Field

❖ Darai Limestone syncline at surface, area historically considered to be

non-prospective

❖ Huge uplift in Muller Ranges:

▪ Surface syncline elevated

>2km amsl

▪ Toro SST reservoir in

outcrop >7km above

regional in Lavani Valley

❖ Limited sub-surface data

prior to the acquisition of

>120km of 2D seismic in

2014 and 2015


Muruk Prospect:

>3 km below surface

A

❖ Top-down interpretation approach:

▪ Field geology fundamental to exploration and remains a crucial constraint on structural models

MURUK CASE STUDY: THE TOOLS

Darai Limestone

Ieru Fm

Lavani

Orubadi Formation

Muruk

Juha

A’



▪ Sr-isotope method of dating Miocene limestones a key step in estimating base Darai Limestone


Darai Limestone

Ieru Fm

Lavani

Orubadi Formation

Muruk

Juha

Strontium base limestone

A A’

Muruk Prospect:

>3 km below surface


Muruk Prospect:

~1.5 km below base Darai


▪ Magnetotellurics (MT) to constrain Darai Limestone structure and identify potential repeats


Darai Limestone

Ieru Fm

Lavani

Orubadi Formation

Muruk

Juha

Resistivity

HighLow

A A’



▪ Seismic reflection data generally of poor to moderate quality, most valuable when interpreted in combination with

other datasets


Darai Limestone

Ieru Fm

Lavani

Orubadi Formation

Muruk

Juha

A A’syncline

anticline


❖ Structural and potential field

techniques important for

interpretation validation

❖ Comprehensive technical

evaluation suggested an

anticline could be present

beneath surface syncline

❖ Muruk chosen as drill

candidate and spudded late

2016

❖ Well results will be reviewed

by ExxonMobil in the next talk

WHAT HAPPENED NEXT?

Muruk 1 wellpad


Strickland Gorge (LiDAR Slope Map)Strickland Gorge (Aerial Imagery)

❖ LiDAR provides ability to “see

through the canopy”

❖ Dramatically improved surface

mapping, seismic and well

planning

❖ Possible to define the level of

decoupling between limestone

and underlying section; key to

understanding new structural

plays

❖ Huge 3D datasets requiring state-

of-the-art computing capabilities

WHAT ARE THE NEW TOOLS?

5 km Looking SE

Map view

3D view


Strickland Gorge (LiDAR Slope Map)

❖ LiDAR provides ability to “see

through the canopy”

❖ Dramatically improved surface

mapping, seismic and well

planning

❖ Possible to define the level of

decoupling between limestone

and underlying section; key to

understanding new structural

plays

❖ Huge 3D datasets requiring state-

of-the-art computing capabilities


5 km Looking SE

Map view

3D view



Merge zone

GJ14-108 LAV74-06 SW

clastic

NE

Slope (°)

Looking NW5 km

❖ Regional merges of historical, prospect-scale 2D seismic lines

❖ PSDM processing optimised by LiDAR, surface geology and

iterative structural modelskarst limestone

clastic



Sr base Darai

VelocityLow

High

PSDM velocity model

SW

NE

Looking NW5 km



iterative structural models

clastic

karst limestone

clastic


Looking NW5 km

Merge zone

Merged PSDMOriginal


Improved focussing,

more realistic dip and

better fault definition

Poor imaging and

unrealistic dips at edge

due to migration swing

and low fold

Processing courtesy of Thrust Belt Imaging (TBI)



iterative structural models



Final HC SaturationFluid

composition

sub-thrust trap

❖ Until recently charge timing taken as a given

❖ With focus on new plays, especially sub-thrust

structures, this is not sufficient

❖ Fully-linked structural, thermal, pressure and

hydrocarbon generation and migration modelling

now possible using IFP package Kronos

Present

Geological Evolution Thermal Maturity

Ro 2.01.61.20.8


❖ Exploration in the PNG Highlands requires application of a variety of techniques and skills:▪ Field geology

▪ Isotopic dating

▪ Magnetotellurics

▪ Seismic reflection

▪ Structural modelling

▪ Potential fields

▪ Physical and numerical analogues

▪ Remote sensing (LiDAR)

▪ Basin modelling (Kronos)

❖ Moving beyond the historical to new-age detached structural plays has required the integration

of all these tools and lateral thought, together with willingness to take a risk on drilling

❖ Even with the best models, surprises are common, and flexibility in the approach to drilling is

required

❖ The Muruk 1 well history demonstrates the challenges and solutions and will be discussed by

ExxonMobil in the next talk

SUMMARY


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Thank you

April 2019

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PNG Foldbelt Exploration - SEAPEX