1

Oil Search Roadshow

September 2008

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

2

Summary

Oil Search has delivered sustained top quartile growth over past five years (53% annualised return)Delivery of PNG LNG Project over next four years, together with progressive development of 2nd and 3rd tier gas, has potential to multiply Company value over this periodPNG LNG – The Premier AsiaPac LNG Project:

On track to deliver FID towards end 2009, with first LNG in late 2013/early 2014

Thirty+ year legacy project, with capacity to triple OSH production. Also positively impacts oil field life, value and reservesCurrent share price discounts assessed PNG LNG value and reflects no value for further gas developments or exploration

3

Profile

Established in Papua New Guinea (PNG) in 1929

Operates all of PNG’s producing oil and gas fields. Current gross production ~44,000 boepd, net share ~23,000 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

At 1.1.08, 73.5 mmboe 2P reserves plus 950 mmboe undeveloped 2C gas and liquids resource. ~60% of gas resource is dedicated to PNG LNG, a world scale LNG development operated by ExxonMobil. Significant resources still to be commercialised

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

Market capitalisation ~US$5.5 billion. Listed on ASX (Share Code OSH) and POMSOX, plus ADR programme (Share Code OISHY)

4

Oil SearchLocation Map

5

Consistent strong performance over past 5 years

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

Share price (rebased to OSH)

Oil Search

Santos

Woodside

ASX 200

WTI oil

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

0.84 1.02 1.33 1.81 3.00 3.69 4.22 3.35 4.16 4.85 6.67

30.33 32.51 38.67 42.17 59.25 61.06 73.85 60.85 71.10 95.95 140.97

OSH (A$/share)

WTI(US$/bbl)

(Actual values of the 1st of the month)

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

1 Aug 08

5.56

123.26

6

World ClassSafety Performance

Total Recordable Incidents (TRIs) 1998 – 2007

APPEAOSH OGPTRI / 1,000,000 Hours

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 3.1 2.9

9.4

8.2

8.3

2006

International Companies

6.3

2.7

7

Strategy

2007/08 Strategy Review defined initiatives to drive continued top quartile returns, by unlocking value within existing asset baseMajor strategy objectives

Ensure Final Investment decision for PNG LNG Project Transforms Oil Search into significant LNG producer, 30+ year legacy project

Position Company to drive 2nd phase gas developments using existing 2C, 3C gas resources and through gas explorationOptimise PNG oil field operating performance to sustain production and cashflows up to and beyond first gasPursue material exploration opportunities in PNG and MENA

8

PNG LNG Project

AsiaPac’s next LNG

development

9

Primary Focus - PNG LNG

PNG LNG Project represents PNG’s cornerstone gas development, will more than double country's GDP

“Affects economy of PNG and its balance of trade situation profoundly” (ACIL Tasman report, Feb 2008)

Will underpin Oil Search’s production and profits for 30+ years

Will commercialise ~550 mmboe of Oil Search’s 2C gas resources and add ~20 mmboe to annual net production, tripling current production

Will unlock value for OSH and shareholders

New gas developments at premium prices (BG & Origin, Petronas/Santos, Shell/Arrow, QGC/Sunshine Gas)

AGL sale will provide market a window to project value

10

Regional LNG marketsare robust

Notes1. Project Under Construction include: Pluto LNG, Tangguh LNG, Yemen LNG, Qatar Gas 2,3,4, RL3, Angola LNG2. Possible projects include: PNG LNG, Sunrise LGN, Gorgon LNG, Browse, Ichthys, Scarborough, Wheatstone LNG, 4 Gladstone projects, Sulawesi, Abadi, Brunei LNG II,

NLNG VII, Brass LNG, OK LNG, Iran LNG3. Speculative projects include: projects that currently lack any reasonable definition in terms of participants, structure or underlying resources as well as defined supply where

major issues are preventing the project from making substantial progress

Regional market fundamentals remain robust

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

Growth from emerging markets of India & China and new markets

Decline in existing contracts and concern with new project timing

Supply and Demand imbalance after 2012

Projects under construction do not match capacity

Extensive set of projects in queue from 2013 onwards

Pacific Basin LNG Supply and Demand to 2020mmpta

Onstream Under Construction Possible Speculative Pacific LNG Demand

0

50

100

150

200

250

300

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

“LNG supply unlikely to keep up with demand with high prices set to continue in the medium term”

“Some of these possible projects are tenuous e.g., LNG from Iran, and actual supply will be lower than shown”

Source Wood MacKenzie Global LNG, April 2008

11

LNG Projects Under Construction and Proposed

Large number of possible projects under consideration

Not many possible projects will be able to cover the demand gap in 2013

Western Australia: strong cost pressures and competition for resources

Potential first production post 2014/15

Australian CSG projects: 4+ projects competing for 2014 window, new technology with several hurdles to be overcomeIncreasing foreign focus

PNG LNG is an attractive option relative to others

12

LNG Pricing

Strong pricing drivers:Supply/demand fundamentalsPull from EuropeDelays in other projectsEnvironmental advantagesPricing and challenges with competing energy sources

Recent contract pricing around oil price parity:

Recent contracts:Sept 07: Petrochina, 2-3 mtpa, 15 - 20 years ex BrowseSept 07: Petrochina, 1 mtpa, 20 years ex Gorgon Nov 07: CPC, 2-3 mtpa, 15 - 20 years ex BrowseApril 08: Petrochina, 3 mtpa, 25 years from 2011 ex QatarGasApril 08: CNOOC, 2 mtpa, 25 years from 2009 ex QatarGas II

0

5

10

15

20LNG (US$/mmbtu)

20 40 60JCC ($/bbl)

80 100

Traditional Contracting

Crude Oil Parity

NWS 2007 Contracting

13

World Class and World Scale LNG Project2C resources of 9.3 tcf

6.3 mmtpa, 2 train LNG project

Clean, liquids-rich gas

No technology issues or concerns

Well positioned for the Asia market

Rapidly advancing in optimal timeframe to satisfy regionaldemand in 2013/2014 period

Joint Venture is strongly aligned with supportive Government

Strong OperatorExxonMobil is the Project operator – excellent record of project delivery on time and on budget, assisted by comprehensive pre-FEED process

Oil Search providing PNG experience

Strong Project team

Real Expansion CapacityNew infrastructure will stimulate additional gas development

Substantial existing 2C and 3C resources

PNG LNG:The Premier AsiaPac LNG Project

14

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

See schematic above for detail

15

PNG LNG Project Fields

Kutubu

Juha Main

Angore

Gobe Main

HidesMoran

Agogo

16

PNG LNG Project Milestones reached in 1H08

Commercial alignment achieved, with Joint Operating Agreement (JOA) executed in March 2008 amongst the Project Owners

Initial funding interests pre-Government back-in agreed (OSH 34%) Unitisation and redetermination procedures agreedActionable finance plan agreed

Marketing Representative Agreement signed for joint marketing of 6.3 mmtpa, led by ExxonMobil, Project rolled-out to buyers at GasTech in Bangkok in March 2008

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 achievedSets terms and mechanism for State equity participation in the Project

Front End Engineering and Design (FEED) commenced in May 2008

17

Project Status

High quality project team assembled – ExxonMobil personnel plus secondees from partners including OSHFEED activities proceeding on schedule. Target completion in 3Q09 (13 months):

EOS (KBR/ WorleyParsons JV) conducting upstream FEED comprising:− Preliminary engineering design for gas field developments − Gas conditioning and compression facilities− Pipeline and infrastructure

Downstream FEED (LNG plant, storage, marine facilities) being conducted in two phases: − Non-competitive phase - support from KBR − Second, competitive EPC bid phase involving APCI (Air Products

and Chemicals, Inc) and COP (ConocoPhillips) process licensed contractors

Oil Search-managed associated gas FEED study commenced with WorleyParsonsMany Project enhancements, optimisations being considered

18

Project Status

Marketing:Negotiations commenced between Project and selected offtakers

Project is strongly positioned, competitive advantages recognised by customers

Targeting end 08/early 09 for HOAs, SPAs prior to FID

Government committed and supportive Leadership and co-ordination defined

Discussions between Government and Landowners commenced on Benefits Sharing Agreement

Environmental, licensing and permitting activities underway

State Nominee agreed

JV considering proposal for early works programme subject to marketing, Benefits Sharing Agreement and permitting progress

19

PNG LNG Capex Estimates

First phase capex (2008 – 2014) expected to be between US$10 –11 bn (real mid-2007 $s)Historically, ExxonMobil has delivered projects on time and on budget Subsequent capex is several years out (additional Hides drilling, Angore and 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 (3Q 09)Further optimisation will occur during dual FEED

Source: ExxonMobil Analyst Briefing 5th March, 2008.

EM Project Execution Performance

Actual vs. Funded (%)

25

Average2003-07 2007

50

75

100

125

0

Cost Schedule

20

Project Interest Determination

Methodology agreed for Project Interest determination

Initial Project Interests will be established at FID, taking into account FEED cost estimates and LNG sales contract outcomes

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 of ~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

21

PNG LNG Financing

Debt:Joint debt financing approach, led by a Finance Committee co-ordinated by ExxonMobil with key input from OSH. Soc Gen financial advisor

Recent road shows elicited strong interest from Export Credit Agencies, commercial banks and rating agencies. Banks’ positive attitude to PNG demonstrated by OSH’s recent corporate facilityIncluding capitalised interest through construction, financing fees and funding of the debt service reserve, seeking project finance for ~US$11.5 billion (nominal)

OSH share of project finance ~US$3.2 billion (nominal)

Equity:OSH’s equity contribution (nominal) expected to be ~US$1.3 billion

Funded from existing cash (~US$600m), corporate borrowing from refinancing (US$450m) and oil cash flows between 2009 – 2013 (operating cash flow in 1H08 was US$348m)

Will utilise hedging, if required, to protect cash flow and optimise borrowings

22

LNG Project Schedule

FEED

PNG GovernmentApprovals

Benefits SharingAgreement

Project Financing

Detailed EngineeringDesign & Procurement

Construction /Commissioning

2008 2009 2010 2011 2012 2013 2014

FirstCargoLNG

*Schedule is Indicative only

FIDPIMClose

Gas Agreement

Entry

Environmental, Licences etc

EPC bids

HOA’sMarketing

SPA’s

Possible early works

23

Economic Importance ofPNG LNG Project

ACIL Tasman Report 6 February 2008“Affects economy of PNG and its balance of trade situation profoundly”GDP will more than double Oil & Gas exports will increase 4 fold 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 over 30 yearsMultiplier effects additional

Government recognises importance. Leadership and Co-ordination defined:

Political leadership through Ministerial Economic CommitteeCo-ordination branch approved and being implemented

Retention Licence renewal:Government has announced PRL 11 and PRL 12 renewal

Commitment to pursue Benefits Sharing Agreement:Targeting 4Q08/1Q09

Strong support for the Project at local community level

24

Impact on Oil Search

For Oil Search, the Project will provide:Annual incremental net production of ~20 mmboe Booking of ~550 mmboe of Oil Search’s 2C gas resources providing positive impact on depreciationPast costs pay back by Government on back-in at Final Investment Decision Value additions to the oilfields by:− Incremental reserves due to extension of oil field life (Gobe to

2024, Kutubu to 2048) and revised reservoir opportunities − Abandonment deferral− Additional pipeline tariffs − Cost sharing benefits in oil fields and pipeline export system− Reduction of oil field taxation rate on conversion

Detailed field review has commenced to analyse field management of gas and oil, optimal development and value synergies− New Moran development plan

25

Benchmark of OSH Peersby AV/2P Reserves

PNG LNG FID will allow booking of ~550 mmboe of 2P reserves

Notes1. Comparable global E&P independent listed companies2. Assumes exchange rate of 0.869 AUD/USD3. Share prices as at 20-Aug-2008

Agg. Value / 2P ReservesUS$/boe

Tullo

w

Lund

inW

oods

ide

ROC

Oil

AWE

Maure

l et P

rom

Adda

x

Dana

Sant

os JKX

Cairn

Vent

ure

Soco

Beac

h Pe

trole

umPA

Res

ourc

es

QGC

DNO

Prem

ier

Oil Se

arch

(+55

0mm

boe)

Nexus

Ene

rgy

Median = US$13.8 boe15.0

14.1 14.1 13.8 13.412.7 12.2 11.8

10.9 10.59.4

8.97.9

6.1

54.7

20.4 20.0

18.1

15.1 15.0

0

5

10

15

20

25

60

International Australian

26

GrowthOpportunities

27

Gas Growth Opportunities

PNG LNG Project sets the stage for additional gas-based growth opportunities, beyond PNG LNG Project debottlenecking (10 +15% above nameplate capacity)

Additional LNG developments command the highest value:

Sufficient 2C resources for additional train already exist in PNG fields

Other gas development options also available with robust economics

Oil Search seeking to: Increase contractible gas (exploration, appraisal, acquisition)

Aggregate gas for highest value development option

Key partnerships with State – MOU signed in July

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

28

Gas Resource Base

~1/3rd of PNG gas resources are held in the Hides field PNG LNG Project accounts for approximately half of PNG’s discovered gas resource OSH has ~1.6 tcf net of discovered gas plus associated liquids not dedicated to PNG LNG

Technical Gas ~ 17,000 bcfTechnical Gas ~ 17,000 bcfStanley

0.1%

Barikewa4%

Pasca1%

Angore7%Juha

6%

P`nyang10%

Pandora A7%

Kutubu Area8.3%

Hides (Technical Reserve)

Kimu4.8%

Elevala3%

Douglas3%

Elk3%

Ketu2.3%

Uramu2%

Gobe Area2%

Moran1%

Kuru1%

Koko0.1%

Bwata0.3%

SE Mananda0.1%

Iehi1%

Pandora B2%

PNG LNG Project

30%

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

29

Oil Search Visionfor LNG Expansion

3.5 – 4.0 tcf additional gas volumes required to underpin construction of additional train

PNG LNG fields comprise Hides, Juha Main, Angore, Kutubu, Agogo, Moran and Gobe Main

Other Highlands JV partner resources (OSH best estimates) include P’nyang and Juha North

Forelands & Offshore resources include Barikewa, SE Gobe, Pandora & Uramu

Considerable exploration upside. 3 year programme targeting >13 tcf gross resource

Exploration

3rd Train Threshold

0

5

10

15

20

25tcf

PNG LNG

Base Volume

PNG LNG3C

Upside

2C

3C

2C

3COther Highlands JV Partner Resources

4th Train Threshold

Forelands & Offshore

Resources

30

Location of Gas Resources:PNG LNG Project Fields

Sufficient 3C upside in existing PNG LNG Project fields to underwrite a third 3.15 mmtpa trainAppraisal drilling planned for 2010/11 on Hides

AngoreJuha

Hides

Moran

AgogoKutubu

Gobe Main

15.09.3Total

5.14.0

Juha, Angore, Kutubu, Moran, Gobe Main

9.95.3Hides

3C2CField

31

Location of Gas Resources:Other field resources

8.54.8Total

4.7

3.7

2.3

2.4

Juha North

Forelands and Offshore:Kimu, Barikewa, SE Gobe, Uramu, Pandora

Highlands:P’nyang

3C2CField

Barikewa

Uramu

Pandora

P’nyang

Kimu

Based on OSH best estimatesAppraisal drilling at Barikewa in 2009 and Pandora in 2010

Juha North

SE Gobe

AngoreJuha

Hides

Moran

AgogoKutubu

Gobe Main

32

Barikewa

Uramu

Pandora

P’nyang

Kimu

Juha North

SE Gobe

Angore

Juha

Hides

Moran

AgogoKutubu

Gobe Main

Location of Gas Resources:Exploration

2009 – 2011 exploration programme will test over 13 tcf mean resource (gross), with average POS of ~15%

Testing off-shore prospectivity (Flinders, Bigpela, PPL 234, APPL 293) to commence in 2009/10

Huria well expected to be drilled prior to the Hides development wells

Considering a range of farm-ins/judicious farm-downs with strategic partners

Flinders

Barikewa Deep

Huria

Hedinia Deep

Cecilia

Iwa

Bigpela

Well 1

Lead 7

33

Other Gas Growth Opportunities

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

Methanol and other derivativesGas to liquids (GtL)Compressed Natural Gas (CNG)Gas for use in mine operations eg extending mine life at PorgeraPower generation and other smaller projects catering to the needs of local communities & industry

Size of dedicated resource important in defining commercial optionRange of study groups are being established with Government and other entities to form non-PNG LNG gas development ‘master plan’

34

Other Gas Growth Opportunities

Optionality in fields such as P’nyang (Western Corridor) and Barikewa (Eastern Hub) to be feedstock for either LNG or alternative development options

Barikewa

Uramu

Pandora

P’nyang

Kimu

Juha North

SE Gobe

Elk

Douglas

Stanley

Ketu

Elevala

35

AGL Asset Sale Outcome a Win:Win for OSH shareholders

AGL is selling its interest in PDL 2 (11.9%) and PDL 4 (66.7%)

Highest bidder expected to be known by mid SeptemberOSH and other licence partners (ExxonMobil, JPP, MRDC) have pre-emptive rights. 30 day pre-emption period post notificationCan pre-empt on either or both licences

Strong investment discipline will be applied when reviewing pre-emption opportunity. Considerations for OSH include:

PriceFunding efficiencyPre-emption intentions of partners

AGL sale outcome a likely Win:Win for OSH shareholders:If a high sale price, demonstrates strong market value and confidence with ‘look through’ implicationsCould represent a potential buying opportunity of well known quality assets subject to meeting investment criteria

25.6%

10.0%

72.3%

49.4%

60.0%

OSH % interest

27.3%SE Gobe Unit (PDL 4)

66.7%Gobe Main (PDL 4)

11.9%SE Mananda (PDL 2)

5.2%Moran Unit (PDL 2)

11.9%Kutubu (PDL 2)

AGL % interestAsset

36

AGL Asset Sale:OSH Core Asset Value Implications

‘See-through’ value range dependent on value ascribed to oil vs gas

OSH offers material upside in PNG LNG Project equity, Other Gas and exploration incremental to AGL assets, plus existing cash balances

OSH interest provides full exposure to Hides, Juha & Angore 3C and 3rd train upside

3.1 –3.5%

28.5% -31.5%

PNG LNG (Project Interest)

As at 30/6/08. Represents NSAI reserves less H1 actuals

10.4 mmbbl

53.8 mmbbl

Producing Oil

CommentsAGLOSH

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

800 850 900 950 1000

Price paid for AGL's PNG Assets (US$m)

Implied OSH Core Asset "See-Through" Value (US$m)

Core Assets

OSH: 3 year drilling programme will test over one bnbbl unrisked oil and over 8 tcf unrisked gas (net to OSH).AGL: minor exploration value in licence package

Exploration

OSH = ~$600 millionCash & Receivables

OSH has ~1.6 tcf net of 2C gas resources (plus associated liquids) and ~3.0 tcf of 3C resources in other well positioned gas fields including P’nyang, Juha North, SE Gobe, Kimu, Barikewa, Pandora & Uramu

Other Gas

Comments

Other OSH Assets

Excludes Other Gas, Exploration, Cash &

working capital balances

37

PNG Oil Operations

38

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 – in 1H08, cash opex of US$10/bbl, realised oil price of US$118/bbl

Need to balance work programmes and hence production outcomes with demand for rigs for exploration and gas drilling

39

PNG Oil Fields

Usano

Kutubu

SE ManandaMoran

SE Gobe

Gobe Main

40

Production Summary

Net Production (mmboe)

MENA

Hides GTE

SE Mananda

SE Gobe

Gobe Main

Moran

Kutubu

0

1.0

2.0

3.0

4.0

5.0

6.0

1H 06 2H 06 1H 07 2H 07 1H 08

41

Field Development Drilling Activity

Usano:2008 : 4 wells2009 : 1 wells

SE Gobe:2010 : 1-2 wells

Kutubu:2009 : 3 wells

Agogo:2009 : 2 wells

Moran:2008 : 1-2 wells2009 : 1-2 wells

42

PNG Drilling Rig Strategy

Two ‘state of the art’ new rigs, owned by Oil Search:Rig 103 – became operational late 2007. Had a number of commissioning and teething problems, now resolved (significant performance improvement on last development well, UDT 9). Leapfrog unit commissioned Rig 104 - delivery delayed primarily due to late delivery of specialist drilling equipment. Due to commence drilling activities in late Dec 08Likely to use full time on development activity in 2009

Decisions to be made regarding Parker Rig 226 and Rig 101 (ex Rig 2):

Contract with Parker Rig 226 expires at end of Moran 14 wellContract expires with HAES on Rig 101 at end of Cobra 1A well. Future programme under reviewRig choice for exploration/gas drilling campaignWorking with other operators in PNG

Hydraulic Workover Unit operating well:Mobilised low cost workover unit and completed first workover

43

Exploration

44

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 based on encouragement from 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 play

− Offshore fans and toe thrusts

Current wells: Cobra (testing), Wasuma, Iwa and Cecilia (2009)

45

PNG Exploration

Iwa

Wasuma

Cobra

Cecilia

46

Cobra 1A

Seismically defined footwall anticline (‘Sub-thrust Play’) adjacent to SE Gobe oil fieldPrimary Iagifu objective was water wet, but Hedinia Sand was thicker than predicted pre-drill

Recovered oil, currently testing, updip potential

Potential play-opener with significant follow-up

De-risks many along strike - large structural features already identified in portfolio

10.9Cue PNG Ltd

26.5Murray Petroleum

62.6Oil Search

WI %PPL 190

COBRA

PPL219

PPL190

PDL4

PDL4PDL3

10km

Gobe Main

SE Gobe Wasuma

47

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 mmbbl with upside potential to 100 mmbblChance of success 1 in 5Well site construction commenced

WASUMA

PPL219

PPL190

PDL4

PDL4PDL3

10km

Gobe Main

SE Gobe Wasuma

SE GobeWasuma

NESW

Wasuma

8.75Merlin Petroleum

91.25Oil Search

WI %PPL 219

48

Near field exploration opportunity located along trend of Usano oil field and adjacent to SE Hedinia gas fieldToro sandstone primary objectiveAdditional upside in Hedinia sandstone (flowed oil when DST’d in SE Hedinia 1x) & Iagifu sandstoneTwo alternative models

Oil exploration prospect separated by fault from SE Hedinia gas field:− Mean recoverable reserves (Toro) 30 mmbbl

with upside potential to 60 mmbbl− Chance of success 1 in 6

Gas appraisal along trend of SE Hedinia (no fault compartmentalisation):− Mean recoverable reserves (Toro) 150 bcf

with upside potential to 250 bcf− Chance of success 1 in 2

IWA

10km

NESW

Iwa

SEMananda

MoranPaua

Kutubu

LakeKutubu

Agogo

PDL2

PPL233

PPL219

PDL5PDL6

Extension of SE Hedinia Anticline

Darai

Ieru

Upper IeruToro

Hedinia

Koi-Iange

Iagifu

Imburu D

11.90AGL (PNG)6.75PRK6.78Merlin Petroleum14.52ExxonMobil60.05Oil SearchWI%PDL 2

49

MENA Exploration Strategy

Sale of some of MENA assets to Kuwait Energy recently completed for US$200 million & WCRe-focus on MENA assets that have potential to make a material contribution Retained assets provide significant upside potential –seeking to mature and de-risk through seismic/drillingPre-drill POS can be reduced to >20% through technology or quality of acreage

Continue to seek material opportunities in world class petroleum systems

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

50

MENA Exploration

Sana’a Office

Dubai Office

Block 3

Block 7

Tajerouine

Le Kef

Area 18

Bina Bawi

Shakal

51

Shakal – Kurdistan, Iraq

Shakal 1 will target a large sub-thrust anticline

Three Tertiary carbonate units are primary target with up to 1,350 metres of closure

Each target has potential of >80 mmbbl recoverable

Key risk is fault separation from adjacent Pulkhana field

Well planned to spud early September

20Govt.20Govt (unassigned)9Petoil36Shakal Prod. Ltd (op)15Oil Search

WI%Shakal PSC

Near Top Euphrates depth map 10km

PulkhanaField

Shakalcompartment

52

Area 18 located in under-explored Pelagian Basin, offshore Libya. Pelagian Basin contains ~7 bn boe reservesArea 18 is located on trend to productive Pelagian Basin fields Exploration targets:

Eocene carbonate (~200 mmbbl mean reserves), proven playCretaceous carbonate (~70 mmbbl), proven play Jurassic clastic gas play (~1 tcf) new playTriassic clastic play (~2.2 tcf) new play

Caliph Prospect will target all three plays Other prospects and leads in the permit are defined on 2D seismic

Area 18 – Offshore Libya

70Petrobras (Operator)

30Oil Search

WI %Area 18

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Yemen Block 3 and 7

Proven commercial fairwayOn trend with OMV basement discovery (2P reserves ~100 mmbbl)>800 km2 3D seismic recently

completed in Blocks 3 and 7Main focus is basement play but shallower plays also presentCurrently processing and interpreting seismicDrilling planned to begin mid-2009

Yemen Oil CompanyMNDPetOil

Oil SearchBlock 3

Yemen Oil Company

ARC/VoyagerKufpec

Oil SearchBlock 7

Adelphi

6.0020.0034.0040.00WI%

8.5021.2521.2534.00WI%

15.00

Example of large, basement-involved structures

Block 7

Block 3

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FinancialOverview

55

0

100

200

300

400

500

600

700

800

Financial Performance

466.7

410.7

133.3

2005 2006 2007 1H 08

Reven

ue

EB

ITD

AX

Co

reN

et

Pro

fit

Half Year

Full Year

US$m

56

~US$600 million in cash following receipt of MENA asset sale funds. No debt

Refinancing of 5 year US$ oil facility in final stages:Very positive response from bank market with competitive offers for more than twice the amount soughtFacility size increased by US$50 million to US$450 millionPricing and facility terms more favourable than those on the facility it is replacingAlmost half the facility provided without political risk insurance – strong endorsement for PNG

With cash and finance facility, liquidity is >US$1bn

No oil hedging undertaken during first half of year or currently in place

Treasury Update

57

FY08 Capital Outlook Update

Exploration expenditure for full year 2008 expected to be US$150 - 160 million, inclusive of acquisition of Shakal interest in Kurdistan

Gas commercialisation and new business expenditure of US$80 million, including growing FEED spend on PNG LNG as activities ramp up

Development expenditure of US$150 million, plus US$20 million on rig acquisition payments

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Outlook

59

Gas set to dominateportfolio over time

Substantial unrealised value exists within Oil Search’s existing asset portfolio (particularly PNG gas)

Current share price discounts assessed PNG LNG value and reflects no value for further gas developments or oil exploration success

Value calibration anticipated from:

PNG LNG: Key milestones reached (LNG HOA’s, early works) Progress on demonstrating value growth options (exploration and appraisal programme, agreements etc.)

2008 2009 2010 2011 2012 2013 2014 2015 2016

Cash

Fourth Train

Third Train

PNG LNG

Oil

Value NPV Over Time (Unrisked)

60

Outlook

Production outlook for 2008 of 8.5 – 9.0 mmboe

Cash flows from operations continue to strengthen already healthy balance sheet. Liquidity of >US$1 bnprovides excellent financing flexibility for PNG LNG as well as an active exploration, appraisal and development programme

PNG LNG Project on track to make Final Investment Decision in late 2009, first production expected late 2013/2014. Will deliver key infrastructure to PNG. 30 year+ legacy project

Debottlenecking opportunities in PNG LNG and resource upside in Hides are likely to provide next tranche of value creation

Significant existing 2C resources outside PNG LNG remain to be commercialised. Value enhanced by PNG LNG Project infrastructure. Oil Search working with PNG Government on non-Project gas development

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Likely Catalystsin 2008-2009

3Q 2008AGL Asset saleSpud Shakal well in Kurdistan

4Q 2008PNG LNG Offtake HOAs late 08/ early 09Spud Caliph well in Libya

1Q 2009Benefits Sharing Agreement

2Q 2009Decision to commence early worksFinalise EPC bids

2H 2009FID on PNG LNGFinancial Close

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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

AGL asset sale provides industry value benchmark, with partial value see-through. May provide opportunity to increase PNG LNG interest, but only in the right circumstances – series of gates for decision-making

Considerable upside value in existing asset base still to be recognised by market

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