Oil Search : Fourth Quarter Report for period ended 31 December 2020

FOURTH QUARTER REPORT FOR PERIOD ENDED 31 DECEMBER 2020

27 January 2021

ASX: OSH | PNGX: OSH | ADR: OISHY

Strongest safety performance since taking operatorship in 2003

• 2020 TRIR of 0.94, strongest since assuming operatorship in 2003

Record annual PNG LNG production, improving price environment

• Record annual PNG LNG production rate of 8.8 MTPA (gross)
• Total net annual production of 29.0 mmboe, up 4% from 2019
• Fourth quarter operating revenue of US$259.5 million, up 37% from Q3 2020

Discipline and focus continue to deliver value

• Cost reductions sustained, unit production costs within full year guidance of US$9.50 - 10.50/boe

Developments progressing

• PNG Parliament passed all remaining amendments to Acts for Papua LNG fiscal stability
• Pikka project on track for FEED entry in early 2021, with strong joint venture alignment
• Alaska resources upgraded by 33% following independent certification

Liquidity position reinforced

• US$1.44 billion total liquidity (US$541m cash, US$896m undrawn credit facilities)
• Net debt reduced by 20% compared to 31 December 2019

Managing Director Dr. Keiran Wulff said "Oil Search has delivered another solid quarter, resulting in record annual PNG LNG production against a backdrop of improving commodity prices.

"Our focus on performance, cost and capital allocation continued to deliver results in the fourth quarter. We are embedding sustainable cost reduction initiatives and enhancing operations across the Company to drive improved performance over the longer term.

"Our developments are also regaining momentum. During the quarter, the PNG Parliament passed all remaining amendments to Acts for Papua LNG fiscal stability. Extensive assurance reviews were completed for the Pikka Unit Development and the project is ready to enter front-end engineering and design (FEED) in early 2021. Strong alignment has been achieved with our partner, Repsol, for the phased development program which is now targeting first oil in 2025 at 80,000 bopd from a single well pad. Initial development costs have more than halved and the breakeven cost of supply1 under US$40/bbl makes the project resilient to lower oil prices.

"Despite the material challenges of 2020, PNG LNG continued to outperform in the fourth quarter, ending the year with its highest ever annual production of 8.8 MT. The North West Moran oil field was also brought back online during the

1 Including a 10% return on capital

FOURTH QUARTER REPORT FOR PERIOD ENDED 31 DECEMBER 2020 - 27 JANUARY 2021

quarter following a shut-in due to the 2018 earthquake. The recommencement of production was a great effort by all involved and resulted in a gross contribution of around 2,500 bopd, notwithstanding remote operational challenges and COVID-19 travel restrictions.

"Our resource position also continued to improve, with independently certified Alaska 2C contingent resources at

967.9 mmbbl (gross), representing a 94% increase since asset acquisition. Most of this upgrade was due to our discoveries earlier in 2020 at Mitquq and Stirrup, which reinforced the potential for an additional stand-alone development in our core Alaska development area.

"At our investor briefing in November, we shared our renewed purpose and ambition and laid out our new strategy to focus on delivering full value and enhancing our appeal to all stakeholders through building resilience to lower and more uncertain commodity prices. We have sustainably lowered our cost base and breakeven costs for existing production and new developments, enhanced productivity and tightened our capital management. In addition, we have substantially increased our focus on sustainability in every part of our business so as to reduce our environmental footprint, optimise our carbon abatement, and allow us to be preferred energy company for all stakeholders.

"We expect that 2021 will continue to be another challenging year and the Company is absolutely focussed on maintaining the operational discipline that resulted in excellent results in 2020 despite the difficult conditions. Oil Search is increasingly well positioned to manage through uncertainty and deliver our projects in 2021 and beyond."

For more information regarding this report, please contact:

Investor Relations	Media
Peter Laliberte	Matthew Park
VP - Investor Relations	VP - Communications and Media
[phone]	[phone]
[e-mail]	[e-mail]

This ASX announcement was authorised for release by the Oil Search Board of Directors

DISCLAIMER

This report contains forward-looking statements. By their nature, forward-looking statements and statements of current intentions involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future and are outside the control of Oil Search. Actual outcomes may differ materially from those expressed in such statements, due to a variety of factors.

Subject to any terms implied by applicable law, which cannot be excluded, or the ASX Listing Rules, Oil Search disclaims any obligation or undertaking to publicly update any forward-looking statement or future financial prospects resulting from future events or new information.

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FOURTH QUARTER REPORT FOR PERIOD ENDED 31 DECEMBER 2020 - 27 JANUARY 2021

Comparative performance

Production1,2

	QUARTER END		FULL YEAR
('000 boe unless noted)	DEC 2020	SEP 2020	DEC 2019	DEC 2020	DEC 2019
PNG LNG Project3	6,419	6,554	6,295	25,723	24,994
PNG oil production ('000 bbls)	564	6754	337	2,619	1,571
Other production5	78	70	374	676	1,382
Total Production	7,061	7,298	7,006	29,017	27,947
Total Sales	7,181	7,546	7,920	28,388	27,785

Sales1

	QUARTER END		FULL YEAR
(US$ million unless noted)	DEC 2020	SEP 2020	DEC 2019	DEC 2020	DEC 2019
LNG and gas sales6	198.4	133.2	336.5	854.9	1,246.3
Oil and condensate sales	52.6	50.2	99.2	188.7	295.5
Other revenue7	8.5	5.6	11.1	30.6	42.9
Total Operating Revenue	259.5	189.0	446.7	1,074.2	1,584.8
Average realised oil and condensate price8 (US$/bbl)	40.35	36.52	61.71	37.22	62.86
Average realised LNG and gas price (US$/mmBtu)	5.99	4.239	9.47	6.49	9.58

Financial Data1

	QUARTER END		FULL YEAR
(US$ million unless noted)	DEC 2020	SEP 2020	DEC 2019	DEC 2020	DEC 2019
Cash	540.8	752.7	396.2	540.8	396.2
Debt10,11
PNG LNG financing	2,617.0	2,803.5	2,939.4	2,617.0	2,939.4
Corporate facilities	300.0	300.0	440.0	300.0	440.0
Net debt	2,376.2	2,350.8	2,983.2	2,376.2	2,983.2

1. Numbers may not add due to rounding.
2. Gas and LNG volumes have been converted to barrels of oil equivalent using an Oil Search specific conversion factor of 5,100 scf = 1 boe, which represents a weighted average, based on Oil Search's reserves portfolio, using the actual calorific value of each gas volume at its point of sale. Minor variations to the conversion factors may occur over time.
3. Production and sales net of fuel, flare, shrinkage and SE Gobe wet gas.
4. Kutubu field volumes restated for third quarter due to a minor revision in field allocations.
5. SE Gobe gas sold to PNG LNG, Hides GTE gas and liquids.
6. Includes LNG provisional price adjustment.
7. Other revenue consists of infrastructure tariffs, rig lease income, electricity, and naphtha sales.
8. Average realised price for Kutubu Blend including PNG LNG condensate.
9. Excludes LNG provisional price adjustment of US$14 million relating to seven cargoes delivered during the second quarter.
10. Excludes lease liabilities recorded as borrowings.
11. As at 31 December 2020, the Company's corporate facilities totaled US$1.20 billion, of which US$300 million had been drawn down and US$4.4 million had been utilised for letters of credit.

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FOURTH QUARTER REPORT FOR PERIOD ENDED 31 DECEMBER 2020 - 27 JANUARY 2021

Coronavirus update

Oil Search has maintained the previously implemented COVID-19 controls to protect our personnel, the communities where we work and the continuity of our operations during the quarter. Following the implementation of our enhanced COVID-19 testing protocols in PNG, our workforce continues to be subject to reduced quarantine periods in strict quarantine zones. Our 2020 Alaska field-based operations were completed in October. When operations recommence, we plan to require a mandatory negative COVID-19 test or proof of vaccination before personnel are approved for travel to the North Slope.

As we move into 2021, Oil Search will continue to monitor health advice around COVID-19, as well as the progress of the global COVID-19 vaccination programmes. We continue to assess the risks to our workforce and operating performance and will modify our COVID-19 protocols in response.

Guidance for Full Year 2020

The Company's financial results for the year to 31 December 2020 will be released to the market on Tuesday 23 February 2021.

Guidance for the 2020 full year results is as follows:

• Unit production costs: Within the US$9.50 - 10.50/boe guidance range
• Other operating costs1: Guidance increased to US$110 - 130 million due to higher future site restoration estimates relating to assets previously impaired.
• Depreciation and amortisation charges: Within the US$12.00 - 13.00/boe guidance range

The underlying effective tax rate for the full year ending 31 December 2020, excluding one-off items such as impairment, site restoration cost increases for assets previously impaired, and the net derecognition of certain deferred tax assets, is expected to be between 27% and 31%. The total one-off derecognition of net deferred tax assets for the full year 2020 is expected to be between US$50 - 80 million.

The guidance is subject to the finalisation of the financial statements, Board review and the year-end audit currently underway.

1 Includes gas purchase costs, royalties, and levies, selling and distribution costs, rig operating costs, power expense, corporate administration costs (including business development), expenditure related to inventory movements, other expenses, and site restoration costs relating to assets previously impaired.

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FOURTH QUARTER REPORT FOR PERIOD ENDED 31 DECEMBER 2020 - 27 JANUARY 2021