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Reserves

As at 31 December 2011, the Company had Proven (1P) reserves of 330 million barrels of oil equivalent (mmboe) and Proven and Probable (2P) reserves of 553 mmboe. The Company also had 318 mmboe of 2C contingent resources, taking the Company’s total 2P reserves plus 2C resources to 870 mmboe. Of these resources, 505 mmboe is associated with the Company’s share of the PNG LNG Project.

Reserves Audit Process

Estimates of reserves and contingent resources are conducted to Society of Petroleum Engineers (SPE) standards. Proven Reserves (1P) and Contingent Resources (1C) are as certified by independent auditors, Netherland Sewell and Associates in Dallas (NSA). Proven and Probable reserves (2P) and Contingent Resources (2C) have been estimated by a combination of independent audit, PNG LNG Project operator estimates and internal assessments.

In 2008, the Company implemented an audit rotation schedule, where each field is now required to be audited at least once every three years. In 2011, no external reserves audit was completed for the following reasons:

Oil field performance during 2011 was generally consistent with expectations. Therefore it is unlikely that there have been any significant changes to the previously audited reserve estimates. The reserves reported for Gobe, SE Gobe, SE Mananda and the Hides GTE Project are based on end 2009 reserves, adjusted for 2010 and 2011 production.
Sanction of the PNG LNG Project resulted in the booking of 301 mmboe of 1P reserves and 505 mmboe of 2P reserves at the end of 2009. There have been no significant changes to gas reserve estimates since then.

Reserves - Key Changes

The Company’s 1P and 2P reserves at the end of 2011 reserves were 2.0% and 1.2% lower than at the end of 2010 respectively. These small declines reflected 2011 production of 6.7 mmboe, with no other changes made to the oil fields or PNG LNG Project reserve estimates, as noted above.

Based on 2011 production rates, the Company has 2P oil reserves cover of 7 years and gas reserves cover of more than 25 years.

Resources - Key Changes

At the end of 2011, Oil Search had 2C resources, comprising gas and associated liquids, of 318 mmboe, the same as at the end of 2010.

Total 2P and 2C reserves and resources at the end of 2011 were 870 mmboe, compared with 877 mmboe at the end of 2010.

Proven Reserves

As at 31 December 2011 (1)(2)
NET TO OIL SEARCH

Licence/Field	End 2010 Reserves	Production	Discoveries/ Extensions/ Revisions	Acquisitions/ Divestments	End 2011 Reserves
PDL2 - Kutubu	12.7	3.0	-	-	9.6
PDL2 - SE Mananda	0.2	0.1	-	-	0.1
PDL 2/5/6 - Moran Unit	11.4	2.3	-	-	9.1
PDL 4 - Gobe Unit	0.2	0.0	-	-	0.1
PDL 3/4 - SE Gobe	0.5	0.2	-	-	0.3
PDL 1 - Hides	11.3	1.1	-	-	10.3
PNG LNG Project	300.6	-	-	-	300.6
Total	336.8	6.7	-	-	330.1

Proven & Probable Reserves

As at 31 December 2011 (1)(2)
NET TO OIL SEARCH

Licence/Field	End 2010 Reserves	Production	Discoveries/ Extensions/ Revisions	Acquisitions/ Divestments	End 2011 Reserves
PDL2 - Kutubu	19.4	3.0	-	-	16.4
PDL2 - SE Mananda	0.6	0.1	-	-	0.5
PDL 2/5/6 - Moran Unit	21.5	2.3	-	-	19.2
PDL 4 - Gobe Unit	0.3	0.0	-	-	0.2
PDL 3/4 - SE Gobe	0.8	0.2	-	-	0.6
PDL 1 - Hides	11.3	1.1	-	-	10.3
PNG LNG Project	505.4	-	-	-	505.4
Total	559.3	6.7	-	-	552.6

Reserves and Resources Summary

As at 31 December 2011 (1)(2)
NET TO OIL SEARCH

		Proven (1P)			Proven & Probable (2P)
Licence/Field	Oil Search Interest	Liquids ⁽³⁾ MMBBL	Gas ⁽⁴⁾⁽⁵⁾ BSCF	BOE ⁽⁶⁾	Liquids ⁽³⁾ MMBBL	Gas ⁽⁴⁾⁽⁵⁾ BSCF	BOE ⁽⁶⁾
RESERVES
PDL2 - Kutubu	60.0%	9.6	-	9.6	16.4	-	16.4
PDL2 - SE Mananda⁽⁷⁾	72.3%	0.1	-	0.1	0.5	-	0.5
PDL 2/5/6 - Moran Unit	49.5%	9.1	-	9.1	19.2	-	19.2
PDL 4 - Gobe Unit	10.0%	0.1	-	0.1	0.2	-	0.2
PDL 3/4 - SE Gobe	25.6%	0.3	-	0.3	0.6	-	0.6
PDL 1 - Hides⁽⁸⁾	100.0%	1.2	54.1	10.3	1.2	54.1	10.3
Oil Fields and Hides GTE Reserves		20.5	54.1	29.5	38.2	54.1	47.2

PNG LNG Project Reserves ⁽⁹⁾	29.0%	38.4	1,572.8	300.6	65.5	2,639.5	505.4

Subtotal Reserves		58.9	1,626.9	330.1	103.7	2,693.4	552.6

		1C			2C
Licence/Field	Oil Search % Interest	Oil ⁽³⁾ MMBBL	Gas ⁽⁴⁾⁽⁵⁾ BSCF	BOE ⁽⁶⁾	Oil ⁽³⁾ MMBBL	Gas ⁽⁴⁾⁽⁵⁾ BSCF	BOE ⁽⁵⁾
CONTINGENT RESOURCES
Other Gas and Liquids Resources ⁽¹⁰⁾		-	-	-	28.6	1,734.6	317.7
Subtotal Resources		-	-	-	28.6	1,734.6	317.7

Total Reserves & Resources		58.9	1,626.9	330.1	132.3	4,428.1	870.3

Notes:

Number may not add due to rounding.
Proven Reserves (1P) are as certified by independent auditors, Netherland, Sewell Associates, Inc. (NSA) in 2009, adjusted for 2010 and 2011 production. Proven and Probable reserves (2P) and Contingent Resources (2C) are based on independent audit and internal assessments.
Liquids include crude oil, separator and plant condensates.
Full wellstream (raw) gas reduced for field separator condensates are quoted for Hides GTE and Other Gas resources.
For PNG LNG Project, shrinkage has been applied to raw gas for the plant liquids recovery, fuel & flare.
Oil equivalent barrels incorporate oil, condensate and gas (converted at 6 mcf / bbl).
NSA did not audit SE Mananda in 2009. Estimate of reserves is based on NSA's end 2007 certification adjusted for 2008-2011 production.
Hides reserves associated with the Gas to Electricity Project only.
PNG LNG Project reserves comprise the Kutubu, Moran, Gobe, SE Hedinia, Hides, Angore and Juha fields. Field condensate from Kutubu, Moran and Gobe are based on licence interests.
Other Gas and Liquids Resources comprises the Company's other fields including SE Gobe, Juha North, P'nyang, Kimu, Pandora, Uramu, Barikewa, Iehi and Cobra fields, as well as the 2010 Al Meashar-1 and Mananda 5 discoveries.