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Reserves

Annual Reserves Report

Each year, Oil Search engages an independent oil expert to prepare a reserves audit for the Company. In March 2008, Netherland, Sewell and Associates (NSA), Dallas completed the reserves audit for the year ended December 2007. The audit is conducted to Society of Petroleum Engineers (SPE) standards on a Proven, and Proven and Probable, reserve basis. The audit is conducted in detail,  field-by-field, and provides an opportunity for various technical opportunities to be independently reviewed.

The annual audit is required as part of the Company’s Corporate Governance processes and provides the Board and the Company’s Banking Syndicate with certainty and assurance in relation to the oil and gas production assets.

Based on this audit, the Company's proven oil equivalent reserve base as at 31 December 2007 was 52.6 million barrels. Proven and probable reserves were 73.5 million barrels of oil equivalent (mmboe).  The Company’s Proven and Probable discovered gas resources were just under 4.7 tcf, and including associated liquids, totalled 952.0.5mmboe

Reserves and Resources(1)(2)

As at 31 December 2007

 Net to Oil Search
Proven (1P)		Net to Oil Search
Proven & Probable (2P)
Licence/FieldOil Search EquityOil(3)
million bbls		Gas(4)
bscf		BOE(5)
million bbls		Oil(3)
million bbls		Gas(4)
bscf		BOE(5)
million bbls
Reserves
PDL2 - Kutubu 60.0% 18.0 - 18.0 24.9 - 24.9
PDL2 - SE Mananda 72.3% 0.8 - 0.8 1.3 - 1.3
PDL 2/5 - Moran(6) 49.5% 17.5 - 17.5 29.9 - 29.9
PDL 4 - Gobe 10.0% 0.2 - 0.2 0.2 - 0.2
PDL 3/4 - SE Gobe 25.6% 1.2 - 1.2 1.7 - 1.7
PDL 1 - Hides (7) 100.0% 1.8 75.7 14.4 1.8 75.7 14.4
Yemen Block 43 28.3% 0.3 - 0.3 0.6 - 0.6
Egypt Area A 70.0% 0.2 - 0.2 0.7 - 0.7
Subtotal Reserves - 40.0 75.7 52.6 60.9 75.7

73.5
Resources
PDL2 - Kutubu/
SE Mananda		 60.0%/72.3% - - - 64.5 706.0 182.1
PDL 2/5 -
Greater Moran		 49.5% - - - 13.1 133.2 35.3
PDL 4 - Gobe 10.0% - - - 1.5 13.2 3.7
PDL 3/4 - SE Gobe(8) 25.6% - - - 3.7 28.6 8.5
PDL 1/PRL 12 - Hides(9) 27.5% - - - 25.7 1,424.1 263.1
PRL 8 - Kimu(10) 60.7% - - - - 418.4 69.7
PRL 10 - Uramu 49.6% - - - 1.0 158.1 27.3
PRL 11 - Angore 52.5% - - - 16.3 608.6 117.7
Other (8, 11) Various - - - 46.6 1,187.1 244.4
Subtotal Resources - - - - 172.4 4,677.4 952.0
Total Reserves & Resources - 40.0 75.7 52.6 233.3 4,753.0 1,025.5

Note:
(1)  Number may not add due to rounding.
(2)  Kutubu, SE Mananda, Gobe and SE Gobe oil reserves certified by NSA as at end 2007.
(3)  Oil includes crude oil, condensate and natural gas liquids .
(4)  Sales gas reserves are quoted.  Raw gas reserves can be obtained by increasing sales gas reserves by approximately 12.7%.
(5)  Oil equivalent barrels incorporate oil, gas liquids and sales gas.
(6)  Includes production from NW Moran PPL 219. NSA did not audit Moran in 2007. Estimate of reserves is based on NSA's end 2006 estimate, adjusted for 2007 production.
(7)  Hides reserves associated with the Gas to Electricity project only.
(8)  Adjusted for change in net interest calculation for SE Gobe and Iehi gas fields (no change in gross figures).
(9)  Hides raw gas resource certified by NSA in 2006. Hides liquids volume is the estimated field condensate associated with the raw gas resource. The yield of additional liquids  and shrinkage from gas processing will be determined once a development project is approved. Oil Search's net share assumes that 80.6% of the Hides field lies in PDL 1 (Oil Search 21.5%) and 19.4% in PRL 12 (Oil Search 52.5%). External gas audits are planned in mid 2008 for the ExxonMobil-operated Hides, Angore and Juha fields and for the Oil Search-operated Kutubu, Gobe, SE Hedinia and Moran fields which are anticipated to provide gas to the proposed PNG LNG Project.
(10)  Oil Search's share in PRL 8 (Kimu) includes a 16.07% interest purchased from Gedd (PNG) Limited that is currently awaiting PNG government approval.
(11)  Other Resources comprises the Company's other fields, for example Juha, SE Hedinia, P'nyang, Iehi, Pandora and Barikewa.  Sales gas estimates for these fields include inerts where applicable.

 

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