SANTOS LIMITED — Capital/Financing Update 2019

May 15, 2019

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PRL 3 (P’nyang) Letter of Intent Executed (ASX: OSH | ADR: OISHY | POMSoX: OSH)

16 May 2019

The PRL 3 Joint Venture participants today signed a binding letter of intent (LOI) with Santos Limited, which sets out the terms by which Santos will purchase a 14.32% equity interest in PRL 3, containing the P’nyang gas field, from the existing participants. Under the LOI, Oil Search will sell 1.65% (pre-State back-in) for a total consideration of US$21.6 million.

The signing of this LOI is an important step in creating alignment between the PNG LNG Project and the PRL 3 Joint Venture, ahead of FEED entry for the planned three train expansion at the PNG LNG plant site. Two of the proposed new trains will be underpinned by gas from the Elk-Antelope fields and one train by gas from the PNG LNG Project and the P’nyang field.

The negotiation of the LOI took into account both the value of the P’nyang field and the access arrangements by P’nyang to PNG LNG Project infrastructure.

Commenting on the transaction, Oil Search Managing Director, Peter Botten, said:

“We are pleased to have signed this agreement, which represents another milestone towards the development of additional LNG capacity in PNG. Ensuring that the PRL 3 and PNG LNG Project ownership structure is broadly similar will facilitate the development of the 4.4 tcf P’nyang gas resource. By using existing PNG LNG Project infrastructure and access to one of the proposed new LNG trains, capital investment for the P’nyang field will be minimised and operating costs reduced materially over its 30-plus year operating life, benefiting all stakeholders.”

The Sales and Purchase agreement for the transaction is expected to be executed ahead of FEED entry for the three-train downstream development, targeted for later this year.

PRL 3 (P’nyang) Equity Interests

	Current interests	Post Santos**acquisition **
**OilSearch **	38.51%	36.86%
ExxonMobil	48.99%	36.86%
JX Nippon	12.50%	11.96%
Santos	-	14.32%
TOTAL	100.00%	100.00%

Note: Before Government and landowner back-in

Sydney office Mailing address 1 Bligh Street GPO Box 2442 Sydney NSW 2000 Sydney NSW 2001 Australia

Head office Port Moresby Papua New Guinea

Tel: +61 2 8207 8400 Fax: +61 2 8207 8500 www.oilsearch.com

Oil Search Limited Incorporated in Papua New Guinea ARBN 055 079 868

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PETER BOTTEN, AC, CBE

Managing Director, Oil Search Limited

For more information regarding this report, please contact:

Investors and Media:

Ann Diamant

General Manager, Investor Relations and Communications

Tel: +612 8207 8440

Mob: +61 407 483 128

Investors:

Stephanie Chu

Investor Relations Manager

Tel: +612 8207 8542 Mob: +61 481 038 179

Sydney office 1 Bligh Street Sydney NSW 2000

Head office Port Moresby Papua New Guinea

Mailing address GPO Box 2442 Sydney NSW 2001 Australia

Tel: +61 2 8207 8400 Fax: +61 2 8207 8500 www.oilsearch.com

Oil Search Limited Incorporated in Papua New Guinea ARBN 055 079 868

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