Oil Search Reports Solid Production Results for Third Quarter

Oil Search Ltd.

Oil Search Ltd. has reported on its production results and activities for the third quarter.

Total oil and gas production for the third quarter of 2008 was 2.11 mmboe, in line with the second quarter. This was a solid result in light of the Company's mature asset base, with production for the quarter benefiting from a number of new in-field development wells.

Total oil sales for the period were 1.54 million barrels, compared to oil production available for sale of 1.85 million barrels, with the lower sales due to timing of shipments. The Company continued to realize excellent
oil prices, with an average oil price of US $122.98 per barrel for the quarter. The Company remained unhedged during the period.

Kutubu (PDL 2 – 60.0%, operator)

Production performance from Kutubu during the quarter was strong, with net Oil Search production 12% higher than in the second quarter at 0.84 million barrels. Gross production rates averaged 15,280 bopd during the period, up from 13,807 in the previous quarter.

The UDT 8 well, which was brought on stream at the end of the second quarter, is producing at a stable rate of 1,800 bopd. The second well in the Usano program, UDT 9, was completed as a new oil producer during the quarter and, following testing of individual zones, is producing at stable rates of approximately 1,900 bopd. The third well in the programme, UDT 10, is being drilled by Rig 103 and has recently reached TD, on prognosis. The well is currently being completed and is expected onstream in October. This will be followed by the fourth Usano well in the campaign, UDT 11.

A six-well work-over program for 2008 continued during the quarter. The first workover in the program, the IDT 1 well, has been completed and the well is now on production at a rate of 1,850 bopd, significantly above expectations.

Work on the second workover, IHT 2, has been suspended pending minor repairs to the Hydraulic Workover Unit, with operations expected to recommence in October.

Moran Unit (PDL 2 - 60%, PDL 5 – 40.7% and PDL 6 – 72.5%, operator)

Oil Search's share of 2008 third quarter production from Moran was 0.80 million barrels, which was 1% lower than in the second quarter of 2008. The fields produced at a gross average rate of 17,518 bopd compared to 17,902 bopd in the second quarter.

Moran production was impacted by ongoing hydrate issues and delays in a number of incremental production activities. In July, the Moran 14 well, which is targeting undrained oil in the north west part of the field, was spudded with Rig 226. During drilling of the top hole Darai Limestone section, the drill string became irretrievably stuck and the well was re-spudded as Moran 14A. The well is currently drilling ahead towards the base of the Darai Limestone. There were also delays in implementing zone changes in a number of wells due to weather issues and a delay in the workover of M6 due to slippage in the Hydraulic Workover Unit schedule. Production from Moran is expected towards the end of the year, following the completion of Moran 14A and progress on the other production optimization activities.

Planning is continuing on additional Moran production wells. In addition, detailed depletion plan studies, which will identify future opportunities for infill wells, and well and surface facilities optimisation projects are underway.

The NW Moran well and the NW extension of the Moran field have now been integrated formally into the Moran Unit.

Gobe (PDL 3 - 36.4% and PDL 4 - 10%, operator)

Oil Search's share of production from the Gobe fields in the third quarter of 2008 was 0.14 million barrels, 9% below second quarter levels. The gross average production rate for Gobe Main was 6% higher than the second quarter at 2,198 bopd, while the average daily production for SE Gobe was 4,953 bopd, a decrease of 13% from the previous quarter.

The Gobe Main field continued to benefit from well intervention projects conducted earlier in the year, with GM2 ST1 continuing to exceed expectations at production rates of 950 bopd.

In the SE Gobe field, while lower than in the second quarter, production continued to outperform base forecast. Production rates in the third quarter were impacted by reduced rates in a number of wells related to swing well
optimization, surface equipment downtime and line restrictions.

SE Mananda (PDL 2 – 72.3%, operator)

Oil Search's share of third quarter production from the SE Mananda field was 0.09 million barrels, 17% below second quarter production. Gross average daily production rates from the field were 1,325 bopd, compared to 1,615 bopd in the second quarter.

Reduced production rates during the quarter were the result of well downtime associated with hydrates and declining production from the SEM 1X well.