Oil Search Q1 production lifts

Production and sales volumes rise, revenue slips, full-year guidance reaffirmed at top end.

Oil Search expects full-year production at the top end of guidance after its March quarter output missed expectations.

Investors sent Oil Search shares 0.75% higher to $8.705 at 11.28am (AEST), against a benchmark index lift of 0.42 of%.

Total oil and gas produced lifted by 7.7% to 1.68 million barrels of oil equivalent (mmboe) in the quarter, up from 1.56 mmboe in the March 2013 quarter.

A Bloomberg survey of three analysts had predicted output of 1.7 mmboe.

Oil Search said it expects 2014 production will be at the upper end of its previously announced range of 13 mmboe to 16 mmboe.

Sales lifted to 1.51 Mmboe in the quarter, compared with 1.48 Mmboe in the previous corresponding period.

Revenue fell to $US170.2 million ($A182.2m) in the quarter, compared with $US176m in the prior corresponding period.

At the end of March, Oil Search had a cash balance of $US411 million and debt of $US4.108 billion.

PNG LNG project ahead of schedule

Oil Search says its key PNG liquefied natural gas (LNG) project will deliver its first cargo a few months ahead of schedule.

Deliveries from the project are now expected to start mid-2014, rather than during the third quarter of the year as previously forecast.

"First LNG sales, which are expected to commence in the next few months, ahead of schedule and within the revised budget, will herald the commencement of a steady, long-term, cash flow stream for Oil Search," managing director Peter Botten said.

The expected cost of the PNG LNG development remains unchanged at $US19 billion.

Oil Search said it will provide further guidance once it receives a formal PNG LNG project production update from the operator.

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