Oil Search signals cash in the pipeline
Managing director Peter Botten said some "very long-term shareholders" of Oil Search were "expecting cash returns" from the PNG LNG project, which is 75 per cent complete and which is on track to produce its first LNG in 2014.
The PNG government owns 15 per cent of Oil Search, while London-based fund manager Capital Group has an 11 per cent stake.
A review of dividend policy was flagged in the last annual report and, releasing the company's full-year profit on Tuesday, Mr Botten said the Oil Search board took a "very measured" approach and would put it to shareholders next year.
Oil Search on Monday announced the resignation of chairman Brian Horwood and his replacement by director Rick Lee.
Mr Botten said the changes reflected the increasing complexity of Oil Search and the need to prepare for the next phase of its growth.
He flagged that there would be a review of the organisation and its investment process in 2013, which was a year of transition for Oil Search.
After 12 years at the head of Oil Search, Mr Botten is the longest-serving chief executive among the ASX50 companies. He said that on the achievement of the first LNG he would consider his future. "I'm continuing on, at least for the foreseeable future."
Oil Search reported a 13 per cent drop in net profit after tax to $US176 million, driven partly by slightly lower oil and gas volumes and realised prices, and an increase in spending on exploration.
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Oil Search signalled a significant return of capital to shareholders once cash starts flowing from the US$19 billion Papua New Guinea (PNG) LNG project. The company said this return of capital will follow production and cash generation from the project, which is being led by partner ExxonMobil.
Oil Search flagged a review of its dividend policy in its last annual report. The board has taken a "very measured" approach and said it will put any proposed dividend policy changes to shareholders next year, with the expectation that cash returns could follow once the PNG LNG project begins generating cash.
The article notes that the Papua New Guinea government owns 15% of Oil Search, while London-based fund manager Capital Group holds an 11% stake.
Oil Search announced the resignation of chairman Brian Horwood and the appointment of director Rick Lee as his replacement. Managing director Peter Botten said the change reflects the increasing complexity of the business and the need to prepare for the next phase of growth—an important signal for investors about governance and strategic focus.
Oil Search flagged a review of the organisation and its investment process in 2013, calling it a year of transition. The review aims to prepare the company for the next growth phase tied to PNG LNG development and future cash generation.
Oil Search reported a 13% drop in net profit after tax to US$176 million. Management attributed the decline partly to slightly lower oil and gas volumes and realised prices, as well as increased spending on exploration.
At the time of the article, the PNG LNG project was about 75% complete and was on track to produce its first LNG in 2014, with ExxonMobil leading the project alongside Oil Search.
Peter Botten, who has been at the helm for 12 years and is the longest-serving CEO among ASX50 companies, said he would consider his future once the first LNG is achieved. For now he said he is continuing at least for the foreseeable future while the company moves into its next phase.
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