Oil Search's PNG project financed

Co-venturers raise an extra $US1.5 billion for a LNG project cost increase.

Oil Search's (OSH) co-venturer in a Papua New Guinea liquefied natural gas project, Exxon Mobil, has completed financing arrangements.

In a statement to the Australian Securities Exchange, the energy group said Exxon subsidiary Esso Highlands has raised $US1.5 billion ($1.6 billion) of supplemental project financing, taking the total project financing facility to $US15.5 billion.

The funds were sourced from co-venturer and commercial bank lenders and will be used to finance the debt component of the project cost increase announced in November last year.

The estimated cost of the project remains unchanged from September estimates at $US19 billion and the project remains on track to deliver LNG in the second half of 2014, Oil Search said (see Tim Treadgold's A gas giant in the making).

Oil Search has a 29% stake in the project, meaning it will be entitled to 1.94 million tonnes of LNG a year.

Analysts overwhelmingly rate the stock a "buy", with an average price target of $9.59. Shares in the company closed yesterday at $8.45.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles