PNG LNG boosts Oil Search production

Group reiterates upgraded production guidance on strong lift in second-quarter output.

Oil Search (OSH) has reiterated its upgraded full-year production guidance after the commencement of production at its Papua New Guinea (PNG) LNG project led to a strong spike in second-quarter output and quarterly revenue.

In the three months to June 30, Oil Search's total oil and gas production was 3.69 million barrels of oil equivalent (mmboe), a sharp increase on the 1.63 mmboe it reported in the previous corresponding period. 

This was the result of the start-up of the PNG LNG project, which contributed 1.87 mmboe in the quarter, alongside the base PNG business' contribution of 1.82 mmboe. 

Oil Search said it remained on track to deliver full-year production within the upgraded 17 mmboe to 20 mmboe guidance range.

Total sales in the quarter were 3.22 mmboe.

The group posted total revenue of $US339.7 million ($A361.57 million) based on an average realised oil and condensate price of $US111.95 per barrel. This was almost double the $US170m in the March quarter and well above the $US204.9m in the previous corresponding quarter.

At the end of the quarter, Oil Search had cash on hand of $US367.8m and debt of $US4.134 billion.

Oil Search managing director Peter Botton said the start of production at the $US19bn PNG LNG project -- of which it the company owns 29 per cent -- was a major milestone for the company.

"It also heralded the start of a major corporate transformation for Oil Search, with the company's production expected to quadruple in 2015, the first full year of operation," he said.

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