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.