Revenue lifts shares

HIGHER oil prices have helped drive up Oil Search's June-quarter revenue, as its ExxonMobil-led joint venture in Papua New Guinea progresses towards first production.

By InvestSMART · 27 Jul 2011

By InvestSMART ·
27 Jul 2011

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HIGHER oil prices have helped drive up Oil Search's June-quarter revenue, as its ExxonMobil-led joint venture in Papua New Guinea progresses towards first production.

Oil Search said yesterday the natural decline of its key producing fields, Kutubu and Moran, was offset partly by new development work. As a result, it did not change its full-year production forecast of between 6.2 million and 6.7 million barrels of oil equivalent.

Shares in the company rose 18?, or 2.67 per cent, to $6.91. This compared with gains in the broader market of about 0.9 per cent.

Chief executive Peter Botten said the company produced similar amounts of oil and gas in the June quarter compared with the previous period.

Oil Search reported operating revenue for the three months to June 30 of $US217.8 million ($A201 million), up 42 per cent from the March quarter.

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Frequently Asked Questions about this Article…

What drove Oil Search's revenue increase in the June quarter?

Higher oil prices were the main driver of Oil Search's stronger June-quarter revenue, and the company's ExxonMobil-led joint venture in Papua New Guinea progressing towards first production also supported the result.

How much operating revenue did Oil Search report for the June quarter?

Oil Search reported operating revenue of US$217.8 million (A$201 million) for the three months to June 30, which was up 42% from the March quarter.

Did Oil Search change its full-year production forecast after the June quarter?

No. Oil Search kept its full-year production forecast unchanged at between 6.2 million and 6.7 million barrels of oil equivalent.

What happened to production at the Kutubu and Moran fields?

The natural decline of the key producing fields Kutubu and Moran was partly offset by new development work, helping the company maintain similar oil and gas output in the June quarter.

How did the market react to Oil Search's June-quarter results?

Shares in Oil Search rose 2.67% to $6.91 following the results, outperforming the broader market gains of about 0.9% on the same day.

What is the significance of the ExxonMobil-led joint venture in Papua New Guinea?

The ExxonMobil-led joint venture in Papua New Guinea is moving towards first production, and that progress was highlighted in the announcement as a positive factor supporting Oil Search's revenue outlook.

Did Oil Search produce more or less oil and gas in the June quarter compared with the previous period?

According to CEO Peter Botten, Oil Search produced similar amounts of oil and gas in the June quarter compared with the previous period.

What should everyday investors take away from Oil Search's June-quarter update?

Investors should note that higher oil prices boosted revenue significantly (US$217.8m, up 42% quarter-on-quarter), the company kept its 6.2–6.7 million boe production guidance, its key PNG fields saw natural decline partly offset by development work, and the stock reacted positively with a share-price rise to $6.91.