(Full report in PDF)

Quick Comment – December quarter production

was

1.77 mmboe (MS expectations 1.6 mmboe), in line

with Q3 and taking full-year production to 6.74 mmboe,

at the top of the previously guided range and due to the

ongoing development of the Kutubu field. Revenue was

US$210m (MS US$204m, Q3 US$175m) with a realized

oil price of US$113//bbl.

Guidance for 2014 production is revised up to the

12-15 mmboe range

compared to 10-13 mmboe

previously, due to underlying field performance and

expected initial contribution from the LNG project in the

5.7-8.2 mmboe range. Our forecast is 14.3 mmboe.

Capex and opex for 2013 are at the lower end of our

estimates and the guided range. Initial per-boe

estimates for 2014 are higher but will depend on LNG

start-up and subsequent production outcomes.

The PNG LNG project

targets a second half start-up.

Commissioning is under way on LNG Train1, and at the

Hides plant. Four of eight production wells are complete.

Drilling has commenced on Hides “G” wells and results

from these will help define the northwestern extent of the

Hides field. Scoping studies for P’nynag gas to underpin

train 3 continue ahead of submission of a development

license in 2015. Discussions are under way with “key

stakeholders” regarding OSH’s potential involvement in

the Elk/ Antelope gas fields.

Exploration:

Mananda7 is expected to reach target late

Q1. Of more importance is Taza-2, expected to reach

target in Q3.

Cash and undrawn credit totaled US$510m (Q3:

US$667m)

and is sufficient to fund existing exploration

and development based on our analysis, ahead of

receipt of LNG cash flows later this year

We retain our Overweight rating.

'Palm' pid='36697' datel Wrote:

Clever, if you look close... you can see the mirror.

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