(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.
