08-20-2014, 09:02 PM
Andrew Snelling
Wednesday, 20 August 2014
OIL Search’s PNG LNG project has contributed to what the company is hailing as one of the most significant periods in its history.
Image courtesy of Oil Search.
The company’s half-yearly results ending June 30 boasted big numbers, largely thanks to the completion and commissioning of the Papua New Guinea-based project, which the producer expects will pave the way for its continued growth.
“Major milestones were reached in April when LNG production from the PNG LNG project commenced and in May when the first LNG cargo left PNG bound for Japan,” Oil Search managing director Peter Botten said.
“The commencement of revenue streams from the PNG LNG project signals the start of Oil Search’s corporate transformation.”
The company’s net profit after tax for the period came to $US152.5 million ($A163.6 million), signalling a 34% increase on the corresponding period in 2013.
The increase reflected first earnings from PNG LNG, which boosted revenue to $510 million.
Total oil and gas production rose 68% on the 2013 period to 5.4 million barrels of oil equivalent, translating to sales of 4.7MMboe, 1.3MMboe of which was attributable to condensate from the PNG project.
Production costs came down $2.49 to $15.49 per barrel of oil equivalent, thanks to the start-up of PNG operations.
At June 30, Oil Search had $1.07 billion total liquidity, $367.8 million of which was cash, while the remaining $700 million lay undrawn in the company’s corporate debt facilities.
Total debt came to $3.8 billion.
The company intends to determine how much more gas is available in its PNG licence portfolio to provide gas feedstock for additional LNG production – knowledge which will become even more integral as the recently acquired Elk Antelope project begins to take shape.
The arbitration between Oil Search and InterOil over the sale of a stake in Elk Antelope’s PRL 15 joint venture to Total will progress to a hearing in London in late November, with a decision expected in the first quarter of next year.
In terms of oil, the company suspended operations at its Taza 2 well in the Kurdistan region of Iraq due to interruptions to the supply chain by recent tensions in the region.
However, the company continued its rigging up of the Taza 3 appraisal wellsite and the acquisition of 3D seismic.
Guidance for the rest of 2014 has been narrowed to 18-20MMboe thanks to PNG LNG operating at full capacity.
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