PNG-Focused Oil Search Output Down

Australia-listed Oil Search posted revenue growth in the December quarter despite a drop-off in production and sales volumes, as it was aided by stronger oil and gas prices, the company said January 23 in its quarterly report.

Its total operational revenue rose from $380.8mn in the September quarter to $389mn in the three months to December. In the previous December quarter it totalled $345.6mn.

Total production was 7.59mn barrels of oil equivalent (boe) in the December quarter, down from 7.72mn boe a year earlier and 7.91mn boe in the September quarter. And total sales fell from 7.93mn boe in the 2016 December quarter and 8.19mn boe in the September quarter to 7.67mn boe in October-December last year, the results showed.

“Our realised oil and condensate price in the fourth quarter was US$63.05 per barrel, up 20% on the third quarter, reflecting the strength in global oil prices. This, together with a 5% increase in our realised LNG and gas prices, helped lift fourth quarter revenue to US$389mn, driving total revenue for the year to US$1.45bn, 17% higher than in 2017,” CEO Peter Botten said.

Oil Search, which was established in Papua New Guinea in 1929, has more than 98% of its assets in PNG, where it operates all of the country’s producing oil fields, and has a 29% interest in the PNG LNG project, operated by ExxonMobil.

The company’s full year 2017 production came in at 30.31mn boe, the highest in its history and up from 30.25mn boe the year prior, it said. For 2018, it’s expecting to produce 28.5-30.5mn boe, it said. “Lower operated production is expected to be offset by higher production from the PNG LNG Project, which continues to perform very well, contributing higher margin barrels of oil equivalent to the Company’s production base,” it said.