Oil Search in $700 million equity raising
- Business developments & projects
Papua new Guinea-focused LNG producer Oil Search is looking to raise up to A$1.16 billion ($700 million) through a discounted share sale to weather a prolonged period of low oil prices.
Oil Search, which owns a 29 per cent interest in the PNG LNG project, said on Tuesday the raising would be conducted at A$2.10 per share, which represents a 23.1 per cent discount to its last closing price.
Abu Dhabi investment fund Mubadala, which is the largest shareholder in OIl Search, will not participate in the equity raise.
Oil prices have dropped considerably since the beginning of this year due to the effects of the coronavirus pandemic.
This caused many oil and gas companies to reduce spending and cut operating costs.
Oil Search said the raising is expected to provide sufficient liquidity to December 31, 2021, assuming the average Brent oil price remains at a low of $20 per barrel or higher from April 2020 onwards.
Further to the equity raising, Oil Search said it would review its operating costs by June and that it had extended the maturity of its $300 million loan facilities from September 2020 to June 2021.
Oil Search says 2020 production guidance of 27.5 to 29.5 million barrels of oil equivalent remains unchanged, assuming there would not be any business interruption from COVID-19.