Oil Search Net Profit at USD 113.5 Mln (PNG)

Oil Search of Papua New Guinea announced its 2013 half year results.

• Total oil and gas production in the first half of 2013 was 3.19 mmboe, similar to the previous corresponding period, reflecting a solid production performance from the key PNG oil fields.
• The average realised oil price was 6% lower than in the first half of 2012 at US$108.58 per barrel, in line with the moderately weaker global oil price environment.
• Net profit after tax was US$113.5 million, 6% higher than the corresponding period in 2012, driven by lower exploration and tax expense.
• Operating cash flow for the six months to June increased 8% on the first half of 2012, to US$214.3 million.
• Oil Search’s balance sheet remains solid, with US$292.1 million in cash and an undrawn US$500 million revolving facility at the end of June.
• A 2013 interim dividend of two US cents per share was announced, payable on 8 October 2013.

“Commenting on the 2013 first half results, Managing Director, Peter Botten, said: “Oil Search recorded a strong operational and financial performance in the first half of 2013.

“Oil and gas production remained solid, declining only marginally from the first half of 2012. Production remains on track to finish the year within our guidance of 6.2 – 6.7 mmboe. Net profit after tax of US$113.5 million was 6% higher than the corresponding period in 2012.

“Major progress was achieved through the continued delivery of the PNG LNG Project, with the Project now 90% complete. The Company also had two oil discoveries, at Mananda 6 in the PNG Highlands and Taza 1 in Kurdistan, and we are now moving to further appraisal and development of these fields. In addition, two gas discoveries were made from drilling in the Gulf of Papua, proving the potential of this area to contain gas in a newly defined play type. A further well, Kidukidu, is now being drilled in the area.

“Exploration success from our drilling programme resulted in a lower exploration expense of US$33.9 million, compared with US$56.5 million in 2012, positively impacting our first half profit.”

PNG LNG Project

“The PNG LNG Project, operated by Esso Highlands Limited, made excellent progress during the first half of 2013. We are now at the 90% completion mark and soon expect to start delivering gas from the oil fields to the LNG Plant to support commissioning.

“At the LNG Plant site near Port Moresby, commissioning activities are underway on Train 1, the common process area, tanks, jetty and utilities and construction activities are continuing on Train 2. On the onshore pipeline, land access is now complete along the entire pipeline route and, as at mid-2013, only 40 kilometres of mainline pipeline remained to be welded between Kutubu and Hides. Nitrogen purging of the offshore pipeline and onshore pipeline to Kutubu has taken place, in preparation for the introduction of commissioning gas from the oil fields. The Hides Gas Conditioning Plant is progressing well, with the arrival of heavy equipment via the Komo airfield increasing the number of work fronts. The drilling rigs are currently drilling ahead on the B and C pad wells and the construction of all Hides well pads is now complete.

“The Project is on track for first deliveries in 2014 and costs incurred to date are consistent with the US$19 billion capital cost outlook provided in November 2012. As highlighted in our second quarter activities report, the operator expects to finalise the US$1.5 billion supplemental project financing for the Project in the second half of 2013.”

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LNG World News Staff, August 20, 2013; Image: Oil Search