Oil Search production doubles

PNG’s Oil Search said it’s oil and gas production in the second quarter was 3.69 million barrels of oil equivalent (mmboe), up 120 percent compared to 1.68 mmboe in the previous corresponding period, reflecting the impact of the start-up of the PNG LNG project.

Production from PNG LNG was 1.87 mmboe, while the base PNG business contributed 1.82 mmboe, 8% higher than in the first quarter of 2014. The company remains on track to deliver 2014 production within the upgraded 17 – 20 mmboe guidance range.

Total revenue for the quarter was US$339.7 million, almost double that of the first quarter, based on an average realised oil and condensate price of US$111.95 per barrel and an average realised LNG and gas price of US$14.41 per mmBtu. Seven LNG cargoes were loaded and five LNG cargoes and seven cargoes of Kutubu Blend (comprising crude from the PNG oil fields and PNG LNG project condensate) were delivered during the second quarter.

“The highlight of the 2014 second quarter was the start of production and sales of LNG from the PNG LNG Project. This was a major milestone for Oil Search, our co-venture partners and Papua New Guinea. It marked the completion of the country’s largest resource project, which is expected to more than double PNG’s Gross Domestic Product and transform the country into a significant supplier of LNG to key neighbouring Asian markets. Delivering this world scale project, ahead of schedule, was the culmination of many years of effort by the operator, ExxonMobil PNG Limited, and its co-venture partners, with significant support from the PNG Government and local communities. It also heralded the start of a major corporate transformation for Oil Search, with the Company’s production expected to quadruple in 2015, the first full year of operation,” Managing Director of Oil Search, Peter Botten said.

“Work continues on aggregating gas to support a potential expansion of PNG LNG as well as a potential LNG development based on the Elk/Antelope gas fields. Income from the PNG LNG Project, together with
continued steady cash flows from our oil fields, will enable us to pursue these and other potential growth opportunities, such as the Taza oil field in Kurdistan, as well as deliver higher dividends to shareholders in the years ahead,” he added.