Oil Search’s revenue drops despite rising sales

Oil Search that has a 29% stake in the ExxonMobil-operated PNG LNG project, posted a revenue of $391.5 million, compared to $472.3 million in the first quarter of 2015 presenting a 17% drop despite the rise in production and sales.

“Total production of 7.41 mmboe for the quarter was the highest quarterly production ever achieved by the company. This result reflected further production increases from the PNG LNG project,” Oil Search Managing Director, Peter Botten said, adding that based on the PNG LNG plant’s performance to date, the project can continue to produce LNG above the nameplate capacity of 6.9 mtpa in 2015.

The company also made progress on gas commercialisation activities, both in the North-West Highlands and in the Gulf Province of PNG. The selection of the site locations for the proposed Elk Antelope development, to be named the Papua LNG project, is a significant milestone and followed extensive evaluation of a large range of options by the PRL 15 Joint Venture over the last 12 months, Botten added.

The company said that its revenue has been hampered by a 35% drop in the average realized LNG and gas price of $8.10 largely reflecting the approximate 2-3 month lag between the oil price and LNG contract prices.

In the period under review, the PNG LNG project shipped 26 cargoes with seven of those being sold on the spot market. Total sales revenue from LNG for the quarter was $242.9 million, compared to $355.7  in the previous quarter.

Based on the first half performance, the company has upgraded its 2015 production forecast range, from 26 – 28 mmboe to 27 – 29 mmboe.

LNG World News Staff; Image: Oil Search