Oil Search Holds 2018 Production Target After Quake Hits Output

   By Robb M. Stewart 
 

MELBOURNE, Australia--Oil Search Ltd. (OSH.AU) stuck with its 2018 production target after ramping operations back up in recent months following a massive earthquake and string of aftershocks in Papua New Guinea that forced it to halt operations.

Output and sales revenue were sharply dented in the first half of the year by February's quake in Papua New Guinea's Highlands region and some fields remained offline through the period, even as the flagship PNG LNG gas-export venture returned to full operation by late April.

Still, Oil Search said Tuesday that based on current estimates its production for the year was trending toward the upper end of an estimated range of 23 million to 26 million barrels of oil equivalent.

Production for the first half of 2018 was 31% lower at 10.24 million barrels and sales revenue 18% weaker at US$557.8 million. As production resumed, second-quarter output rebounded 12% over the first quarter even as revenue was 11% weaker quarter-over-quarter, the company said.

Oil Search operates all of Papua New Guinea's producing oil fields, though these are dwarfed by output from Exxon Mobil Corp.'s (XOM) US$19 billion PNG LNG operation, in which Oil Search has a 29% interest. Output at the plant near the capital Port Moresby, gas-processing facilities and Oil Search's sites in the Highlands were all shut after the quake.

Oil Search, based in Port Moresby and listed in Australia, said the average price it received for oil was 3% higher in the second quarter than in the first three months of the year, but liquefied natural gas and natural gas prices were 4% lower on average to a higher number of cargoes being sold into the spot market after the earthquake.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

July 16, 2018 20:19 ET (00:19 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.