Oil Search Revenue Jumps as Papua New Guinea Output Rebounds

   By Robb M. Stewart 
 

MELBOURNE, Australia--Oil Search Ltd. (OSH.AU) recorded a jump in quarterly revenue as production from its oil and gas operations in Papua New Guinea recovered from a powerful earthquake.

With the PNG LNG gas-export plant in Papua New Guinea operating at its highest rates since the project began producing in 2014, Oil Search lifted the bottom-end of its annual output target by 1 million barrels of oil equivalent to between 25 million and 26 million barrels.

Sales revenue rose to US$474.9 million for the three months through September, up 81% from US$262.8 million the quarter before.

Production for the period was up 39% quarter-over-quarter at 7.53 million barrels, and sales volumes climbed 60% to 7.44 million barrels.

A massive earthquake and series of aftershocks struck the Highlands region of Papua New Guinea in February, forcing the temporary shutdown of oil and gas operations including the flagship PNG LNG gas-export operation.

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. The liquefied natural gas plant returned to full operation by late April.

The company, based in the Papua New Guinea capital of Port Moresby and listed in Australia, said the PNG LNG project managed an annualized production rate of 8.9 million metric tons for the latest quarter and a daily rate in September of 9.2 million.

Quarterly revenue for Oil Search was the highest since the final quarter of 2014, which it said was underpinned by a 68% lift in LNG and natural gas sales and a 31% increase in oil volumes that was bolstered by increased prices.

Oil Search narrowed its operating-cost forecast for the full year to between US$11.50 and US$12.50 a barrel, from US$11-US$13 previously.

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

(END) Dow Jones Newswires

October 22, 2018 19:05 ET (23:05 GMT)

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