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Australia's Oil Search cuts 2018 production forecast after PNG earthquake

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LNG Industry,

Reuters are reporting that Australia’s Oil Search cut its full-year production forecast and said first-quarter revenue fell 14% as output from its key PNG LNG project fell after a major earthquake in the region in February.

In a statement on 17 April, the company cut its full-year production guidance to 23 – 26 million barrels of oil equivalent (mmboe) from an earlier estimate of 28.5 – 30.5 mmboe.

January – March production fell 36.1% to 4.84 mmboe from 7.57 mmboe a year ago. First-quarter production from the PNG LNG Project, net to Oil Search, was 4.00 mmboe, the company said, while revenue for the quarter slipped to US$295 million from US$343.7 million.

In February, a magnitude 7.5 earthquake rocked PNG’s energy-rich interior, forcing PNG LNG project operator ExxonMobil Corp to shut down operations. Production resumed last week, about two weeks ahead of schedule.

Oil Search has a 29% stake in the PNG LNG project and also resumed operations at its Kutubu field in PNG earlier this month.

The company said it expects 2018 unit production costs to be in the range of US$10.5 – US$13.50 per barrel of oil, a reflecting high proportion of fixed costs in the context of the lower production outlook.

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