Oil Search has released its first half 2014 operational and financial results, highlighting the progress of the Papa New Guinea LNG project.
- Net profit after tax for H1 2014 was US$ 152.5 million, 34% higher than in the corresponding period last year. The increase reflected the first earnings contribution from the PNG LNG project.
- Total oil and gas production rose 68% on the same period of 2013, to 5.4 million barrels of oil equivalent, while total sales were 4.7 million boe, including 1.3 million boe of LNG and condensate from the PNG LNG project.
- Revenue rose 34% to US$ 510.0 million, driven by first sales from the PNG LNG project, continued strong oil production and a slightly higher realised oil price.
- Operating cash flow rose 19% to US$ 255.4 million, lagging behind the higher revenue due to the timing of LNG cargo receipts.
Commenting on the results, Oil Search Managing Director, Peter Botten, said: “The first half of 2014 was one of the most significant periods in Oil Search’s history.
“Major milestones were reached in April, when LNG production from the PNG LNG project commenced, and in May, when the first LNG cargo left PNG bound for Japan. The commencement of revenue streams from the PNG LNG project signals the start of Oil Search’s corporate transformation. Production in the first half of 2014 was 68% higher than in the same period of 2013, while both revenue and net profit increased by 34%.
“Production is expected to be significantly higher in the second half of the year, now that the PNG LNG project production ramp-up phase is complete. In 2015, the first full year of operations, the project is expected to add approximately 21 million boe net to Oil Search, resulting in total production more than four times 2013 levels.
“Another key event during the period was Oil Search’s acquisition in March of an interest in PRL 15 in the onshore Papuan Gulf Basin, which contains the Elk/Antelope gas fields. An appraisal programme on this resource, which has the potential to underwrite another major LNG development in PNG, will start soon.
“Together with potential expansion of the PNG LNG project, PRL 15 provides Oil Search with a second, commercially attractive, LNG development opportunity and an extremely strong platform for future growth.
“The company is in a good financial position to be able to fund our growth projects, a position that will only strengthen in coming years with steady cash flows now being generated from both the PNG LNG project and our oil fields.”
PNG LNG project
Both PNG LNG project trains are now operating at full capacity, just three months after first LNG production.
Botten added: “ExxonMobil’s development personnel are being steadily demobilised and, as they leave, I would like to congratulate them for delivering the project ahead of schedule, within the revised budget and, together with the new Production Team, for completing the commissioning and ramp-up phase safely and efficiently.”
The production team, comprising some 750 employees and contractors (of which approximately half are PNG citizens) working at Hides, the LNG plant site and the Port Moresby PNG LNG project office, is now in place and operating well. The focus for the team, Botten added, is to ensure continued incident free operations and to optimise the performance of the project infrastructure.
“With both PNG LNG project LNG trains operating at full capacity, production in the second half of 2014 is expected to be materially higher than that achieved in the first.
“Our production guidance has been narrowed, from 17 – 20 million boe to 18 – 20 milllion boe, based on the PNG LNG plant performance during start-up and commissioning,” Botten concluded.
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/19082014/oil-search-highlights-lng-progress-in-h1-2014-results-1234/