Oil Search has released its Q4 2013 production results, highlighting the progress of the PNG LNG (Liquefied Natural Gas) project in Papua New Guinea.
The company’s production in the fourth quarter was 1.77 million barrels of oil equivalent (boe), taking production for the 2013 full year to 6.74 million boe, slightly above the 6.2 – 6.7 million boe guidance range and 6% higher than the 2012 full year.
- Total revenue for the quarter was US$ 210 million, 20% higher than Q3, based on an average realised oil price of US$ 113.33 per barrel. Total revenue for the 2013 full year was US$ 766.3 million, compared to US$ 724.6 million in 2012, an increase of 6% year on year.
- At the end of 2013, the PNG LNG Project was more than 90% complete and remained on budget and on target for first LNG sales in the second half of 2014. Commissioning activities continued during the fourth quarter, with the introduction of gas from the Kutubu field into the Hides Gas Conditioning Plant in December.
- Work by the PRL 3 Joint Venture continued on the potential development of the P’nyang field as a resource for PNG LNG expansion.
- Discussions were ongoing during the quarter regarding Oil Search’s potential involvement in PRL 15 in PNG, which contains the Elk/Antelope gas fields.
- Two high potential oil appraisal wells commenced drilling in December, with the spudding of Mananda 7 in the PNG Highlands and Taza 2 in Kurdistan.
- At the end of December 2013, Oil Search had a cash balance of US$ 210 million and debt of US$ 4024 million, comprising US$ 3824 million drawn down from the PNG LNG Project finance facility and US$ 200 million from the Company’s US$ 500 million corporate facility.
- Based on updated information from the PNG LNG Project operator and a strong operating performance from the PNG oil fields, Oil Search’s 2014 full year production guidance has increased, from 10 – 13 mmboe to 12 – 15 mmboe.
Commenting on the Q4 results, managing director, Peter Botten, said: “Oil Search closed the 2013 financial year on a very positive note, with strong production in the second half resulting in full year production above guidance. The fourth quarter also saw continued progress on the PNG LNG Project, which remains on track for flist sales in the second half of 2014, and the commencement of oil appraisal drilling both in PNG and Kurdistan.
“At the PNG LNG Project, commissioning activities are now in full swing. A major milestone was reached In December 2013 when gas was introduced from the Oil Search-operated Kutubu field into the Hides Gas Conditioning Plant (HGCP). This followed the commencement of commissioning activities at the LNG plant In the third quarter of 2013.
“Significant progress has also been made on the onshore pipelines. Welding of the main gas pipeline, connecting the HGCP to the offshore pipeline, was completed during the fourth quarter and the condensate line, linking the Kutubu field to the HGCP, was completed and Is now being used to supply commissioning gas from Kutubu to the HGCP. Installation of the gathering pipeline system, linking the Hides production wells to the HGCP, is also making good progress, with the pipeline between Wellpad B and the HGCP now complete. Drilling is moving ahead, with the fourth production well at Hides completed during the quarter. Drilling is presently ongoing at Wellpad D and at the most northerly wellpad, Wellpad G, where the two wells drilled will not only produce gas for the LNG Project but will also help better constrain the north-western extent of the Hides gas field.
“Work continues on the potential development of the P’nyang gas field, to help underwrite an expansion of the PNG LNG Project. As previously indicated, scoping studies are expected to continue through 2014 in preparation for the submission of a development licence application for the field in early 2015. Seismic programmes, which had previously been suspended due to the wet weather season, recommenced over both P’nyang and Juha in the fourth quarter.
“In December, Total SA announced that it had reached agreement with InterOil Corporation to acquire a material interest in PRL 15, which contains the Elk/Antelope gas fields. Oil Search is in ongoing discussions with the key stakeholders regarding a potential involvement in the licence.”
PNG LNG activities
At the end of Q4 2013, the PNG LNG Project was more than 90% complete and on track for first LNG deliveries in the second half of 2014. Over 180 million hours have been worked since project sanction.
Key activities and achievements during the quarter included:
- By the end of December 2013, the LNG Plant labour force had completed 64 million work hours without a Lost Time Incident.
- Commissioning activities ramped up at the LNG plant, with gas circulating in Train 1 and the refrigeration compressors being test run.
- Commissioning activities also continued on the common process and utilities areas. All gas turbine generators are now operable. The LNG loading jetty and both LNG tanks are complete and ready for handover.
- Construction of Train 2 continued to make progress.
- Both LNG tanks were completed and are being used to store the excess commissioning gas flowing into the Plant from the Oil Search-operated Kutubu field.
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/28012014/oil_search_highlights_png_progress_100/