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Oil Search HY profit soars to $US129m

AAP  |  22 Aug 2017Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Shares in Oil Search (ASX: OSH) have lifted after the Papua New Guinea-focused energy company reported a fivefold increase in first-half profit, courtesy of higher oil prices and cost cuts.

Oil Search's profit for the first half of 2017 is $US129.1 million ($A162.6 million), up from just $US25.6 million a year earlier.

The company says higher average oil and gas prices helped lift revenue 16 per cent to $US676.2 million despite a drop in sales volumes, while a 12 per cent drop in operating costs improved operating margin to 74 per cent.

Managing director Peter Botten said the company had improved its debt and cash position in the half year and would be cash-flow positive with a breakeven oil price of $US29.40 a barrel, "significantly lower than the realised oil price of $US53.35 a barrel".

While oil price forecasts had been revised down in line with market expectations, Mr Botten said the revision would not result in any asset impairments.

Oil Search increased its interim dividend from 1 cent to 4 cents and slightly lifted the bottom end of its full-year production guidance to between 29.0 and 30.5 million barrels of oil equivalent.

Oil Search shares were up 24 cents, or 3.8 per cent, to $6.63 at 1220 AEST.

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