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Higher prices boost Oil Search profit 13pc

AAP  |  19 Feb 2019Text size  Decrease  Increase  |  
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Oil Search has posted a 13 per cent rise in annual profit, boosted by higher prices for its liquefied natural gas and oil, which offset a loss of output after an earthquake in Papua New Guinea early in 2018.

The PNG-focused company said net profit for the year ended 31 December rose to $US341.2 million from $US302.1 million a year earlier.

The profit was below analysts' forecasts around US360.83 million, according to Refinitiv data.

An oil rig

Oil Search's profit was below analyst forecasts

Oil Search declared a final dividend of 8.5 US cents per share.

For the full year, its dividend was 10.5 US cents, up from 9.5 US cents in 2017.

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The big goal for Oil Search in 2019 is to reach an agreement with its partners Exxon Mobil Corp and France's Total SA and the PNG government on financial terms for an expansion of the PNG LNG plant, which would clear the way for engineering and design work to begin.

The companies aim to double exports from the PNG LNG plant from 2024, underpinned by gas from the Total-led Elk and Antelope fields and the Exxon-led P'nyang field.

The PNG-based firm said capital costs are forecast to increase in 2019 from 2018 levels, as it enters the FEED phase of LNG developments in PNG and the Pikka oil field development in Alaska.

"In 2019, production is expected to be back at pre-earthquake levels, while unit production costs are forecast to be 15 to 20 per cent lower than in 2018, reflecting lower earthquake-related remediation work and higher production," the company said in a statement.

Output from the PNG LNG project, run by Exxon Mobil and 29 per cent owned by Oil Search, was hit in the first half of 2018, after a major earthquake rocked the country's gas-producing Southern Highlands region in February last year.

Oil Search last month said it expects to produce between 28.0 million barrels of oil equivalent and 31.5 mmboe in 2019, supported by surging output from PNG LNG, which fully recovered in the second half of 2018.

Shares in Oil Search dipped as much as 1.4 per cent in early trade in a slightly firmer broader market.

Oil Search lift net profit on price boom:

  • Full-year profit up 13pc to $US341.2m
  • Revenue up 6pc to $US1.54bn
  • Final dividend US8.5c per share


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