PERTH (miningweekly.com) – The share price of ASX-listed oil and gas producer Oil Search tumbled nearly 8% on Tuesday as lower oil prices, scheduled maintenance and government negotiations in Papua New Guinea (PNG) impacted its results.

Despite the challenges, Oil Search has reported a 3% increase in quarterly production, and an 11% increase in full year production, which reached 7.01-million and 27.95-million barrels of oil respectively.

Sales volumes also increased by 22% in the quarter, to 7.9-million barrels, and by 11% in the full year, to 27.79-million barrels, while sales revenue was up 24% in the quarter to $446.7-million and by 3% in the full year, to $1.58-billion.

Despite the increase in production for the quarter and full year, Oil Search noted that production at the PNG liquefied natural gas (LNG) operation had been impacted by scheduled plant maintenance in the second quarter, and a short curtailment of production in the third quarter, while repairs were made to the Kumul marine terminal offshore liquids loading facility.

Furthermore, the average realised oil and condensate price for the year was 11% lower than in 2018, while the average LNG and gas prices fell 5%.

Meanwhile, ten legislative changes required for the PNG LNG project gas agreement were passed in the fourth quarter, and while detailed discussions took place with the P’nyang joint venture (JV) and PNG government on terms for the P’nyang field development, no terms were reached by the end of 2019, within the targeted timeframe.

However, Oil Search told shareholders that negotiations restarted in January and were ongoing, with all parties working to reach an equitable outcome.

Meanwhile, during the quarter ended December, the Oil Search board also approved entry into the front end engineering design (FEED) phase for the Pikka unit development project, in Alaska, subject to JV approval.

FEED activities will include completing the detailed engineering design and ordering long lead items and production related equipment and infrastructure.

The early production system will target production of up to 30 000 barrels of oil a day, beginning in late 2022. A final investment decision is expected in the second half of 2020.

Looking at the 2020 financial year, Oil Search has estimated that production would reach between 27.5-million and 29.5-million barrels of oil equivalent,.