PERTH (miningweekly.com) – A 68% increase in production during the first half of 2014 has seen ASX-listed Oil Search’s net profits increase by some 34%, to $152.5-million.

The increased production reflected the first earnings from the Papua New Guinea (PNG) liquefied natural gas (LNG) project, in which it holds a 29% interest.

During the interim period, total production increased to 5.36-million barrels of oil equivalent, compared with the 3.18-million barrels of oil equivalent reported in the previous corresponding period. Some 1.3-million barrels of oil equivalent LNG was produced from the PNG LNG project during the period under review.

Total sales volumes for the first half of the year also increased by 41%, to 4.73-million barrels of oil equivalent, which resulted in revenues increasing by 34% on the previous corresponding period, to $510-million.

“The first half of 2014 was one of the most significant periods in Oil Search’s history,” said MD Peter Botten.

“Major milestones were reached in April when LNG production from the PNG project started, and in May, when the first LNG cargo left PNG bound for Japan. The start of revenue streams from the PNG LNG project signals the start of Oil Search’s corporate transformation,” Botten added.

He said that production for the second half of the year was expected to be significantly higher as the PNG LNG project had completed its ramp-up phase.

In 2015, the first full year of operations, the PNG LNG project was expected to add some 21-million barrels of oil equivalent to Oil Search’s portfolio, resulting in total production of more than four times that achieved in 2013.

“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,” Botten said.