Photo by: Reuters
PERTH (miningweekly.com) – ASX-listed Oil Search has reported a 5% drop in production during the three months to March, compared with the December quarter, as a planned shutdown of its oil facilities impacted on production.
Oil Search reported on Tuesday that production for the quarter under review declined to 1.51-million barrels of oil equivalent, compared with 1.77-million barrels of oil equivalent produced in the previous quarter.
MD Peter Botten noted that the first quarter delivered a number of important events for the company, which placed Oil Search on a strong platform for future growth.
“In March, the company completed the acquisition of a material interest in a petroleum retention licence, containing the Elk/Antelope discoveries in the onshore Papuan basin. This resource has the potential to underpin a world-scale, commercially attractive liquefied natural gas (LNG) development,” Botten said.
He noted that along with the potential expansion of the Papua New Guinea LNG (PNG LNG) project, in which Oil Search owns a 29% interest, underwritten by gas resources in the Highlands and Western Province regions, it was now likely that Oil Search would be involved in the development of two or three additional LNG trains in PNG, over the next five years.
“Meanwhile, the construction and commissioning of the foundation PNG LNG project entered its final stages during the quarter. The first LNG sales, which are expected to start in the next few months, ahead of schedule and within budget, will herald the start of a steady-state, long-term cash flow stream for Oil Search, providing the company with sufficient funds to finance these value accretive growth opportunities, as well as pay material dividends to shareholders,” Botten said.
The PNG LNG project’s gas would be transported by pipeline to a liquefaction plant with a capacity of 6.9-million tonnes a year, about 25 km from Port Moresby.
Oil Search also reported that the company had generated $170.2-million in revenues during the quarter under review, down from the $210-million generated in the previous quarter, from the sale of 1.51-million barrels of oil equivalent product.