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Strong performance by Oil Search

Staff Reporter | 5:49 PM | |
OIL Search’s financial performance in the previous year was the best in its history, recording a massive 72 per cent increase in profit.
The Australian firm posted a profit of US$353.2 million (K942.49m) in 2014 compared with US$206 million (K549.69m) in 2013.
Its sales last year more than doubled to US$1.61 billion (K4.29bn).
Oil Search said it has received more than US$850 million (K2,268m) revenue from the PNG LNG project’s first distribution.
Managing director Peter Botten said Oil Search was financially and operationally strong enough to weather a long period of lower prices.
“Oil Search is well positioned, with materials interests in these two potentially high returning LNG developments, which could both benefit from a recalibrated development cost based, brought about by the downward pressure on costs globally as a result of lower oil and gas prices,” he said.
“Our gas growth opportunities in PNG, where we have a major competitive advantage, are robust, while the long term legacy cash flows from the PNG LNG project will continue to bolster the company’s balance sheet.
“These opportunities, including the potential expansion of the PNG LNG project through debottlenecking and a potential third PNG LNG project LNG train and the potential development of the Elk/Antelope fields (Gulf), continue to offer attractive economic returns based on our current oil price assumptions.”
The company’s production in the period was boosted by the opening of its PNG LNG project, where the company is focused on further growth opportunities.
But Oil Search has reduced the value of its exploration assets by US$130 million (K346m) because of falling oil prices, which recently plunged to a six year low.
Those falls have led to a 20 per cent cut to its expected expenditure for this year, and a further 20 per cent cut to production costs, including a freeze on new hiring and new arrangements with contractors and suppliers.