Announcing the results yesterday, the company stated that the PNG LNG Project and the PNG oil fields are generating positive free cash flow.
The company will focus more on its PNG operations this year seeing that both PNG LNG expansion and the Papua LNG Project offer attractive returns and remain highly competitive.
This is relative to other possible LNG projects, even in light of revised oil price expectations, the company stated.
Oil search believes there is high probability that the low-cost, globally competitive PNG LNG expansion and Papua LNG development will proceed to Final Investment Decision while many other proposed LNG developments are delayed or deferred.
This progress will enable Oil Search to continue generating strong longterm returns for shareholders.
The company has more than sufficient funds to support all scheduled debt repayments, as well as planned exploration, appraisal and development activities over the medium term.
Oil Search’s financial strength also provides the Company with considerable optionality in continuing judiciously to pursue its growth initiatives.
Oil Search continues to pursue prudent cost reduction and efficiency program, with production costs for operated assets expected to fall by approximately a further 25 per cent in 2016, as the benefits of restructuring are realised.
The company also believes that a progressive rebalancing of supply and demand will see a lift in oil prices in 2017 and 2018.