Managing director Peter Botten revealed this while announcing the results for the year ending December 31.
But he said it was significantly offset by the lower global oil and gas prices.
He said the core profit for 2015 was US$359.9m (K1076m), compared to US$482.8m (K1443m) in 2014 – a drop by 25 per cent.
He said the result was achieved despite 2015 being one of the most challenging years in recent history for the oil and gas industry.
He said the company benefited from strong cash operating margins, with the margin of 73 per cent realised in 2015 being one of the highest in the region.
“Unit production costs fell from US$12.21 (K36) per barrel of oil equivalent (boe) in 2014 to US$10.08 (K30) per boe,” he said. “Depreciation and amortisation charges of US$13.28 (K40) per boe were in line with guidance.
“Despite strong operating results from our key assets, Oil Search is clearly not immune to low oil and gas prices.
“Fortunately, our producing assets are in the lowest quartile of operating costs in the region and we have a strong balance sheet, which allows us to continue to judiciously invest in what we believe are very competitive, potentially high returning growth projects.
“We will continue to drive further efficiencies and reduce costs in 2016, in line with what is likely to be a sustained period of low prices.
“We do, however, believe that there will be a progressive rebalancing of supply and demand that will see a lift in oil prices in 2017 and 2018.”
At the end of 2015, Oil Search had total liquidity of US$1.66 billion (K4.96 billion). “Together with cash flow from our operations, this is sufficient to fund all current committed activities, including continued investment in our highly competitive potential LNG (liquefied natural gas) growth projects, including expansion of the PNG LNG and development of Papua LNG, which we believe can deliver strong returns even in a sustained low oil price environment.” The National