Oil Search continues to perform well with overwhelming results in the third quarter when it produced its highest ever production results in 2016.
Managing Director Peter Botten said this when releasing the third quarter results to the market on Tuesday, January 24, 2017.
Here are some of the highlights for the quarter as announced on Tuesday as follows;
• Production in the fourth quarter of 2016 was 7.72 million barrels of oil equivalent (mmboe). The strong performance during the quarter took 2016 full year production to 30.24 mmboe, 3% higher than production in 2015 and marginally above the top of the 2016 guidance range, as well as being an all-time record for the Company.
• Fourth quarter production net to Oil Search from the PNG LNG Project was 6.11 mmboe (26.6 bcf LNG and 0.90 mmbbl liquids), while the operated PNG oil and gas business contributed 1.62 mmboe. The PNG LNG plant continued to operate well above its nameplate capacity, reaching its highest average annualised production rate since production commenced, of approximately 8.3 MTPA, during the quarter.
• Product sales in the fourth quarter were 6% higher than in the third quarter, reflecting increased production and timing of liftings. Total sales for the 2016 full year, at 30.59 mmboe, were 6%higher than in 2015 and the highest in Oil Search’s history.
• Total revenue for the quarter was $ US 345.6 million, 12% above the third quarter, due to higher liftings combined with the increase in global oil and gas prices. The average realised LNG and gas price was $US 7.09/mmBtu, up 10% from the third quarter, while the aveSrage realised oil and condensate price increased 5%, to $ US 49.68/barrel. Total revenue for the 2016 full year was $ US 1.24 billion.
• During the quarter, Oil Search continued discussions with key stakeholders, including ExxonMobil, Total and the PNG Government, on how to deliver cost-effective, coordinated LNG expansion synergies within PNG. Oil Search expects formal talks to take place in early 2017, contingent on the successful completion of ExxonMobil’s revised offer to purchase InterOil Corporation and its entry into the PRL 15 Joint Venture.
• During the quarter, the Oil Search-operated Muruk 1 exploration well in PPL 402 discovered gas in the primary target, the Early Cretaceous Toro Formation. A sidetrack, Muruk 1 ST1, is currently being drilled, to better define the structure and investigate the downdip extent of hydrocarbons. Located only 21 kilometres northwest of the nearest Hides well, Muruk is an exciting new discovery and, assuming appraisal success, is well placed to be tied into PNG LNG
• Netherland Sewell and Associates, Inc (NSAI) is close to finalising its review of the Hides, Angore, Juha and Associated Gas fields. Preliminary indications are that NSAI’s estimate of technically recoverable raw gas resources within these fields will increase significantly from its 2009 PNG LNG Project resource certification. Work is underway to assess the impact this would have on Oil Search’s share of PNG LNG Project reserves, which, together with a revision to the Company’s estimate of resources in the Elk-Antelope fields post drilling, will be reported in the Reserves and Resources Statement, due to be released in February 2017.
• In December, the PRL 15 Joint Venture (Elk-Antelope fields) received the formal grant of a five-year extension to the Petroleum Retention Licence. The licence conditions provide the PNG Government and the Joint Venture with a clear pathway and timeframe for development of the fields.
• During the quarter, the PRL 3 Joint Venture commenced preparatory work for the construction of the P’nyang South 2 well pad, which is targeted to be drilled in the second half of 2017.
• The 2016 Strategy Refresh was successfully concluded during the quarter, with a number of key findings to be implemented in 2017.
• At the end of December 2016, Oil Search held cash of
$US 863 million and had available facilities of $US 750 million, taking total liquidity to $US 1.61 billion. The Company’s total debt was $US 3.94 billion, all of which related to the PNG LNG Project finance facility ($US4.08 billion at the end of September 2016.)
Press Release
Picture: Oil Search Foundation