Oil Search records 405% profit

Oil Search Limited has recorded a massive 405 per cent net after tax profit of 129.1 million, more than five times the first half year result of 2016.

This also surpasses the full year core profit by 21 per cent.

In its announcement of its 2017 Half Year, Oil Search said the results reflected higher sales revenue and lower costs.

The PNG company said sales revenue increased by 16 per cent to US$676.2 million (K2,028,194,361), underpinned by materially higher average realized oil/condensate and LNG/gas prices, which increased by 28% and 26%, respectively.

There was a 12 per cent reduction in operating costs, which resulted in total unit production costs of a very competitive US$8.52 (K25.55) barrel of oil equivalent (boe) and an increase in operating margin to 74 per cent.

There was also a 13 per cent reduction in depreciation and amortization expense, driven by lower depreciation and amortisation rates for the PNG LNG Project as a result of a material increase in Project reserves following recertification.

Based in the results, the company’s 2017 full year production guidance has been upgraded, while the ranges for forecast full year unit operating costs, depreciation/amortisation and capital expenditure have been reduced.

Total capital expenditure for 2017 is now estimated to be between US$350 million and US$400 million, compared with previous guidance of US$380–480 million

Oil Search said despite a reduction in oil price forecasts no impairment charges were required to the Company’s asset carrying values.

Cedric Patjole