Oil Search is fortunate to have a low cost production base with low sustaining capital requirements and a substantial liquidity buffer, says Managing Director Peter Botten.
Botten, when commenting on the 2015 full year results said unlike some of their global energy peers, the company is committed, and has the financial capacity, to continue investing in its growth projects, despite the challenges of a low oil price environment.
“We regard the coming year as an ideal time to optimise our asset portfolio and we have the ability to take advantage of acquisition opportunities, should strategically sensible and well-priced assets arise.
“We will also continue to promote cooperation between projects and stakeholders in order to optimise development timetables and capital efficiencies.”
He said from a production perspective, while activity levels within the operated fields will be lower than they have been in recent years, they will continue to focus on optimising production from these mature fields in 2016.
“It is anticipated that lower operated production will be offset by an increase in PNG LNG Project production.”
Botten added that operating costs are expected to decline in 2016, reflecting both reduced work programmes and the cost reductions that have been achieved through the business optimisation programme.
“Total capital spend in 2016 is expected to be approximately 35% lower than in 2015, with activities primarily focused on the high returning Highlands and Gulf gas commercialisation activities,” he sai