Oil Search records positive cash flow in second quarter

Despite the sharp fall in LNG prices, Oil Search continued to generate positive cash flows during this second quarter.

The sharp fall is believe to be the low point in the LNG contract pricing cycle, and lower sales volumes.

During the period, the Company paid US$145 million (K443.29m) in scheduled semi-annual principal and US$83 million (K253.75) in interest under the PNG LNG Project finance facility, as well as US$39.1 million (K119.54m) on capital expenditures.

Managing Director Peter Botten said despite funding these disbursements, net debt declined slightly, from US$3,315 million to US$3,304 million, highlighting the strong cash flows generated from operations.

“Our cash flow break-even in 2016 is expected to be less than US$20 per barrel of oil equivalent (boe), including cash operating costs and interest payments.”

He said the Company is in good shape with the production base performing well, with costs under tight control.

“Our balance sheet remains strong and more than capable of supporting measured exploration and appraisal activities, along with progressive development of our LNG business, subject, of course, to realising reasonable oil and gas prices.”

Freddy Mou