Oil Search records positive production

In a media release, Oil Search states that this recording is 6% higher than in the second quarter and only 1% lower than its all time record level of 7.72 mmboe in the first quarter of 2016.

Managing Director, Peter Botten, says the third quarter of 2016 was another very strong period for Oil Search operationally.

“Total operating revenue rose by 16% to US$309.5 million (K 925.5 million), driven by a 4% life in hydrocarbon sales and a23% increase in the average realized LNG and gas price and was achieved despite a 3% fall in the average realized oil and condensate prices to US$47.24 (K141.27) per barrel, reflecting slightly weaker global oil prices,” said Botten.

“Despite continued low oil prices, Oil Search generated positive cash flow during the quarter. The company’s cash balance increased from US$780 million (K 2.3 billion) to US$939 million (K 2.8 billion), and with no PNG LNG Project finance facility principal payments due during the period, net debt declined from US$3, 304 million (K 909 million) to US$3,145 million (K 9.4 billion), highlighting the strong cash flows generated from operations”

Also during the quarter, Oil Search’s Arrangement Agreement for the takeover of InterOil was terminated after 80% of InterOil holders favored terms in a separate agreement arrangement with Exxon Mobil.

The Oil Search Board decided not to resubmit a revised offer as the main objective of its bid for InterOil was based on the belief that cooperation between the Papua LNG and PNG LNG projects was materially enhanced by ExxonMobil’s entry into the PRL 15 Joint Venture.

Oil Search says the consideration offered by ExxonMobil underscores the potential value that would be created by cooperation as it was well positioned to benefit from a cooperative development, given its material interest in all the key gas resources, including PRL 3 (38.5%), PRL 15 (23%) and the PNG LNG Project (29%).