In July, the company had reported a 38% jump in half-year production from the same period last year, when a deadly earthquake halted operations at the Exxon Mobil-operated PNG LNG plant, in which Oil Search has a 29% stake.
Australia’s Oil Search on Tuesday said its half-year profit more than doubled and raised its dividend, boosted by robust output at its key Papua New Guinea liquefied natural gas (LNG) project. Net profit after tax rose to $161.9 million for the six months ended June 30, from $79.2 million a year earlier, above a consensus estimate of $160 million cited by Citi.
In July, the company had reported a 38% jump in half-year production from the same period last year, when a deadly earthquake halted operations at the Exxon Mobil-operated PNG LNG plant, in which Oil Search has a 29% stake. The company said the average realised LNG and gas price was $9.71 per million British Thermal Unit (mmBtu) over the half year, up from $9.02 (mmBtu) a year earlier.
Oil Search reiterated its expectations for output for the year to be between 28 million barrels of oil equivalent (mmboe) to 31 mmboe, while costs are expected to be $11 to $12 per boe. Oil Search and its partners are facing a delay on their $13 billion plan to double LNG exports from Papua New Guinea (PNG), as the new government renegotiates terms on one of the projects crucial for the expansion, in an effort to extract more benefits for the impoverished country.
The review of the Papua LNG agreement, a joint venture between Total, Exxon Mobil and Oil Search, has in turn delayed talks on another gas agreement for the P’nyang field, also needed for the expansion. Delays on the two agreements could push out a final investment decision on the expansion beyond the companies’ target of 2020.
On Tuesday, Oil Search said that the company and its partners were expecting a resolution for the Papua LNG agreement by the end of August. In June, the 90-year old company exercised an option to double its stake in several Alaskan exploration assets, a move that would allow it to reduce dependence on LNG production in PNG. The oil and gas explorer declared an interim dividend of 5 cents a share, up from 2 cents a year ago.