Oil Search reports record quarter

PERTH (miningweekly.com) – Oil and gas major Oil Search on Tuesday reported record production for the March quarter, as its Papua New Guinea liquefied natural gas (PNG LNG) operation delivered above expectations.

Total production during the quarter reached 7.72-million barrels of oil equivalent, up 3% on the previous quarter, while total sales were up by 13% to 7.97-million barrels of oil equivalent.

The PNG LNG project delivered 5.94-million barrels of oil equivalent to the Oil Search bottom line.

“First quarter production of 7.72-million barrels of oil equivalent was the highest in the company’s history, reflecting a continued outstanding performance by the PNG LNG project and a stable contribution from the operated PNG oil fields,” said Oil Search MD Peter Botten.

He pointed out that the PNG LNG project had achieved its highest quarterly production since coming on stream in 2014, producing at a yearly rate of about eight-million tonnes a year, up from the 7.6-million tonnes a year achieved in the previous quarter, and 16% above nameplate capacity.

The increased production was driven by high levels of facility uptime, as well as continued strong productivity from the wells.

“Total operating revenue for the quarter was $313.1-million, with stronger sales volumes, particularly from LNG, offset by a 19% decline in average realised oil and gas prices,” Botten said.

Some 31.2-billion British thermal units of LNG were sold during the quarter, which was up 18% on the fourth quarter of 2015. Oil Search noted that 28 cargoes of LNG were sold during the quarter under review, compared with the 24 cargoes sold during the December quarter, with 24 of these sold under long-term contracts and four to the spot market.

Oil condensate and naphtha sales volumes reached 2.27-million barrels during the three months to March, a 2% increase on the liquid sales in the previous quarter.