Oil Search Provides Quarterly Report

HIGHLIGHTS

  • 2017 Third Quarter Production reaches: All-Time High Total production in the third quarter of 2017 was 7.91 million barrels of oil equivalent (mmboe), 9% higher than in the second quarter. The Company is presently on track to deliver 2017 production at the upper end of the 29.0 – 30.5 mmboe guidance range.
  • PNG LNG Production at Record Levels: Record production was underpinned by an excellent performance from the PNG LNG Project, which contributed 6.39 mmboe net to Oil Search and produced at an annualised rate of approximately 8.6 MTPA, the highest quarterly rate achieved since the Project came onstream in 2014. The Oil Search-operated PNG oil and gas fields also performed well, contributing 1.52 mmboe net to Oil Search, compared to 1.34 mmboe in the previous quarter, with high facilities uptime achieved over the quarter.
  • Higher Oil and Gas Sales Volumes Drive Revenue: Total revenue for the quarter was US$380.8 million, 15% higher than in the previous quarter, reflecting an 18% increase in total sales volumes and a 3% lift in liquids prices, slightly offset by a 6% reduction in the LNG and gas price. The average realised oil and condensate price was US$52.75 per barrel while the average gas and LNG price was US$7.48/mmBtu.
  • Cash Balance Increases to US$1.1 billion: The Company’s cash balance increased by US$145.4 million during the quarter, to US$1.12 billion. Including US$850 million of undrawn corporate credit facilities, Oil Search had total liquidity of US$1.97 billion at the end of the quarter.
  • Continued Progress of Activities on LNG Expansion: Work on LNG expansion took place over a wide number of fronts during the quarter. Engineering studies on the various integrated development options for the Elk-Antelope fields in PRL 15 and P’nyang in PRL 3 and discussions on commercial structures all made good progress. The joint venture partners are working towards being in a position to present an aligned view on the development to the PNG Government around year end.
  •  P’nyang South 2 Appraisal Well to Spud Shortly: Site preparation for the P’nyang South 2 well was completed during the quarter and the rig mobilised to site, with drilling expected to commence shortly. While the key aim of the well is to migrate 2C gas resource volumes to the 2017 THIRD QUARTER REPORT | 17 OCTOBER 2017 | page 2 1C category, the well will also appraise material potential resource upside in the field. Analysis of seismic data acquired over prospects adjacent to P’nyang is currently underway.
  • Muruk Appraisal Programme Underway: Site preparation for the Muruk 2 appraisal well commenced during the quarter. Subject to weather, Muruk 2 is expected to spud towards the end of the first quarter of 2018 and will help constrain the potential volumes in the field. Planning is underway for a 100 kilometre seismic acquisition programme, to commence in the fourth quarter of 2017, which will help further delineate Muruk and the adjacent Karoma prospect.
  • 100 Day Economic Stimulus Plan Released by the New PNG Government: Entering Front End Engineering and Design (FEED) in 2018 for PNG LNG Project expansion and commencing early works for Papua LNG have been identified as major objectives for the new PNG Government in its 100 Day Economic Stimulus Plan. In line with the Government’s priority to resolve PNG LNG landowner benefits distribution issues, first PNG LNG landowner royalty payments were paid in September.

oil search.PNG


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