Thanks to a strong three months output from the PNG LNG project, Oil Search says it remains on track to meet its 2017 guidance after lifting September quarter production and reporting a solid 22% jump in revenue for the latest three month period.
The company yesterday revealed that production of 7.91 million barrels of oil equivalent (mmboe), was up 9% per cent from the preceding three months and higher than the 7.63 mmboe produced in the September quarter in 2016.
Sales for its fiscal third quarter jumped to 8.19 mmboe from the three months to June and were also 9.3% higher than the 7.49 mmboe in the same quarter of 2016.
Revenue was also 22% higher at $US380.8 million compared with $US309.5 million in the September quarter of 2016, despite a 6% drop in LNG prices over the period.
The company said it is on track to achieve the upper end of its 29.0 to 30.5 mmboe full-year production guidance range. Record production was underpinned by an excellent performance from the PNG LNG Project, the company said.
“Since the PNG LNG Project compressor upgrades took place in May, production from the project has increased substantially,” managing director Peter Botten said in yesterday’s release.
The ExxonMobil-operated PNG LNG project, in which Oil Search owns a 29%, contributed 6.39 mmboe to production, producing at the highest quarterly rate since it came onstream in 2014.
Revenue for the company’s third quarter jumped 15 per cent to $US380.8 million ($A484.9 million) despite a six per cent decline in gas prices over the period.
That was mostly a result of an 18 per cent increase in sales volume to 8.19 mmboe.
The average realised price for oil and condensate was 3% higher at $US52.75 per barrel, it said.
Oil Search narrowed the production cost guidance, raising the bottom end of the range to $US8.50 per boe from $US8.0 previously, and cut full-year capital cost guidance to between $US295 million to $US340 million, from $US350 to $US400 million previously. The shares rose 0.4% to $7.24.
