Earlier this year Oil Search revealed big cuts in investment and other spending as global oil prices collapsed, taking LNG prices with them. The cuts were so deep that to achieve them, the company would have cut staff.
Yesterday saw a host of downgrades and other poor news from ASX companies of all sizes - all understandable in the current terrible investment climate as the combination of the coronavirus pandemic and the idiotic price war in oil between Russia and Saudi Arabia wreck market confidence and share price.
Oil Search has cut its final dividend after reporting an 8.4% fall in full-year profit to $US312.4 million ($A472.7 million). Directors largely blamed the fall in global energy prices, especially LNG towards the end of the year.
An agreement on fiscal terms for the P'nyang project has not been forthcoming. Papua LNG is now the sole focus. Citi notes Papua LNG will need to renegotiate its commercial terms with PNG LNG and re-engineer the downstream.
Production in the September quarter was down -1% because of the mooring damage. The company has revised 2019 guidance, reducing production volumes by -5%. Unit production costs are up 9%, driven by lower production volumes and higher repair costs.