Capital management priority: OSL

OIL Search Ltd chief financial officer Stephen Gardiner says capital management is the key focus area for the oil company going forward.
Gardiner said recently that it remained an absolute priority and they continued to assess their funding capacity and sources of liquidity.
“This includes assessing the impact of various oil price scenarios and capital expenditure profiles as we look closer to the major capital commitments on the development projects ahead of us,” he said.
“Our current liquidity and balance sheets are in good shape and bolstered by the strong ongoing operating cash flow from the PNG LNG project and our oil operations.
“This is hopefully underpinned by the stabilisation and recover of oil prices market.
“We have had a very encouraging initial engagement with respective lenders for the expansion projects and we have been out meeting them around the world introducing them to the LNG expansion projects.
“We are very comfortable that our aim of securing around 60 to 70 per cent of gearing at the project level can be achieved for those developments.
“That leaves funding for the equity part of those projects to be sourced from our current liquidity position and free cash-flow.
“Importantly, investment and future exploration activities that we have in front of us is largely discretionary and we can certainly spend and we can hold back if required.”
Gardiner said Oil Search was confident their financial ratios remained comfortable in lender cabinet limits during the development phase that was in front of the oil company.
“Post LNG expansion and with Alaska in production, we see free cash flow resulting in a very rapid deleveraging of Oil Search’s balance sheet,” he said.
“This will be aided by a full repayment of the foundation project debt for PNG LNG in 2026.”