Oil Search posts K978mil profit

OIL Search has announced a profit of US$302.1 million (K978.48 million) for last year, a figure that is almost three times the company’s recorded profit for 2016.
Increased global gas and oil prices and greater efficiency in production were behind the boost, Oil Search managing director Peter Botten said.
“Oil Search reported a net profit after tax of US$302.1 million, 236 per cent higher than the net profit in 2016,’’he said.
“Sales revenue benefited from the rise in global oil and gas prices, with the average realised oil and condensate price increasing by 24 per cent to US$55.68/bbl (K178/bbl), and the average realised LNG and gas price 21 per cent higher at US$7.67/mmBtu (one million British thermal units).
“This more than offset slightly lower sales volumes, driving a 17 per cent increase in total revenue to US$1.45 billion (K4.64 billion).
“Unit production costs remained highly competitive, at US$8.67 (K28) per boe (barrel of oil equavalent), and the company’s operating margin was a healthy 73 per cent.
“The board has approved the payment of a final unfranked dividend of 5.5 US cents (18toea) per share, compared to the 2016 final dividend of 2.5 US cents (8toea) per share.
“The total dividend payment for the year, of 9.5 US cents (30toea) per share, represents a dividend payout ratio of 48 per cent, which is towards the upper end of the board’s dividend policy to return between 35 per cent and 50 cent of net profit after tax to shareholders by way of dividend.”
Botten said taxation amendments in the PNG 2018 Budget allowed for dividends paid from PNG LNG-sourced profits to be paid without dividend withholding tax, in accordance with the PNG LNG Gas Agreement.
“Consequently, the final dividend for 2017 will be exempt from PNG dividend withholding tax, as it will be paid solely from PNG LNG-sourced profits,” the managing director said.