Oil Search’s K1.1bil net loss reflects on lower hydrocarbon prices

OIL Search’s financial results for 2020 reflected a significantly lower realised hydrocarbon prices compared to 2019.
It resulted in a full-year net loss of US$320.7 million (K1.1bil).
According to Oil Search, that included a post-tax impairment charge of US$260.2 million (K898.7mil) that had been recognised in the interim financial results.
Core net profit after tax (NPAT) excluding impairment and other significant non-recurring items was US$22 million (K75.9mil).
This was according to the company’s 2020 full year results released yesterday.
Managing director Dr Keiran Wulff said: “Oil Search emerged from 2020 stronger and more resilient as a result of its response to the Covid-19 pandemic, demand collapse and oil price downturn.
“Despite the material challenges, Oil Search achieved three important records.
“The first is the strongest safety performance in PNG since becoming operator of the PNG oil fields in 2003, with a total recordable incident rate of 0.78 per million hours worked, and no tier 1 process safety events. The second is the strongest production reliability from our operations in PNG since the 2018 earthquake.
“And lastly, the delivery of record annual production from the PNG LNG project.”
Oil Search made some very strong decisions last year.
“The company took decisive action to ensure that we limited discretionary spending, enhanced our liquidity, right size the organisation and reduce our operating cost base and breakeven for new and existing projects,” Dr Wulff said.
“We also undertook a major strategic review to prioritise activities and capital spending for a low carbon future.”
“This resulted in streamlining our portfolio and incurring a non-recurring, post-tax impairment charge of US$260.2 million (K898.7mil).”