OSL unveils US$53m profit

OIL Search Ltd (OSL) has reported a record after-tax profit of US$52.9 million (K144 million) in the six-month period ending June 30 this year compared to the last year’s profit for the same period of US$35.6 million (K97 million).
The 49% increased profit was driven by firmer realised oil prices and an increase in oil sales volumes.
Managing director Peter Botten said: “The company benefited from the rebound in global oil prices, realising an average oil price of US$76.31 per barrel, 47% above the corresponding period of last year.
“Together with an 8% increase in oil lifting, total revenue increased to US$276.6 million, compared to US$185.1 million in the first half of last yeaer,” Botten said.
He stressed that total oil and gas production was 3.95 million barrels of oil equivalent (mmboe), 4% higher than in the first half of last year.
This increase was primarily due to the success of the ADT2 ST3 well, which, early in the year, discovered oil in the forelimb of the Agogo field, the first time this structure had been tested.
Production in the first half of last year was also positively impacted by generally good field performance and improved facilities performance and uptime resulting from investment in various life extension and reliability programmes.
Botten said as anticipated, the start of full-scale activities on the liquefied natural gas project had an inflationary effect on certain costs in PNG, such as labour and contractor costs, while higher oil prices have impacted fuel costs and royalties.
However, the impact of these pressures in the first-half was reduced by a relatively low level of discretionary work activities.
Botten said during the first-half of the year, the LNG project, operated by ExxonMobil, achieved financial close and full execution.
Activities are now taking place at a number of locations throughout the coutnry, with a focus on establishing major logistics routes, installing accommodation facilities, resettlement and clearing activities in the Highlands and site preparation of the LNG plant site near Port Moresby.
The target date for first LNG sales of 2014 and the estimate of total project costs to first LNG of US$15 billion remained unchanged.