MELBOURNE, Australia--Oil Search Ltd. (OSH.AU) recorded a rise in sales revenue in the final quarter of last year despite a dip in production as compressors were upgraded at the flagship PNG LNG gas-export plant in Papua New Guinea.
Overall production for the year was up modestly to a fresh record, driven by a ramp-up in liquefied natural gas output, and revenue increased strongly over 2017.
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Oil Search, based in the Papua New Guinea capital of Port Moresby and listed in Australia, said its production of oil and natural gas fell 4% quarter-over-quarter to 7.59 million barrels of oil equivalent in the three months through December but revenue was up 2.2% at US$389 million.
For the year, production edged up to 30.31 million barrels from 30.25 million in 2016, and was at the upper end of the company's target range. Oil Search said that in 2018 production was likely to be between 28.5 million and 30.5 million barrels as higher production from the PNG LNG project offset lower output from the company's operated assets.
Sales volumes in 2017 were 1.8% lower at 30.04 million barrels but revenue for the year was 17% higher at US$1.45 billion.
In an effort to balance a portfolio heavily weighted to gas operations in a single country, Oil Search in November invested US$400 million for interests in assets in Alaska's North Slope, including the Nanushuk oil field that could hold an estimated 1.2 billion barrels of recoverable light oil.
Oil Search operates each of Papua New Guinea's producing oil fields, though these are dwarfed by output from Exxon Mobil Corp.'s PNG LNG gas-export operation in the country, in which Oil Search has a 29% stake. It also has interests in a number of undeveloped gas fields in Papua New Guinea, including assets operated by France's Total SA.
The company said discussions with Total and Exxon on the expansion of LNG operations in Papua New Guinea continued to make progress, and the companies expected to settle on key project definition early this year before presenting their preferred development option to the government.
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(END) Dow Jones Newswires
January 22, 2018 18:39 ET (23:39 GMT)