Oil Search secures funding bulwark

PAPUA New Guinea-focused Oil Search has inked new documents with a 14-member bank group for a new five year, non-amortising, revolving credit facility of $US600 million ($A795 million).
Oil Search secures funding bulwark Oil Search secures funding bulwark Oil Search secures funding bulwark Oil Search secures funding bulwark Oil Search secures funding bulwark

PNG's Highlands.

Haydn Black

Reporter

The banking group includes all four major Australian domestic banks, one PNG bank and nine international banks.
 
This new facility is in addition to the two existing bilateral facilities totalling $250 million, taking the company's total available facilities to $850 million, all of which remain undrawn.
 
Combined with the company's cash balance, total liquidity is now in excess of $1.7 billion.
 
The new corporate facility replaces a $500 million non-amortising revolving credit facility that was set to expire in October.
 
"We wish to thank the banks for their ongoing support of Oil Search and their endorsement of Papua New Guinea as an attractive country for investment," managing director Peter Botten said.
 
"Given the strong demand from existing and new lenders and attractive terms offered, we have increased the size of the facility from our original target of $500 million to $600 million.
 
"The new facility will provide us with funding flexibility for the next phase of LNG development and expansion in Papua New Guinea, while we also continue to progress focussed exploration and appraisal activities."
 
The company is maintaining its 2017 production forecast at 28.5-30.5MMboe and, with the year now half over, is advanced in its plans for 2018 and 2019.
 
That includes designs for the tie-in of the Angore field to the wider PNG LNG infrastructure and associated modifications to the Hides gas conditioning plant next year, and further production optimisation benefits in 2019, increasing gross output from the PNG LNG plant to an estimated 8.5MMtpa, more than 20% above nameplate.
 
Oil Search is working with Santos, Total and ExxonMobil to examine two new LNG trains which if approved, would take gas from the P'nyang and Elk-Antelope fields where there is more than 10 trillion cubic feet of gas waiting for development.
 
Two new trains would increase Oil Search's production by more than 50%. 
 
While LNG is in a global glut, Oil Search said it was well place to meet any demand in the wider Asian region, both new and in recontracting, and more directly in PNG's immediate neighbourhood with plans for small-scale LNG also being assessed.
 
Oil Search shares were $6.60 this morning.