Strong half year result for Oil Search

Strong commodity prices and a positive contribution from the merger with Orogen Minerals, which took effect from the beginning of April, have seen Oil Search report a big increase in profit for the first half of the year to June 30.

The PNG oil and gas producer reported a 369% increase in profits to $US23.85 million on revenues of $105 million, up 82% on the corresponding period last year. The result includes $US85 million for oil and gas, $US10 million for gold sales and $US6.9 million as proceeds from the sale of shares in Lihir.

Oil equivalent production for the half-year increased by 10.9% to around 4 million barrels (mmbbls) while net oil production grew by 12.9% to 3.634 mmbbls. However, gross oil production from all fields in Papua New Guinea declined by 17.4% largely due to decline in all fields except Moran Central, Oil Search said.

Managing director Peter Botten said there was no reason why the second half performance could not be better than the first half. He said the company was improving its reserves through exploration in PNG and Yemen and was expecting a 50% boost to oil production with production from the Moran field.

He was also confident about the outcome of the PNG-Queensland gas project.

Shares in Oil Search strengthened slightly on heavy trade to 85c, up from its lows in mid July of 66c.