BY JOSH LEWIS
PAPUA NEW GUINEA-focused Oil Search posted a drop in revenue during the third quarter of the year as oil sales and prices fell.
Revenue for the quarter slipped 26.4% during the third quarter to $160.2 million, compared to $217.8 million during the second quarter of the year.
The fall in revenue reflected a 25% drop in oil sales, from 1.6 million barrels for the June quarter, to 1.2 million barrels.
Output for the quarter also fell 16%, to 1.5 million barrels of oil equivalent, due to the planned two week shutdown of the Central and Agogo processing facilities for the associated gas tie-in project to enable oilfield gas to be delivered to the PNG liquefied natural gas project.
“Apart from the shutdown, underlying field performance during the period was in line with expectations and production rates have now returned to pre-shutdown levels,” Oil Search managing director Peter Botten said.
He added total output for the year was expected be towards the upper end of the company’s forecast range of 6.2 million – 6.7 million barrels of oil equivalent.
Despite the slump in revenue during the third quarter, the company’s total operating revenue for the first nine months of the year was $531.3 million, a 26.9% rise on the $418.8 million booked during the same period in 2010.
During the quarter the company spent $55.7 million on exploration and evaluation activities, $308.5 million on the PNG LNG project and $42.6 million on oilfield development work.
The PNG LNG project is on schedule for first production in 2014 and will initially produce 6.6 million tonnes per annum from two liquefaction trains.
Oil Search holds a 29% stake in the project along with operator ExxonMobil (33.2%), the government of Papua New Guinea (16.6%), Santos (13.5%), Nippon Oil Exploration (4.7%), Mineral Resource Development Company (2.8%) and Petromin PNG (0.2%).
Source: Upstream Online, 25 October