ROSS KELLY | Wall Street Journal
OIL SEARCH HAS DISCOVERED modest quantities of natural gas during a new exploration campaign in Papua New Guinea, and the find had encouraged it to continue drilling.
Oil Search began looking for gas in the Gulf of Papua this year as part of a campaign that may help it develop another gas-export plant in PNG.
The Australian company is already a major shareholder in the US$19 billion PNG liquefied natural gas export project led by Exxon Mobil Corp.
Oil Search said in a statement Tuesday that its Flinders and Hagana wells in the Gulf of Papua intersected good quality geological properties that may indicate the presence of larger resources nearby. Hagana is still drilling ahead to its target depth.
"Although the volumes at Flinders and Hagana are likely to be relatively modest, the company has been sufficiently encouraged to take up a further well option and will drill the Kidukidu prospect once Hagana-1 is completed," the company said.
Separately, Oil Search said oil and gas output in the three months to June 30 fell 9.7% from a year earlier to 1.63 million barrels of oil equivalent, but kept its annual guidance of between 6.2 million and 6.7 million barrels.
Revenue in the quarter fell 3% from a year earlier to US$204.9 million, the company said.