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New Guinea-based Oil Search Ltd. Reported Quarter 2 Earnings 

Papua New Guinea-based Oil Search Ltd. said higher prices for its oil and natural gas drove a 22% increase in second-quarter operating revenue, offsetting lower output.New Guinea-based oil firm rejected a merger proposal from Santos Ltd., reported operating income of US$366.2 million in the three months through June.

Production dropped 4.1% to 6.6 million barrels of oil equivalent compared to the first quarter, reflecting the impact of planned maintenance work. Annual guidance for production and capital expenditure was maintained, although the company raised a forecast for the other operating costs line item to US$155 million-US$175 million, from US$145 million-US$165 million.

The new guidance reflects an expected increase in royalties, levies, and fuel costs resulting from higher realized prices and lower inventory driven by higher sales volumes.Some analysts comprehended the resignation of Keiran Wulff as managing director as a setback for the firm’s plans to develop the Pikka oil project in Alaska, given Dr. Wulff had previously been president of the asset. Dr. Wulff has been replaced by Peter Fredricson as acting chief executive.

Mr. Fredricson said on Tuesday that it is in everyone’s interest in Oil Search Ltd, shareholders, JV partners that they commit to a final investment decision on this high-quality asset only when appropriate funding and ownership levels are in place. He added that considerable progress had been made on several funding opportunities that Oil Search Ltd hopes it will strengthen its balance sheet ahead of planned investment in Pikka and Papua LNG, which aims to expand its operations in Papua New Guinea.

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