Oil Search last month abandoned a bid to cement its position in Papua New Guinea with a deal to buy InterOil Corp.
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Under the deal, the Australian company would have ended with identical 29 per cent stakes in the existing ExxonMobil-operated PNG LNG project, as well the planned Papua LNG project run by Total.
“So we’ve got other customers getting used to PNG LNG product – and that’s also very good for future marketing of longer term spot cargoes”, Fowles said.
While the fall in profitability and dividends could lead some shareholders to pull the “sell trigger”, arguably investors would be better off focusing on estimating the through-the-cycle cash flows which Oil Search should earn.
PNG-focused oil producer Oil Search’s first-half profit has slumped 89 per cent plunge to $US25.6 million ($A33.5 million) after falling global oil prices hit revenue despite a lift in sales.
Oil Search shares closed down six cents or 0.8 per cent, at $7.38. The benchmark S&P/ASX 200 Index gained 0.7%.
Aug 23 ExxonMobil Corp’s Papua New Guinea liquefied natural gas (LNG) project is eyeing multi-year contracts for sales of spot cargoes to soak up excess production, co-owner Oil Search said on Tuesday.
Oil Search slashed its interim dividend to 1.0 cents, from 6.0 cents a year earlier.
But Managing Director Peter Botten believes oil prices have now bottomed out.
The company delivered a higher than expected dividend, Macquarie Group Ltd. said in a note.
So What: For the six months ending June 30 2016, Oil Search managed to increase production by 4% to 14.9 million barrels of oil equivalent (mmboe). Brent oil averaged about $41.20 a barrel for the first half, more than 30 percent less than the corresponding period in 2015.
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Oil Search’s realized price of $5.23 per million British thermal units for its gas in the second quarter is lower than rival Woodside Petroleum Ltd., according to data compiled by Bloomberg.
