Oil Search profit spikes on higher LNG prices

PNG LNG (image: Oil Search)

Oil Search, the owner of a 29 percent stake in the ExxonMobil-operated PNG LNG project, reported a sharp jump in half-year profit on the back of higher LNG prices and lower operating costs.

Net profit rose 405 percent to $129.1 million for the first half of 2017 from $25.6 million a year ago, the Papua New Guinea-focused energy company said on Tuesday.

The company posted a 16 percent increase in sales revenue to $676.2 million, underpinned by higher average realised oil/condensate and LNG/gas prices, which increased by 28% and 26%, respectively.

The average price realised for LNG and gas sales rose to $7.67 per mmBtu, reflecting a rebound in the global oil prices and approximate three month lag between the spot oil price and LNG contract prices, Oil Search said.

The company also lifted the lower end of its 2017 production guidance to 29 million barrels of oil equivalent from the previous 28.5 million, while leaving the upper end at 30.5 million barrels.

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