Papua New Guinea-focused Oil Search saw its net profit after tax shoot up 236 percent in 2017, compared to the previous year, on the back of record production levels and stronger oil and gas prices.
Net profit after tax reached $302.1 million, the company reported in its full-year results.
Total production hovered at 30.3 mmboe in 2017 on a similar level to the previous year while the total sales dipped 2 percent from 30.6 mmboe in 2016 to 30 mmboe in the year under review.
However, the rise in global oil and gas prices, with the average realized oil and condensate price increasing by 24 percent to $55.68/bbl and the average realized LNG and gas price 21 percent higher, at $7.67/mmBtu more than offset the lower sales volumes. this drove the revenue up 17 percent to $1.45 billion.
Speaking of the year ahead, Oil Search managing director Peter Botten noted, “2018 is expected to be a pivotal year for Oil Search, with many activities reaching important milestones.”
The company plans to focus on the LNG expansion in Papua New Guinea and is aiming to commence discussions with prospective lenders on joint project financing and to make a decision on Front End Engineering and Design.
Production in 2018 is forecast to be in the range of 28.5 – 30.5 mmboe. Oilfield production is expected to decline, reflecting the maturity of the fields, combined with the impact of little well work having been conducted in 2016 and 2017, due to the low oil price environment.
This is expected to be largely offset by an increase in production from the PNG LNG Project, which, following the 2017 compressor upgrades, and despite approximately a two-week planned shutdown for the HGCP and Angore tie-in work in the second quarter, is forecast to produce between 8.2 and 8.5 MT (gross) in 2018.