PNG LNG Project Drives Oil Search's Profit to Record

Oil Search reported a sharp jump in 2014 production, sales and profits driven by successful startup of PNG LNG project.

“In 2014, Oil Search recorded the highest annual production and financial performance in the Company’s history, reflecting the first contributions from the PNG LNG project, which came onstream ahead of expectations,” company said in a statement Tuesday.

For the year ended December 31, 2014 net profit after tax was $353.2 million, 72 percent higher than in 2013. Excluding significant items, core profit was $482.8 million, up 135 percent compared with the previous year and the highest profit in the company’s 86 year history. Revenue for the year stood at $1.61 billion, up 110 percent from $766.3 million recorded in 2013.

“The strong result was driven by a near tripling of production, again to record levels, following the commencement of LNG production from the PNG LNG project in April, partially offset by a 12 percent fall in the average realised oil and condensate price,” the company said.

In response to the substantial fall in oil prices over the past six months, Oil Search has reprioritised its 2015 work programmes, to focus on the company’s high-returning core LNG growth projects.

“Oil Search enters 2015 in a strong position, with a profitable production base from the PNG LNG project and the PNG oil fields, two potentially high-returning LNG growth opportunities and a solid balance sheet. The company is well placed to manage the present lower oil price environment as well as support its growth projects,” the company said.