OIL SEARCH has celebrated a huge uplift in production on the back of the full first full quarter of contributions from the PNG LNG project, with the company lifting output by 81 per cent and netting its highest-ever revenue for the quarter.
Oil Search’s total oil and gas production in the September quarter was 6.67 million barrels of oil equivalent (mmboe) – an all-time high for the company and nearly four times production achieved in the corresponding period of 2013.
Record-breaking revenue of US$538.2 million for the quarter has prompted the company to promise higher dividends for its shareholders.
The PNG LNG project netted 4.84 mmboe for Oil Search, while the company’s base PNG oil and gas business contributed 1.83 mmboe.
Oil Search, who has 29 per cent interest in the PNG LNG project, said the result produced a tripling of sales revenue for Oil Search.
“The PNG LNG Project reached full operating capacity in late July, ahead of expectations following a largely trouble-free ramp-up,” managing director Peter Botten said.
“All components of the LNG production facilities are now operating in line with, or better than, expectations, which is a very pleasing outcome.”
The company lifted 23 LNG cargoes and sold 21 for the PNG LNG project in the September quarter, taking their yearly total for the project up to 30 lifted and 26 sold.
Six cargoes of Kutubu Blend, comprising production from the PNG oil fields and condensate from the PNG LNG Project, were also sold during the quarter.
Oil Search said September marked the first LNG cargo to be sold under long-term contract and all other long-term contracts were expected to start by the end of the year.
Gas developments and exploration
Antelope 4, the first of at least two appraisal wells on the Elk/Antelope field in PRL 15, was spudded during the quarter, with preparation of the rig site for Antelope 5 completed and preliminary development concept selection work studies continued.
Mr Botten said the company was also continuing to work towards aggregating gas to support at least two LNG expansion trains in PNG.
“Gas for further developments is expected to come from two key areas – the northwestern Highlands Hub, which includes the P’nyang gas field, and the Gulf Hub, including the Elk/Antelope gas fields,” Mr Botten said.
Oil Search completed environmental and social fieldwork on the P’nyang gas field in PRL 3 during the quarter.
“These are essential components of the work required for the production development licence application on the field, which is planned to be submitted in early 2015, with P’nyang to be used as an underwriting gas resource for the possible expansion of the PNG LNG project,” Mr Botten said.
He said development drilling at Hides was almost complete, with the eighth production well and the produced water disposal well reaching total depth in September.
The results from these wells are being used to update the Hides wells structural and reservoir models, which will help further define the Hides field gas reserves and distribution.
“Work is now being undertaken to better delineate the Hides gas reserves and distribution, using the data obtained from all the wells drilled to date,” Mr Botten said.
The studies were expected to continue into 2015 and demobilisation of development personnel at the LNG plant site and Hides gas conditioning plant was expected to be completed at year’s end.