A strong fourth quarter performance has helped Oil Search Ltd set a new annual production record in 2017.
The company’s managing director, Peter Botten, said Oil Search finished 2017 strongly, with fourth quarter production of 7.59 mmboe taking full year production to 30.31 mmboe, which was at the upper end of our guidance range and an all-time record for the company.
Mr Botten said the record was set despite some planned downtime at the PNG LNG project.
“In October, the second phase of scheduled compressor upgrades at the PNG LNG Project plant site took place. Production rates picked up following this work, with the plant averaging 8.6 MTPA in December. The upgrades to the compressors undertaken during 2017 should enable production to be maintained sustainably at or above 8.5 MTPA, before factoring in normal levels of downtime.”
Mr Botten said the company’s operated oil and gas fields in PNG also performed well during the quarter, with production of 1.51 mmboe, net to Oil Search, largely unchanged from the third quarter.
The company benefited from a 20% increased in realised oil and condensate price in the fourth quarter of US$63.05 per barrel, reflecting the strength in global oil prices.
“This, together with a 5% increase in our realised LNG and gas price, helped lift fourth quarter revenue to US$389 million, driving total revenue for the year to US$1.45 billion, 17% higher than in 2017,” Mr Botten said
The record breaking production effort continues Oil Search’s run of succeed with the company featuring in two exciting drill campaigns at Muruk and P’nyang, which look set to provide significant gas supplies for proposed LNG expansions in PNG.
Mr Botten says those expansion plans continue to make strong progress.
“In December, ExxonMobil, on behalf of the PNG LNG Project participants, completed its evaluation of proposals received for the additional 1.3 MTPA of LNG being marketed.
“Offers were received from a number of top-tier LNG buyers, including end users and traders, with strong interest in securing contracts for periods of up to five years. Oil Search expects the joint venture to sign binding contracts during the first half of 2018.”
In the meantime work continues on activities aimed at maintaining Oil Search” strong profuction curve.
“In the first half of 2018, modifications to the Hides Gas Conditioning Plant are planned to further optimise production rates upstream. Oil Search expects to see production benefits from this in the second half of the year. Work on tying in the Angore A1 and A2 wells to existing Project processing facilities remains ongoing, with the wells expected to come online in 2019.”