Gas Week

EWN Publishing

Oil Search with $US487m in bank and no debt at 30 June, still talking LNG plant for Kutubu

Posted by gasweek on 15 September, 2007

Oil Search is pursuing the study after high exploration spending and write-offs of unsuccessful drilling contributed to a 61 per cent slump in half-year profit to $US46.9 million, according to The Australian Financial Review (22/8/2007, p. 52).

Revenue falls despite record half-year exploration: Revenue fell 5 per cent to $US305.4 million. Despite record half-year exploration spending of $US66.2 million, high oil prices left Oil Search with $US487 million in the bank and no debt at the end of the six months to June 30.

Oil Search set to move into front-end engineering: Managing director Peter Botten said Oil Search was set to move into front-end engineering and design for an LNG project by early next year, either in joint venture with long-time partner ExxonMobil or as a smaller development with Britain’s BG Group. “All the work is underscoring the viability of PNG LNG,” Botten said. “We’re looking at how to optimise the oil and gas together.”

Delays in securing drilling rigs: PNG has a substantial certified reserves base to support an LNG development. He said PNG’s new government was very committed to the LNG project. It would cost between $30 million and $35 million to develop from about 2 trillion to 2.5 trillion cubic feet of gas in the Kutubu field for the LNG project, because of the existing infrastructure for producing oil. Oil Search said in its quarterly report it expected between 9.5 million barrels and 10 million barrels, down from 10.5 million to 11 million, because of issues including delays in securing drilling rigs.

The Australian Financial Review, 22/8/2007, p. 52

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