Oil Search (ASX:OSH) announced today that although sales were up in the March quarter, both production and revenue fell compared to 4Q2014. Total production fell 5 per cent to 6.91 million barrels of oil equivalent (mmboe) compared to the previous quarter. Total revenue fell 16 per cent to US$472.3m, compared to the US$562.1m from 4Q2014. The company has reaffirmed its guidance and expects to deliver 2015 production within 26 to 28 mmboe. The company cited the global downturn in oil prices as the cause for lower liquefied natural gas (LNG), oil and condensate sales revenue. The average realised LNG and gas price was down 14 per cent compared to the previous quarter. The averaged realised oil and condensate price fell 30 per cent from the previous quarter.
In February, a joint venture submitted a petroleum development license application for the P’nyang field to the Papua New Guinea (PNG) government. The venture consists of Exxon Mobile, Oil Search, Santos and PNG and Japanese investors. The PNG project is expected to increase Oil Search’s LNG sales, the report said. At the end of March 2015, the company had US$1067.2m in cash and US$4,331.7m in debt. All of the debt is comprised of PNG LNG project finance debt facility after paying off US$150m taken from its bilateral revolving credit facilities. The company had a total liquidity of US$1,817.2m, which includes US$750m of undrawn corporate credit facilities. Shares of OSH were down 2c, or .25 per cent, at $8.09 per share on Tuesday. OSH has fallen 6.48 per cent in the last 12 months but is up 2.41 per cent so far this year.
Author: Simon Herrmann
Apr 21, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.