Higher oil prices helped drive a surge in Oil Search’s June quarter revenue, as its Exxon Mobil-led joint venture in Papua New Guinea progresses towards first production.
Oil Search also on Tuesday said the natural decline of its key producing fields, Kutubu and Moran, was offset partly by new development work.
As a result, it did not change its full-year production forecast of between 6.2 million and 6.7 million barrels of oil equivalent.
The market welcomed the news, sending shares in the company up 18 cents, or 2.67 per cent, at $6.91.
This compared with gains in the broader market of about 0.9 per cent.
Chief executive Peter Botten said the company produced similar amounts of oil and gas in the June quarter compared to the previous period.
“This was a pleasing performance, with natural decline in Kutubu and Moran largely offset by recent development activity and field optimisation,” Mr Botten said.
Oil Search on Tuesday reported operating revenue for the three months to June 30 of $US217.8 million ($A201 million), up 42 per cent from the March quarter.
The gains were based on a 13.5 per cent jump in the average realised oil price during the period and a substantial lift in oil sales compared to the first quarter.
Higher sales volumes were due to increased shipments, which reduced the company’s crude oil stockpile.
Mr Botten said the company’s key growth project, the $US15 billion ExxonMobil-led PNG LNG (liquefied natural gas) joint venture, was progressing well towards slated first production in 2014.
“Preparations for commissioning of the first PNG LNG project drilling rig have commenced and drilling on the Hides field is scheduled to commence in the fourth quarter,” he said in a statement.
ExxonMobil remained focused on exchange rate exposure to the high Australian dollar, Mr Botten said.
He said significant progress had been made with gas exploration and appraisal drilling work in PNG’s Highlands, with a view to using any finds for a potential expansion of the PNG LNG project.
Oil Search will shut its oil fields for a fortnight for infrastructure modifications in the September quarter.
This will prepare the fields to provide pre-commissioning gas for the PNG LNG project.
