Australian-listed Oil Search reported on Thursday a 47.6% drop in its revenues for third-quarter 2020, primarily driven by significantly lower oil and gas prices, Kallanish Energy reports.
Total revenues for the three months ending September 30 were recorded at $189 million, nearly half of the $361.1 million revenue figure recorded in Q3 2019.
At the same time, Oil Search recorded a 7.2% year-on-year increase in production to 7.30 million barrels of oil equivalent (Mmboe), and a 16.6% y-o-y growth in total hydrocarbons sales.
Lower revenues were due to a large reduction in the average realized liquefied natural gas (LNG) and gas price, impacted by the two-to-three month oil price lag on LNG contract prices and a higher proportion of LNG sold on the spot market. They were also affected by “a $14 million negative revenue adjustment relating to the final price determinations for seven delivered ex ship (DES) cargoes delivered during the second quarter, with pricing finalised during the third quarter.”
The company recorded an average realized LNG and gas price of $4.23 per million British thermal units (MmBtu), down 55% from $9.44/MmBtu in 3Q19. Its average realized oil and condensate prices of $36.52 per barrel, were down 38.7% from $59.54/Bbl a year ago.
LNG production levels for the ExxonMobil-operated PNG LNG project were up 6.2% y-o-y at 6.55 Mmboe. The project produced at an annualized rate of 8.9 million tonnes per annum during the quarter.
“A primary focus during the third quarter has centred around finalizing the longer-term strategy for our business, taking into consideration the global economic and investment conditions and trends, as well as ensuring the company is resilient to lower oil prices and well positioned to optimally take advantage of its world class assets and deliver full value when conditions allow,” commented Oil Search managing director, Kieran Wulff.
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