Australian-listed Oil Search reported on Tuesday a drop of 19% in total revenues for the first half of 2020, despite maintaining its production and sales levels, Kallanish Energy reports.
Revenues reached $625.6 million, a decrease of 19% from $777 million in H1 2019. This was despite total production and sales figures increasing by 4% to 14.66 million barrels of oil equivalent (Mmboe) and 2% to 13.66 Mmboe, respectively, during the same period.
The company reported total liquefied natural gas (LNG) and gas sales of $532.2 million during the first half of the year — a 14% year-on-year decline.
The average realised LNG and gas price fell 19% to $7.34 per million British thermal units (MmBtu), “supported by the two-to-three month lag between oil prices flowing through to LNG contract prices.”
Managing director Keiran Wulff stated the company is on track to meet its 2020 production targets, “despite the shut-in of the Hides Gas-to-Electricity (GTE) project during the quarter due to the suspension of operations at the Porgera gold mine.”
Oil Search has maintained is production guidance for 2020 at 27.5 – 29.5 Mmboe, but revised the Papua New Guinea (PNG) LNG production guidance upwards to 24.5 – 25.5 Mmboe. It had previously planned 24-25 Mmboe.
During the first six months of the year, LNG production levels for the ExxonMobil-operated PNG LNG project was relatively stable year-on-year, recording 12.75 Mmboe during H1 2020 compared to 12.53 Mmboe a year earlier.
Total production for the PNG LNG project was 14.66 Mmboe, bolstered by a 48% year-on-year increase in oil production — from 0.9 million barrels (Mmbbl) in H1 2019 to 1.38 Mmbbl in H1 2020.
Despite a strong production performance for the PNG LNG project, Oil Search stated that ExxonMobil and Total had “demobilised the majority of their LNG expansion technical and commercial staff,” due to the Covid-19 pandemic and its impact on oil and gas prices.
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