Oil Search to look at long-term vision in industry

OIL Search says its full-year profit was down 8.4 per cent to $US312.4 million ($A472.7 million) largely because of the fall in global energy prices. The result missed consensus estimates of $US366 million profit and came despite production rising 11 per cent to 27.9 million barrels of oil equivalent as operations rebounded from the February 2018 Papua New Guinea earthquake. Revenue for the 12 months to December 31 rose 3.2 per cent to $US1.58 billion compared with 2018.

“Clearly, the last six months have been challenging for all of us,” the company’s managing director Keiran Wulff told shareholders and analysts at the Museum of Sydney yesterday.

Mr Wulff said Oil Search was conducting a comprehensive strategic review in conjunction with Bain & Co and Goldman Sachs that would examine its Papua New Guinea assets, its long-term vision and how the company positions itself as the energy industry transitions from fossil fuels.

The report would be presented to shareholders in September, Mr Wulff said. “It’s our intention to be a model for social and environmental responsibility,” he said.

Oil Search also announced its total resources nearly doubled for the year, increasing to 497 million barrels of oil reserves following appraisal drilling at its Pikka Unit on the North Slope of Alaska that Oil Search acquired in 2018 and 2019 for $US950 million. It expects to make a final investment decision in the second half on its Alaska operations, where it expects to have over 800 personnel in the field, and is planning to sell off 15 per cent interest of its 51 per cent stake in the Pikka Unit to bolster its liquidity.

Oil Search declared a final dividend of 4.5 US cents per share, unfranked, down from 8.5 US cents.