Ending December 31 2015, the company recorded annual production of 29.3 mmboe, (mmboe is for Million barrels of oil equivalent, It is an industrial unit of energy used by the oil exploration and production industry and it indicates the amount of energy that is equivalent to the amount of crude oil in a single barrel.) being the highest in its history.
This reflected a full year of very strong performance from the Papua New Guinea Liquefied Natural Gas (PNG LNG) project and a solid contribution from the Oil Searchoperated oil fields in Papua New Guinea.
The company generated total revenue of US$1585.7 compared to US$1610.4 in 2014.
A 62 per cent increase in hydrocarbon sales volumes was offset by significantly lower realised oil and gas prices, resulting in the 2 per cent decline in revenue.
However, the increase production was offset by significantly lower global oil and gas prices, with average price almost half 2014 levels.
Managing Director Peter Botten said the company benefited from strong cash operating margins over the year, with the margin of 73 per cent realised in 2015 being one of the highest in the region.
“2015 full year production of 29.3 mmboe was well above the guidance at the beginning of the year of 26 – 28 mmboe. Despite strong operating results from our key assets, Oil Search is clearly not immune to low oil and gas prices.
“Fortunately, our producing assets are in the lowest quartile of operating costs in the region and we have a strong balance sheet, which allows us to continue to judiciously invest in what we believe are very competitive, potentially high returning growth projects.
“We will continue to drive further efficiencies and reduce costs in 2016, in line with what is likely to be a sustained period of low prices. We do, however, believe that there will be a progressive rebalancing of supply and demand that will see a lift in oil prices in 2017 and 2018,” he said.
At the end of 2015, Oil Search had total liquidity of US$1.66 billion.
“Together with cash flow from our operations, this is sufficient to fund all current committed activities, including continued investment in our highly competitive potential LNG growth projects, including expansion of PNG LNG and development of Papua LNG, which we believe can deliver strong returns even in a sustained low oil price environment.