- With the rise in oil and gas prices over the past few weeks, producers such as Oil Search (OSH) have been enjoying the bigger pay cheque
- Production fell from 7.28 million barrels to 6.58 million, but this was offset by a major increase in prices
- All up, total operating revenue for the period jumped from $266.2 million last year to $366.2 million
- Shares in Oil Search are up 0.51 per cent to $3.97 at 11:13 am AEST
With the rise in oil and gas prices over the past few weeks, producers such as Oil Search (OSH) have been enjoying the bigger pay cheque.
While production for the June quarter this year fell — from 7.28 million barrels of oil equivalent last year to 6.58 million barrels — the effect was offset by a major shift in the market. The average realised price for oil and condensate jumped from US$23.05 (A$31.22) per barrel to US$71.55 (A$96.90), while LNG and gas rose from US$7.34 (A$9.94) per mmBtu to US$8.61 (A$11.66).
As a result, total operating revenue for the period increased from $266.2 million last year to $366.2 million.
Acting chief executive Peter Fredricson, who took over from Keiran Wulff last week, said the Pikka Phase 1 project in Alaska was tracking in line with expectations.
"It is in everyone's interest — Oil Search, shareholders, JV partners — that we commit to FID on this high quality asset only when appropriate funding and ownership levels (across upstream and infrastructure) are in place," he said.
"During the second quarter Papua LNG has progressed financing, technical and commercial work on the expansion scope in preparation for a further ramp up in project activity in 2H 2021."
Details of the company's second-quarter performance come hot on the heels of a takeover bid from fellow energy producer Santos, which offered to purchase all of Oil Search's shares for $4.25 each.
In response, Oil Search noted that, based on last week's closing share price, "the proposed terms represent a premium of only 6.8 per ncent despite Santos shareholders owning 70 percent more of the equity than Oil Search shareholders."
"Oil Search has communicated to Santos that it is open to receiving a revised proposal which more appropriately reflects the value which Oil Search would bring to any combined entity."
Shares in Oil Search are up 0.51 per cent to $3.97 at 11:13 am AEST.