Gas price drop affects Oil Search revenue: Exec
Oil Search says its total revenue for the first quarter of this year was impacted by a 4 per cent drop in LNG and gas price.
Managing director Dr Keiran Wulff said the total revenue of US$359.4 million (K1.21 billion) was also impacted by a 20 per cent fall in the average realised oil and condensate price as well as lower LNG shipments due to timing of cargo.
“The first quarter of 2020 has been one of the most volatile periods in history for Oil Search and the global oil and gas industry in general,” Wulff said.
“The Covid-19 pandemic, limiting movement of personnel and equipment, the fall in oil demand and the substantial drop in oil prices have created unprecedented challenges.
“The company has taken swift steps to ensure that we are in the strongest position possible to weather a potentially protracted period of global disruption.”
Dr Wulff noted that Oil Search recognised early in the quarter the potential for incidences of coronavirus to escalate globally.
“In response to the steep decline in global oil prices in March, the company undertook decisive action to strengthen its balance sheet and increase liquidity,” he said.
“Investment expenditure for 2020 has been reduced by approximately 40 per cent, by either suspending or deferring discretionary activities not related to safety, value or reliability.
“In early April, Oil Search announced an entitlement offer, an institutional placement and an offer to eligible PNG shareholders to raise a total of up to approximately US$700 million (K2.36 billion).
“The placement and institutional component of the entitlement offer, raising US$650 million (K2.19 million), were completed on April 8, with the placement significantly oversubscribed and shares allocated only to existing shareholders.”