Oil Search Nets K546.9m Profit
Oil Search Limited (OSL) has reported a net profit after tax of US$162 million (K550 million) in its 2019 first half year results which is 105 per cent higher for the corresponding period in 2018.
It is double the first half year results for 2018 which was US$79.2 million (K268.9m) which was mostly impacted by the destructive 7.5 magnitude earthquake that hit the PNG Highlands.
According to the 2019 first half results report, it reflected a 37 per cent increase in sales volumes and an 8 per cent increase in the realised LNG and gas price which was partially offset by a 9 per cent fall in the realised oil and condensate price.
The report also stated that the board has also approved payment of an interim dividend of US$0.5 cents (K1.69) per share, compared to the 2018 interim dividend of only US$0.2 cents (68 toea) per share.
This represents a dividend payout ratio of 47 per cent which is consistent with the boards’ dividend policy to return between 35 per cent and 50 per cent of core net profit after tax to shareholders by way of dividend.
The report also highlighted a US$419 million (K1.42b) operating cashflow which was underpinned by strong production performance from the PNG LNG Project and higher LNG and gas price realisation.
Investing cash outflows of US$170 million (K573.9m) was spent mainly on PNG gas expansion and Alaska appraisal activities.
However, a healthy liquidity of US$1.43 billion (K3.5b) was maintained with operating cash flow used to help fund the assessment drilling campaign in Alaska and pre-FFED works for LNG expansion in PNG.
It is also reported that US$174.3 million (K 587.4m) of PNG LNG project finance debt was also repaid as scheduled.
Managing director Peter Botten in his webcast presentation said predictability and stability are keys to investor confidence and being the largest investor in PNG and when PNG wobbles, Oil Search wobbles as well.
“Off course we fully recognise and respect that any government has the right to review agreements and over the Papua Joint Venture agreement signed earlier on in the year provides the State with significantly greater benefits quite rightly then the PNG LNG project,” he said.
“As PNG’s largest investor, we are obviously very sensitive of the uncertainty surrounding where the Papua LNG gas agreement is going and we are working extremely hard to resolve and work with the joint venture partners and government to resolve any outstanding issues.”
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