Oil Search (OSH) SNAPSHOT
Profile: Oil Search (OSH) is involved in the exploration, evaluation, development, production and sale of liquefied natural gas (LNG), natural gas, liquefied petroleum gas (LPG), condensate and crude oil. It has interests in the PNG LNG project and Papua LNG project as well as other assets in Papua New Guinea. It also has assets in the Alaska North Slope. It is listed on the ASX as well as the PNGX (POMSoX: OSH) and has American Depository Receipts which trade over the counter (OISHY).
History: OSH was established in 1929. During much of the first 50 years of its life only relatively small gas discoveries were made. The first more substantial discovery was made in 1986 at Lagifu, while first revenue was generated in 1992 from Kutubu and the Hides Gas-to-Electricity developments. In 2018, OSH acquired oil assets in the Alaska North Slope.
Earnings composition: In FY18, 100% of the US$1,536m of revenue was generated in Papua New Guinea. This comprised liquified natural gas sales of US$1,125m (73%), oil and condensate sales of US$326m (21%) and gas sales and other revenue of US$85m (6%).
Most recent result – 1H19: EBITDAX increased 60% on the prior corresponding period (pcp) to US$582m. Revenue increased 39% on the pcp to US$777m, aided by higher realised LNG prices – up 8% to 9.71/mmBtu (million British thermal units) – and increased production volumes. This was slightly offset by lower oil and condensate prices, which were down 9% on the pcp to US$65.30 per barrel. Production increased to 14.1mmboe (million barrels of oil equivalent) from 10.2mmboe in the pcp. NPAT increased 105% on the pcp to US$162m, from US$79m (impacted by the PNG Highlands earthquake in 2018). OSH declared a dividend of US$0.05 (AU$0.07) up from US$0.035 (AU$0.03) in the pcp.
Company outlook: OSH expects 2019 full-year production of 27-29 mmboe, including 24-26 mmboe from the PNG LNG project. Expected unit production cost is US$12-13 per barrel of oil equivalent. Other operating costs are expected to be in the range of US$140-150m.
Important dates: Q4 FY19 results are scheduled for 28 January 2020, and FY19 results for 25 February 2020. Ex-dividend date is 3 March 2020. Payment date is 26 March 2020. Q1 FY20 results are scheduled for 21 April 2020. OSH’s AGM is scheduled for 1 May 2020 and Q2 FY20 results are scheduled for 21 July 2020. 1H20 results are scheduled for 25 August 2020.
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