Moran shut-in costs Oil Search Ltd dearly
Copyright, 1999, Post-Courier Online (PNG)
November 2, 2000
THE shut-in of the Moran oil field in August and September has dented Oil Search Ltd’s results for the quarter, with its revenue dropping 22 per cent compared to the previous quarter.
This is despite the historical high oil prices that were prevalent for most of the last two quarters.
Oil Search Ltd said its oil production for the September quarter totalled about 1.713 million barrels of oil, a reduction of four per cent on the previous quarter.
It attributed the decline to the shut-in of the Moran. Production from the field resumed on September 20.
“Oil production fell marginally to 1.713 million barrels during the quarter,’’ Oil Search reported.
“The lower output level was largely due to the Moran landslide and production shut-in for a four week period in August and September.’’
The company said its share of production from the Moran Central extended well test rose by 11 per cent during the quarter while production from Moran 4 (PPL 138) rose by more than 34 per cent, despite the shut-in.
They said that due to a decline in movements in the quarter, production exceeded liftings by 307,315 barrels, 22 per cent below the June quarter.
The operating revenue was $US28.38 million, 22 per cent down from the previous reporting period because of the lower level of oil sales.
“This would be addressed in the last quarter, with present expectations being that production and liftings would be balanced by the end of the year,” Oil Search said.
It said its balance sheet continued to improve for the quarter, with net debt down to $US212 million compared with $US240 million as at December last year.
Oil Search reported that further progress was made in the quarter to bring the PNG to Queensland gas project to a commercial reality and commence full Front End Engineering and Design (FEED) activities.
“Approval was received from the ACCC for joint marketing of gas, including, for the first time, Exxon and Santos as full project participants. Significant progress was also made in finalising the fiscal terms applicable to the gas project with the PNG government,” Oil Search said.
The company said that a comprehensive technical review of the development plan had finalised the optimal design concept before entering the FEED stage.
“Material progress has also been made on finalising a finance plan and equity arrangements for the PNG government and landowner interests in the PNG infrastructure. Marketing activities commenced immediately following ACCC approval to joint market gas and there is accelerated dialogue between all stakeholders to close remaining commercial issues prior to year end,’’ the company said.
Oil Search said exploration and development drilling activity restarted during the quarter, with the drilling of SE Gobe-8 and Anama-1.
The company said that subsequent to the end of the period, SE Gobe-8 was successfully completed as a production hold, and Anama-1 was at total depth.
Preparations also began for the drilling of Saunders 1X to follow SE Gobe-9 well.
Oil Search also reported that the PPL138 joint venture had been offered PDL5, covering a portion of the Moran Central field on terms that were acceptable to the partners.
They said the licensees were formalising acceptance of the offer, and the Moran Central parties had agreed to accelerate the project by early beginning of road construction and the drilling of the Moran development well.