PERTH, Feb 24 - Oil Search Ltd , an Australian-listed oil and gas producer, posted a 70 percent jump in 2008 net profit, helped by record high oil prices for much of last year, but forecast a fall in output this year.
Oil Search also slashed its 2009 exploration budget to $70 million from $176 million last year and cut its development expenses by about $30 million to $130 million in a bid to help it fund its share of a major liquefied natural gas (LNG) project.
The Papua New Guinea-based company said underlying net profit was $240 million, up from $140.8 million a year ago. Production in 2008 fell 12 percent from a year ago to 8.58 million barrels of oil equivalent (boe) due to natural field decline, and 2009 production was expected to fall to between 8-8.3 million boe.
Oil Search said its focus remain on supporting its LNG project and while it will cut discretionary expenditure in 2009, new acquisitions which would help support its medium term gas growth objectives were likely.
Its share rose 1.6 percent to A$4.57 in a broader market down 1.5 percent.
Oil Search is a partner in Exxon Mobil's proposed 6.3 million tonnes a year LNG project in Papua New Guinea. The project, estimated to cost between $10-$11 billion, is targeting first deliveries by 2014.
Oil Search said the front-end engineering and design work on the project was 50 percent complete and the project economics remain robust, even in a low oil price environment.
"There are now tangible signs that costs pressures will reduce in the required timeframe, enabling the project to take advantage of a favourable cost cycle," Oil Search said.
Oil Search said extensive discussions has been held last year with large LNG buyers from Japan, Korea, China, Taiwan and India. Despite the economic slowdown, a number of buyers remain willing to sign long term offtake agreements with the project and heads of agreement are expected to be signed in the near future.
Reported net profit, which includes one-off items, jumped 128 percent from a year ago to $313.4 million, thanks to a one-time profit from the sale of its Middle East and North Africa assets.
The firm declared a final dividend of 4 cents, bringing its full-year dividend to a total of 8 cents.
Oil Search also slashed its 2009 exploration budget to $70 million from $176 million last year and cut its development expenses by about $30 million to $130 million in a bid to help it fund its share of a major liquefied natural gas (LNG) project.
The Papua New Guinea-based company said underlying net profit was $240 million, up from $140.8 million a year ago. Production in 2008 fell 12 percent from a year ago to 8.58 million barrels of oil equivalent (boe) due to natural field decline, and 2009 production was expected to fall to between 8-8.3 million boe.
Oil Search said its focus remain on supporting its LNG project and while it will cut discretionary expenditure in 2009, new acquisitions which would help support its medium term gas growth objectives were likely.
Its share rose 1.6 percent to A$4.57 in a broader market down 1.5 percent.
Oil Search is a partner in Exxon Mobil's proposed 6.3 million tonnes a year LNG project in Papua New Guinea. The project, estimated to cost between $10-$11 billion, is targeting first deliveries by 2014.
Oil Search said the front-end engineering and design work on the project was 50 percent complete and the project economics remain robust, even in a low oil price environment.
"There are now tangible signs that costs pressures will reduce in the required timeframe, enabling the project to take advantage of a favourable cost cycle," Oil Search said.
Oil Search said extensive discussions has been held last year with large LNG buyers from Japan, Korea, China, Taiwan and India. Despite the economic slowdown, a number of buyers remain willing to sign long term offtake agreements with the project and heads of agreement are expected to be signed in the near future.
Reported net profit, which includes one-off items, jumped 128 percent from a year ago to $313.4 million, thanks to a one-time profit from the sale of its Middle East and North Africa assets.
The firm declared a final dividend of 4 cents, bringing its full-year dividend to a total of 8 cents.
